Lizalde v. Vista Quality Markets
United States Court of Appeal for the Fifth Circuit
746 F.3d 222 (2014)
Jorge Lizalde (plaintiff) worked as a meat cutter for Vista Quality Markets (Vista) (defendant). Lizalde suffered an injury while at work in Texas. Even though Vista and Lizalde had entered into an agreement to submit all work-related injury claims to arbitration, Lizalde filed a suit against his employer in a state court that included a claim based on federal law. Vista removed the case to federal court and filed a motion to compel arbitration of the federal claim. However, a federal district court denied the motion and agreed with Lizalde that the arbitration agreement was illusory and not enforceable. The district court interpreted the arbitration agreement as granting Vista an unconstrained power to terminate the arbitration agreement unilaterally. The arbitration agreement did allow Vista to terminate the agreement. However, Vista could only terminate the agreement prospectively, the termination would not affect injury claims that occurred prior to termination, and termination would not take effect until 10 days after Vista provided reasonable notice to Lizalde. On appeal, Vista argued that the arbitration agreement was not illusory.
Rule of Law
Holding and Reasoning (Jolly, J.)
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