An Arbitration Agreement Found Unconscionable Without Translation

It is no secret that many Texas businesses employ Spanish-speaking employees.  It is also no secret that many businesses in Texas require their employees to sign arbitration agreements, in which employees agree to arbitrate any disputes with their employers.  What happens when an employee who only speaks Spanish is asked to sign an arbitration agreement in English?  The Eighth Court of Appeals of Texas ruled that such agreement, when not explained to the employee, is unconscionable.

In Delfingen US-Texas, L.P. v. Guadalupe Valenzuela, Guadalupe Valenzuela was hired to work for Delfingen in El Paso, Texas.  Following a company orientation that was conducted entirely in Spanish, Valenzuela signed a number of documents that were written in English including a “Dispute Resolution and Arbitration Policy and Agreement.”  The agreement included a clause that required all disputes related to Valenzuela’s employment be submitted to binding arbitration.

After Valenzuela was terminated, she filed a lawsuit against Delfingen for wrongful termination.  Delfingen then filed a motion to compel arbitration based on the agreement Valenzuela signed during the orientation.  Valenzuela argued against arbitration by stating the agreement was “procedurally unconscionable” and said she was rushed to sign the agreement despite that it was written in English.  She also alleged that the agreement was not fully explained to her.  Delfingen challenged Valenzuela’s assertions and argued that her inability to read English did not invalidate the agreement.  Following an evidentiary hearing, the district court found that Delfingen did not explain the agreement to Valenzuela and denied Delfingen’s motion to compel arbitration.  The company then filed an interlocutory appeal.

On appeal, Valenzuela argued that the agreement was procedurally unconscionable because: (1) she was unable to read English and Delfingen failed to provide a Spanish translation or explain the agreement to her in Spanish; and (2) Delfingen affirmatively misrepresented the nature of the arbitration agreement.  Because of the district court’s finding that Delfingen had not explained the agreement to Valenzuela at the orientation and because of Delfingen’s stipulation that Valenzuela spoke no English, the Court of Appeals found that the arbitration agreement was procedurally unconscionable.

In contrast, in a case involving a similar issue and decided by another Court of Appeals, the court found that an arbitration agreement was enforceable when a Spanish version of the agreement was provided to employees by their employer.  See Superbug Operating Co., Inc. v. Sanchez (First Court of Appeals, 2013).

THE MORAL OF THE STORY?  If you have Spanish-speaking employees, make sure that the translated versions of any agreements that they sign are available to them, to thwart any arguments of procedural unconscionability.