In affirming an order denying an employer's motion to compel arbitration, the Texas Court of Appeals held that a wrongful death dispute was outside the scope of the arbitration agreement because the prerequisite duty to mediate was not fulfilled.

In In re Igloo Products Corp., 238 S.W.3d 574 (Tex. Ct. App. 2007), Varela was fatally injured in the course of his employment with Igloo. His family filed a wrongful death lawsuit. Igloo moved to compel arbitration pursuant to an ADR agreement signed by Varela.

In opposing the motion, Varela's family argued that the ADR agreement did not apply because there was no preliminary attempt at mediation as required by the agreement. The trial court denied the motion.

On appeal, the Court held that the wrongful death dispute was outside the scope of the ADR agreement because there was no evidence of any attempt at mediation.

Igloo cited Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) in arguing that application of the mediation requirement raised a question for the arbitrator. The Court rejected this argument on the reasoning that the failure to mediate did not constitute a waiver of the right to arbitrate but instead removed the dispute from the scope of the arbitration agreement.