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The Texas Court of Appeals refused to hold an arbitration agreement in an employment contract unconscionable simply because it contained a fee-splitting provision.
In In re Standard Meat Co., L.P., No. 05-06-01470-CV, 2007 WL 730660 (Tex. App. Mar. 9, 2007), Chagoya sued Standard Meat, her former employer, for alleged negligence in connection with an on-the-job injury. Standard Meat moved to compel arbitration pursuant to an arbitration agreement that required Chagoya to pay some of the arbitration costs, including a $75 application fee and 25 percent of the "costs of the proceeding."
Chagoya argued that the fee-splitting provision rendered the arbitration agreement unconscionable and therefore unenforceable. However, under Texas precedent cited by the Court, such fee-splitting provisions are not, on their own, sufficient to render an arbitration agreement unconscionable. Accordingly, the Court upheld the arbitration agreement.
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