ENERGY TRANSFER LP LP GP LLC v. MOOCK (2025)

OPINION

Three affiliated companies appeal the trial court's interlocutory order denying their motion to compel arbitration of personal-injury claims asserted against them by an employee. Concluding that the trial court erred in denying the motion, we reverse and remand.

I. Factual and Procedural Background

In 2021 Appellant/defendant Energy Transfer LP (“Energy Transfer”) acquired appellant/defendant Enable Midstream Partners, LP (“Enable”), and its general partner, appellant/defendant Enable GP, LLC (“Enable GP”). Energy Transfer became the sole limited partner of Enable and the sole member of Enable GP. Appellee/plaintiff Clay Moock, a licensed professional geologist, was employed as an environmental specialist by Enable. Pursuant to a merger agreement, Energy Transfer agreed to continue Moock's employment. Evidence submitted by Energy Transfer shows that Energy Transfer Partners, LLC (“ET Partners”)¹ became Moock's “payroll employer.”

As part of Moock's onboarding process with Energy Transfer, in December 2021 Moock signed a “Resolve Program and Mutual Arbitration Agreement” (the “Agreement”). The first paragraph of the Agreement contains a statement in bold stating that “All disputes covered by this Agreement shall be decided by an arbitrator through final and binding arbitration and not by way of court or jury trial.” The Agreement states that “[e]xcept as this Agreement otherwise provides, [Energy Transfer, LP and the affiliated entity of Energy Transfer, LP that employs Moock (“Employer”)] and [Moock] mutually consent and agree to the resolution by arbitration of all claims or controversies, past, present, or future, including but not limited to claims arising out of or related to [Moock's] application for employment, employment, and/or the termination of [Moock's] employment, that [Energy Transfer and the Employer have] against [Moock] or that [Moock] may have against: [Energy Transfer and the Employer]; their parents, subsidiaries and affiliates; ․ each and all of which can enforce this Agreement as direct or third-party beneficiaries.”

The Agreement contains a delegation provision and provides that the arbitration will be held under the auspices of the American Arbitration Association (“AAA”) and under the then-current Employment Arbitration Rules of the AAA (“AAA Employment Rules”). The Agreement provides that unless the parties jointly agree otherwise, the arbitration will take place in or near the city in which Moock was last employed. Although the Agreement contains no provision choosing the law of any jurisdiction, it provides that “[t]he Federal Arbitration Act (9 U.S.C. § 1 et seq.) governs this Agreement, which evidences a transaction involving commerce. If the Federal Arbitration Act does not apply, the parties agree that the Texas Arbitration Act would apply.”

In April 2022 Energy Transfer allegedly instructed Moock to inspect a leak in a natural gas pipeline near Haughton, Louisiana when the pipeline had not been cleared of all dangerous and explosive gas and when the pipeline was actively leaking dangerous and highly explosive substances. An employee of La Grange Acquisitions, L.P., who allegedly was driving a motor vehicle that had been in continuous use for approximately three hours, picked up Moock to take him to the leak site. As they drove into the area of the leak, an ignition source from the vehicle allegedly caused a massive fire explosion, and Moock was engulfed in flames, causing life-threatening, disabling, and permanent injuries. Allegedly as a direct and proximate result, Moock suffered third-degree burns across almost all of his body.

Appellees/plaintiffs Clay Moock, Individually, Trisha Moock, Individually, and As Next Friends of L.M., Minor, and Hannah Moock (collectively the “Moock Parties”) filed suit against appellants/defendants Energy Transfer, Enable, and Enable GP (collectively the “ET Parties”) and others, asserting claims for negligence, loss of consortium, and for “knowing and/or intentional misconduct.” The Moock Parties seek exemplary damages based on allegations of gross negligence, and allege that the ET Parties engaged in intentional, criminal, and fraudulent acts.

The ET Parties filed a Motion to Stay Proceedings and Compel Arbitration (“Motion to Compel Arbitration”), in which they argued that Moock's claims must be arbitrated in the Shreveport-Bossier City metropolitan area in Louisiana, pursuant to the Agreement. The ET Parties asserted that the trial court should compel arbitration under (1) the Federal Arbitration Act (“FAA”),² (2) if the FAA does not apply, then under the Texas Arbitration Act (“TAA”),³ and (3) if neither the FAA nor the TAA apply, then under the law of the state (either Louisiana or Texas) which has the “most significant relationship” to the arbitration issue. The ET Parties also argued in the trial court that the Agreement may be enforced under the Louisiana Binding Arbitration Law.⁴ The ET Parties requested a stay of all proceedings in the case pending arbitration.

The ET Parties resisted the Moock Parties’ attempts to obtain discovery before the trial court's ruling on their Motion to Compel Arbitration. The Moock Parties responded in opposition to the Motion to Compel Arbitration, asserting various arguments, including (1) Moock is a transportation worker exempted from application of the FAA under section 1 of the FAA (“Section 1”); (2) the TAA does not apply to Moock's claims because the Agreement does not satisfy section 171.002(c) of the TAA; (3) the Louisiana Binding Arbitration Law does not apply to the Agreement because the Agreement is a “contract of employment of labor”;⁵ and (4) given the inapplicability of the FAA and TAA and given that the Agreement only chooses these two statutes, the ET Parties may not enforce the Agreement under Louisiana law or Texas common law. The Moock Parties also filed a motion to compel discovery.

The trial court held an oral hearing on the Motion to Compel Arbitration at which the court stated that it was thinking of allowing pre-arbitration discovery before ruling on the Motion to Compel Arbitration. The trial court gave the parties an opportunity to confer regarding discovery requested by the Moock Parties and did not rule on the Motion to Compel Arbitration at the hearing. Almost three months after the hearing, the trial court signed an order granting the Moock Parties’ motion to compel discovery responses and an order denying the Motion to Compel Arbitration, without specifying the grounds for this ruling.

The ET Parties timely perfected this interlocutory appeal from the trial court's denial of the Motion to Compel Arbitration. The ET Parties filed a separate mandamus action in this court, in which this court granted the ET Parties mandamus relief and directed the trial court to vacate its order granting the Moock Parties’ motion to compel discovery responses.

II. Issues and Analysis

The ET Parties assert two appellate issues: (1) Did the trial court reversibly err in refusing to compel arbitration and denying the Motion to Compel Arbitration? and (2) Did the trial court reversibly err in denying the ET Parties’ motion to stay proceedings and instead compelling the ET Parties to respond to expansive arbitration-related discovery?

A. Did the trial court err in denying the Motion to Compel Arbitration?

In support of their argument that the trial court erred in refusing to compel Moock to arbitrate his claims against them, the ET Parties assert that (1) Moock agreed to arbitrate his claims against the ET Parties; (2) Each of the ET Parties is a direct or third-party beneficiary of the Agreement; (3) The parties clearly and unmistakably agreed to delegate to the arbitrator the determination of disputes regarding arbitrability issues; (4) Moock is not a transportation worker exempted from application of the FAA under Section 1; (5) even if Moock is a transportation worker and the FAA does not apply of its own force, the FAA still applies based on the parties’ agreement that the FAA would apply; (6) if the FAA does not apply to the Agreement, then the TAA applies to the Agreement based on the parties’ agreement that the TAA would apply in this situation and notwithstanding the failure of the TAA to apply of its own force under section 171.002 of the Civil Practice and Remedies Code; and (7) if the FAA and TAA do not apply to the Agreement by their own force or by the parties’ agreement, arbitration should be compelled under the Louisiana Binding Arbitration Law, Louisiana law, or Texas common law.⁶

1. Standard of Review

We review the denial of a motion to compel arbitration for an abuse of discretion, reviewing matters of law de novo, but deferring to any fact findings by the trial court. See Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018); In the Estate of Guerrero, 465 S.W.3d 693, 700–01, 705 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) (en banc). When, as in today's case, the trial court files no findings of fact or conclusions of law, it is implied that the trial court made all necessary findings of fact to support its ruling. See In the Estate of Guerrero, 465 S.W.3d at 701. If a factual finding by the trial court is in dispute, we review the finding under a legal sufficiency standard of review. See id. at 700. In conducting a legal sufficiency review, we credit favorable evidence if a reasonable fact finder could do so, disregard contrary evidence unless a reasonable fact finder could not do so, and determine whether the evidence would enable reasonable and fair-minded people to find the fact at issue. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); In the Estate of Guerrero, 465 S.W.3d at 700. We defer to the trial court's factual determinations that are supported by legally sufficient evidence. See In the Estate of Guerrero, 465 S.W.3d at 700–01.

2. Applicability of FAA

The Agreement provides that “[t]he [FAA] governs this Agreement, which evidences a transaction involving commerce.” Under this court's precedent, this provision constitutes an agreement that the FAA applies to the Agreement, and the ET Parties are not required to establish that the transaction at issue involves or affects interstate commerce. See In re Pham, 314 S.W.3d 520, 526 (Tex. App.—Houston [14th Dist.] 2010, orig. proceeding [mand. denied). As they did in the trial court, the Moock Parties assert that Moock is a transportation worker and therefore the Agreement is exempt from the FAA under Section 1. See 9 U.S.C. § 1 (providing that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce”) (emphasis added); Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246, 252–53 (2024). The ET Parties assert that by agreeing that the FAA governs the Agreement, the parties agreed that the FAA applies even if Moock is a transportation worker. We presume, without deciding, that even though the parties agreed that the FAA governs the Agreement, the FAA does not apply if Moock establishes that he is a transportation worker exempt from application of the FAA. If Moock does not fall within the transportation-worker exemption, then the FAA applies.

3. Transportation-Worker Exemption

The Moock Parties had the burden of proving that Moock was a transportation worker. See Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91–92 (2000); Amazon.com Services, LLC v. De La Victoria, No. 14-23-00493-CV, ––– S.W.3d ––––, ––––, 2024 WL 3941376, at *5 (Tex. App.—Houston [14th Dist.] Aug. 27, 2024, no pet.). Even if the parties to the Agreement clearly and unmistakably agreed to arbitrate arbitrability issues, the determination of whether Moock is a transportation worker is an issue for the courts not for the arbitrator. See New Prime, Inc. v. Oliveira, 586 U.S. 105, 108–21 (2019).

The transportation-worker exemption covers a worker “who is actively engaged in transportation of goods across borders via the channels of foreign or interstate commerce.” Bissonnette, 601 U.S. at 256 (internal quotations omitted). An exempt worker “need not work in the transportation industry,” but “must at least play a direct and necessary role in the free flow of goods across borders.” Id. (internal quotations omitted). “These requirements ‘undermine[ ] any attempt to give [Section 1] a sweeping, open-ended construction,’ instead limiting [Section 1] to its appropriately ‘narrow’ scope.” Bissonnette, 601 U.S. at 256 (quoting Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 118 (2001)). In determining whether a worker is exempt, courts focus on the work performed by the worker, not the industry of the worker's employer or the work performed by the employer. Id. at 253–54.

a. Moock's Affidavit Testimony

The Moock Parties submitted numerous exhibits in opposition to the Motion to Compel Arbitration, including an affidavit of Clay Moock where he testified regarding his work duties. At the time of the occurrence made the basis of this suit, Moock was working as an environmental specialist. According to Moock, environmental specialists for a pipeline company interface, coordinate, and collaborate with other field operations, engineering, regulatory, safety, legal, and construction personnel to ensure compliance with all federal and state environmental requirements and programs to ensure oil and gas is transported and flows through pipelines, whether that be when a pipeline comes on-line and is ready to begin flowing or restoring flow when a disruption has occurred. Thus, as an environmental specialist Moock worked to ensure that the pipeline complied with applicable environmental requirements. We presume for the purposes of our analysis that the pipelines involved in Moock's work were instrumentalities of interstate commerce that transported natural gas across state lines.

Moock states that the central features of an environmental specialist's job duties include: (1) visiting and inspecting sites; (2) assessing and evaluating soil, groundwater, sediment and surface water site data; (3) administering and conducting activities for soil and groundwater remediation projects; (4) supervising and directing contractors, subcontractors, and field personnel; (5) overseeing contracts and budgets for remediation projects; (6) conducting verification sampling to assess progress of site cleanups and analyze data; (7) directing waste management needs; (8) decommissioning of structures and equipment; and (9) ensuring environmental compliance with all of the operating permits, both state and federal, without which the pipeline cannot operate.

Moock states in his affidavit that the performance of his job duties involved actively controlling, working with, and handling regulated materials in transmission pipelines and that this includes Moock being notified of leaks in transmission pipelines. Moock does not explain how his duties involved controlling, working with, or handling materials inside transmission pipelines. His statement that his duties involved actively controlling, working with, and handling regulated materials in transmission pipelines is a conclusory statement that is incompetent to raise a fact issue. See In re Pham, 314 S.W.3d at 527. Moock states that a leak of any size interrupts the free flow of gas inside the pipeline, prevents it from reaching its intended destination, and creates environmental issues that require remediation. According to Moock in most cases in which there is a leak in a pipeline the pipeline will have to be shut down to facilitate repairs.

Moock testified that, at times, in the event of an active gas leak, he would receive direct notification from the field or a notification from the gas control department and that he was on a schedule to be “on call” to be available for conference calls and interface with: (1) the pipeline safety group; (2) the environmental group; and (3) the operations and gas control group, to determine whether the pipeline needed to be shut down in the event of a leak. According to Moock these leak-related conference calls involved discussion of the ongoing leak and issues such as (1) the time the leak started; (2) the location of the leak; (3) status of containment—whether the leak had already been contained; (4) if not, the pressure on the line and whether the leak needed to be shut off upstream from where it was leaking; (5) what products were involved in the leak; (6) the estimated volume of the leak (gas or liquid); (7) the proximity of the leak to water bodies and whether the leak was already, or at risk of, entering a creek or other body of water; and (8) the identity of nearby landowners. Moock also stated that for job duties concerning leaks, he was directly engaged in restoring the interrupted flow of product, and he was necessary to the continued flow and transportation of natural gas. This statement is conclusory and is incompetent to raise a fact issue. See In re Pham, 314 S.W.3d at 527.

Moock stated that his job duties included responding to and managing releases to air, land, and water of regulated materials, which sometimes resulted from interstate pipeline operations. Moock claims that the regulated materials he handled included salt water, natural gas, condensate, and solid waste, all of which were generated by or were by-products of the operation of interstate transmission pipelines.

Moock testified that in the event of an active leak, he was responsible for determining if the release was of a reportable quantity and providing notification to state and federal agencies as well as affected property owners. Moock stated that he was responsible for (1) “interfacing with the regulated materials at the leak site,” (2) conducting environmental-impact assessments, and (3) “interfacing with the leak site to determine whether remediation activities were necessary for the restoration of flow of regulated materials.” According to Moock (1) these remediation activities might include shutting down the pipeline until repairs are completed; and (2) under the “Louisiana State Police Policy,” any leak of flammable gas is considered a reportable event and is classified as an emergency situation that may require the shut-down of the flow of gas to facilitate repairs. Moock stated that a pipeline must be in compliance with environmental regulations to operate. Moock testified that he was responsible for “coordinating management of the regulated materials that had emitted from inside the pipelines which are being transported and shipped interstate, including the contaminated materials resulting from pipeline leaks.” Moock asserted that these remediation measures “would permit the flow of gas/regulated materials to begin running again.”

Moock stated that to sample regulated materials that come out of the pipeline, he would physically visit the site of the leak to identify the extent of the leak, take samples, and determine necessary remediation measures. If the leak was large enough, Moock would contact contractors to provide heavy equipment and containerize the waste with any impacted soil, water, or vegetation. If the leak was small enough, Moock would direct and supervise workers to containerize the materials without the need for contractors with heavy equipment. Moock testified that once this waste was containerized he would personally collect composite samples and either drive or ship the samples across state lines to a branch lab office for shipment to Texas for lab testing.

According to Moock under the generally recognized and accepted safety standard commonly referred to as “Stop Work Authority,” which is afforded to all employees at any level, Moock had the authority to halt any job or task related to the transportation, conveyance, or flow of oil and gas through any given pipeline being operated or controlled by his employer when a hazardous situation appears imminent, without fear of retribution, “thereby directly engaging with the flow of such products, especially in an emergency situation involving a reportable event such as a known leak.” The quoted clause is a conclusory statement incompetent to raise a fact issue. See In re Pham, 314 S.W.3d at 527. Moock did not testify that he has ever exercised this stop work authority. In any event such authority does not constitute a significant control over the pipeline, nor does it mean that Moock played a direct and necessary role in the free flow of goods across state borders. See Bissonnette, 601 U.S. at 256; Hanley v. Ill. Cent. R.R. Co., No. 23-30709, 2024 WL 2045728, at *3 (5th Cir. May 8, 2024).

Moock testified that his day-to-day job duties also frequently included the management and disposal of waste and other regulated materials associated with midstream assets involved in transmission pipelines, as well as direct by-products of these regulated materials from within the natural gas transmission pipelines. The waste and other by-products were a result of the gathering and processing activities “directly related to the interstate transport or flow of natural gas.” This quoted clause is a conclusory statement that is incompetent to raise a fact issue. See In re Pham, 314 S.W.3d at 527. According to Moock his duties involved identifying and classifying the regulated materials and by-products as hazardous or non-hazardous and then directing their further handling, disposal, or reuse. Moock says that the removal of these hazardous/non-hazardous by-products may require the shutdown of the pipeline and that without the ability to dispose of this waste, it would be impossible to operate the pipeline.

Moock stated that to perform his job duties, he directly engaged with entities in other states to oversee the testing of these regulated materials, took samples of the materials, and shipped them to a lab in Texas for testing. For example, Moock transported samples by regularly shipping them across state lines to Ana-Lab Corporation in Kilgore, Texas, who would conduct testing of the samples and provide the results back to Moock at his regional office in Louisiana. Depending on the lab results, Moock would determine whether the materials were hazardous or non-hazardous. If the materials were non-hazardous, Moock would direct that the materials be sent to an appropriate landfill. If the materials were hazardous, Moock would contact third-party vendors, such as Safety-Kleen, Inc., to handle the transportation, disposal, or reuse of the hazardous materials.

According to Moock, in addition to management of regulated materials that come out of the pipelines, he also managed regulated materials and by-products that impact the environment during production at the processing plants. Moock states that natural gas is gathered from the ground at the well site and is composed of salt water, hydrocarbons, and other impurities, materials that are gathered and transported to a gas plant for processing. Moock asserts that processing plants are an integral part of the interstate transportation of natural gas through pipelines. Moock testified that pipeline quality gas is produced within the processing plants by removing impurities and undesired hydrocarbons from the raw gas. According to Moock these impurities and undesired materials are separated and stored in tanks and are also collected at drip points along the pipeline. Moock stated that these substances can include oil, condensate, and natural gas liquids. Moock said that his job duties required him to categorize the collected materials at the drip points and processing plants to determine how they would be disposed of or sold to third parties. Moock asserted that his job duties also included the disposal, management, and remediation of any production water that is spilled or otherwise uncontained. If this happens, Moock stated that he is directly involved in shutting off the source of the leak, containing and recovering the regulated materials and impacted areas, and sampling the regulated materials. According to Moock vendors such as Safety-Kleen, Inc. had the following options to address waste by-product from pipelines and processing plants: (1) landfills; (2) incineration; and (3) fuel blending. Moock stated that fuel blending is a form of recycling that allows the waste by-product to be re-introduced into the interstate stream of commerce. Moock stated that this process blends organic solids and sludge into a kiln-ready pumpable slurry, which provides kilns with a green alternative to coal, oil, and other fossil fuels. Moock contends that these services provide an economic and environmentally friendly recycling option for solvent-based liquids, solids, and sludge.

Moock testified that his job duties also included sampling regulated materials, by-products, and waste generated from or coming out of transmission pipelines during and after pigging operations. Moock stated that during pigging operations, natural gas, condensate, and other waste can be released into the environment or mixed with other regulated materials and that the pigged liquids must be separated from the natural gas prior to entering the processing plant compressors and must then be tested, classified, and re-used or disposed of accordingly. Without the ability to move this waste, Moock contends that pigging operations could not occur, and transmission pipelines would not be able to operate efficiently.

Moock testified that his job duties also included conducting surveys or checking for naturally occurring radioactive material (“NORM”) that may develop and accumulate in transmission pipelines as a by-product of the oil and gas transportation, processing, and waste management activities. According to Moock, NORM that accumulates in pipelines and processing equipment becomes a radioactive hazard that must be remedied. Moock asserted that NORM management and disposal is integral to the continued processing and interstate transportation of natural gas through transmission pipelines. Moock did not testify that his job duties included managing or disposing of NORM, just that his job duties included conducting surveys or checking for NORM.

According to Moock his duties also involved identifying and overseeing the specific corrective actions needed for remediation of any leaks and the transportation of hazardous by-product under the Resource Conservation and Recovery Act, laws and regulations mandated by Congress and the Environmental Protection Agency, along with the federal regulations mandated by the Pipeline and Hazardous Materials Safety Administration, which is responsible for regulating the transportation of energy and other hazardous materials.

Moock testified that he performed the duties described in his affidavit in and across multiple states, including Louisiana, Texas, Arkansas, Mississippi, Oklahoma, and Alabama.

b. Boultinghouse-Abshier's Affidavit Testimony

The ET Parties submitted numerous exhibits in support of the Motion to Compel Arbitration, including an affidavit of Stacy Boultinghouse-Abshier (“Boultinghouse”).⁷ In this affidavit Boultinghouse testified that she works as an Environmental Senior Manager for Energy Transfer and that when Moock was working as an Energy Transfer employee, he reported directly to Boultinghouse. According to Boultinghouse, Moock was qualified for his position at Energy Transfer due to his training and experience as a licensed professional geologist. Boultinghouse stated that Moock's primary job function was to manage and coordinate soil and groundwater remediation projects associated with Energy Transfer operations and that Moock also assisted with waste management activities. Boultinghouse said that as an Energy Transfer employee Moock worked on several remediation projects, all of which were site-specific.

Boultinghouse testified that Moock did not do any of the following (1) transport or distribute oil or natural gas products, (2) handle oil or natural gas products before those products entered into a pipeline, (3) handle oil or natural gas products as they flow through a pipeline, or (4) direct or supervise anyone who handles oil or natural gas products before they enter into a pipeline or as they flow through a pipeline. According to Boultinghouse, Moock's day-to-day job responsibilities did not include: (1) physically starting or shutting down a pipeline or processing plant, (2) deciding when or where a pipeline operates, (3) deciding when a pipeline complies with laws applicable to pipeline operations, (4) deciding when to restore service to a pipeline after service is interrupted; (5) deciding where to construct a pipeline or other oil and gas facility; or (6) deciding whether or how to modify a pipeline or other oil and gas facility. Boultinghouse testified that Moock did not direct or supervise anyone who performed the foregoing six tasks. Boultinghouse stated that in his role Moock was not tasked with (1) deciding the grade or quality of oil or natural gas to be placed into pipelines or other oil and gas facilities, (2) deciding whether, when, or how to sell or market the movement of oil or natural gas to Energy Transfer customers or partners, (3) handling oil or natural gas to facilitate their flow through Energy Transfer assets, or (4) receiving or taking custody of oil or natural gas as it flows through Energy Transfer assets. Boultinghouse testified that Moock did not direct or supervise anyone who performed the foregoing four tasks.

According to Boultinghouse the sampling activities described by Moock in his affidavit are required by agency regulations, and environmental specialists such as Moock do not sample, or otherwise handle, free flowing product as it is being placed into a pipeline or as it moves through a pipeline or other facility. Boultinghouse stated that the sampling activities described by Moock occur after oil or natural gas escapes from a pipeline or other facility, when environmental specialists such as Moock collect samples of the impacted areas from a location near or adjacent to the oil and gas infrastructure from which it escaped. Boultinghouse testified that none of the samples are placed back into the pipeline or other facility from which they escaped. Boultinghouse said that the samples are all considered waste and that none of the waste samples are sold by Energy Transfer as part of its oil and natural gas business.

Boultinghouse testified that to the extent a sample is shipped or driven across state lines to a laboratory, it is not for the purpose of placing the sample back into a pipeline or other facility that delivers oil or natural gas to Energy Transfer customers or partners. Rather, the laboratory that receives the sample analyzes it and then disposes of it in accordance with local, state, and federal regulations. Boultinghouse stated that Energy Transfer is in the oil and natural gas midstream business, not in the business of transporting or disposing of environmental waste. According to Boultinghouse, environmental specialists like Moock do not cross state lines for the purpose of transporting oil or natural gas products to Energy Transfer customers or partners.

Boultinghouse stated that to the extent Moock ever collected materials at processing plant drip points, it was not for the purpose of assessing whether the drip point contents were fit for a downstream market. Boultinghouse testified that drip point contents are considered waste and that environmental specialists like Moock do not analyze waste or emissions for the purpose of determining the grade or quality of a product as it flows through Energy Transfer assets.

According to Boultinghouse, environmental specialists never physically shut down or restart a pipeline in connection with a leak; nor do they direct anyone who does. Boultinghouse stated that shut down of a pipeline after a leak does not depend on the permission or opinion of environmental specialists such as Moock, unless the environmental specialist has invoked stop work authority. Anyone working at an Energy Transfer work site, including people not employed by Energy Transfer (such as third-party contractors), can invoke stop work authority. According to Boultinghouse, restarting a pipeline after a leak does not depend on the permission or opinion of environmental specialists such as Moock.

Boultinghouse stated that environmental specialists such as Moock do not perform services for or on behalf of vendors like Safety-Kleen and that such vendors are not engaged by Energy Transfer to place oil or natural gas into a pipeline or to handle oil or natural gas as it moves through a pipeline. According to Boultinghouse, these vendors are engaged to assist with the disposal of hazardous or nonhazardous waste in accordance with applicable agency regulations.

c. Analysis

Almost all cases addressing whether a plaintiff falls within the transportation-worker exemption in Section 1 were decided by a court whose opinions are not binding on this court. The parties have not cited and research has not revealed any cases addressing whether a plaintiff with the same work duties as Moock falls within the transportation-worker exemption.

Although Moock is not a pipeline inspector, we find persuasive the Sain court's conclusion that a class of workers who inspect the physical infrastructure needed for the interstate transportation of oil and gas but does not handle, control, direct, or otherwise directly engage with the flow of those products is not a class of workers that falls within the transportation-worker exemption. See Sain v. TransCanada USA Services, Inc., No. H-22-2921, 2023 WL 417476, at *3–4 (S.D. Tex. Jan 25, 2023). In Whitaker the court found that a class of pipeline inspectors did not fall within the transportation-worker exemption because they did not play a direct role in the free flow of goods across borders. See Whitaker v. Enbridge (U.S.), Inc., 644 F.Supp.3d 355, 359–61 (S.D. Tex. 2022). The Whitaker court made this determination even though the work of this class of pipeline inspectors was necessary for the safe and legal operation of the pipeline and even though the inspectors directly inspected pipelines, thus ensuring the flow of oil and gas by, for example, identifying needed repairs or ensuring legal compliance. See id. at 359. This class of pipeline inspectors did not handle or transport the oil and gas in the pipeline, nor did it have any control over or interfacing with the oil and gas in the pipeline or its flow. See id. We also agree with the Cottrill court that “inspection is not equivalent to transportation.” Cottrill v. MDM Services Corp., No. 8:21-CV-00817-JLS-DFM, 2022 WL 19829437, at *3 (C.D. Cal. Jan. 20, 2022).

Moock's affidavit testimony shows that Moock was an environmental specialist for a pipeline company whose job duties included (1) working with other personnel to ensure compliance with all environmental requirements; (2) responding to pipeline leaks and assessing the environmental impact of the leak and whether remediation activities were needed; (3) working on soil and groundwater remediation projects, including the containment and disposal of materials that had leaked out of the pipeline; (4) managing and disposing of waste and other by-products that were a result of gathering and processing activities; (5) inspecting sites, assessing data regarding soil, groundwater, sediment, and surface water, and conducted verification sampling; (6) managing, remediating, and disposing of any production water that is spilled; (7) sampling waste and by-products generated from transmission pipelines during pigging operations; (8) conducting surveys and checking for NORM; and (9) collecting samples to be carried or shipped across state lines to a lab in Texas for testing.

In Saxon the United States Supreme Court concluded that Southwest Airlines ramp supervisors, who frequently physically load and unload cargo on and off planes traveling in interstate commerce, belong to a class of workers who play a direct and necessary role in the free flow of goods across borders and who are actively engaged in the transportation of those goods across borders via the channels of foreign or interstate commerce, therefore falling within the transportation-worker exemption. See Southwest Airlines Co. v. Saxon, 596 U.S. 450, 455–59 (2022). Moock does not belong to a class of workers who physically load and unload goods on and off vehicles traveling in interstate commerce; therefore the Saxon holding is not on point in today's case. See id.; Whitaker, 644 F.Supp.3d at 359 (distinguishing Saxon).

Considering all of the evidence before the trial court in the light most favorable to the challenged finding and indulging every reasonable inference that would support it, crediting favorable evidence if a reasonable factfinder could and disregarding contrary evidence unless a reasonable factfinder could not, the evidence would not enable reasonable and fair-minded people to find (1) that Moock was “actively engaged in the transportation of goods across borders via the channels of foreign or interstate commerce” and played “a direct and necessary role in the free flow of goods across borders” or (2) that Moock was a member of a class of workers who were “actively engaged in the transportation of goods across borders via the channels of foreign or interstate commerce” and played “a direct and necessary role in the free flow of goods across borders.” Bissonnette, 601 U.S. at 256 (internal quotations omitted); see City of Keller, 168 S.W.3d at 823, 827; Sain, 2023 WL 417476, at *3–4; Whitaker, 644 F.Supp.3d at 359–61; Cottrill, 2022 WL 19829437, at *3.

The Moock Parties suggest that we apply the factors from the Lenz case as part of the legal standard for determining whether the trial court erred in impliedly finding that Moock falls within the transportation-worker exemption. See Lenz v. Yellow Transp., Inc., 431 F.3d 348, 352 (8th Cir. 2005). In Lenz the United States Court of Appeals for the Eighth Circuit synthesized various analytical factors used by other courts to arrive at a list of non-exclusive factors for courts to evaluate in determining whether a person is a transportation worker exempt from application of the FAA. See id. Notably, these factors are different from the legal standard that the United States Supreme Court articulated for this analysis after Lenz was decided. See Bissonnette, 601 U.S. at 256; Saxon, 596 U.S. at 458. Although the district court in Bissonnette cited the Lenz factors and applied some of them, the United States Supreme Court did not cite Lenz or include the Lenz factors in its legal standard. Compare Bissonnette, 601 U.S. at 256, with Bissonnette v. LePage Bakeries Park St., LLC, 460 F.Supp.3d 191, 198–202 (D. Conn. 2020), affirmed, 49 F.4th 655, 658 (2d Cir. 2022), vacated and remanded, 601 U.S. 246, 256 (2024). The courts in Whitaker, Sain, and Cottrill did not apply the Lenz factors. Although the Eighth Court of Appeals recently has applied the Lenz factors, we conclude that we are bound by precedent from the United States Supreme Court not to do so. See Bissonnette, 601 U.S. at 253–56; Saxon, 596 U.S. at 453–59; Rush Truck Centers of Texas, L.P. v. Mendoza, 676 S.W.3d 821, 841–44 (Tex. App.—El Paso 2023, pet. denied).

The Moock Parties rely on several cases from courts whose opinions are not binding on us. See Palcko v. Airborne Express, Inc., 372 F.3d 588, 592–94 (3rd Cir. 2004); Wirtz v. B.B. Saxon Co., 365 F.2d 457, 461 (5th Cir. 1966); Gabay v. Roadway\ Movers, Inc., 671 F.Supp.3d 371, 383–87 (S.D. N.Y. 2023); Lopez v. Aircraft Serv. Int'l, Inc., No. CV 21-7108-DMG, 2022 WL 18232726, at *2–3 (C.D. Cal. Dec. 9, 2022), aff'd, 107 F.4th 1096 (9th Cir. 2024); Zamora v. Swift Transp. Corp., No. EP–07–CA–00400–KC, 2008 WL 2369769, at *4–9 (W.D. Tex. 2008), aff'd, 319 Fed. Appx. 333 (5th Cir. 2009); Western Dairy Transp., LLC v. Vasquez, 457 S.W.3d 458, 464–67 (Tex. App.—El Paso 2014, no pet.). None of these cases persuade us that the evidence in today's case is legally sufficient to support a finding that Moock falls within the transportation-worker exemption.

We conclude that the evidence is legally insufficient to support the trial court's implied finding that Moock falls within the transportation-worker exemption under Section 1, and the trial court abused its discretion to the extent it found that Moock falls within this exemption or concluded that the FAA does not apply to the Agreement.⁸ See Bissonnette, 601 U.S. at 256; Sain, 2023 WL 417476, at *3–4; Whitaker, 644 F.Supp.3d at 359–61; Cottrill, 2022 WL 19829437, at *3; In re Pham, 314 S.W.3d at 526. The FAA applies to the Agreement. See In re Pham, 314 S.W.3d at 526.

4. The Law Applicable to Arbitration Agreements Containing Delegation Provisions

Arbitrators are competent to decide any legal or factual dispute the parties agree to arbitrate. RSL Funding, LLC v. Newsome, 569 S.W.3d 116, 121 (Tex. 2018). Generally, a court may consider an arbitration agreement's terms to decide which issues must be arbitrated. See id. But parties have a right to contract as they see fit, and they may agree to a delegation provision that clearly and unmistakably delegates to the arbitrator, rather than the courts, the determination of disputes over one or more of the arbitrability issues, such as the validity, scope, or enforceability of the arbitration agreement. See TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694, 702, 718–19 (Tex. 2023); RSL Funding, 569 S.W.3d at 121; Amazon.com Services, LLC, 2024 WL 3941376, at *8.

Thus, a dispute over whether parties agreed to resolve their controversies through arbitration often encompasses three distinct disagreements: (1) the merits of the underlying controversy, (2) whether the merits must be resolved through arbitration instead of in the courts, and (3) who (a court or the arbitrator) decides the second question. TotalEnergies E&P USA, Inc., 667 S.W.3d at 701. The second question must be answered before the first, and the third must be answered before the second. Id. The ET Parties assert that the Agreement contains two provisions that delegate to the arbitrator the determination of arbitrability disputes: a delegation provision in the Agreement's text and a delegation provision in the AAA Employment Rules that is incorporated by reference into the Agreement.

When faced with an agreement that contains an arbitration provision and a delegation provision, courts have no discretion but to compel arbitration unless a party specifically and successfully challenges the validity or enforceability of the delegation provision on legal or public policy grounds. See TotalEnergies E&P USA, Inc., 667 S.W.3d at 718–19; RSL Funding, 569 S.W.3d at 121. In this situation a court should first determine whether an arbitration agreement was formed ⁹ that contains a provision clearly and unmistakably delegating to the arbitrator the determination of one or more arbitrability issues. See TotalEnergies E&P USA, Inc., 667 S.W.3d at 716; RSL Funding, 569 S.W.3d at 121; In re Morgan Stanley & Co., 293 S.W.3d 182, 187–88 (Tex. 2009). If so, the court should determine whether a successful challenge specific to the delegation provision has been asserted. See RSL Funding, 569 S.W.3d at 121. In deciding the contract-formation issue the court may consider defenses to contract formation such as whether a signor had authority to bind a principal or whether the signor had the capacity to assent. See id. at 124; In re Morgan Stanley & Co., 293 S.W.3d at 186. If an arbitration agreement was formed that contains a provision delegating to the arbitrator the determination of the arbitration agreement's validity and enforceability and if the delegation provision has not been specifically and successfully challenged, then (1) the court must compel arbitration so the arbitrator may decide the arbitrability issues the parties have agreed to arbitrate, as well as the merits of any dispute that the arbitrator determines is arbitrable and (2) the court has no power to rule on challenges to the validity or enforceability of the arbitration agreement. See TotalEnergies E&P USA, Inc., 667 S.W.3d at 709; RSL Funding, 569 S.W.3d at 121, 124–25; In re Morgan Stanley & Co., 293 S.W.3d at 186–88. The Supreme Court of the United States has held that a court must enforce an agreement to delegate arbitrability issues to the arbitrator even if the court thinks that the argument that the arbitration agreement applies to a particular dispute is “wholly groundless.” See Henry Schein, Inc. v. Archer and White Sales, Inc., 586 U.S. 63, 68 (2019); TotalEnergies E&P USA, 667 S.W.3d at 703–04.

5. The Formation of an Arbitration Agreement

We next address the evidence as to whether an arbitration agreement was formed. Under the FAA, ordinary principles of state contract law determine whether an arbitration agreement was formed. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995); In re Rubiola, 334 S.W.3d 220, 224 (Tex. 2011).

To form a contract there must be an offer, acceptance of the offer in strict compliance with its terms, a meeting of the minds, and mutual assent to the terms. See Mid. Continent Cas. Co. v. Glob. Enercom. Mgmt., Inc., 323 S.W.3d 151, 157 (Tex. 2010); Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555–56 (Tex. App.—Houston [14th Dist.] 2002, no pet.). Though evidence of mutual assent in written contracts often consists of signatures of the parties and delivery, signature and delivery are not required for contract formation. See Mid. Continent Cas. Co., 323 S.W.3d at 157. The FAA does not require that arbitration agreements be signed, so long as they are written and agreed to by the parties. In re Polymerica, LLC, 296 S.W.3d 74, 76 (Tex. 2009). Unless the parties explicitly require that a party to an arbitration agreement sign the agreement to manifest the party's assent thereto, a party may manifest its assent to the arbitration agreement by its acts, conduct, or acquiescence in the terms of the agreement, and signing the agreement is not a condition precedent to its enforceability. See Mid. Continent Cas. Co., 323 S.W.3d at 157; GSC Wholesale, LLC v. Young, 654 S.W.3d 558, 563 (Tex. App.—Houston [14th Dist.] 2022, pet. denied).¹⁰

In construing the Agreement, our primary concern is to ascertain and give effect to the intentions of the parties as expressed in the contract. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998); Carter v. Z.B., N.A., 578 S.W.3d 613, 618–19 (Tex. App.—Houston [14th Dist.] 2019, no pet.). To ascertain the parties’ true intentions, we examine the entire agreement in an effort to harmonize and give effect to all provisions of the contract so that none will be rendered meaningless. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 652 (Tex. 1999). Whether an agreement is ambiguous is a question of law for the court. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). An agreement is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation. Id. But, when a written agreement is worded so that it can be given a certain or definite legal meaning or interpretation, it is unambiguous, and the court construes it as a matter of law. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003).

The evidence before the trial court, including the affidavits of Robert M. Kerrigan, III and Christopher Andersen, proved as a matter of law the contents of the Agreement and that Moock signed the Agreement. See Amazon.com Services, LLC, 2024 WL 3941376, at *8–9. Under its plain text the Agreement is between Moock and Moock's “Employer,” a term defined as “the affiliated entity of [Energy Transfer] that employs [Moock] or with whom [Moock is] applying or applied [sic] for a position, on behalf of itself and Energy Transfer.” The undisputed evidence shows that Moock's employer was ET Partners, and thus “Employer” in the Agreement refers to ET Partners, on behalf of itself and Energy Transfer. As used in the Agreement “Partnership” refers to the Employer and Energy Transfer, collectively. The Agreement states that it is the complete agreement of the parties on the subject of arbitration of covered disputes. The Agreement also provides that it is a “stand-alone contractual agreement to arbitrate claims,” and that therefore, any statements in any Partnership handbooks or policies that otherwise disclaim contracts do not apply to the Agreement. The Agreement states in boldface type and all caps that (1) Moock acknowledges that he has carefully read and understands the Agreement and that he agrees to its terms; and (2) Moock understands that the Employer likewise agrees to be bound by the Agreement.

The Agreement states that “[e]xcept as this Agreement otherwise provides, [Energy Transfer and the Employer] and [Moock] mutually consent and agree to the resolution by arbitration of all claims or controversies, past, present, or future, including but not limited to claims arising out of or related to [Moock's] application for employment, employment, and/or the termination of [Moock's] employment, that [Energy Transfer and the Employer have] against [Moock] or that [Moock] may have against: [Energy Transfer and the Employer]; their parents, subsidiaries and affiliates; ․ each and all of which can enforce this Agreement as direct or third-party beneficiaries.” The Agreement provides that it applies to claims based upon or related to fraud, negligence, tort claims, and all statutory and common law claims, unless specifically excluded in the Agreement.

According to the Agreement the arbitration will be held under the auspices of the AAA and under the AAA Employment Rules. The Agreement provides that unless the parties jointly agree otherwise, the arbitration will take place in or near the city in which Moock was last employed. The evidence shows that this city was Bossier City, Louisiana. Though Moock electronically signed the Agreement, nobody signed the agreement on behalf of the Employer or on behalf of anyone else. The Agreement does not provide a signature block or other space for an individual to sign on behalf of the Employer or any other entity.

For a signature to be the only way to manifest assent to an agreement, the parties must “explicitly require signatures as a condition of mutual assent.” Mid. Continent Cas. Co., 323 S.W.3d at 157; see GSC Wholesale, LLC, 654 S.W.3d at 566. No language in the Agreement says that assent thereto may only be made by signature or that signatures by the parties are a condition precedent to the formation of the agreement. The Agreement also states in boldface type and all caps that Moock understands that the Agreement is a condition of his employment and that even if he does not sign the Agreement, Moock still will be bound by the Agreement if he continues his employment after receiving notice of the Agreement. Thus the plain text of the Agreement provides that assent may be made to the Agreement by conduct, without any signature, by Moock's continued employment after receiving notice of the Agreement. If this court were to construe the Agreement to require a party to sign the agreement for the party to manifest assent to the agreement, this construction would make the foregoing language meaningless. Under the unambiguous language of the Agreement, as a matter of law, the Agreement does not explicitly require a party's signature as a condition of mutual assent. See Mid. Continent Cas. Co., 323 S.W.3d at 157; GSC Wholesale, LLC, 654 S.W.3d at 563–68. Therefore, the Employer's signing of the agreement is not a condition precedent to the agreement's formation, and the Employer may manifest its assent to the Agreement by its conduct. See Mid. Continent Cas. Co., 323 S.W.3d at 157; GSC Wholesale, LLC, 654 S.W.3d at 563–68.

In the absence of a signature on an agreement, a court may look to other evidence to establish a party's assent to the agreement's terms. SK Plymouth, LLC v. Simmons, 605 S.W.3d 706, 718 (Tex. App.—Houston [1st Dist.] 2020, no pet.). A party's intent to be bound by an agreement may be evidenced by its conduct at the time the agreement was drafted and by its subsequent conduct reflecting that it was acting in accordance with the agreement's terms. Id. Courts have considered various actions taken by an employer to determine whether the employer intended to be bound by an arbitration agreement, including the employer's act of drafting the arbitration agreement, its actions in maintaining the agreement as a business record, and its actions in moving to enforce the agreement after the employee filed suit against it. Id.

William Healy, Energy Transfer's Corporate Secretary and Associate General Counsel, testified in his affidavit that (1) Energy Transfer is a publicly traded master limited partnership; (2) Due to its organizational structure, Energy Transfer conducts its business operations through wholly-owned and commonly-controlled subsidiaries; (3) These subsidiaries exist to function solely on behalf and for the benefit of Energy Transfer; (4) ET Partners is a wholly-owned subsidiary of Energy Transfer; and (5) ET Partners is sometimes referred to as an “employing affiliate,” a “payrolling entity,” or a “payroll employer” of Energy Transfer.

Christopher Andersen, Energy Transfer's Director of Talent, testified in two affidavits that (1) Andersen is responsible for overseeing and directing the onboarding process for new Energy Transfer employees; (2) The onboarding process requires new employees to sign and complete certain documents, including the Agreement; (3) These documents, including the Agreement, are electronically signed; (4) Certain onboarding documents, including the Agreement, must be electronically signed and completed before a new hire can complete the onboarding process; and (5) Moock had completed his onboarding paperwork including the Agreement, by December 13, 2021. Andersen testified in a third affidavit in which he authenticated the copy of the Agreement submitted in support of the Motion to Compel Arbitration and proved the Agreement up as a business record of Energy Transfer.

Robert M. Kerrigan, III, Energy Transfer's Senior Vice President of Human Resources and Administration, testified in his affidavit that (1) He has personal knowledge of the preparation of the Agreement that Energy Transfer employees sign upon commencement of employment, whether as a new hire or in connection with a merger or acquisition transaction; (2) New employees of Energy Transfer are required to complete an “onboarding” process which, among other things, involves electronically signing the Agreement through a secure onboarding software program known as Taleo; (3) Kerrigan is aware that Moock electronically signed the Agreement through the Taleo platform on December 3, 2021; (4) The Agreement, signed by Moock, was part of Moock's personnel file; (5) Energy Transfer's subsidiaries include what Kerrigan refers to as “employing affiliates,” “payrolling entities,” or “payroll employers,” which are interchangeable terms; (6) ET Partners is Moock's “payroll employer” and is the employing affiliate entity through which Moock would receive payment for his work; and (7) Employing affiliates operate solely on behalf of and for the benefit of Energy Transfer.

In the trial court, the Moock Parties asserted that the Agreement is “a prepared standard contract.” An offer was made to Moock when the Agreement was presented to him, and he accepted that offer in strict compliance with the terms of the offer and manifested his unconditional assent to the Agreement's terms by signing it. In the Agreement Moock stated, “I UNDERSTAND THAT MY EMPLOYER LIKEWISE AGREES TO BE BOUND BY THE ARBITRATION AGREEMENT.” Under the plain text of the Agreement and the undisputed evidence, “Employer” in the Agreement refers to ET Partners, on behalf of itself and Energy Transfer, and the term “Partnership” in the Agreement refers to ET Partners and Energy Transfer. In the Agreement the arbitration agreement is made by Moock and the Partnership. Because ET Partners acted for itself and for Energy Transfer in entering into the Agreement, the parties to the Agreement are Moock, Energy Transfer, and ET Partners. In the Agreement the Partnership and Moock agree that their mutual obligations to arbitrate disputes provide consideration for the Agreement. The undisputed evidence shows that the Agreement was a condition of Moock's employment and that after he completed the onboarding process Moock was employed by ET Partners. The undisputed evidence shows that the form of the Agreement was a standard form used by Energy Transfer, and that that the Agreement, signed by Moock, was part of Moock's personnel file and was maintained by Energy Transfer as a business record. The Moock Parties did not sue ET Partners in this case, so ET Partners had no reason to seek to compel arbitration. The Moock Parties did sue Energy Transfer, which moved to compel arbitration under the Agreement twenty-five days after filing its original answer. The evidence proves as a matter of law that Energy Transfer and ET Partners unconditionally assented to the Agreement's terms and that the Agreement was formed by a meeting of the minds among Moock, Energy Transfer, and ET Partners. See Bradford v. Brident Dental Servs., No. H-23-3460, 2024 WL 1839458, at *5–7 (S. D. Tex. Apr. 26, 2024); SK Plymouth, LLC, 605 S.W.3d at 718–20. The evidence proves as a matter of law that an arbitration agreement—the Agreement—was formed and that Moock, ET Partners, and Energy Transfer are parties to the Agreement. See Bradford, 2024 WL 1839458, at *5–7; Mid. Continent Cas. Co., 323 S.W.3d at 157; In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 676 (Tex. 2006); Amazon.com Services, LLC, 2024 WL 3941376, at *9; GSC Wholesale, LLC, 654 S.W.3d at 563–68; SK Plymouth, LLC, 605 S.W.3d at 718–20.

6. Clear and Unmistakable Agreement to Arbitrate Arbitrability Issues

We next address whether the Agreement contains a clear and unmistakable agreement to arbitrate arbitrability issues. For the most part, the determination of whether parties have agreed to delegate arbitrability issues to an arbitrator is governed by “ordinary state-law principles that govern the formation of contracts.” TotalEnergies E&P USA, Inc., LLC, 667 S.W.3d at 702 (quoting First Options of Chicago, Inc., 514 U.S. at 944). But because parties often might not realize the significance of having arbitrators decide the scope of their own powers, and to avoid the risk of requiring parties to arbitrate a dispute they have not agreed to arbitrate, courts will only enforce an agreement to delegate an arbitrability issue to the arbitrator if that agreement is “clear and unmistakable.” TotalEnergies E&P USA, Inc., LLC, 667 S.W.3d at 702.

The Supreme Court of Texas has held that if an arbitration agreement provides that the arbitration shall be administered by the AAA in accordance with the AAA Commercial Rules, then the parties have incorporated the AAA Commercial Rules into their arbitration agreement, and these rules are a part of the parties’ agreement as if they were set forth within the agreement itself. See id. at 709. Absent any conflict between these rules and the rest of the agreement, these rules are binding. See id. A rule providing that “[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim” clearly and unmistakably delegates the determination of arbitrability issues to the arbitrator. See id. at 710–11.

As a general rule, an agreement to arbitrate disputes in accordance with rules providing that the arbitrator shall have the power to determine arbitrability incorporates those rules into the agreement and clearly and unmistakably demonstrates the parties’ intent to delegate arbitrability issues to the arbitrator. See id. at 712. Though the parties may agree to limit their delegation of arbitrability issues to the arbitrator to only certain claims or controversies or to only certain arbitrability issues, limitations on the scope of the arbitration agreement do not limit the delegation of arbitrability issues to the arbitrator. See id. If a provision clearly and unmistakably delegates the determination of the arbitrability of the claims at issue to the arbitrator, the delegation provision is severable from the broader arbitration agreement, and courts must enforce the delegation provision and require the arbitrator to decide whether the parties agreed to arbitrate the claims at issue, unless a party opposing arbitration specifically and successfully challenges the validity or enforceability of the delegation provision on legal or public policy grounds. See id. at 718–19; RSL Funding, 569 S.W.3d at 121.

The Arbitration Agreement provides for arbitration administered by the AAA under the AAA Employment Rules. Thus, the AAA Employment Rules were incorporated into the Agreement, and these rules are a part of the Agreement as if they were set forth within the agreement itself. See TotalEnergies E&P USA, Inc., 667 S.W.3d at 709. Rule 1 of the AAA Employment Rules provides:

1. Applicable Rules of Arbitration

The parties shall be deemed to have made these rules a part of their arbitration agreement whenever they have provided for arbitration by the [AAA] or under [the AAA Employment Rules] or for arbitration by the AAA of an employment dispute without specifying particular rules ․ These rules, and any amendment of them, shall apply in the form in effect at the time the demand for arbitration or submission is received by the AAA.

Am. Arb. Ass'n, Employment Arbitration Rules, 10 (Jan. 1, 2023), http://adr.org/sites/default/files/EmploymentRules_Web_3.pdf (last accessed May 21, 2025).

Rule 6 of the AAA Employment Rules provides:

6. Jurisdiction

a. The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement.

b. The arbitrator shall have the power to determine the existence or validity of a contract of which an arbitration clause forms a part․

Id. at 12. The language of Rule 6 of the AAA Employment Rules is substantially similar to the language of Rule 7(a) of the AAA Commercial Rules applied by the TotalEnergies court. See TotalEnergies E&P USA, Inc., 667 S.W.3d at 700. The parties to the Agreement incorporated the AAA Employment Rules into the Agreement, and these rules are a part of the Agreement as if they were set forth within the agreement itself. See id. at 709. Rule 6 does not conflict with the rest of the Agreement and is binding. See id. Rule 6 clearly and unmistakably delegates the determination of arbitrability issues to the arbitrator. See id. at 710–11. In addition the Agreement contains a delegation provision that clearly and unmistakably delegates the determination of arbitrability issues to the arbitrator: “The Arbitrator—and not any federal, state, or local court or agency—will have exclusive authority to resolve any dispute relating to the interpretation, applicability, scope, alleged waiver, enforceability, or formation of this Agreement” (“Delegation Provision”).¹¹ Under the unambiguous language of the Agreement, the parties did not agree to limit their delegation of arbitrability issues to the arbitrator to only certain claims or to only certain arbitrability issues. Instead under Rule 6 and the Delegation Provision, the parties agreed to arbitrate any dispute with respect to the scope or validity of the Agreement and any dispute relating to the applicability, scope, alleged waiver, or enforceability of the Agreement (collectively “Arbitrability Disputes”). The Agreement clearly and unmistakably delegates the determination of the arbitrability of Moock's claims to the arbitrator, and Rule 6 and the Delegation Provision are severable from the broader arbitration agreement. See id. at 718–19. Because Moock has not asserted any challenge to the validity of Rule 6 itself or to the Delegation Provision itself, courts must enforce Rule 6 and the Delegation Provision and require the arbitrator to decide the Arbitrability Disputes. See id.

7. Enforcement of the Agreement by Non-Signatories

The Moock Parties have not sued ET Partners, and that company has not sought to compel arbitration. Each of the ET Parties is a non-signatory to the Agreement. We concluded above that under principles of contract law the evidence proves as a matter of law that the Agreement was formed and that Moock, ET Partners, and Energy Transfer are parties to the Agreement. Thus, Energy Transfer may seek to enforce the Agreement as a party. See GSC Wholesale, LLC, 654 S.W.3d at 568–70. An issue remains as to whether Enable and Enable GP may compel arbitration of Moock's claims against them. We presume that under the Jody James Farm case, neither Rule 6 nor the Delegation Provision delegates to the arbitrator the determination as to whether non-signatories may compel arbitration under the Agreement. See Jody James Farms, JV v. Altman Group, Inc., 547 S.W.3d 624, 631–33 (Tex. 2018). An obligation to arbitrate not only attaches to one who has personally signed the written arbitration agreement but may also bind a non-signatory under principles of contract law and agency. In re Rubiola, 334 S.W.3d at 224. The question of who is bound by an arbitration agreement is a function of the intent of the parties, as expressed in the terms of the arbitration agreement. Id. Here, the question is not whether a non-signatory may be compelled to arbitrate, but rather whether a non-signatory may compel arbitration of the claims asserted against it by a party to the arbitration agreement. One situation in which a non-signatory may be able to compel arbitration is if the non-signatory is a third-party beneficiary of the arbitration agreement. See In re Palm Harbor Homes, Inc., 195 S.W.3d at 677.

As a general rule, the benefits and burdens of a contract belong solely to the contracting parties, and no person can sue upon a contract unless the person is a party to or in privity with it. See First Bank v. Brummitt, 519 S.W.3d 95, 102 (Tex. 2017). An exception to this general rule permits a person who is not a party to the contract to sue for breach of the contract if the person qualifies as a third-party beneficiary. Id. Absent a statutory or other legal rule to the contrary, a person's status as a third-party beneficiary depends solely on the contracting parties’ intent. Id. Specifically, a person seeking to establish third-party-beneficiary status must demonstrate that the contracting parties “intended to secure a benefit to that third party” and “entered into the contract directly for the third party's benefit.” Id. To create a third-party beneficiary, the contracting parties must have intended to grant the third party the right to be a “claimant” in the event of a breach. Id. To determine whether the contracting parties intended to directly benefit a third party and entered into the contract for that purpose, courts must look solely to the contract's language, construed as a whole. Id. The contract must include “a clear and unequivocal expression of the contracting parties’ intent to directly benefit a third party,” and any implied intent to create a third-party beneficiary is insufficient. Id. at 103.

In the Agreement Energy Transfer is included in the defined term “Partnership.” Therefore, in the Agreement, except as otherwise provided therein, Energy Transfer and Moock agree to the resolution by arbitration of all claims or controversies, past, present, or future, including but not limited to claims arising out of or related to Moock's employment, that Energy Transfer has against Moock or that Moock may have against Energy Transfer, and its parents, subsidiaries and affiliates. The Agreement expressly provides that each subsidiary of Energy Transfer “can enforce this Agreement as direct or third-party beneficiaries.” Thus, in addition to agreeing to arbitrate all claims that he has against Energy Transfer and its subsidiaries, Moock also agreed that Energy Transfer's subsidiaries may enforce the arbitration agreement as third-party beneficiaries. The evidence proved as a matter of law that Enable and Enable GP are subsidiaries of Energy Transfer. Thus, Enable and Enable GP are each a third-party beneficiary of the Agreement entitled to enforce the Agreement. See In re Palm Harbor Homes, Inc., 195 S.W.3d at 677; ConocoPhillips Co. v. Graham, No. 01-11-00503-CV, 2012 WL 1059084, at *3–7 (Tex. App.—Houston [1st Dist.] Mar. 29, 2012, no pet.) (mem. op.).

8. The Moock Parties’ Arguments Against Enforcement of the Agreement

In the trial court the Moock Parties asserted that the trial court should deny the Motion to Compel Arbitration because (1) it would be against the public policy of Louisiana to compel Moock to arbitrate his claims; and (2) Moock's claims against the ET Parties do not fall within the scope of the arbitration agreement.¹² Because the Agreement delegates to the arbitrator the determination of the Arbitrability Disputes, the two points asserted by the Moock Parties are for the arbitrator to determine and do not provide a proper basis for denying the Motion to Compel Arbitration. See TotalEnergies E&P USA, Inc., 667 S.W.3d at 720–21; RSL Funding, LLC, 569 S.W.3d at 125; Guerra v. Garza, 648 S.W.3d 493, 497 (Tex. App.—San Antonio 2021, no pet.).

In the trial court the Moock Parties asserted that the trial court should deny the Motion to Compel Arbitration because the Agreement is unenforceable for the following reasons: (1) the Agreement is unconscionable; (2) the Agreement is illusory; and (3) the Agreement is a “contract of adhesion” under Louisiana law. On appeal the Moock Parties continue to assert that the Agreement is unconscionable and a “contract of adhesion” under Louisiana law. Any dispute as to whether the Agreement is unconscionable or illusory is for the arbitrator to decide. See Arnold v. Homeaway, Inc., 890 F.3d 546, 550–51 (5th Cir. 2018); In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185, 190 (Tex. 2007); Taylor Morrison of Texas, Inc. v. Klein, Nos. 14-20-00520-CV, 14-20-00532-CV, 2021 WL 5459222, at *3 (Tex. App.—Houston [14th Dist.] Nov. 23, 2021, no pet.) (mem. op.); Browne v. Gordon McKernan Injury Attorneys, LLC, 361 So.3d 34, 39–40 (La. Ct. App. 2023); Firstlight Fed. Credit Union v. Loya, 478 S.W.3d 157, 164–65 (Tex. App.—El Paso 2015, no pet.).

Under Louisiana law, a “contract of adhesion” or an “adhesionary contract” is unenforceable. See Aguillard v. Auction Manag. Corp., 908 So.2d 1, 12 (La. 2005). The real issue in a contract-of-adhesion analysis is not the standard form of the contract, but rather whether a party truly consented to all the printed terms. Id. Consent is called into question by the standard form, small print, and most especially the disadvantageous position of the accepting party, which is further emphasized by the potentially unequal bargaining positions of the parties. Id. An unequal bargaining position is evident when the contract unduly burdens one party in comparison to the burdens imposed upon the drafting party and the advantages allowed to that party. Id. Once consent is called into question, the party seeking to invalidate the contract as adhesionary must then demonstrate that the contract is unenforceable because the non-drafting party either did not consent to the terms in dispute or the non-drafting party's consent was vitiated by error. Id. In determining whether an arbitration agreement is a “contract of adhesion” under Louisiana law, courts should focus on four factors: (1) the physical characteristics of the arbitration agreement, including font size; (2) whether the arbitration agreement was distinguished or concealed; (3) the mutuality of the arbitration agreement, in terms of the relative burdens and advantages conferred by the agreement upon each party; and (4) the relative bargaining strength of the parties. See id. at 16–17. The Louisiana Supreme Court has held that a presumption of arbitrability applies when a court determines whether an arbitration agreement is enforceable under a contract-of-adhesion analysis. See id. at 18.

Though the contract-of-adhesion analysis focuses on whether the party that did not draft the standard-form arbitration agreement truly consented to the agreement, the analysis determines the agreement's enforceability, considering factors similar to an unconscionability analysis. See Bennoit v. Global Atlantic Fin. Group, LLC, No. 23-2481, 2023 WL 8375667, at *5 (E.D. La. Oct. 23, 2023) (noting that the factors considered in a contract-of-adhesion analysis are similar to the factors considered in an unconscionability analysis). Because of Rule 6 and the Delegation Provision, any dispute as to whether the Agreement is a “contract of adhesion” is for the arbitrator to decide. See Sierra v. Halliburton Energy Servs., No. 6:17-CV-01002, 2018 WL 4089404, at *5 (W.D. La. Aug. 27, 2018); Browne, 361 So.3d at 39–40.

Because the Agreement delegated the determination of these issues to the arbitrator, the trial court abused its discretion to the extent it denied the Motion to Compel Arbitration based on any of the Moock Parties’ arguments against enforcement of the Agreement addressed in this section II.A.8 of this opinion.

9. Conclusion as to the First Issue

For the reasons stated above the trial court abused its discretion by failing to (1) grant the Motion to Compel Arbitration, (2) enforce Rule 6 and the Delegation Provision, and (3) compel the parties to proceed to arbitration for the arbitrator (a) to determine the Arbitrability Disputes, and (b) to the extent that the arbitrator determines that the Agreement requires arbitration of some or all of Moock's claims, to determine the merits of the claims that the arbitrator concludes are arbitrable. See Yates v. Experian Information Solutions, Inc., No. 3:22-cv-00143, 2023 WL 4747386, at *5 (S.D. Tex. Jul. 25, 2023) (memorandum and recommended ruling), adopted by district court, 2023 WL 5279467, at *1 (S.D. Tex. Aug. 16, 2023); TotalEnergies E&P USA, Inc., 667 S.W.3d at 720–21.¹³ Therefore, we sustain the ET Parties’ first issue.

B. Did the trial court reversibly err in denying the motion to stay contained in the Motion to Compel Arbitration?

In their second issue, the ET Parties assert that the trial court reversibly erred in denying the motion to stay under section 3 of the FAA that they asserted in the Motion to Compel Arbitration. As to an arbitration agreement to which the FAA applies, Texas courts are required to grant stays pending arbitration if section 3 of the FAA so requires. See OptumRx, Inc. v. Advant-Edge Pharmacy, No. 14-23-00236-CV, 2025 WL 1107094, at *9 (Tex. App.—Houston [14th Dist.] Apr. 15, 2025, no pet. h.). The United States Supreme Court has concluded that when a trial court determines that a lawsuit involves a dispute subject to arbitration under the FAA and a party has requested a stay of the court proceeding pending arbitration, section 3 of the FAA requires that the trial court stay the proceeding until arbitration has been had in accordance with the terms of the agreement, as long as the applicant for the stay is not in default in proceeding with the arbitration. See Smith v. Spizzirri, 601 U.S. 472, 477–78 (2024). The trial court should have granted the ET Parties’ motion to compel arbitration. Therefore, under section 3 of the FAA, the trial court was required to stay the proceeding in the trial court until arbitration has been had in accordance with the terms of the Agreement, as long as the ET Parties are not in default in proceeding with the arbitration. See id. The trial court reversibly erred in denying the ET Parties’ request for a stay under section 3 of the FAA and in failing to grant the stay required under that section. See id. To the extent the ET Parties assert that the trial court so erred in their second issue, we sustain the second issue.¹⁴

III. Conclusion

The Agreement provides that it is governed by the FAA and that the Agreement evidences a transaction involving commerce. Therefore the FAA applies to the Agreement, and the ET Parties are not required to establish that the transaction at issue involves or affects interstate commerce. We presume, without deciding, that this provision still allows the Moock Parties to prove that the FAA does not apply to the Agreement because Moock falls within the transportation-worker exemption in Section 1. Considering all of the evidence before the trial court in the light most favorable to the challenged finding and indulging every reasonable inference that would support it, crediting favorable evidence if a reasonable factfinder could and disregarding contrary evidence unless a reasonable factfinder could not, the evidence would not enable reasonable and fair-minded people to find (1) that Moock was “actively engaged in the transportation of goods across borders via the channels of foreign or interstate commerce” and played “a direct and necessary role in the free flow of goods across borders” or (2) that Moock was a member of a class of workers who were “actively engaged in the transportation of goods across borders via the channels of foreign or interstate commerce” and played “a direct and necessary role in the free flow of goods across borders.” Under the applicable legal standard we conclude that the evidence is legally insufficient to support the trial court's implied finding that Moock falls within the transportation-worker exemption under Section 1, and the trial court abused its discretion to the extent it found that Moock falls within this exemption or concluded that the FAA does not apply to the Agreement.

The evidence proves as a matter of law that an arbitration agreement—the Agreement—was formed and that Moock, ET Partners, and Energy Transfer are parties to the Agreement. The Agreement clearly and unmistakably delegates the determination of the Arbitrability Disputes to the arbitrator, and Rule 6 and the Delegation Provision are severable from the broader arbitration agreement. Because Moock has not asserted any challenge to the validity of Rule 6 itself or to the Delegation Provision itself, courts must enforce Rule 6 and the Delegation Provision and require the arbitrator to decide the Arbitrability Disputes. Enable and Enable GP are each a third-party beneficiary of the Agreement entitled to enforce it, and Energy Transfer is entitled to enforce the Agreement as a party thereto.

Because the Agreement delegated the determination of these issues to the arbitrator, the trial court abused its discretion to the extent it denied the Motion to Compel Arbitration based on any of Moock's arguments against enforcement of the Agreement addressed in section II.A.8. of this opinion.

The trial court reversibly erred in denying the ET Parties’ request for a stay under section 3 of the FAA and in failing to stay the proceeding in the trial court until arbitration has been had in accordance with the terms of the Agreement, as long as the ET Parties are not in default in proceeding with the arbitration.

We reverse the trial court's order and remand with instructions to the trial court to issue an order (1) granting the Motion to Compel Arbitration, (2) compelling the parties to proceed to arbitration before the AAA in or near Bossier City, Louisiana, (3) requiring the arbitrator (a) to determine the Arbitrability Disputes, and (b) to the extent that the arbitrator determines that the Agreement requires arbitration of some or all of Clay Moock's claims, to determine the merits of the claims that the arbitrator concludes are arbitrable; and (4) staying the proceeding in the trial court until arbitration has been had in accordance with the terms of the Agreement, as long as the ET Parties are not in default in proceeding with the arbitration.

FOOTNOTES

1.   ET Partners is not a party in this litigation.

2.   See 9 U.S.C. § 1, et seq.

3.   See Tex. Civ. Prac. & Rem. Code Ann. § 171.001, et seq.

4.   See La. R.S. Ann. 9:4201, et seq.

5.   See La. R.S. Ann. 9:4216.

6.   In their argument as to this last point, the ET Parties request, to the extent necessary, that this court treat their appellate brief as a mandamus petition.

7.   The Moock Parties filed objections to Boultinghouse's affidavit in the trial court, but they did not obtain a ruling on any of these objections. Therefore, the Moock Parties waived all objections to the form of the affidavit. See New AAA Apartment Plumbers, Inc. v. DPMC-Briarcliff, L.P., No. 14–05–00485–CV, 2006 WL 2827275, at *2 (Tex. App.—Houston [14th Dist.] 2006, no pet.) (mem. op.).

8.   We need not address the ET Parties’ arguments that (1) if the FAA does not apply of its own force, the FAA still applies based on the parties’ agreement that the FAA would apply; (2) if the FAA does not apply to the Agreement, then the TAA applies to the Agreement based on the parties’ agreement that the TAA would apply and notwithstanding the failure of the TAA to apply of its own force under section 171.002 of the TAA; and (3) if the FAA and TAA do not apply to the Agreement by their own force or by the parties’ agreement, arbitration should be compelled under the Louisiana Binding Arbitration Law, Louisiana law, or Texas common law.

9.   A party opposing arbitration may prove that there is no arbitration agreement by proving that the agreement containing the arbitration provision at issue was not formed. In re Morgan Stanley & Co., 293 S.W.3d 182, 187–88 (Tex. 2009).

10.   The Agreement does not contain a provision choosing the law of any state. The Moock Parties asserted in the trial court that Louisiana law applies to the issue of the Agreement's enforceability, and apparently to contract-formation issues. In the trial court the Moock Parties cited Louisiana cases on various points. On appeal the Moock Parties argue that the Agreement is a “contract of adhesion” under Louisiana law but do not address Louisiana law regarding contract formation. In the trial court the Moock Parties asserted that Louisiana contract-formation principles require an offer, acceptance, and a meeting of the minds. Texas law also requires these elements. See Lopez, 93 S.W.3d at 555–56. Because no party has established that Louisiana law differs from Texas law on the issue of whether an arbitration agreement was formed, we presume that Louisiana law on this issue is the same as Texas law. See Excess Underwriters at Lloyd's, London v. Frank's Casing Crew & Rental Tools, Inc., 246 S.W.3d 42, 53 (Tex. 2008); In re A.M.P., 368 S.W.3d 842, 848 n.1 (Tex. App.—Houston [14th Dist.] 2012, no pet.). Because of this presumption we need not conduct a conflict-of-laws analysis to determine whether Louisiana law applies to the issue of whether an arbitration agreement was formed.

11.   The Agreement also provides that this delegation provision does not apply to the “Class Action Waiver and/or Collective Action Waiver” in the Agreement. Those waivers are not at issue in today's case.

12.   The Moock Parties argued that Moock's claims against the ET Parties do not fall within the scope of the arbitration agreement because (1) Moock's claims do not arise out of contract and they did not exist when he signed the Agreement; (2) Moock's claims based on the ET Parties’ alleged intentional, fraudulent, or criminal acts do not fall within the scope of the Arbitration Agreement; and (3) under the ET Parties’ position Moock's claims are workers’ compensation benefit claims that are not covered by the Agreement.

13.   We express no opinion on the merits of the parties’ claims or on whether the arbitrator or the courts must resolve them.

14.   In part of their second issue the ET Parties assert that the trial court reversibly erred in compelling them to respond to expansive arbitration-related discovery. Based on this court's prior ruling in the mandamus action filed by the ET Parties regarding this discovery and based on our determination that the trial court abused its discretion in denying the Motion to Compel Arbitration, we conclude that this part of the second issue is moot.

Randy Wilson, Justice