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Texas: arbitration clauses are binding in employment agreement?

Houston, TX |

Signed an employment agreement: employer says that since I as an employee signed an an agreement to arbitrate all disputes I am not able to sue about overtime pay? Is this generally true in Texas?

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Attorney answers 5

Best Answer

The Texas Arbitration Act (Texas Civil Practices and Remedies Code section 171.001, et seq.) provides the following:
(a) A written agreement to arbitrate is valid and enforceable if the agreement is to arbitrate a controversy that:
(1) exists at the time of the agreement; or
(2) arises between the parties after the date of the agreement.
(b) A party may revoke the agreement only on a ground that exists at law or in equity for the revocation of a contract.

Here is a link to the Arbitration Act:

Except in very limited situations dealing with preemptive federal statutes (such as ERISA), arbitration agreements related to employment are enforceable in Texas. An employee who has signed a valid employment agreement and then tries to initiate litigation relating to the subject matter of the arbitration agreement may have his/her lawsuit dismissed or stayed in favor of compulsory arbitration proceedings.

Your question has been answered as a courtesy. This is not paid legal advice. Nothing in this communication is intended to create an attorney-client relationship. Unless expressly stated otherwise, nothing contained in this message should be construed as a digital or electronic signature, nor is it intended to reflect an intention to make an agreement by electronic means.


Without knowing the exact language of your employment agreement, generally mandatory arbitration provisions are enforceable. This may actually be a good thing for you, because your employer will be limited in how much they can throw their weight around in an arbitration vs. court room setting.

If you are having issues with your employment contract, you might want to schedule an appointment with an employment/labor law attorney in your area.


Thank you for your question! First off, if there is an issue with an employer and overtime wages, you should contact the Texas Workforce Commission and have them do an investigation. As for arbitration, they can certainly move to move it to arbitration. You do not have to initially arbitrate. Contact an Attorney to help you out with this.

Please note that this is not legal advice, nor does it constitute the establishment of an attorney-client relationship. Further, without a full case evaluation, there is no way to provide legal advice about potential outcomes.


Arbitration agreements are widely enforced in Texas. I tell my clients that if they have ever eaten at an Arby's, they can expect to be ordered to arbitrate in Texas. As is the case with every rule, there are exceptions. You may want to consider consulting with an employment law attorney. An arbitration agreement would not bar you from making a complaint to the US Department of Labor Wage and Hour Division. Good luck!


Texas law generally favors arbitration agreements. But even if your claim is subject to an arbitration agreement, you may still bring claims against your employer... you'll just potentially have to do so in arbitration. Depending on the circumstances, it is sometimes advantageous to pursue your claims in arbitration.

I encourage you to seek legal counsel.