Hanson Building, et al v. Pennington

United States Court of Appeals
Fifth Circuit
F I L E D
April 18, 2006
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 05-10510
Summary Calendar
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HANSON BUILDING MATERIALS AMERICA, INC.,
AND
HANSON AUSTRALIA PTY LIMITED,
Plaintiffs-Appellants,
VERSUS
JOEL PENNINGTON,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Northern District of Texas
m 3:04-CV-1247-N
______________________________

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Before SMITH, GARZA, and PRADO,
Circuit Judges.
PER CURIAM:*
Hanson Building Materials, Inc., and Han-
son Australia PTY Limited (collectively “Han-
son”) appeal an order compelling arbitration of
a lawsuit against Joel Pennington. We affirm.
I.
Pennington is a former employee of Han-
son’s. From 1999 to 2001 Pennington was
stationed in Australia, during which time Han-
son paid Pennington’s foreign income taxes
under a “tax equalization policy.” On termi-
nation of his employment with Hanson, Pen-
nington and Hanson entered into a Confi-
dential Separation Agreement and Full Settle-
ment of Claims (“Separation Agreement”),
which contained a mandatory arbitration
clause.1
Hanson later sued Pennington under the tax
equalization policy for the return of foreign tax
refunds that were paid to Pennington. Pen-
nington counterclaimed for breach of the
Separation Agreement.
Each party moved for compelled arbitration
of the claim against it pursuant to the Separa-
tion Agreement’s arbitration provision. The
district court issued an order dismissing and
compelling arbitration of both claims. The
court determined that Pennington’s counter-
claim for breach of the Separation Agreement
was plainly governed by the Separation Agree-
ment and therefore subject to arbitration. The
court further held that Hanson’s claim under
the tax equalization policy was subject to the
arbitration provisions of the Separation
Agreement because the Separation Agreement
superseded the tax equalization policy. The
court relied on the following language from
paragraph 14 of the Separation Agreement:
Employee (Pennington) fully under
stands and acknowledges that this Agree-
ment . . . constitutes the full resolution
and satisfaction of all duties and obliga-
tions owed by the Company (Hanson)
and supersedes any other agreement,
whether express or implied, regarding the
terms and conditions of his employment.
The parties agree that Pennington’s coun-
terclaim for breach of the Separation Agree-
ment is subject to arbitration. Hanson con-
tends, however, that its claim for the return of
foreign tax refunds under the tax equalization
policy is not covered by the Separation Agree-
ment and therefore is not subject to arbitration.
Hanson argues that the Separation Agreement
did not supersede the tax equalization policy.
II.
We review de novo the district court’s
grant of a motion to dismiss and to compel
arbitration. Pennzoil Exploration &Prod. Co.
v. Ramco Energy Ltd., 139 F.3d 1061, 1065
(5th Cir.1998). “A party cannot be required to
submit to arbitration any dispute which he has
not agreed so to submit.” United Steelworkers
of Am. v. Warrior & Gulf Nav. Co., 363 U.S.
574, 582 (1960). In determining whether the
* Pursuant to 5TH CIR. R. 47.5, the court has de-
termined that this opinion should not be published
and is not precedent except under the limited cir-
cumstances set forth in 5TH CIR. R. 47.5.4.
1 Paragraph 13 of the Separation Agreement
states as follows: “In the event of any dispute un-
der the provision [sic] of this Agreement other than
a dispute in which the primary relief sought is an
equitable remedy such as an injunction, the Parties
shall be required to have the dispute, controversy,
or claim settled by arbitration . . . .”

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parties have agreed to arbitrate, we ask
(1) whether a valid agreement to arbitrate be-
tween the parties exists and (2) whether the
dispute in question falls within the scope of
that arbitration agreement. PaineWebber Inc.
v. Chase Manhattan Private Bank (Switzer-
land), 260 F.3d 453, 462 (5th Cir. 2001). “In
doing so, we must bear in mind the strong fed-
eral policy favoring arbitration and resolve any
ambiguity as to the availability of arbitration in
favor of arbitration.” Id.
The parties agree that the Separation
Agreement contains a valid arbitration clause
covering all disputes under the Separation
Agreement. We must determine, therefore,
whether Hanson’s claim under the tax equal-
ization policy falls under the Separation
Agreement.
The plain language of paragraph 14 of the
Separation Agreement contains two distinct
agreements. First, the parties agreed that the
Separation Agreement “constitutes the full res-
olution and satisfaction of all duties and ob-
ligations owed by the Company.” Second,
they agreed that the Separation Agreement
“supersedes any other agreement, whether ex-
press or implied, regarding the terms and con-
ditions of his (Pennington’s) employment.”
This second agreement is not somehow sub-
sumed by the first, as argued by Hanson.
The tax equalization policy is certainly an
“agreement . . . regarding the terms and condi-
tions of [Pennington’s] employment.” There-
fore, it was superseded by the Separation
Agreement. Any dispute now arising under
the tax equalization policy is therefore gov-
erned by the Separation Agreement and sub-
ject to arbitration.
AFFIRMED.

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