Incorporating Arbitration Requirement From One Agreement to Another

by Lionel M. Schooler, FCIArb
Jackson Walker LLP¹

Introduction. In Ford v. ConocoPhillips, _____ F.4th ____, 2025 WL 2602544 (5th Cir. 2025), the United States Court of Appeals for the Fifth Circuit addressed the issue of enforceability of an arbitration clause in an agreement not signed by the claimant. The decision reinforces the significance upon arbitrability of interposing a related arbitration requirement from a separate document.

Background. ConocoPhillips contracted with staffing companies (Bedrock PC and Bedrock Petroleum Consultants) to furnish personnel to perform, among other things, safety consultant work for ConocoPhillips operations. The service providers were thus retained by ConocoPhillips to provide contract staff support. Mr. Ford entered into a “Master Consulting Agreement” (“MCA”) with Bedrock, in an agreement which identified the parties as (among others) “Bedrock, its parent, subsidiaries, partners and affiliates.”

The MCA referred Mr. Ford to the fact that Bedrock was a party to a Master Services Agreement (“MSA”) with a Bedrock “customer.” The MCA specifically recited that if Bedrock hired Mr. Ford, then he was simultaneously agreeing to the terms of the MSA, including all of Bedrock’s obligations and responsibilities to the Customer, pertaining to his work. The MCA further “incorporated by reference” the MSA.

The MSA, in turn, provided that Bedrock was agreeing to provide staffing services through independent contractors, and that Bedrock was taking on the responsibility of paying Mr. Ford for services rendered, which included Bedrock’s obligation to determine whether Mr. Ford was an exempt or nonexempt employee, and correspondingly, to pay (where appropriate) any overtime wages due to Mr. Ford, if any. In undertaking this obligation, Bedrock agreed with ConocoPhillips that it was indemnifying ConocoPhillips against any claim of non-compliance with the federal Fair Labor Standards Act concerning overtime pay.

The MSA further required Bedrock to have Mr. Ford sign an arbitration agreement, an agreement that differed in wording from the arbitration agreement contained in the MSA.

Lawsuit Claim. Mr. Ford subsequently filed suit against ConocoPhillips (but not Bedrock), claiming that he was improperly classified as an independent contractor and therefore was owed unpaid overtime. Bedrock intervened to protect its interests, including the interests represented by the arbitration provisions in the MCA and MSA. Therefore, Bedrock and ConocoPhillips moved to compel arbitration of the claims filed, which the District Court denied.

Issues Presented. The issues presented to the Fifth Circuit were: whether there was an enforceable arbitration agreement, and whether that agreement could be enforced in this case so as to compel arbitration of Mr. Ford’s claim.

The first issue arose because of the Fifth Circuit’s recent decision in Newman v. Plains All American Pipeline, 23 F.4th 393 (5th Cir. 2022). In that case, the Fifth Circuit had held that where a particular entity was not a signatory to an arbitration agreement, and could not qualify as a third party beneficiary of such an agreement, and was not endowed with any particular rights under such an agreement, that entity could not compel arbitration. Though invited to re-visit the Newman decision, the Ford Court declined to do so. Rather, the Court concluded that Newman was distinguishable, both because of the existence of an arbitration agreement between Bedrock and Mr. Ford, and because of the existence of an arbitration agreement in the MSA which had been incorporated into the agreement between Bedrock and Mr. Ford.

In addressing the second issue, the Ford Court focused upon Texas law’s doctrine of document incorporation, which authorizes inclusion of an unsigned document when it is clearly referred to in another writing. In this case, the Court determined that the MCA clearly referred to Mr. Ford’s agreement to the inclusion of the terms of another document, a document explicitly incorporated into the MCA. The Court therefore concluded that even if Mr. Ford was not aware of the contents of the MSA, his failure to request a copy of that document “was at his own risk.”

Conclusion. Because Mr. Ford only filed claims against ConocoPhillips, the Ford Court determined that ConocoPhillips was entitled to enforce the arbitration clause in the MSA as to all the claims against it, irrespective of the potential arbitrability of any potential claims against Bedrock. This decision demonstrates the extent to which contracting parties can incorporate arbitration obligations into agreements, such that a party pursuing a claim against a third party with whom it did not have any signed agreement could nevertheless be bound to arbitrate such a claim against that “non-signatory.”

---

¹ Mr. Schooler is a former member of the Board of the CIArb North America Branch, and the immediate Past Chair of the Texas Chapter.