United States Court of AppealsFifth Circuit

F I L E DApril 18, 2006

Charles R. Fulbruge IIIClerk

In the

United States Court of Appealsfor the Fifth Circuit

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m 05-10510Summary Calendar_______________

HANSON BUILDING MATERIALS AMERICA, INC.,AND

HANSON AUSTRALIA PTY LIMITED,

Plaintiffs-Appellants,

VERSUS

JOEL PENNINGTON,

Defendant-Appellee.

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Appeal from the United States District Courtfor 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”) appealan order compelling arbitration ofa lawsuit against Joel Pennington. We affirm.

I.Pennington is a former employee of Han-

son’s. From 1999 to 2001 Pennington wasstationed in Australia, during which time Han-son paid Pennington’s foreign income taxesunder 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 arbitrationclause.1

Hanson later sued Pennington under the taxequalization policy for the return of foreign taxrefunds that were paid to Pennington. Pen-nington counterclaimed for breach of theSeparation Agreement.

Eachpartymoved for compelled arbitrationof the claim against it pursuant to the Separa-

tion Agreement’s arbitration provision. Thedistrict court issued an order dismissing andcompelling arbitration of both claims. Thecourt determined that Pennington’s counter-claim for breach of the Separation Agreementwas plainlygoverned by the Separation Agree-ment and therefore subject to arbitration. Thecourt further held that Hanson’s claim underthe tax equalization policy was subject to thearbitration provisions of the SeparationAgreement because the Separation Agreementsuperseded the tax equalization policy. Thecourt relied on the following language fromparagraph 14 of the Separation Agreement:

Employee (Pennington) fully understands and acknowledges that this Agree-ment . . . constitutes the full resolutionand satisfaction of all duties and obliga-tions owed by the Company (Hanson)and supersedes any other agreement,whether express or implied, regarding theterms 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 offoreign tax refunds under the tax equalizationpolicy is not covered by the Separation Agree-ment and therefore is not subject to arbitration.Hanson argues that the Separation Agreementdid not supersede the tax equalization policy.

II.We review de novo the district court’s

grant of a motion to dismiss and to compelarbitration. Pennzoil Exploration &Prod. Co.v. Ramco Energy Ltd., 139 F.3d 1061, 1065(5th Cir.1998). “A party cannot be required tosubmit to arbitration any dispute which he hasnot agreed so to submit.” United Steelworkersof 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 publishedand is not precedent except under the limited cir-cumstances set forth in 5TH CIR. R. 47.5.4.

1 Paragraph 13 of the Separation Agreementstates as follows: “In the event of any dispute un-der the provision [sic] of this Agreement other thana dispute in which the primary relief sought is anequitable remedy such as an injunction, the Partiesshall 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 thedispute in question falls within the scope ofthat arbitration agreement. PaineWebber Inc.v. Chase Manhattan Private Bank (Switzer-land), 260 F.3d 453, 462 (5th Cir. 2001). “Indoing so, we must bear in mind the strong fed-eral policy favoring arbitration and resolve anyambiguity as to the availability of arbitration infavor of arbitration.” Id.

The parties agree that the SeparationAgreement contains a valid arbitration clausecovering all disputes under the SeparationAgreement. We must determine, therefore,whether Hanson’s claim under the tax equal-ization policy falls under the SeparationAgreement.

The plain language of paragraph 14 of theSeparation Agreement contains two distinctagreements. First, the parties agreed that theSeparationAgreement “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 SeparationAgreement. Any dispute now arising underthe tax equalization policy is therefore gov-erned by the Separation Agreement and sub-ject to arbitration.

AFFIRMED.