In re Halliburton Company and Brown & Root Energy Services

Summary

The Supreme Court of Texas held that an employer's dispute-resolution program, including mandatory arbitration, validly modified an at-will employment agreement when the employee continued working after receiving unequivocal notice of the change. The court rejected challenges based on illusory promises, a heightened knowing-waiver standard for statutory employment claims, and procedural or substantive unconscionability. It conditionally granted mandamus relief compelling arbitration because the employer lacked an adequate remedy by appeal.

Holdings

1. An employer may modify an at-will employment contract by unequivocally notifying the employee of definite changes and obtaining acceptance through the employee's continued work with knowledge of those changes. Myers's continued employment after January 1, 1998, constituted acceptance as a matter of law.
2. The arbitration agreement was supported by consideration and was not illusory merely because the employment relationship remained at will or because Halliburton retained limited authority to amend or terminate the program.
3. No heightened 'knowing agreement to arbitrate' standard is required before an employee may be compelled to arbitrate statutory employment claims; ordinary contract principles govern enforceability.
4. A court may consider both procedural and substantive unconscionability of an arbitration clause when deciding whether to compel arbitration.
5. The arbitration program was not shown to be procedurally or substantively unconscionable.
6. Mandamus relief was appropriate because the trial court should have compelled arbitration and Halliburton had no adequate remedy by appeal.

Questions Presented

1. Whether Halliburton's notice and Myers's continued employment formed an enforceable modification of the at-will employment contract requiring arbitration.
2. Whether Halliburton's promise to arbitrate was illusory because the employer could modify or terminate the dispute-resolution program.
3. Whether an employee must knowingly and specifically agree to arbitrate statutory employment-discrimination claims.
4. Whether the arbitration provision was procedurally or substantively unconscionable.
5. Whether mandamus relief was appropriate to compel arbitration.

Disposition

writ_granted