## Facts

- Halliburton implemented a company-wide dispute resolution program requiring arbitration of employment-related disputes.
- Employees received notice that continuing to work would constitute acceptance of the arbitration requirement.
- Employees nevertheless filed employment-related claims against Halliburton in Texas state court.
- Halliburton moved to compel arbitration under the program, but the trial court refused to compel arbitration.
- Halliburton sought mandamus relief from the Supreme Court of Texas to enforce the arbitration agreement.

## Issues

1. Whether employees accepted an arbitration agreement by continuing at-will employment after receiving notice that arbitration was a condition of continued employment.
2. Whether continued at-will employment constitutes sufficient consideration to support an agreement to arbitrate.
3. Whether the arbitration promise was illusory because Halliburton reserved the right to amend or terminate the program.
4. Whether the arbitration agreement was unconscionable due to its presentation or terms.
5. Whether mandamus relief was available to correct the trial court’s refusal to compel arbitration.

## Decision

- The Supreme Court of Texas conditionally granted mandamus relief and directed the trial court to compel arbitration.
- The court held the arbitration agreement was formed because employees accepted the terms by continuing to work after receiving notice.
- The court held continued at-will employment supplied sufficient consideration for the arbitration agreement.
- The court held Halliburton’s promise to arbitrate was not illusory because any right to amend or terminate operated prospectively and did not permit avoidance of arbitration for accrued or pending disputes.
- The court rejected the unconscionability challenge due to a lack of proof of specific procedural or substantive unfairness.
- The trial court’s refusal to compel arbitration was a clear abuse of discretion, and appeal was an inadequate remedy.

## Legal Principles

- Arbitration agreements are enforced under ordinary contract principles; assent may be shown by continued performance after notice of new terms in an at-will employment relationship.
- Continued at-will employment can constitute consideration supporting an agreement to arbitrate when the employer conditions ongoing employment on the new term and the employee continues working with notice.
- An arbitration agreement is illusory and unenforceable if one party retains an unrestricted unilateral right to alter or withdraw from arbitration obligations as to existing or accrued disputes; a prospective-only modification/termination power with notice does not render the promise illusory.
- An arbitration clause is not unconscionable merely because it is imposed as a condition of employment; the resisting party must show specific procedural or substantive unconscionability.
- Mandamus may issue to enforce a valid arbitration agreement when a trial court clearly abuses its discretion by denying arbitration and the benefits of arbitration would be substantially lost if parties are forced to litigate before appeal.

## Conclusion

The Supreme Court of Texas enforced Halliburton’s employment arbitration program, holding that employees accepted the agreement by continuing work after notice, the agreement was supported by consideration and not illusory, unconscionability was not shown, and mandamus was the proper remedy to compel arbitration.


In re Halliburton Co., 80 S.W.3d 566 (Tex. 2002)