An Update from Our Firm about COVID-19

Abraham, Watkins, Nichols, Sorrels, Agosto, Aziz & Stogner remains fully operational and committed to serving our clients and colleagues throughout the Coronavirus (COVID-19) crisis. As we follow the CDC guidelines and practice social distancing, we remain available for phone consultations and scheduled in-person meetings with both current and prospective clients and colleagues. Please contact our office by email or by calling 713-222-7211 with any questions. We look forward to hearing from you.

Supreme Court Rules Against Employee

Recently, the Texas Supreme Court ruled that a worker was required to arbitrate her employment discrimination claims against her employer even though she was an "at-will" employee. Normally, an employer cannot take away an employee's rights to bring a claim in the Texas court system unless the agreement to arbitrate has "consideration." That term means that the employer has given value in order to compel arbitration. Here, the employee was an "at-will" employee, and so the employer could fire her at any time for any cause (other than for an illegal reason, such as one based upon age, religion, or race). She therefore argued that the employer gave no consideration to remove her right to pursue a lawsuit. The Supreme Court disagreed.

The Supreme Court's opinion was issued in the case of In re 24R, Inc., d/b/a The Boot Jack, ___ S.W.3d ___ (Tex. 2010)(10/22/10). "Because the arbitration agreement is not illusory," the Supreme Court ordered the trial court to compel arbitration.

"A party seeking to compel arbitration must establish that a valid arbitration agreement exists between the parties. 'The party seeking to avoid arbitration then bears the burden of proving its defenses against enforcing an otherwise valid arbitration provision.'"

Here, the Supreme Court ruled that the arbitration agreement did not lack consideration. "Mutual agreement to arbitrate claims provides sufficient consideration to support an arbitration agreement. At-will employment does not preclude employers and employees from forming subsequent contracts, 'so long as neither party relies on continued employment as consideration for the contract.' 'In the context of stand-alone arbitration agreements, binding promises are required on both sides as they are the only consideration rendered to create a contract.' A promise is illusory if it does not bind the promisor [here, the employer], such as when the promisor retains the option to discontinue performance. When illusory promises are all that support a purported bilateral contract, there is no mutuality of obligation, and therefore, no contract."

"An arbitration clause is not illusory unless one party can avoid its promise to arbitrate by amending the provision or terminating it altogether." Though the employer could change its policy manual, "the arbitration agreement makes no mention of the right to change its terms, nor does it mention or incorporate by reference the employee manual. Documents incorporated into a contract by reference become part of that contract. . . . Express disclaimers in employee handbooks 'negate[] any . . . restriction on the employment at will relationship.'" "The Boot Jack does not retain any right within the arbitration agreement to modify or abolish its terms. . . ." "The arbitration agreement is a stand-alone contract that . . . does not incorporate the employee policy manual."

The bottom line is that the employee cannot pursue her claims in the court system of the State of Texas, and she must instead pay for expensive arbitration.

No Comments

Leave a comment
Comment Information
  • $50+ Million Fire & Explosion

    The firm successfully represented nearly 100 victims who suffered personal injuries and damages to property from a large fire and explosion resulting in a settlement of more than $50 million. The firm served as lead lawyers on the steering committee in this litigation.

  • $80 Million Plant Explosion

    The firm successfully represented 270 plaintiffs, taking a lead role in the plaintiffs’ steering committee, who suffered injuries in a large plant explosion resulting in a settlement of nearly $80 million.

  • $50+ Million Plant Fire & Explosion

    The firm successfully represented 45 personal injury victims in a plant fire and explosion, serving on the plaintiffs steering committee, concluding with a settlement of more than $50 million.

  • $22+ Million Worksite Accident

    The firm prevailed in a personal injury trial for a worksite injury client with the jury returning a verdict and resulting in a judgment of over $22 million for the firm’s client.

  • $12 Million 18-Wheeler Collision

    The firm successfully achieved a $12 million settlement for the family of a man who died in an 18 wheeler collision.

  • $48 Million Catastrophic Burns

    The firm prevailed on behalf of three burn victims with settlements totaling nearly $48 million.

Our Record Of Success

When you are hurt and you choose a law firm to represent you in court or at the negotiation table, you need to carefully consider the firm's record.

Read More Success Stories

Let Us Help You Request a Free Consultation Today

Get Help Now

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Back to top