In re Halliburton Co

In In re Halliburton Co., 80 S.W.3d 566, 573, 45 Tex. Sup. Ct. J. 720 (Tex. 2002), the employer notified employees of a new alternative dispute resolution program that required both the employer and the employees to submit all employment-related disputes to binding arbitration. Id. at 568. The terms included the employer's right to modify or discontinue the program, but also required the employer to give its employees notice of changes and stated that any amendments would apply only prospectively. Id. at 569-70. The Court upheld the arbitration agreement between Halliburton and its employee. Id. at 570. The Court concluded that the employee's at-will employment status did not render the agreement illusory because Halliburton did not rely on continued employment as consideration for the agreement. Instead, mutual promises to submit all employment disputes to arbitration constituted sufficient consideration, because both parties were bound to the promises to arbitrate. Id. at 569. Halliburton's right to modify or terminate the policy did not allow the employer to avoid its promise to arbitrate because it was limited by express contract provisions. Id. at 569-70. First, the policy stated that any changes only applied prospectively to unknown claims. Id. And second, if Halliburton terminated the policy, such termination required notice and applied to both Halliburton's and the employees' rights. Id. Therefore, Halliburton could not avoid its promise to arbitrate by amending or terminating the dispute resolution program. Id. Because the express terms of the policy provided that both the employee and Halliburton were bound to their promises to arbitrate, we held the agreement was not illusory. Id. at 570. In Halliburton, the Court rejected the argument that the arbitration agreement at issue was illusory because, among other things, it required ten days notice of any modification or termination and stated that any such amendment would apply prospectively only. 80 S.W.3d at 569-70. Thus, the Court held that "Halliburton cannot avoid its promise to arbitrate by amending the provision or terminating it altogether." Id. at 570. The termination provision in this case does not contain similar limitations. Accordingly, we hold that the agreement is ambiguous and must be remanded to the trial court to determine what the parties intended by the clause 'The 'Company' reserves the right to unilaterally abolish or modify any personnel policy without prior notice."