Flemma v. Halliburton Energy Services, Inc.

Facts

D hired P to work as a cement equipment operator in Louisiana, in January of 1982. During twenty-six years of employment with D, P was promoted several times and worked for the company in Louisiana, Texas, Angola, and New Mexico. P was as district manager in Farmington, New Mexico, where he worked from 2006 until the time of his termination in 2008. P was involved in the consolidation of three Farmington facilities into one suitable facility. Under consideration were Troy King, located within the Farmington city limits, and Crouch Mesa, located outside the city limits. The company preferred the Troy King due to tax incentives offered by the city. P opposed the Troy King facility for various reasons, including concerns about the safety of the general public. P alleged that in August 2006, he and Karl Madden (D), a district sales manager for D received a warning from Richard Montman (D), P's supervisor, that 'if you value your career, you will keep your mouth shut about the Troy King property.' The day after this warning, Rick Grisinger, a Vice President of D, told P to stop making 'negative comments' regarding the Troy King location. P did not heed Grisinger's warning, and in July 2007, P continued to express his concerns when he prepared an executive summary comparing the two locations and reiterating the public safety issues at the Troy King location. In April 2008, Montman gave P the option of signing a resignation, general release, and settlement agreement, as well as accepting twelve weeks of base salary, or being terminated. ZP refused to sign the documents and was terminated. He stated in an affidavit that he was terminated in retaliation for 'not keeping [his] mouth shut' about his concerns related to the Troy King facility. P filed a complaint in district court on December 22, 2008, against Ds for wrongful and retaliatory discharge. D filed a motion to compel arbitration, alleging that P agreed to a binding arbitration provision in the company's Dispute Resolution Program (DRP), which was adopted in 1997. D attached documentary evidence that on four separate occasions, D mailed P materials notifying him that continued employment with the company constituted his acceptance of the terms of the DRP. The first two notifications occurred in December 1997 and spring 1998 while P was working in Texas. The third notification occurred in the summer of 1999 while P was working in Louisiana. The fourth alleged notification occurred in October 2001 while P was again working in Texas. None of the mailings sent to P were returned to D. D claims that P was on notice that he agreed to arbitrate any employment-related disputes by continuing his employment. P claimed he was not bound by the DRP's arbitration provisions because D was required to show that P had actual knowledge of both the employer's offer and its invitation that the offer be accepted by performance. P did not remember seeing, receiving, opening, or reading the DRP material and that his ex-wife may have disposed of it. P argues that the DRP is invalid because D's promise to arbitrate is illusory, as it allows D to amend or terminate the DRP after a claim accrues. The district court denied D's motion to compel arbitration. It stated that the arbitration agreement was unenforceable because under New Mexico law it would be illusory, in that there cannot be a change to the arbitration agreement after a claim accrues. The court also declined to apply Texas law on the basis that Texas law offends New Mexico public policy. The district court reasoned that enforcing an agreement solely on the basis of the mailings without affirmative evidence of acceptance or mutual assent would be contrary to public policy. D appealed. The Court of Appeals reversed the district court. It reasoned that 'the mere differences between Texas and New Mexico in terms of the evidence required to prove acceptance of and assent to an agreement are not sufficient to overcome the place-of-formation rule on public-policy grounds.' P appealed. P argues that New Mexico's requirement of proof of actual knowledge and conscious assent is a reflection of public policy protecting workers from contractual obligations of which they are not aware and to which they never agreed. P argues that D's ability to modify the terms of the arbitration agreement after a claim has accrued, but before an arbitration proceeding has been initiated, renders the arbitration agreement illusory and thereby unenforceable.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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