A federal district court in Texas has compelled arbitration of a former employee's intentional tort and statutory claims against Halliburton for incidents allegedly arising while she was employed in Iraq.

In Barker v. Halliburton Co., No. Civ. A. H-07-2677, 2008 WL 276390 (S.D. Tex. Jan. 30, 2008), Halliburton and Barker entered into an employment contract that included an arbitration agreement. Later, Barker alleged that she had been subjected to sexual harassment and other oppressive and abusive working conditions while employed with Halliburton in Iraq.

When Barker returned to the United States, she filed a sexual harassment claim with the Equal Employment Opportunity Commission (EEOC) and filed an arbitration demand with Halliburton. While the EEOC and arbitration proceedings were pending, Barker also filed a civil suit against Halliburton. Halliburton then petitioned the court to compel arbitration of Barker's claims.

The Court first addressed Barker's claim that no valid arbitration agreement existed, based on theories of fraudulent inducement and unconscionability. The Court observed that Barker was alleging fraudulent inducement of the entire contract, which barred the Court from considering the issue under the well-established severability doctrine. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403 (1967).

Furthermore, the Court found that any allegation of fraudulent inducement based on an accusation that Halliburton never intended to enforce the arbitration agreement was contradicted by Halliburton's attempt to enforce the agreement through the instant motion to compel.

The Court also found no evidence of unconscionability in the agreement. While Halliburton did not provide Barker with a copy of the agreement at the time of contracting, Barker was still charged with notice of its contents, including its attendant trial waiver, under controlling Texas law. See In re D. Wilson Const. Co., 196 S.W.2d 774, 781 (Tex. 2006). The Court similarly rejected Barker's adhesion argument, holding that, even if it was a contract of adhesion, such contracts are not per se unconscionable under Texas law.

Next, the Court considered Barker's assertion that her intentional tort and statutory claims fell outside the scope of the arbitration agreement. While the Court agreed that some of the claims asserted were "extra-contractual," this classification did not put those claims outside the scope of the broadly-worded agreement. To the Court, the statutory and intentional tort claims were "entirely based on her employment" and therefore arbitrable.

Barker also attempted to distinguish some of her claims as non-arbitrable because they were based on incidents occurring outside the work environment. Citing Fifth Circuit precedent, the Court held that the distinction between work and leisure time for overseas employees was not clear, and that personal activities in such an environment would "be considered incident to the overseas employment relationship" and therefore within the scope of the arbitration agreement. See O'Keefe v. Pam Am. Airways Inc., 338 F.2d 319, 322 (5th Cir. 1964).