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The Court of Appeals of Texas issued a conditional writ of mandamus ordering a lower court to compel arbitration of an employment dispute.
In D.R. Horton, Inc. v. Brooks, Nos. 14-06-00099-CV, 14-06-00152-CV, 2006 WL 3091457 (Tex.App. Nov. 2, 2006), Brooks attempted to file suit against D.R. Horton, her at-will employer, following Brooks’ termination from employment. D.R. Horton filed a motion to compel arbitration, but the trial court denied the motion without explanation.
On appeal, D.R. Horton argued that the denial of its motion to compel was an abuse of discretion, given the clear language of the arbitration agreement within the “Employee Acknowledgment Form” (EAF). Brooks contended that the arbitration agreement was both illusory and unconscionable, and therefore, unenforceable.
The Court found the arbitration agreement to be valid, and directed the trial court to compel the parties to arbitrate. Arbitration agreements are “illusory” when they lack mutuality of obligation and an employer can avoid its promise to arbitrate. In re Halliburton Co., 80 S.W.3d 566, 568 (Tex. 2002). However, the arbitration agreement in this case was clearly set aside from the Employee Handbook, and D.R. Horton had not reserved any right to unilaterally amend or rescind the arbitration provisions.
As for the unconscionability argument, the Court disagreed with Brooks’ contention that costs of arbitration were prohibitive. D.R. Horton had agreed to pay all costs associated with arbitration, thus alleviating any concerns of substantive unconscionability.
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