Opinion ID: 2546327
Heading Depth: 2
Heading Rank: 1

Heading: Coercion and At-Will Employment

Text: Valdez argues that the trial court did not abuse its discretion in granting him a jury trial because he was coerced into signing the Jury Trial Waiver and waiving his right to a jury trial by his supervisor's threat of termination. We disagree. As we explain below, an employer does not coerce an at-will employee by demanding that the employee accept new dispute resolution procedures. It is well established that the at-will employment relationship is governed by specific rules. See Tex. Farm Bureau Mut. Ins. Cos. v. Sears, 84 S.W.3d 604, 608 (Tex.2002) (explaining that in an at-will employment relationship, either party may terminate the employment relationship for any reason or no reason at all); Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 229 (Tex.1986) ([W]hen the employer notifies an employee of changes in employment terms, the employee must accept the new terms or quit.). In In re Halliburton Co., this Court held that it was not procedurally unconscionable to premise continued employment on acceptance of an arbitration plan. 80 S.W.3d 566, 572 (Tex.2002) (orig.proceeding). Halliburton sent notice to its employees that it was adopting a new dispute resolution program and informed them that continued employment would constitute acceptance of the new plan. Id. at 568. An employee continued to work for Halliburton and sued when he was demoted. Id. In holding that the arbitration agreement was not procedurally unconscionable despite the disparity in bargaining power and the employee's inability to negotiate its terms, we reasoned that [b]ecause an employer has a general right under Texas law to discharge an at-will employee, it cannot be unconscionable, without more, merely to premise continued employment on acceptance of new or additional employment terms. Id. at 572; see also Carter v. Countrywide Credit Indus., Inc., 362 F.3d 294, 301 (5th Cir.2004) (citing Halliburton and rejecting the argument that an arbitration agreement was procedurally unconscionable because the employer used its superior bargaining position to coerce potential employees). Valdez argues that the analysis in Halliburton does not apply because arbitration is legislatively and judicially favored. See In re Poly-America, L.P., 262 S.W.3d 337, 348 (Tex.2008) (orig.proceeding) (Texas law has historically favored agreements to resolve [employment] disputes by arbitration.); In re D. Wilson Constr. Co., 196 S.W.3d 774, 782 (Tex.2006) (orig.proceeding) (noting a strong presumption favoring arbitration). Valdez contends that there is no corresponding policy for waivers of jury trial. We disagree. There is no reason to treat the effect of the at-will employment relationship on a waiver of jury trial differently from its effect on an arbitration agreement. See In re Bank of Am., 278 S.W.3d at 344 ([O]ur jurisprudence `should be the same for all similar dispute resolution agreements.' (quoting Prudential, 148 S.W.3d at 134)). Arbitration removes the case from the court system almost altogether, and is every bit as much of a surrender of the right to a jury trial as a contractual jury waiver. Additionally, refusing to allow the enforcement of jury trial waivers in the context of the at-will employment relationship would create a practical problem. Since employers can fire at-will employees for almost any reason, employers could resort to firing all employees when they wanted to implement new dispute resolution procedures and rehiring only those employees who signed the waiver. Applying the analysis in Halliburton to jury trial waivers will discourage such unnecessary firings. An employer's threat to exercise its legal right cannot amount to coercion that invalidates a contract. While the facts set out in Valdez's affidavit may be true, they do not amount to legal coercion since Frank Kent had the legal right to fire Valdez for almost any reason, including his failure to sign the Jury Trial Waiver. The facts presented in the affidavit do not support Valdez's argument that Frank Kent's threat to terminate him invalidates his waiver of the right to a jury trial. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 33, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) (holding that an employment discrimination claim was subject to arbitration despite inequality in bargaining power); Carter, 362 F.3d at 301 (rejecting the argument that potential employees were coerced into signing an arbitration agreement because they feared they would not be hired if they refused); In re D.E.H., 301 S.W.3d 825, 828 (Tex.App.-Fort Worth 2009, pet. denied) (Coercion occurs if someone is compelled to perform an act by force or threat.); Smith v. H.E. Butt Grocery Co., 18 S.W.3d 910, 912 (Tex. App.-Beaumont 2000, pet. denied) (rejecting the argument that an arbitration provision is unconscionable because the parties did not negotiate its terms); Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 837 (Tex. App.-Houston [1st Dist.] 1999, no pet.) (listing the elements of economic duress or business coercion as (1) a threat of an act that the actor had no legal right to do; (2) a threat of such a nature it destroys the other party's free agency; (3) a threat that overcomes the other party's free will and causes it to do what it otherwise would not have done and that it was not legally bound to do; (4) imminent restraint; and (5) no means of protection). Since an employer has the legal right to fire an employee for almost any reason, threatening to fire an employee who does not accept new employment terms is not coercion that will invalidate a contract.