Jones v. Halliburton Inc., No. 08-20380 (5th Cir. Sept. 15, 2009)

| Sep 15, 2009 | Daily Developments in EEO Law |

By all appearances, this employment arbitration case is a victory for the plaintiff, because the Fifth Circuit (2-1) held certain personal tort claims non-arbitrable. But the facts are so awful — a female employee allegedly gang-raped by co-workers in her barracks in Bagdad — that it ought to be Exhibit A for reform in this area of the law.

Jones v. Halliburton Inc., No. 08-20380 (5th Cir. Sept. 15, 2009): The employee, an administrative assistant, signed the following contract before she mustered out to Iraq:  “You understand that the Dispute Resolution Program requires, as its last step, that any and all claims that you might have against Employer related to your employment, including your termination, and any and all personal injury claim[s] arising in the workplace, you have against other parent or affiliate of Employer, must be submitted to binding arbitration instead of to the court system.” The Dispute Resolution Program (DRP), in turn, provided:

“‘Dispute’ means all legal and equitable claims, demands, and controversies, of whatever nature or kind, whether in contract, tort, under statute or regulation, or some other law, between persons bound by the Plan or by an agreement to resolve Disputes under the Plan . . . including, but not limited to, any matters with respect to . . . any personal injury allegedly incurred in or about a Company workplace.”

Just three days after arriving to work in the Green Zone, the plaintiff alleges that “she was drugged, beaten, and gang-raped by several Halliburton/KBR employees in her barracks bedroom. Allegedly, when she awoke the next morning, naked and severely bruised, she discovered one of the alleged perpetrators lying in the lower bunk in her bedroom. At that time, he allegedly admitted to having unprotected sex with her. Jones received several serious injuries as a result of the alleged incident, including torn pectoral muscles, which would later require reconstructive surgery.”

When the plaintiff reported the incident to her employer, “she was placed under armed guard in a container and not permitted to leave; and, despite repeated requests to be allowed to do so, she was denied access to a telephone to contact her family, until she convinced one of her guards to allow her to telephone her father.”  Only when her father intervened with their Congressman was the plaintiff allowed to return home.

The plaintiff filed a charge with the EEOC (upon which the office found probable cause, according to the opinion), and eventually filed a civil action alleging statutory claims, breach of contract, fraud and a variety of personal torts (assault, false imprisonment, infliction mental distress and negligent retention).  The employer moved to compel arbitration, and the district court granted the motion except for the personal torts, which it found was outside the scope of the agreement.  Halliburton, dissatisfied with even this small leakage in the arbitration agreement, appealed.

The Fifth Circuit affirms the ruling on the torts.  It generously quote and adopts the district court’s analysis: “Just because an assailant’s actions happen to be in violation of his employer’s policies, and those policies also govern plaintiff’s behavior, does not necessarily render the assault related to plaintiff’s employment for purposes of arbitration.” 

The panel majority also rejects an analogy, proffered by the employer, to the broad scope of workers compensation preclusion: “In interpreting the arbitration provision at issue, and in the light of the above-discussed precedent, we conclude that the provision’s scope certainly stops at Jones’ bedroom door, as further discussed infra. As such, it was not contradictory for Jones to receive workers’ compensation under a standard that allows recovery solely because her employment created the ‘zone of special danger’ which led to her injuries, yet claim, in the context of arbitration, that the allegations the district court deemed non-arbitrable did not have a ‘significant relationship’ to her employment contract.” 

The panel makes special note of the employee’s lack of mobility in Iraq: “Of further note, the record is unclear regarding both how free Jones was to travel in the Green Zone and whether non-Halliburton employees were allowed in Camp Hope, where the alleged incident occurred. If Jones was not restricted to Camp Home, but was able to travel in the wider Green Zone area, Halliburton’s contention that the nature of her employment was pervasive and all-encompassing, such that most aspects of her life were ‘related to’ it, would be weakened. The Green Zone housed a multitude of civilian workers in a wide range of occupations, and was the situs of many potential recreational and other social outlets that arguably could not be said to relate to Jones’ employment.” 

One judge (DeMoss) dissents, finding that the personal torts covered by the agreement. 

This opinion demonstrates not only that judges can disagree about the meaning of an arbitration contract (nothing remarkable there), but that a decision of this type need occur only once — Halliburton is now free to re-write the agreement around the majority decision, and impose private adjudication on even the grossest of miscarriages that occur on its properties.  This ought to catalyze interest in corrective legislation to restore the long-understood bar to employment arbitration for employees outside of a collectively-bargained workplace, which toppled when the Supreme Court decided Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991).

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