Labor & Employment Law Daily EEOC settlement meant Halliburton rehiring employee, even if no vacancy
Friday, June 15, 2018

EEOC settlement meant Halliburton rehiring employee, even if no vacancy

By Nicole D. Prysby, J.D.

Because a settlement agreement with the EEOC required Halliburton to rehire an employee conditioned only upon his passing a medical screening, which he did, so Halliburton breached the agreement by not rehiring him, concluded a federal district court in Mississippi. The agreement did not require that there actually be a vacancy, as argued by Halliburton. Nor was Halliburton shielded from liability by the employee’s purported “unclean hands” because any omission of medical information on his part was merely negligent and not done in bad faith, the court averred. The absence of a hire-by date meant that the hiring was required within a “reasonable” period of time, which had long passed. Though the court was inclined to grant summary judgment for the EEOC sua sponte, it gave Halliburton ten days to come forward with evidence in opposition (EEOC v. Halliburton Energy Services, June 12, 2018, Reeves, C.).

Background. In 2013, the employee filed an EEOC charge alleging Halliburton fired him because of his age and knee-related disability. Halliburton opted to use EEOC’s alternative dispute resolution program. This led to a February 2014 agreement, under which Halliburton agreed to pay the employee $40,000 and, contingent on his passing a pre-employment medical screening, rehire him as an employee with a $100,000 annual salary and duties comparable to those of Project Specialist Safeguard III. In exchange, the EEOC agreed to end its investigation. By September 2014, although Halliburton made the $40,000 payment, it had not rehired the employee. Nevertheless, it told the EEOC that it had fulfilled its obligations under the agreement. In 2016, the EEOC filed suit alleging breach of contract. Halliburton moved for summary judgment.

Breach of contract. The court concluded that Halliburton breached the agreement. The contract made no reference to a requirement that there be a vacancy; Halliburton was unambiguously required to rehire the employee into a specified position and salary. The only qualification was that he pass a pre-employment screening. The court rejected Halliburton’s assertion that the agreement merely required it to offer a position to the employee or that there had to be a vacancy, as that interpretation would require the court to transform the word “hire” into the word “offer” or add a vacancy qualifier where none existed.

Therefore, the only relevant question was whether the employee passed the pre-employment screening, which consisted of a medical clearance process, based on the country in which the employee would be located. The employee passed the screening for Western-style medicine, although there was a dispute about whether he passed the screening for a position in Iraq. The court found that Halliburton was obligated to hire the employee into a country for which he had passed the screening.

Liability. Halliburton argued that the absence of a hire-by date in the agreement made the obligation to hire an obligation of indefinite duration, which it could terminate at any time. The court disagreed, because a contract may be terminated at will when it is indefinite in duration and contemplates continuing performance. The single exchange in this case—rehiring the employee in exchange for a promise not to sue—did not constitute continuing performance. Therefore, Halliburton was required to rehire the employee within a reasonable time, and that time had long passed.

Halliburton also argued that the employee’s “unclean hands” should shield it from liability because he failed to disclose medical problems during a 2014 medical questionnaire. The court found that he had disclosed the bulk of his medical issues and to the extent that he omitted any, the omission was negligence and not in bad faith.

No requirement that vacancy exist. Finally, the court rejected Halliburton’s assertion that the impossibility doctrine protected it from liability. Halliburton argued that the absence of an available Project Specialist Safeguard III position prevented it from hiring the employee. Because the agreement contained no requirement that a vacancy exist, Halliburton was required to hire him regardless of whether it had an open position.

The court concluded by stating that it was inclined to grant summary judgment in favor of the EEOC, sua sponte, but under Fifth Circuit precedent, it first had to give Halliburton 10 days to come forward with any evidence in opposition.

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