In Re Kellogg Brown & Root, Inc.
166 S.W.3d 732 | Texas Supreme Court | 2005
What This Case Means for Subcontractors
KBR, a second-tier subcontractor, was not a signatory to a contract containing an arbitration clause between MacGregor and Unidynamics. When disputes arose, MacGregor tried to force KBR into arbitration even though KBR never agreed to it. The Texas Supreme Court ruled that KBR cannot be forced to arbitrate claims just because it's part of the subcontracting chain. This protects subcontractors from being dragged into arbitration proceedings they didn't sign up for.
Key Takeaways
- •Non-signatories to arbitration clauses cannot be forced to arbitrate unless they explicitly agreed to be bound by the clause
- •Being a subcontractor in a chain does not automatically make you subject to arbitration clauses in contracts above you
- •Review all contracts you sign directly and understand which disputes you're agreeing to arbitrate—don't assume upstream contracts apply to you
The Act is civil and Fisher received the process due under the Constitutions.
Frequently Asked Question
Can my general contractor force me into arbitration if I didn't sign the arbitration clause?
No. Under this Texas case, you cannot be forced to arbitrate unless you personally agreed to the arbitration clause. Simply being a subcontractor in the chain does not bind you to arbitration agreements in contracts you didn't sign. Always review and sign only the contracts you agree to.
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