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Whataburger Restaurants LLC v. Cardwell

Court of Appeals of Texas, Eighth District, El Paso

July 26, 2017

WHATABURGER RESTAURANTS LLC, Appellant,
v.
YVONNE CARDWELL, Appellee.

         Appeal from County Court at Law No. 7 of El Paso County, Texas (TC # 2013DCV0910)

          Before McClure, C.J., Rodriguez, and Hughes, JJ. Hughes, J., not participating.

          OPINION

          ANN CRAWFORD McCLURE, Chief Justice.

         This is an interlocutory appeal from the denial of a motion to compel arbitration. See Tex.Civ.Prac. & Rem.Code Ann. § 51.016 (West 2015)(permitting an interlocutory appeal from the denial of a motion to compel arbitration under the Federal Arbitration Act). The trial court denied the motion based on extensive findings supporting some of Yvonne Cardwell's claims that the arbitration agreement is unconscionable. When we first heard this case, we sustained Whataburger's contention that the trial court erred in its unconscionability analysis. Whataburger Restaurants LLC v. Cardwell, 446 S.W.3d 897, 912-13 (Tex.App.--El Paso 2014), reversed, 484 S.W.3d 426 (Tex. 2016). On petition for review, Yvonne Cardwell did not challenge that part of our opinion, but rather she successfully claimed before the Texas Supreme Court that we erred in not addressing her other reasons to deny arbitration that the trial court had not ruled on. Id. at 428. We now take up those additional arguments.

         Our prior opinion sets out the full procedural and factual background. Relevant to the issues before us, it is enough to state that Cardwell claims she was injured while working in the course and scope of her employment with Whataburger when an object struck her on the head. She filed suit alleging a common law negligence cause of action against Whataburger, which is a non-subscriber under the Texas worker's compensation system. Whataburger answered and then moved to compel arbitration.

         Whataburger supported the motion to compel arbitration with the affidavit of Cardwell's general manager. According to the affidavit, the manager provided Cardwell at the time of hire with Whataburger's arbitration policy that was contained within the Employee Handbook. The policy appears on pages twenty-two and twenty-three of the handbook, under a bold header titled "Texas Arbitration Policy." The policy contains sixteen numbered paragraphs (1.01 to 7.05) which comprehensively set out the terms of the policy.

         The core of the agreement provides:

2.01 All employees, by accepting employment or by continuing employment after the implementation of this Policy, shall be required to submit any legally recognized claim or dispute related to their employment, including workplace injury or disease or to the termination of their employment, to arbitration, rather than to litigation, according to this Policy and the rules established for its enforcement. The Company similarly shall be required to proceed to arbitration on all matters properly brought for arbitration by employees and former employees pursuant to this Policy.

         The policy has a specific provision that addresses when Whataburger could, and could not, alter this policy:

The duty imposed on both the Company and on employees to arbitrate all legally recognized claims or disputes arising from the employment relationship shall continue beyond, and not be affected by, the termination of an employee's employment. Moreover the company shall have no right, once the facts giving rise to the legally recognized claim or dispute have occurred, to unilaterally amend or modify this Policy or otherwise avoid its obligation to proceed to arbitration if requested to do so in the absence of mutual consent of the Company and the Employee. Whataburger, Inc. will not alter, modify or amend this Policy without first providing all employees with 30 days advanced written notice. An Employee who chooses to continue employment for at least thirty (30) days after receiving written notice of an amendment or modification of the Policy shall be deemed to have consented.

         At the time she was hired, Cardwell signed an "Acknowledgement Sheet" where she made four distinct acknowledgements. Relevant here, she acknowledged receipt of the Employee Handbook. That acknowledgment states:

EMPLOYEE HANDBOOK: I understand that the information provided in the Employee Handbook is intended to be used as a guide only. Its provisions are not conditions of employment and may be modified, revoked, changed or deleted by Whataburger Restaurants LLC at any time with or without notice. Nothing in this manual is intended to create, nor is it to be construed to constitute a contract between Whataburger and any of its employees.

         Yet the Acknowledgment Sheet also has a specific place where Cardwell acknowledged the binding nature of the arbitration policy:

ARBITRATION: I understand that Whataburger Restaurant, LLC will submit any legally recognized claim or dispute related to employment, termination of employment, including workplace injury or disease claims except as specifically excluded in paragraph 3.02 of the Arbitration Policy to arbitration and by accepting or continuing employment I shall be required to submit any legally recognized claims or disputes to arbitration.

         Her regular paychecks also contained an almost identically worded statement acknowledging the arbitration policy.

         Cardwell opposed arbitration on a number of grounds including claims that the agreement was unconscionable and illusory. Following a hearing, the trial court denied arbitration, issuing findings of facts and conclusions of law that sustained one of Cardwell's unconscionability theories. But the findings did not address all of the possible unconscionability theories, and only inferentially refer to the illusory contract argument. In our original opinion, we did not resolve these unaddressed arguments. The supreme court held that was error and we now turn to those additional issues.

         UNCONS ...


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