Whataburger Restaurants LLC v. Yvonne Cardwell, 545 S.W.3d 73

Cardwell, a Whataburger employee, sued for workplace negligence after an object struck her head; Whataburger moved to compel arbitration under an arbitration policy found in its Employee Handbook.
The arbitration policy (two handbook pages) required arbitration for employment-related claims, contained time and venue provisions, and included reciprocal promises to arbitrate; Cardwell signed an acknowledgment referencing both the handbook and the arbitration provision.
Trial court denied the motion to compel, finding the agreement unconscionable based principally on the court’s view that Whataburger sought a favorable factfinder and might force arbitration in Dallas; the court did not resolve all unconscionability theories or the illusory-contract argument.
On initial appeal this court reversed parts of the trial court’s unconscionability analysis; the Texas Supreme Court remanded, noting this court had not addressed several unresolved arguments.
On remand this opinion: (1) sustains Whataburger’s challenge to the trial court’s substantive and procedural unconscionability findings (in part because certain arguments were waived), and (2) remands the illusory-contract issue for further fact-finding because the record is incomplete.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Substantive unconscionability (time limit — §7.01)	§7.01’s 12-month completion requirement and subjective "good cause" standard impair discovery and are one-sided	Provision governed by FAA; objections not developed on appeal	Waived by plaintiff for failure to brief; trial court’s substantive-unconscionability ruling reversed
Substantive unconscionability (remedies — §6.01)	§6.01 narrows FAA grounds for vacatur and is more restrictive than 9 U.S.C. §10(a)	Provision enforceable; plaintiff didn’t pursue on appeal	Waived by plaintiff; trial court’s ruling reversed
Procedural unconscionability (adhesion / buried term / unequal bargaining power)	Agreement was hidden in handbook, presented on a take-it-or-leave-it basis to an employee with limited means	Handbook acknowledgment and arbitration text establish notice; record lacks fraud/misrepresentation	Trial court’s procedural-unconscionability finding reversed; record insufficient to show the "shocking" circumstances required to invalidate agreement
Illusory-contract (employer’s unilateral modification rights)	Handbook disclaimer ("may be modified, revoked, changed or deleted") makes arbitration illusory or creates ambiguity	Arbitration is a stand-alone agreement; handbook not a contract and does not incorporate arbitration provisions	Remanded to trial court for full-record factfinding on whether arbitration is integrated with handbook and thus illusory or ambiguous

In re Halliburton Co., 80 S.W.3d 566 (Tex. 2002) (distinguishes when employer modifications render arbitration illusory)
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (contract ambiguity principles; remand when instrument reasonably susceptible to multiple meanings)
In re 24R, Inc., 324 S.W.3d 564 (Tex. 2010) (enforcing "stand-alone" arbitration clause despite handbook modification language)
Royston, Rayzor, Vickery & Williams, LLP v. Lopez, 467 S.W.3d 494 (Tex. 2015) (defines illusory arbitration agreements)
In re Poly-America, L.P., 262 S.W.3d 337 (Tex. 2008) (severability of unconscionable provisions from arbitration agreements)
Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (U.S. 2010) (arbitration chosen for lower cost, efficiency, and speed)
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (U.S. 1991) (mere inequality in bargaining power insufficient to invalidate arbitration in employment contexts)