Texas Supreme Court to nail down arbitration issue
The Texas Supreme Court will hear arguments in mid-January about a Whataburger Restaurants case that has been bouncing around the state legal system for several years. As you will soon discern, I believe the court’s decision will be good news for employers with alternate dispute resolution procedures in their workplaces. It also will deliver yet another message to lower courts that continue to resist sending claims to arbitration. For more about Whataburger’s travails, read on.
‘The Long and Winding Road’
Recall that Lennon/McCartney hit from 1970? It surely wasn’t what Whataburger was contemplating when employee Yvonne Cardwell injured herself at an El Paso outlet on December 23, 2012 (no, that’s not a typo). The restaurant was a nonsubscriber to the workers’ compensation system but had a plan to pay employees injured on the job coupled with an arbitration agreement requiring them and the company to arbitrate any disputes under the setup. Easy peasy.
Cardwell filed a lawsuit, and Whataburger asked the trial court to send the matter to binding arbitration. The suit found its way to the Texas Supreme Court, which in 2016 told the lower courts to consider whether the arbitration agreement was illusory (that is, not binding).
The trial court determined Whataburger’s arbitration agreement was illusory and refused to enforce it (more on what “illusory” means in a minute). When did the ruling happen? August 23, 2018.