Many of the non-subscribing employers, particularly those with the resources to employ such tactics, use arbitration agreements in conjunction with other risk management and insurance techniques, to mitigate the possibility that an injured worker can get to the civil courts.
One element that some employers may not appreciate, though, is the limited contracting power of minors - and that is a worker demographic that has a higher exposure in certain industries, particularly fast food restaurants.
My first job at age 16 was at the McDonald's restaurant in Torrance, California. I lasted 2 weeks, literally. I'm sure I did what a lot of kids did or still do, just not show up for work one day.
That job wasn't for me...
But for many kids, as we go into the summer months, employment in the fast food industry provides valuable lessons in life, and a couple extra bucks to spend at the amusement park.
A recent Texas Court of Appeals case reminds those non-subscribing employers that minors can't legally enter into a binding contract - and an arbitration agreement is a contract - ergo an arbitration agreement entered into by a 16 year old as a condition of employment is unenforceable if the minor does not wish to be bound.
In PAK Foods Houston v. Marissa Garcia, the 16 year old minor identified as "S.L." signed an agreement as a condition to her employment to use arbitration for any injury claim dispute that arose from her employment.
According to an appellee brief on the case, S.L. was a cashier at at a KFC restaurant operated by PAK Foods. She was injured when she removed corn from a microwave oven “despite having received no training in the operation or use of the microwave oven.” [The case doesn't say how, exactly, S.L. was injured.]
|Bucket o' chicken anyone?|
But counsel got the result desired because the 14th circuit agreed with the trial court that S.L.'s signature on the arbitration agreement wasn't worth the food pulled from the microwave.
Garcia, the mother of the injured worker, filed suit individually and on her daughter’s behalf. PAK Foods filed a motion to compel arbitration which was denied by the trial court. The appellate court affirmed that ruling.
The appellate court said, “It has long been the law in Texas that a contract executed by a minor is not void, but it is voidable by the minor. … It is well settled that a minor’s contracts are voidable at the minor’s instance, and they may be either disaffirmed by the minor or ratified after the minor reaches majority.” The decision stated that while the filing of a lawsuit may not necessarily disaffirm an arbitration agreement, Garcia’s filing of an opposing response to the motion to compel arbitration definitively did so.
In the dissenting opinion, Chief Kem Thompson Justice Frost wrote that if minors are allowed to disaffirm a condition of their employment that applies to adult workers, the minors “may find it harder to obtain employment.”
That's just a plain fatuous argument. My guess is that kids just don't work fast food or similar jobs all that much anymore - the "kid" behind the counter nowadays is likely 18 or over. When I was a teenager that age of majority was still 21, so there was a big employable demographic that lacked the power to legally contract. That gap largely doesn't exist any longer.
And the demographic that may be shut out of fast food jobs per Justice Frost is likely very, very small; most of that population is too busy writing mobile phone apps or Facebook games, if they're working at all.
But the case is a reminder to non-subscribing Texas employers that an arbitration agreement is not a total risk panacea. Sometimes you can have your fried chicken and eat it too, but not all of the time.