Texas Supreme Court Upholds Jury Waiver
Published by Eric A. Welter on March 29, 2012
On March 9, 2012, the Texas Supreme Court ruled that an employer’s advising an at-will employee that his employment would be terminated if he did not sign a mutual waiver to resolve disputes without a jury was not unlawful coercion. More after the break. According to the Court, Steven Valdez had been an at-will employee at […]
On March 9, 2012, the Texas Supreme Court ruled that an employer’s advising an at-will employee that his employment would be terminated if he did not sign a mutual waiver to resolve disputes without a jury was not unlawful coercion. More after the break.
According to the Court, Steven Valdez had been an at-will employee at Frank Kent Motor Company, doing business as Frank Kent Cadillac (“Frank Kent”), for over twenty-eight years. On April 4, 2008, Valdez signed the Frank Kent Motor Company Employee Handbook Acknowledgment & Mutual Waiver of Jury Trial (“Jury Trial Waiver”). He had previously been approached about signing the Jury Trial Waiver, but had not signed. Valdez immediately signed the Jury Trial Waiver when his supervisor warned him that he would lose his job if he failed to do so.
The Jury Trial Waiver contained the following provision:
I agree that with respect to any dispute between [Frank Kent] and me to resolve any disputes between us arising out of or in any way related to the employment relationship (including, but not limited to, employment and discontinuation of employment) before a judge without a jury. [FRANK KENT] AND EACH EMPLOYEE THAT SIGNS THIS ACKNOWLEDGMENT, RECEIVES A COPY OF THIS HANDBOOK, HAS KNOWLEDGE OF THIS POLICY, AND CONTINUES TO WORK FOR [FRANK KENT] THEREAFTER, HEREBY WAIVES THEIR RIGHT TO TRIAL BY JURY AND AGREE TO HAVE ANY DISPUTES ARISING BETWEEN THEM RESOLVED BY A JUDGE OF A COMPETENT COURT SITTING WITHOUT A JURY.
(Emphasis in original).
Almost a year later, Valdez was terminated from his employment with Frank Kent. He sued alleging age discrimination and made a jury demand. Frank Kent filed a motion to strike Valdez’s jury demand, arguing that Valdez had waived his right to a jury trial by signing the Jury Trial Waiver. Valdez responded by saying that the Jury Trial Waiver “was not signed under circumstances which were ‘knowing, voluntary and intelligent’ and cannot be enforced.”
The lower court granted Valdez a jury trial. Frank Kent moved for mandamus relief to enforce the jury waiver agreement. Valdez argued that the trial court did not abuse its discretion in granting him a jury trial because he was coerced into signing the Jury Trial Waiver and waiving his right to a jury trial by his supervisor’s threat of termination. The Texas Supreme Court disagreed, and overturned the lower court, stating that an “employer does not coerce an at-will employee by demanding that the employee accept new dispute resolution procedures.”
The Court had previously held that it was not procedurally unconscionable to premise continued employment on acceptance of an arbitration plan. It found that there is no reason to treat the effect of the at-will employment relationship on a waiver of jury trial differently from its effect on an arbitration agreement.
An employer’s threat to exercise its legal right cannot amount to coercion that invalidates a contract. The facts set out by Valdez do not amount to legal coercion since Frank Kent had the legal right to fire Valdez for almost any reason, including his failure to sign the Jury Trial Waiver. Since an employer has the legal right to fire an employee for almost any reason, threatening to fire an employee who does not accept new employment terms is not coercion that will invalidate a contract. Therefore the Court conditionally granted mandamus relief directing the trial court (1) to vacate the lower court’s order and (2) to grant Frank Kent’s motion to strike Valdez’s jury demand.
A copy of the opinion can be found here.Topics: Texas