Texas Supreme Court Enforces Jury Waiver Agreement

March 27, 2012

In the case of In re Frank Kent Motor Company d/b/a Frank Kent Cadillac, the Texas Supreme Court found that a jury waiver agreement entered into between an employer and an at-will employee is enforceable.

The dispute arose between a car dealership and one of its at-will employee in which the employee had signed a conspicuous jury waiver clause after being told that he would lose his job if he refused. The employee was later fired but still demanded a jury trial despite signing the jury waiver agreement.

At the trial level, the trial court sided with the employee who claimed that the employer's threat constituted coercion and therefore the contract was invalidated. The employee claimed that he only signed the contractual jury waiver to avoid being discharged from his job of 28 years.

Although the Texas Court of Appeals affirmed the trial court's decision, the Texas Supreme Court decided otherwise. The Court pointed out that in an at-will employment situation, the employer has the legal right to fire an employee for almost any reason, including the employee's failure to accept new employment terms. Therefore, the Court held that such a threat would not constitute coercion that would invalidate a contract.

This decision sends a strong message for employers in Texas, and other states, that jury waivers are being tested and most are upheld. Jury trial waivers can be beneficial for employers because they can drastically decrease litigation costs and bring cases to a resolution quicker.