Many employers, for various legal reasons, ask their existing workers to sign assorted documents as a condition of their continued employment. Such documents include non-compete agreements, confidentiality agreements, arbitration agreements, and jury trial waivers. But conditioning continued employment on the execution of such documents raises the question of whether the signatures are coerced, making the documents invalid. After all, the phrase "a new condition of your continued employment is your acceptance of these terms" is just a flowery way of saying, "you'll be fired if you don't sign this." The Texas Supreme Court recently ruled in favor of an employer on this issue, holding that telling an at-will employee that he will be fired if he does not sign a jury trial waiver is not coercive.*
In Frank Kent, a 28-year employee of an auto dealership who had repeatedly declined to sign the company's jury trial waiver, when pressed by his supervisor, explained he did not wish to sign the document. In response, the supervisor bluntly said that he would lose his job if he did not sign it. Because he wanted to keep his job, because he had no experience negotiating agreements and because he assumed any attempt to negotiate a change to the form would be futile, the employee signed the document. The form indicated that he and the company agreed any employment-related dispute between them would be decided by a judge without a jury. When the employee was terminated from employment about one year later, he sued for age discrimination and demanded a jury trial. Both the trial court and the Texas Court of Appeals held the jury trial waiver was not voluntarily signed by the employee, and therefore, unenforceable. The Texas Supreme Court reversed, holding that the supervisor's threat of dismissal was not coercive.
The supervisor's ultimatum was not legal coercion, the Supreme Court reasoned, but rather, a mere expression of the employer's legal rights. "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." Although not addressed directly, the Jury Trial Waiver was implicitly approved by the Supreme Court as not contrary to public policy.
The Court also noted that, if the supervisor's statement were deemed coercive, an employer wishing to implement new dispute resolution procedures (including jury trial waivers and arbitration agreements) would be forced to fire all of its at-will employees, and then immediately rehire only those employees willing to sign the new procedures.
* In re Frank Kent Motor Co., No. 10-0687 (Tex. March 9, 2012).