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Jury Waivers in Employment Contracts

Jury Waivers in Employment Contracts. 1. Contractual jury waivers are enforceable. a. Parties to a contract may agree to waive a jury in the contract, in advance of litigation. In re Prudential Ins. Co. of Am. , 148 S.W.3d 124, 129-135 (Tex. 2004).

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Jury Waivers in Employment Contracts

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  1. Jury Waivers in Employment Contracts

  2. 1. Contractual jury waivers are enforceable. a. Parties to a contract may agree to waive a jury in the contract, in advance of litigation. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 129-135 (Tex. 2004). b. The jury waiver must be voluntary, knowing, and intelligent, and made with full awareness of the relevant circumstances and legal consequences. Id., at 133-135. i. A conspicuous waiver provision is prima facie evidence of a knowing and voluntary waiver and shifts the burden of proof to the opposing party to rebut it. In re GE Capital Corp., 203 S.W.3d 314, 316 (Tex. 2006). 1. “Conspicuous” means “so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it.” Tex. Bus, & Com. Code § 1.201(b)(10).

  3. c. Burden of proving the jury waiver was not executed voluntarily, knowingly, and intelligently, and made with full awareness of the relevant circumstances and legal consequences lies upon the party seeking to avoid enforcement of the waiver. In re Bank of America, N.A., 278 S.W.3d 342, 344-346 (Tex. 2009) i. Exception: 1. The allegation of fraud connected to waiver provision itself could shift burden even though general allegation of fraud in inception of entire contract does not do so. Id. d. Coercion in the execution of the contractual jury waiver also invalidates the waiver. Prudential, 148 S.W.3d at 132. i. So what is coercion in the execution of a contractual jury waiver?

  4. 1. a threat of an act that the actor had no legal right to do; 2. a threat of such a nature it destroys the other party’s free agency; 3. a threat that overcomes the other party’s free will and causes it to do what it otherwise would not have done and that it was not legally bound to do; 4. imminent restraint; and 5. no means of protection. Flameout Design &Fabrication, Inc. v. Pennzoil Caspian, Corp., 994 S.W.2d 830, 837 (Tex. App.—Houston [1st Dist.] 1999, no pet.)

  5. ii. What is not coercion 1. Threatening to terminate an at-will employee who did not sign waiver, since employer’s threat to exercise its legal right to terminate at- will employee cannot amount to coercion. In re Frank Kent Motor Co., 361 S.W.3d 628, 631-632 (Tex. 2012). a. Same applies to not hiring an employee. Id., citing Carter v. Countrywide CreditIndus., Inc., 362 F.3d 294, 301 (5th Cir. 2004).

  6. 2. So why do you want a contractual jury waiver? a. Avoid runaway juries. i. Perception that the judge will give you a fairer trial. b. Less costly than jury trial.

  7. 3. Why not just go to arbitration? a. Contractual jury waiver will be less costly than arbitration. i. Costs to file with American Arbitration Association - $975-$18,800+ (capped at $71,000) plus arbitrator’sfees ii. Costs to file lawsuit - $242+ b. Discovery may be restricted in arbitration, but not in a bench trial.

  8. 4. Don’t sit on your right to a non-jury trial. a. Party must promptly urge existence of contractual waiver in response to jury demand or it may be ineffective. b. Contractual waiver was ineffective when party waited more than four months after jury demand before moving to quash that demand. Rivercenter Assocs. v. Rivera, 858 S.W.2d 366, 367- 368 (Tex. 1993).

  9. 5. So how do you go about obtaining a jury waiver from your employee? a. Employment contract. b. Employee handbook. i. Signed acknowledgment of receipt of employee handbook.

  10. c. Example of enforceable jury waiver as part of signed acknowledgment of an employee handbook (adopted from Frank Kent, 361 S.W.3d at 629) i. I agree that with respect to any dispute between Employer 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. EMPLOYER AND EACH EMPLOYEE THAT SIGNS THISACKNOWLEDGMENT, RECEIVES A COPY OF THIS HANDBOOK, HAS KNOWLEDGE OF THIS POLICY, AND CONTINUES TO WORK FOR EMPLOYER 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.

  11. 1. Caveat – make sure the handbook and acknowledgment contains language that the jury waiver can only be changed by the employer with the mutual agreement of the employee in writing. a. Otherwise, language in the handbook that the employer may revise or revoke anything contained in the handbook without any reason or without notice may be interpreted to void the jury waiver for lack of mutuality.

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