Many fast food and entertainment-oriented businesses hire employees who are under eighteen. Although any contract entered into with those employees is theoretically enforceable (e.g. an agreement to arbitrate all claims), those agreements can later be disaffirmed by the employee pursuant to Family Code section 6710 (which allows minors to disaffirm contracts within a “reasonable time” after turning eighteen). Thus, all employers should calendar when minor employees turn eighteen and have them execute new employment-related agreements—otherwise, they may fall victim to the same fate which recently befell Del Taco.

In Coughenour v. Del Taco, LLC 2020 WL 6817570 (Cal. Ct. App. Nov. 20, 2020), the Plaintiff began working for Del Taco when she was 16. At the time she began working she signed an agreement to arbitrate all claims. Four months after turning eighteen the Plaintiff quit Del Taco and four months thereafter sued Del Taco for sexual harassment and wage and hour claims. When Del Taco attempted to enforce the arbitration provision, the trial court held that by virtue of quitting the Plaintiff had disavowed the arbitration agreement, and that (under the circumstances of the case) the disaffirmance had occurred within a “reasonable time” of her turning eighteen—thus allowing her to successfully reject Del Taco’s efforts to compel arbitration of her claims. The trial court’s denial of Del Taco’s motion to compel arbitration was ultimately upheld on appeal.

Because employers do not want to be held captive to a judge’s capricious determination of what constitutes a “reasonable time” after turning eighteen (Is six months ok? A year? Two years?), all employers should calendar when their employees reach the age of majority and have those employees execute new employment-related agreements. If they do not, they could find themselves on the wrong side of a disaffirmance by a disgruntled current or former employee.

Author’s Bio:  Douglas A. Plazak

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