When the plaintiff was 16, he was employed by Kmart as acashier. At the end of his training, he was required to readKmart’s policy agreement, which included an agreement to submit allemployment disputes to arbitration. and click online to acknowledgethe agreement or click another button to opt out. After clicking onthe confirmation, the employee receives the following message: “Byclicking below, I acknowledge that I have reviewed and agreed tothe terms page 371and conditions set forth in the ArbitrationPolicy/Agreement. I also understand that I may change my mind andopt out of the Agreement within 30 days of today’s date byreturning the Arbitration Policy/Agreement Opt Out form located atthe end of the Agreement.” Lopez did not opt out of theagreement.

One month after his eighteenth birthday, Lopez joined aputative class action case against Kmart for failure to provideaccurate written wage statements as California Labor Code required.Kmart filed a motion to compel arbitration consistent with theAgreement that Lopez electronically signed. Lopez contended thatthere was never any valid agreement in the first instance becausePlaintiff was a minor when he acknowledged receipt of theAgreement, or in the alternative, because Plaintiff was a minorwhen he acknowledged the Agreement, he disaffirmed it one monthafter his eighteenth birthday when he filed his classaction.

JUDGE JACQUELINE SCOTT CORLEY California lawplainly provides that a minor has the capacity to contract, withthe exception of those contracts specifically prohibited…..a minormay make a contract in the same manner as an adult, subject to thepower of disaffirmance…. a contract of a minor may be disaffirmedby the minor before majority or within a reasonable timeafterwards

Disaffirmance “may be made by any act or declaration” indicatingintent to disaffirm; in other words, “express notice to the otherparty is unnecessary… and “[n]o specific language is required tocommunicate an intent to disaffirm… The policy behind disaffirmanceis clear: it “shields minors from their lack of judgment andexperience and confers upon them the right to avoid their contractsin order that they may be protected against their own improvidenceand the designs and machinations of other people…. At the sametime, the disaffirmance statute also reflects a policy “ofdiscouraging adults from contracting with minors.”

The parties have not cited any California case in which a courtconsidered a minor’s right to disaffirm an employment contract orarbitration agreement with an employer, and this Court has foundnone. However, no case law is required when the relevant statutespells out the answer: the plain language of Section 6710 entitlesPlaintiff to disaffirm the Agreement… Filing the instant action wassufficient to disaffirm the contract. … Plaintiff did sowithin one month of reaching the age of majority, which by anymeasure is sufficiently soon to constitute the “reasonable time”that the statute envisions.

Kmart next contends that Section 6710 only applies to contractsfor goods and services, not contracts that govern the employmentrelationship… Section 6710 refers to “a contract of a minor”generally, without reference to the type of contract. Instead, theonly limitations the statute includes are the express statutoryexceptions in Section 6711 and contracts for necessaries

In short, although Plaintiff entered into a valid arbitrationagreement with Kmart, he has exercised his statutory right ofdisaffirmance, thereby rescinding the contract and rendering it anullity.

Defendant’s Motion to Compel ArbitrationDenied.

CRITICAL THINKING

Kmart’s attorneys argued unsuccessfully that by allowing theminor to disaffirm the employment, the court was discouragingemployers from hiring minors in the future. Do you think the courtshould have given more weight to this argument?

ETHICAL DECISION MAKING

What values were in conflict when the court made thisdecision?