Foss v. Circuit City Stores, Inc.
477 F. Supp. 2d 230 (2007)
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Rule of Law:
Under Maine law, a contract made by a minor is unenforceable unless the minor ratifies it in writing after reaching the age of majority. Continued performance under the contract after turning eighteen does not constitute the required written ratification.
Facts:
- On October 7, 2004, Andrew Foss, then seventeen years old, applied for a job at Circuit City using its online system.
- The application required consent to a Dispute Resolution Agreement, which mandated arbitration for all employment-related claims.
- Because Foss was a minor, the system required parental consent; the name 'Sharon Foss' (his mother) was entered, but his parents later declared they never gave consent.
- On October 14, 2004, before starting his job, Foss signed a hard copy of the arbitration agreement, which did not require or include a parent's signature.
- Foss began working for Circuit City in October 2004 and turned eighteen on February 4, 2005.
- Foss continued to work for Circuit City after his eighteenth birthday.
- In December 2005, Foss alleged his supervisor created a hostile work environment, and his employment was terminated shortly thereafter.
Procedural Posture:
- Andrew Foss filed a lawsuit against Circuit City Stores, Inc. in federal district court, alleging a hostile work environment and retaliation.
- Circuit City filed a Motion to Compel Arbitration and a Motion to Stay the Proceedings, based on the Dispute Resolution Agreement Foss signed.
- Foss objected to the motion, arguing the agreement was invalid due to his infancy when he signed it and that it was unconscionable.
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Issue:
Is a mandatory arbitration agreement, entered into by an employee as a minor, enforceable when the employee did not ratify the agreement in writing after reaching the age of majority?
Opinions:
Majority - Singal, Chief Judge
No. An arbitration agreement entered into by a minor is not enforceable if it was not ratified in writing after the minor reached the age of majority. First, the court determined that the question of contract formation, specifically a defense of infancy, is a 'question of arbitrability' for the court to decide, not an arbitrator. This is because the defense goes to the very existence of a valid agreement. Applying Maine state law, the court found that Maine's infancy doctrine, codified in 33 M.R.S.A § 52, requires that a contract made by a minor must be ratified in writing after the minor turns eighteen to be enforceable. The court rejected Circuit City's arguments that Foss ratified the agreement by continuing to work, submitting time cards, or filing the lawsuit. These actions do not constitute the 'deliberate written ratification' required by the statute. Furthermore, Foss's potential misrepresentation of parental consent does not estop him from asserting the infancy defense, as the doctrine is designed to protect minors from their own improvident acts.
Analysis:
This case illustrates the intersection of the Federal Arbitration Act (FAA) and state-law contract defenses. It affirms that while the FAA establishes a strong federal policy favoring arbitration, it does not override fundamental state contract formation principles, such as the infancy doctrine. The court's decision clarifies that a challenge to the very existence of a contract (formation) is a gateway issue for the court to decide, not an arbitrator. For employers, this case serves as a critical reminder that standard employment agreements, including arbitration clauses, may be voidable if entered into with minors, and that state-specific requirements for ratification must be strictly followed to ensure enforceability.
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