As a recent Wall Street Journal cover story pointed out, technology start-ups and other computer software companies like Apple and Google often compete to employ young teenage whiz kids to write code or create new apps. With media giants like Disney and Viacom creating shows featuring younger and younger performers, and YouTube, Spotify and other online companies hosting content by eager young creators, content from minors is in ever-increasing demand by corporations. All of this raises the predicament of employing or dealing with contracts with minors (or contracts which involve a contracting party under the age of 18). I have handled many court proceedings concerning contracts with minors so the following might be of interest to my colleagues in legal departments of tech firms.
A minor may disaffirm a contract at any time during minority or upon reaching majority. Without a valid written agreement the employment is "at will" under the law of most states which means the minor can depart at any time. Copyright law, which is applicable to computer code, requires a signed writing to transfer copyrights and applies to authors of all ages, so without a valid written agreement the content created by the minor may not be validly transferred from its author to the employer. The dilemma created by a minor's ability to disaffirm a contract is that it may seriously jeopardize the employer's financial investment in the services of the minor.
The mere exercise of having the parent or guardian of the minor co-sign, approve or "guarantee" the contract does not resolve the problem. The minor may still repudiate the contract on the ground of infancy, asserting that the parent or guardian lacked authority to make the contract. In some jurisdictions, courts deem it against public policy to even enforce such guarantee language against the parent or guardian since it would subvert the purpose of the laws concerning the judicial approval of contracts with minors. So-called "working papers" under state law might work for purposes of a fast food chain or similar hourly wage employment but probably are insufficient for a tech company's purposes.
Although many tech companies may rely on the fact that they believe the minor is an employee creating intellectual property for the company, this may not be sufficient to transfer rights to the company in the computer code written by the teenage whiz kid as, for example, "work made for hire" under
copyright law. It is beyond the scope of this article to address all of the
factors courts consider when determining the issue of work for hire and the
ramifications of the various outcomes of the cases concerning employers and
computer programmers. Suffice to say that relying on the work for hire doctrine
is an uncertain path for a tech company (all the more so when dealing with a
Several states, including
have laws specifically concerning judicial approval of contracts with minors. California 's Arts and
Cultural Affairs Law §35.03 provides for judicial approval of certain contracts
for services of "minors" under the age of 18. The procedure involved
can be somewhat arduous to navigate, and may prove to be a difficult gauntlet
to run for a lawyer inexperienced in this area. However, tech and media
companies employing minors or contracting with minors should investigate the
efficacy of pursuing court approval to protect their investment. New York
Once the court judicially approves the contract, the minor is held to a standard of adult responsibility for its contractual obligations assuring the employer company that it will get what it bargained for and that the contract is legally valid.
As a practical matter, a proceeding for judicial approval of a minor's contract in
is commenced by the filing of a verified petition. It can be filed by a parent,
the guardian, a relative of the minor or any interested person or entity such
as the employer. The petition must contain a statement of the length of the
employment term, compensation, and all other relevant, material terms of the
agreement. A complete copy of the proposed contract must be annexed to the
petition together with affidavits from the parents and/or guardians which
consent to the petition and support the facts. New York
In addition to identifying the details of the nature of the minor's employment and the compensation to be paid, the petition must also contain a statement of who, other than the minor, is entitled to the minor's earnings and facts regarding the property and financial circumstances of the parent or parents so entitled. The petition may nominate a person to be appointed as limited guardian solely for purposes of establishing a trust account for the proceeding and should set forth the reasons why the person nominated would be proper and suitable.
Although a lawyer is usually appointed, a parent or other petitioner is not precluded from being appointed as limited guardian by reason of his or her interest in any part of the minor's earnings or in the contract provided such interest is disclosed. The court will designate how much is to be set aside and saved for the minor under guardianship until the minor becomes 18 years old. The court also has the option to appoint a special guardian to represent the interests of the minor at any time after the petition is filed.
As directed by the court, before the time at which the petition is noticed to be heard certain persons (other than the petitioner and anyone who has joined in the petition) must be served with an order to show cause why the petition should not be granted: (1) the minor; (2) the parents of the minor; (3) the minor's guardian(s); (4) each party to the contract; (5) any person having the care and custody of the minor; (6) the person with whom the minor resides; and, (7) the minor's spouse.
An order granting judicial approval of a contract for the services of a minor will rarely be granted on the papers alone. Usually a brief hearing is held at which the minor, the parent(s) and the various other interested parties may be questioned by the judge regarding the contract. Courts may require provisions in the court's order concerning how many hours the minor can work and may require that the employer provide tutors if regular schooling will be disrupted by the employment. Most terms and conditions of each arrangement will be affirmed as long as they are found by the court to be reasonable and not contrary to the best interests of the minor. Once the court does grant approval, an order will be issued which will, in effect, declare the minor an adult for purposes of fulfilling his or her contractual obligations.
Once the court does grant approval, an order will be issued which will, in effect, declare the minor an adult for purposes of fulfilling his or her contractual obligations. Then all the results of the minor's services, including any copyrights in code or apps created by a minor during employment by the start-up or tech company, will be properly transferred as bargained for by the employer.
Wallace E.J. Collins III is an entertainment and intellectual property lawyer with more than 30 years of experience based in New York. He was a recording artist for Epic Records before receiving his law degree from Fordham Law School. Tel: (212) 661-3656; www.wallacecollins.com
*reprinted with permission of The New York Law Journal 2014