California Employees Cannot be forced into Foreign Courts by Employer

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Far far away

California employees cannot be forced to litigate their employment claims far, far away.

Far Far Away

California has always been protective of its citizens.  However, with the ever increasing mobility of employees, some employers will insert a “choice of law” provision into employment contracts, either for convenience of the employer or for favorable (pro-employer) “forum shopping.”  Either way, as of January 1, 2017, California employees cannot be dragged into a foreign court quite so easily to litigate employment claims.

California Labor Code Section 925

California Senate Bill SB-1241 provides that after January 1, 2017,  an employer would be prohibited from requiring an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would require the employee to adjudicate outside of California a claim arising in California or deprive the employee of the substantive protection of California law with respect to a controversy arising in California. The bill would make any provision of a contract that violates these prohibitions voidable, upon request of the employee, and would require a dispute over a voided provision to be adjudicated in California under California law. The bill would specify that injunctive relief is available and would authorize a court to award reasonable attorney’s fees. The bill would provide that adjudication includes litigation and arbitration for purposes of these provisions. The bill would except from these provisions a contract with an employee who was represented by legal counsel, as specified.

Read the text of the law here: SB-1241 Employment contracts: adjudication: choice of law and forum.

Two notes: 1. the award of attorney’s fees is a huge hammer for the employee; and 2. the protection will not apply if the employee is represented by counsel when signing the contract.

Eric Papp, Esq.

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