Diminished Protections
As appeared in The Los Angeles Daily Journal
By Daniel A. Crawford and Robert J. Drexler, Jr.
Abstract:
Most employees work without a contract. However, California employees who work under contract for an out-of-state company may be in for a nasty surprise if the contract contains either a forum-selection clause or a choice-of-law provision. If those employees file a case in California and the company's home state is designated in the contract, they may be forced to travel to that state, and possibly to rely on that state's substantive labor laws, to enforce their rights, even if they have never been to that state. Given California's leading position in protection of its workers, this may leave employees with diminished protections. The potential for problems is magnified in a class action.
Forum-Selection Clauses
Assuming the case is in federal court, a contractual forum-selection clause is prima facie valid and enforceable. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972); Spradlin v. Lear Siegler Mgmt. Servs. Co., 926 F.2d 865 (9th Cir. 1991). The burden to show that the clause is unenforceable belongs to the party opposing transfer to the new forum, Manetti-Farrow Inc. v. Gucci America Inc., 858 F.2d 509 (9th Cir. 1988), but for purposes of the motion, the court must draw all reasonable inferences and resolve all factual disputes in favor of the nonmoving party. Murphy v. Schneider Nat'l. Inc., 362 F.3d 1133 (9th Cir. 2004).
Under Murphy, a forum-selection clause may be unenforceable if 1) the inclusion of the clause was the product of fraud or overreaching by the employer, 2) transfer to the designated forum would effectively deny the employee his or her day in court, or 3) transfer would contravene a strong public policy of the forum in which the suit is brought.
For a copy of the complete article, please contact :
John Quisenberry
310-785-7966
jquisenberry@quislaw.com
