Labor Code 925 forum selection and choice-of-law provisions absolute

Many employers, especially national employers, insert choice-of-law and forum selection provisions in their employment agreements specifying application of the laws and venue of other states for resolution of disputes, even for workers who live and work within California. Since 2017, California law has precluded general use of such out-of-state provisions. In a recent decision, a California Court of Appeal reviewed one employer’s attempts to force an employment dispute to proceed outside of California under another state’s laws. This decision shows us that such attempts are difficult, if not impossible.

Background

LGCY POWER, LLC, is a company formed under Delaware law with its headquarters in Utah. It is in the residential solar energy system business and operates throughout the western United States. LGCY hires numerous sales managers and representatives who are required to sign employment agreements that include noncompetition, nonsolicitation, and confidentiality provisions as well as forum and choice-of-law provisions.

Michael Sewell is a California resident who worked for LGCY as a sales representative and sales manager from January 2015 until August 2019. When he joined, he signed a “Solar Representative Agreement” wherein he agreed to work as a sales representative in a specific geographical area (California) and to work as an independent contractor and not an employee.