As part of our efforts to update employers regarding the newly-enacted statutes that will affect employers in the coming year, this post addresses a bill recently signed into by California Governor Jerry Brown that prohibits employers from requiring most employees who live and work in California to agree to a forum selection or choice of law clause that would designate a forum or substantive law of a jurisdiction outside California.
The bill, designated as Senate Bill 1241, is straightforward on its face adding section 925 to the California Labor Code. It prohibits any employer from requiring an employee who “primarily resides and works in California” to adjudicate outside of California a claim arising in California, or to deprive California-based employees of “the substantive protection of California law” with respect to such a claim. “Adjudication” is defined to include litigation and arbitration. The statute becomes effective on January 1, 2017, with respect to contracts entered into after that date.