2017 labor law change affects many California agreements

When a legal commentator refers in a recent article to something that “every employer [in California] should know,” she is referencing a new statutory enactment that took legal effect from the first of the year.

Specifically, that is section 925 of the California Labor Code, which rolls out a new provision applicable to choice-of-law and forum selections for resolving disputes.

Such topics comprise the subject matter of entire courses in law schools in California and nationally. At first blush, a choice-of-law discussion might sound a bit abstruse and even esoteric to some readers, but it actually pertains to a relatively simple matter, namely, contractual parties’ agreement as to where a dispute that arises should be legally adjudicated.

What the new law mandates is this: An employer cannot compel an employee to agree with a contractual clause requiring that worker to adjudicate an employment dispute in a forum outside California or under the laws of a state other than California if the employee
“primarily” works and lives in California.

For Section 925 to kick in, the forum clause must be executed as a condition of employment, with license to depart from the restriction being given in any case where a worker negotiates a choice-of-law forum in concert with a retained attorney.

Unsurprisingly, things can get a bit tricky with the new law, and an affected employee might reasonably want to consult with a proven employment attorney if any questions are harbored.

And that applies even more to employers, given the potential for workers to allege that they were somehow coerced or tricked into agreeing to the laws of a jurisdiction that favors an employer in a dispute.

As noted in the above-cited article, employers with employees who work and reside in California might want to now take the time necessary to thoroughly review all their employment contracts, making revisions as necessary and ensuring that future contracts pass muster with Section 925. An experienced employment attorney can help ensure that they are fully compliant with the law.