33 Cal.App.5th 1066
Cal. Ct. App.2019Background
- Ryze, an Indiana company, hired California resident Jerome Nedd in May 2014 to work in El Cerrito (Contra Costa County) and terminated him March 28, 2017.
- The parties’ 2014 Employment Agreement contained a forum selection clause requiring employee claims to be brought only in Marion County or Hamilton County, Indiana, or the Southern District of Indiana (Indianapolis).
- Nedd sued Ryze in Contra Costa County Superior Court (Aug. 1, 2018), pleading FEHA and other causes of action.
- Ryze moved to dismiss or stay for improper forum (forum non conveniens) relying on the forum selection clause; the trial court denied the motion, citing California public policy (Labor Code §925 and Gov. Code §12965).
- The Court of Appeal granted Ryze’s petition for writ relief, concluding the trial court erred: FEHA’s venue provisions do not invalidate an interstate forum selection clause, and Labor Code §925 does not apply because the agreement was not entered into, modified, or extended on or after Jan 1, 2017.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Employment Agreement’s interstate forum selection clause is unenforceable as contrary to FEHA venue policy | Nedd: FEHA’s broad venue options reflect a policy favoring local access; enforcing clause defeats that policy | Ryze: Forum clause is valid; FEHA’s venue rules address intrastate venue, not interstate forum selection | Court: Clause enforceable; FEHA venue provisions govern county choice, not choice of a different state forum; clause not contrary to FEHA policy |
| Whether Labor Code §925 (prohibiting requiring out-of-California adjudication for CA employees) renders the clause unenforceable | Nedd: §925 reflects California public policy barring out-of-state forum requirement for CA workers; enforcement would contravene that policy | Ryze: §925 applies only to contracts entered into, modified, or extended on/after Jan 1, 2017; this agreement predates and was not extended in 2017 | Court: §925 does not apply to this agreement; trial court erred to apply its policy to a pre-2017 contract |
| Whether Nedd showed Indiana would be inadequate or enforcement would be unreasonable/unfair | Nedd: Did not specifically argue adequacy; relies on public policy concerns | Ryze: No showing Indiana is inadequate; clause selects an adequate forum | Court: Nedd made no showing Indiana is inadequate; enforcement would not be unreasonable |
| Proper remedy: stay or dismissal under forum non conveniens | Nedd: Trial court stayed/dismissal would impede access | Ryze: Trial court should dismiss or stay in favor of Indiana per clause | Court: Writ directs trial court to vacate denial and enter order granting dismissal or stay as appropriate; leave exercise of stay vs dismissal to trial court |
Key Cases Cited
- Smith, Valentino & Smith, Inc. v. Superior Court, 17 Cal.3d 491 (1976) (forum-selection clauses valid and enforceable absent unreasonableness)
- Brown v. Superior Court, 37 Cal.3d 477 (1984) (FEHA plaintiffs afforded broad choice of venue to ease access to courts)
- Alexander v. Superior Court, 114 Cal.App.4th 723 (2003) (distinguishing venue selection from interstate forum selection)
- Olinick v. BMG Entertainment, 138 Cal.App.4th 1286 (2006) (employment discrimination claims may be subject to forum-selection clauses if forum provides adequate remedy)
- Intershop Communications v. Superior Court, 104 Cal.App.4th 191 (2002) (contractual forum-selection clauses presumed valid absent showing enforcement is unreasonable)
- Quanta Computer Inc. v. Japan Communications Inc., 21 Cal.App.5th 438 (2018) (discusses standards of review for enforcing forum-selection clauses)
- Korman v. Princess Cruise Lines, Ltd., 32 Cal.App.5th 206 (2019) (noting abuse of discretion is proper standard in many forum-selection clause cases)
- Jurcoane v. Superior Court, 93 Cal.App.4th 886 (2001) (statutory interpretation principles; courts must effectuate legislative intent)