HR Alert

CA: Employers May Not Require Employees to Adjudicate Certain Claims Out of State

Employers Also May Not Deprive Employees of Substantive Protection of State Law

Under a new law in California, an employer generally may not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would do either of the following:

  • Require the employee to adjudicate outside of California a claim arising in California.
  • Deprive the employee of the substantive protection of California law with respect to a controversy arising in California.

Any provision of a contract that violates the law above is voidable by the employee. If a provision is rendered void at the request of the employee, the matter will be adjudicated in California and California law will govern the dispute. Under the new law, adjudication includes litigation and arbitration.

Note: The new law does not apply to a contract with an employee who is in fact individually represented by legal counsel in negotiating the terms of an agreement to designate either the venue or forum in which a controversy arising from the employment contract may be adjudicated or the choice of law to be applied.

The new law applies to contracts entered into, modified, or extended on or after January 1, 2017. Click here to read the text of the law.


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