November 2016 Bar Bulletin
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November 2016 Bar Bulletin

California Law Limits
Employment Conditions

 

Beginning January 1, California law prohibits employers from requiring employees primarily residing in California to agree, as a condition of employment, to a contractual provision that would apply the substantive laws of other states or agree to venue outside of California. It allows employees to void such clauses.

In addition to injunctive relief and any other remedies available, a court may award an employee who is enforcing his or her rights under this section reasonable attorney’s fees. 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 employment contract.

The law, adopted as Senate Bill No. 1241, adding a new Section 925 to the Labor Code, and signed into law by Gov. Jerry Brown on September 25, provides:

SECTION 1.

Section 925 is added to the Labor Code, to read:

925.

(a) An employer shall 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:

(1) Require the employee to adjudicate outside of California a claim arising in California.

(2) Deprive the employee of the substantive protection of California law with respect to a controversy arising in California.

(b) Any provision of a contract that violates subdivision (a) is voidable by the employee, and if a provision is rendered void at the request of the employee, the matter shall be adjudicated in California and California law shall govern the dispute.

(c) In addition to injunctive relief and any other remedies available, a court may award an employee who is enforcing his or her rights under this section reasonable attorney’s fees.

(d) For purposes of this section, adjudication includes litigation and arbitration.

(e) This section shall 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.

(f) This section shall apply to a contract entered into, modified, or extended on or after January 1, 2017.


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