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California Protects Employees’ Rights to Have Their Claims Heard in the State, Under California Law

In recent years, some employers doing business in the Golden State have required their employees to sign arbitration and employment agreements that require the employee to sue or arbitrate in – or under the law of – another state.  After January 1, 2017, this practice will be illegal unless the employee was represented by legal counsel who assisted in negotiating the out-of-state venue, forum or choice of law terms.

On September 25, 2016, California Gov. Jerry Brown signed S.B. 1241, which regulates where and under what law a California employee may sue or arbitrate.  In particular, for claims arising in California for employees who primarily reside and work in the state, employers are prohibited from requiring adjudication of claims in venues or forums outside of California – including both litigation and arbitration – or from depriving employees of the substantive protections of California law.  Any contract provision to the contrary is voidable by the employee, who may seek injunctive relief and other available remedies (including attorney’s fees) in California and under California law.

The bill will be codified as Section 925 of the California Labor Code and the new law will apply to any contract entered into, modified, or extended on and after January 1, 2017.

Employers should immediately review any employment and arbitration agreements, handbooks, and other employment-related documents to determine whether they should be revised in light of this important new law.

© 2020 Proskauer Rose LLP.


About this Author

Anthony J Oncidi, Employment Attorney, Proskauer Rose Law Firm

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office. Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection....

Elaine Lee, Proskauer Law Firm, Labor and Employment Attorney

Elaine Lee is an associate in the Labor & Employment Law Department. Her practice focuses on representing and counseling management on all aspects of employment law.

Elaine’s litigation work includes defending employers and supervisors against single-plaintiff claims for unlawful discrimination, harassment, whistleblowing, retaliation, and wrongful termination, as well as class action wage and hour disputes. In addition, Elaine advises clients on compliance with state and federal employment laws and develops company policies ranging from hiring to firing and everything in between. She counsels clients from a wide variety of industries, including telecommunications, entertainment, retail, health care and finance.

Prior to attending law school, Elaine was a Certified Public Accountant and worked at a Big Four accounting firm for four years.