This month, the Ninth Circuit’s decision in DePuy Synthes Sales v. Howmedica Osteonics held that a U.S. district court in California properly invalidated a foreign choice-of-law and forum selection provision under California Labor Code § 925, and denied a motion to transfer the case to a different venue. While this might seem at first blush like a technical issue of federalism and contractual interpretation, the decision indicates that federal courts in the Ninth Circuit will also apply California’s partial prohibition on the use of foreign forum-selection and choice-of-law clauses as to employees.
In September 2017, Jonathan L. Waber, a California resident, was hired as a sales associate for Howmedica Osteonics Corp. (“HOC”) and signed an employment agreement with HOC’s parent company, Stryker Corporation (“Stryker”). The contract included a one-year non-compete clause and a forum-selection and choice-of-law clause requiring contract disputes to be adjudicated in New Jersey under New Jersey law. In July 2018, Waber left Stryker to work at DePuy, an HOC competitor, in violation of the non-compete clause in his employment agreement. Stryker sent Waber a cease and desist letter threatening to enforce the non-compete clause, but Waber responded by stating that he was voiding the forum-selection and choice-of-law clause under California Labor Code § 925, which allows employees to void such clauses in certain circumstances.
Waber and DePuy then sought declaratory judgment in...
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