california employment agreementsEffective January 1, 2017, Section 925 will be added to the California Labor Code as a result of California Governor Jerry Brown signing Senate Bill 1241 in late September 2016. It is critical for both employers located in California and employers who employ workers in California to understand that, once in effect, Section 925 will preclude employers from stipulating in employer agreements that employees arbitrate or litigate employment disputes outside California or under the laws of a state other than California, though employees who negotiated their employment agreement with the assistance of an attorney are not subject to this change.

Though the law is not retroactive, the main takeaway here is that many companies that currently have employees sign employment contracts that contain forum-selection and choice-of-law clauses will no longer be able to enforce contracts based on these clauses in any employment contracts signed on or after January 1, 2017, when Section 925 goes into effect.

Whether you are a company located in California or a business with employees who primarily reside and work here, Your Contract Lawyer can review your current employment agreements or help you draft new agreements in recognition of the upcoming effective date of Section 925. If you have any questions about Section 925 or employer agreement considerations in general, please do not hesitate to contact our office via the contact form on this site or by giving us a call at 310-623-7665.