©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 97 priority Texas may place on providing a hospitable legal climate for Texas-based employers that is conducive to such uniformity. But when weighed against the countervailing interest of California in ensuring that its statutory protections for California-based workers are not selectively disabled by out-of-state companies wishing to do business in this state, we think California has the materially greater interest. … [T]he parties’ choice of Texas law will not be enforced ‘for the obvious reason’ that it would be contrary to ‘fundamental policy’ in California to do so.”152 In another decision pitting California law against Texas law, the Court of Appeal ruled against another Texasbased company.153 In this case, Alliantgroup, LP had an employee agreement containing a forum-selection clause requiring any lawsuit against the company to be heard in Texas.154 The employee nonetheless sued in California when asserting claims for unpaid overtime pay, meal and rest premium pay, and penalties for inadequate wage statements.155 Although the trial court found the forum-selection clause enforceable and stayed the lawsuit, the Court of Appeal reversed, holding that the clause had the potential to operate as a waiver of the employee’s unwaivable statutory rights under the Labor Code.156 The Court of Appeal ruled: “Although a party opposing enforcement of a forum-selection clause ordinarily bears the burden to show enforcement would be unreasonable or unfair, the burden is reversed when the underlying claims are based on statutory rights the Legislature has declared to be unwaivable.”157 In that instance, the party seeking to enforce the forum-selection clause has the burden to show enforcement would not diminish unwaivable California statutory rights; otherwise a forum-selection clause could be used to force a plaintiff to litigate in another forum that may not apply California law.”158 The Court of Appeal reversed the trial court’s stay order because the employer had “failed to show a Texas court would apply California law, and therefore the Texas-based company failed to meet its burden to show enforcing the forum selection clause would not diminish the unwaivable statutory rights on which [the plaintiff] bases her claims.”159 5.4 Public Policy Claims for Wrongful Employment Actions California permits employees to seek economic, non-economic, and punitive damages from employers who have fired or demoted them in violation of public policy. 5.4.1 Broad definition of public policy Admitting that “public policy” is “inherently not subject to precise definition,”160 the California Supreme Court has sought to put some defining boundaries around it. First, the public policy must be clearly established and substantial, and stem from a constitution, a statute, or an administrative regulation. Second, the policy must be established for the benefit of the public as a whole, and not just for the individual.161 Third, the policy must sufficiently describe prohibited conduct to give employers adequate notice.162 Nonetheless, as seen below, these limits encompass a broad variety of lawsuits. 5.4.2 Examples of absence of public policy Can employers insist on arbitration agreements to the point of firing employees who refuse to sign? A California appellate court rejected the wrongful termination claim of an employee fired for refusing to sign an arbitration agreement. The Court of Appeal rejected the plaintiff’s argument that the employer violated public policy by requiring employees to waive the right to jury trial, because the parties could, consistent with public policy, agree to waive a jury trial as part of an arbitration agreement.163 This argument gained renewed vitality in light of Labor Code section 432.6, which was to go into effect in 2020 and would have forbidden employers from requiring employees to waive any right, forum, or procedure with respect to a Labor Code or FEHA claim. A federal district
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