In Verdugo v. AlliantGroup, L.P., a California appeals court disregarded a forum selection clause requiring a California employee to pursue her wage and hour claims in Texas under Texas law, finding the clause violated California public policy. The plaintiff had signed an employment agreement selecting Harris County, Texas as the exclusive forum for resolution of employment disputes and designating Texas law as the governing law. When the plaintiff brought a class action in California for unpaid overtime and other Labor Code violations, the employer sought to enforce the contract. The trial court stayed the California action to allow the matter to proceed in Texas. The appellate court disagreed and lifted the stay, finding the clause unenforceable as against public policy. The court concluded the Labor Code afforded California employees certain unwaivable rights. Forcing the plaintiff to litigate her claims in Texas, where the choice-of-law clause would require application of Texas law (unless the Texas court were to decide to disregard it), had the potential to diminish the employee's unwaivable substantive rights. The defendant had failed to prove—or even stipulate—that California law would be enforced, so the Court refused to enforce the forum selection clause.
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