Attorney Nancy Gray Educates Employers on New California Labor Code

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Attorney Nancy Gray, of Gray & Associates, P.C., lists the top three tips on how California Labor Code Section 925 affects employers.

Attorney Nancy Gray

Employers with employees working and residing in California may want to review all mandatory employment agreements to determine whether they contain out-of-state forum selection or choice-of-law clauses.

On September 25, 2016, California Governor Jerry Brown signed into law a new California Labor Code provision (Section 925) that is likely to have major repercussions for contracts with employees who live and work primarily in California. “The new California Labor Code provision prohibits the use of contract provisions that apply the law of a different state or require adjudication of disputes in another state as a condition of the employment of an individual who primarily resides and works in California," said Attorney Nancy Gray, founder of Gray & Associates, P.C.

To help employers better understand the new California Labor Code provision, Gray lists the following three tips:

No. 1: Time frame. The law applies to agreements entered into, modified or extended on or after January 1, 2017. “The law does not apply to existing agreements that remain unchanged,” added Gray.

No. 2: Consequences of violating the law. Any provision of an agreement that violates the law is voidable by the employee. If an employee requests that a provision be rendered void, the dispute over whether the provision is voidable will be litigated in California under California law. “A court may issue a full range of relief in connection with the resolution of that dispute, including injunctive relief and reasonable attorneys’ fees,” said Gray. “Additionally, existing law prohibits an employer from requiring an employee or applicant for employment to agree, in writing, to any term or condition that is known by the employer to be illegal.”

No. 3: What employers can do now. “Employers with employees working and residing in California may want to review all mandatory employment agreements to determine whether they contain out-of-state forum selection or choice-of-law clauses, including arbitration clauses, at-will agreements and handbook acknowledgments, confidentiality and nondisclosure agreements and invention and assignment agreements,” concluded Gray. “For those agreements that will be modified or extended and for all new agreements, employers should consider removing out-of-state forum selection or choice-of-law clauses.”

However, the law does not apply to a contract with an employee who is represented by legal counsel in negotiations. This caveat presents a whole host of questions about the nature and extent of the involvement of counsel and whether that representation means the employer can insist on out-of-state law or forum. The “attorney-negotiated” exception could result in unrepresented employees, who are automatically protected, faring better than those who retain counsel.

About Nancy Gray, Gray & Associates, P.C.

Nancy Gray is an AV-Rated attorney and Los Angeles Super Lawyer with more than 30 years of experience providing personalized attention and creative solutions to her clients’ legal issues. Gray & Associates focuses on civil litigation and trials, commercial law, contracts, sexual harassment, labor and employment law, employment contracts, intellectual property litigation, trademark litigation, unfair competition, false advertising, and business law. For more information, please call (310) 452-1211, visit or follow them on Facebook. The law office is located at 11500 W. Olympic Blvd., Suite 400, Los Angeles, CA 90064.

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