USA – FLORIDA Trends and Developments Contributed by: Stuart Singer and Carl Goldfarb, Boies Schiller Flexner
icy against non-compete agreements... [and] fails because the only relevant consideration is whether the forum clause selection clause itself violates Cali - fornia’s public policy, not the agreement in which it appears” (Id at *7). Numerous cases have reached a similar conclusion. See, for instance: • Dexcom, Inc v Medtronic, Inc , 2021 WL 5908930, at *3 (SD Cal, 14 December 2021) – “[p]laintiffs’ argument, however, relates to California’s public policies surrounding non-compete and choice- of-law provisions, not public policy against the enforcement of forum-selection clauses”; • Thermomagnetics & Cryogens, Inc v Pittsburgh Universal, LLC , 2016 WL 11002591, at *4 (CD Cal, 19 December 2016) – “[w]hile California has a policy against restrictive covenants against compe - tition, this Court is not aware of any general policy of non-enforcement of forum-selection clauses”; • Future Foam, Inc v FXI, Inc , 2016 WL 11752908, at *7 (CD Cal, 5 April 2016) – “[t]he Eastern District of Pennsylvania is capable of vindicating any claims arising under California law because, despite the existence of a choice-of-law provision, the trans - feree court may apply California law if it determines that such application is appropriate”; and • In re AutoNation, Inc , 228 SW 3d 663, 670 (Tex 2007) – “we will not presume to tell the 49 other states that they cannot hear a non-compete case involving a Texas resident-employee and decide what law applies, particularly where the parties voluntarily agree to litigate enforceability disputes there and not here”. Furthermore, if the venue provision is upheld, the court should send the case to Florida without reach - ing choice-of-law and enforceability issues. Build Group, Inc v NR Windows, Inc , 2022 WL 3697355, at *1 (CD Cal, 17 February 2022), is instructive. That case arose from a dispute between two Florida com - panies, their ex-employee and his new employer, two California companies. While still employed in Florida, the employee entered into a non-compete with a Florida choice-of-law provision and venue in the state court in Florida. After the ex-employee began working
for a competitor in California, the two Florida compa - nies sued him in a Florida court for breach of his duty of loyalty. In response, the new employer brought a multi-count action in California against the two Florida companies. The defendants invoked the forum selec - tion clause and moved to dismiss. The court first held that the plaintiffs were bound by the forum selection clause even though they were not signatories, because their claims were intertwined with the non-compete agreement. Then, the court found that the forum selection clause did not violate Califor - nia public policy because “the only relevant consid - eration is whether the forum [...] selection clause itself violates California public policy, not the agreement in which it appears” (Id at *4). The court thus dismissed the California action, allowing the Florida action to proceed. In reaching its decision, the Build Group, Inc court rejected the defendants’ invocation of the California Labor Code Section 925, which limits employers’ abil - ity to require employees who reside and work primarily in California to litigate outside California a claim that arose in California. The court held that the provision did not apply because it was limited to employees who signed contracts with forum selection clauses while residing and working in California, and the ex- employee did not fit that bill (Id at *5). However, since that decision was issued, the California legislature enacted a new statute, the California Busi - ness and Professions Code Section 16600.5 (2024), which states that any non-compete contract that is void under California law “is unenforceable regard - less of where and when the contract was signed”. That provision was intended to help California com - panies hire out-of-state workers because “as the mar - ket for talent has become national and remote work has grown, California employers increasingly face the challenge of employers outside of California attempt - ing to prevent the hiring of former employees”. There is not yet a definitive ruling on the scope of that new provision or on how it would operate in tandem with the California Labor Code Section 925. Even if such a case were to remain in California, there would be a dispute about whether California
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