What is a forum selection clause?

| Mar 26, 2020 | Firm News |

Your employment contract contains a number of provisions that could affect how you resolve a dispute with your employer. One of these provisions may include a forum selection clause. It is important you know whether your contract has this clause, since it may mandate which court can hear your dispute against your employer if you should have one. 

The Cornell Law School explains that in a contract, a forum selection clause identifies the location and the court where the signatories to the contract will take a legal dispute. The contract will establish a court as having the authority over the parties, and the location of the court as the venue. 

Clause validity 

Forum selection clauses may help to streamline the litigation process if a dispute should occur. However, you might have concerns that the clause gives your workplace a venue that is too favorable to them or puts you at certain disadvantages. In some circumstances, a court might strike down a forum selection clause as invalid. 

Inconvenient venues 

In past cases, courts have examined forum selection clauses to see if they name inconvenient venues. The courts often define inconvenient venues as locations that do not possess any actual connection to the contract, or venues that are so inconvenient for a signatory that he or she decides not to file a lawsuit. Form contracts may contain inconvenient venues, but if you are in a position to negotiate a contract, you may ask for a fairer venue. 

Broad or overreaching language 

Forum selection clauses may lose validity based upon unclear language. A clause might, for example, bestow jurisdiction upon a court, but not exclusive jurisdiction, or it might neglect to specify a location that will hear a dispute. People have also challenged forum selection clauses on the grounds that they overreach, have fraudulent provisions, or do not actually cover the parties involved in a dispute. 

Failure to inform 

Even if your contract includes a forum selection clause, it is possible the company never mentioned it to you or made it a point of any discussion. This is not an insignificant point, as courts may look at whether your workplace made a reasonable effort to communicate to you that your contract contains a forum selection clause. A court might strike the clause down if your employer failed to do so.