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A new California law prohibiting employers from requiring workers to litigate claims under other states' laws should be a wake-up call to companies that have not already updated their employment agreements to reflect case law that holds such choice of law provisions are invalid, said James Evans, a Los-Angeles-based partner with Alston & Bird.
The law, signed by Democratic Governor Jerry Brown on Sept. 25, will apply to agreements entered into, modified or extended beginning Jan. 1, 2017. It says any agreement to pursue employment-related claims, including in arbitration, outside of California or under the laws of another state violate public policy and are "voidable by the employee." State and federal courts in California have been invalidating such agreements for years, but the California Supreme Court has never definitively addressed the issue.
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