More Litigation Regarding Claims Covered

Chris Lemens pointed out to me this item on Lexology. (Free registration required, I think.) It’s by Michael S. Melbinger of Winston & Strawn, and it describes a recent decision by the Eleventh Circuit Court of Appeals regarding a forum-selection provision in an employment agreement.

Here’s the forum-selection provision:

The parties agree that all claims or causes of action relating to or arising from this Agreement shall be brought in a court in the City of Richmond, Virginia.

Here’s how Michael describes the dispute:

The former employee/plaintiff claimed that the company could not enforce the forum selection clause in her employment agreement because the clause:

  • was not mandatory by its terms,
  • did not apply to her claims, since they were statutory-based, and not based on the employment agreement, and/or
  • should not be enforced for public policy reasons.

The Court of Appeals held that the “shall” in the forum-selection provision made it mandatory; that “all claims or causes of action relating to or arising from this Agreement” was broad enough to encompass a statutory claim; and that there was no reason to hold the provision invalid on public-policy grounds.

I think the Court of Appeals got it right, but let’s look at this from the perspective of the drafter. In introducing his analysis, Michael says, “a significant federal court case vindicates our practice.” But any vindication that comes after appellate litigation is to some extent Pyrrhic.

So to make it a bit clearer that jurisdiction was mandatory, I would have used “may only” rather than “shall”—it’s language of limited discretion, not language of obligation. And to make it a bit clearer that the provision covers statutory claims, I would have said “arising out of this agreement or the Employee’s employment by the Company.”

Regarding the latter point, I know I’m repeating myself, as I made basically the same point in this recent post.  But I think it bears repeating.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.