Uncertain enforceability of forum selection clauses in COVID-19 era

A forum selection clause included in an employment contract permits the contracting parties to specify where a lawsuit must be filed and litigated in the event there's a dispute. Idaho federal courts regularly enforce forum selection clauses that specify a locale other than Idaho and transfer a case filed by an Idaho resident in Idaho federal court to the locale specified in a forum selection clause. The U.S. 9th Circuit Court of Appeals (whose rulings apply to all Idaho and Montana employers) recently held, however, forum selection clauses specifying a locale other than Idaho are unenforceable under state law.

Because the enforceability of forum selection clauses varies from jurisdiction to jurisdiction, you should determine whether a forum selection clause contained in an employment agreement would be enforced by the jurisdictions in which your company or the employee resides, particularly now that many are working remotely because of COVID-19.

9th Circuit reverses

Gemini Technologies, Inc., an Idaho-based company filed litigation in the U.S. District Court for the District of Idaho against non-Idaho residents. The contract at issue contained a forum selection clause specifying Delaware as the required location for any dispute between the contracting parties. The district court held the forum selection clause was enforceable and required the case to be transferred to and litigated in Delaware.