Oxford Global Resources, LLC v. Hernandez
Superior Court of Massachusetts
(Suffolk, Business Litigation Session)
Docket No. 1684-CV-03911-BLS-2
The Business Litigation Session of the Suffolk Superior Court in Massachusetts invalidated a contractual forum selection clause and dismissed an employer’s action to enforce a noncompetition agreement signed by a former employee, because the employer forced a Massachusetts forum upon a California employee in order to circumvent California public policy against the enforcement of noncompetition agreements.
Plaintiff-employer Oxford Global Resources, LLC (“Oxford”), a recruiting and staffing company specializing in placement of information technology contractors to businesses, hired defendant-employee Hernandez to an entry-level position as an account manager. When hired, Hernandez had to sign an offer letter and a separate “protective covenants agreement” which contained confidentiality, noncompetition, and non-solicitation provisions. The agreement also contained a forum selection clause requiring that any lawsuit arising from the agreement be brought in Massachusetts, and a choice-of-law provision providing for the application of Massachusetts law to the agreement.
Oxford hired Hernandez to work in its Campbell, California, office. Hernandez interviewed for the position in California; signed the offer letter and agreement in California; was trained by Oxford in California; conducted all of his work for Oxford in California; and reported to Oxford supervisors who were located in California. Indeed, the Court found that all relevant events and all of Oxford’s alleged injuries occurred in California. The only connection to Massachusetts, the Court noted, was Oxford’s allegation that its principle place of business was there.
Oxford sued Hernandez in Massachusetts alleging that Hernandez used information regarding the identity of Oxford’s customers to solicit those customers on behalf of a competitor in California. Hernandez moved to dismiss the action under the doctrine of forum non conveniens, which permits dismissal when “the court finds that in the interest of substantial justice the action should be heard in another forum.” Mass. Gen. Laws, ch. 223A, § 5. Despite the forum selection clause, Hernandez prevailed and the Court dismissed the action in order for it to be heard in a California court.
The Court engaged in a three-step analysis leading to dismissal. First, it determined that California law governed the agreement despite the choice-of-law provision favoring Massachusetts law because the agreement was an improper contract of adhesion since Hernandez did not have a meaningful opportunity to negotiate it. Oxford’s offer to Hernandez was a take-it-or-leave-it offer, no negotiation of the agreement’s terms took place, and Hernandez had no bargaining power as an entry-level employee with no previous experience in the industry. The Court discounted the agreement’s boilerplate language that Hernandez had the opportunity to consult a lawyer and that he was not under duress as insufficient to overcome the disparity in bargaining power between the parties.
Significantly, the Court found the choice-of-law provision to be an apparent attempt by Oxford to circumvent California’s public policy against the enforcement of noncompetition agreements. Without the provision, California law would have governed the agreement because California had the most significant relationship to the
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