Employment Agreement’s forum, venue and personal jurisdiction clause upheld despite argument that the agreement was signed “under extreme pressure” and without sufficient time for counsel to review.  CLP Resources, Inc. v T. Salerno, 2011 WL 1597677 (W.D.Wash.) (April 27, 2011).

Plaintiff CLP Resources, Inc. (“CLP”), a large provider of temporary construction workers, sued a former employee, defendant Salerno, and his new business, Defendant Alliance Project Staffing (“Alliance”), claiming causes of action for breach of contract, misappropriation of trade secrets and tortious interference with existing and prospective contracts. CLP’s causes of action were based upon allegations that Salerno, while employed as an Account Manager at CLP, started a directly competing business, Alliance, using CLP resources. CLP asserted that Salerno’s conduct violated the terms of his Employment Agreement with CLP.

Defendant Salerno moved to dismiss the action upon the arguments (1) that the Western District of Washington lacked personal jurisdiction and (2) that venue was not proper in that court as he had worked for CLP in central California, not Washington.

In response, CLP argued that the action was commenced in the United States District Court for the Western District of Washington pursuant to the terms of the Employment Agreement, which directed that venue for any action to enforce the agreement would be either the State Court in Pierce County Washington, or the Federal Court in the Western District of Washington. It was further argued that the Employment Agreement also contained covenants that Salerno would submit to the personal jurisdiction of either of those courts, would not raise personal jurisdiction as a defense to any action premised upon the Employment Agreement, and finally that the laws of the State of Washington would govern any dispute. 

Salerno attempted to counter the enforceability of the Employment Agreement by claiming that he signed the agreement “under extreme pressure," three days after he began working for CLP, and after he had irrevocably relocated from Tennessee to work for CLP in California.  He further claimed that he did not have an attorney review the document, and did not have time to review it himself, thereby making the jurisdiction, venue and  are unenforceable due to duress and fraud. Finally, he claimed that the agreement was not supported by consideration because he had already begun working at the time he signed it.

In addition to his common law defenses to the agreement, Salerno added a statutory defense, alleging that the Employment Agreement also contained a non-competition provision which was not consistent, and as such void under, California Code §16600.

The Western District of Washington rejected all of Salerno’s arguments, denying his motion in its entirety. In denying the motion and upholding the jurisdiction, venue and choice of law provisions of the Employment Agreement the court held as follows.

First, whether California Code §16600 would ultimately be dispositive of CLP’s claims was not relevant at this stage in the litigation because “it plainly does not apply to the consent to personal jurisdiction, forum selection and choice of law provisions.”  Further holding that “[t]his California statute is not a defense to jurisdiction or venue in this Court.”

Next, with respect to Salerno’s argument that the Employment Agreement was procured by fraud or duress, or was otherwise not enforceable because Salerno was “coerced” into signing without adequate time to review the document, and without the benefit of the advice of counsel, the court held that “[t]here is no authority for the proposition that such time or attorney review is a prerequisite for the execution of a binding Employment Agreement. Nor is it novel that one seeking employment is offered the same conditioned on the acceptance of the terms of an employment agreement.”  

Finally, with respect to Salerno’s claim that he did not see the actual agreement before he began working for CLP, the court found that “…it is undisputed that his employment was always expressly conditioned upon his agreement to those terms. His claim about the consideration provided for his agreement is not enough, therefore, to negate his assent to the terms of the Employment Agreement.”