Will a Washington court enforce a clause requiring suit elsewhere?
Usually. Forum selection clauses are prima facie valid, and the Supreme Court of Washington has adopted this analysis: the clause is presumptively valid and enforceable and the party resisting it bears the burden of demonstrating that it is unreasonable; enforcement may be denied on a clear showing that, in the particular circumstance, it would be unreasonable; and the clause may be unreasonable if induced by fraud or overreaching, if the chosen forum is so unfair and inconvenient as for all practical purposes to deprive the plaintiff of a remedy or its day in court, or if enforcement would contravene a strong public policy of the state where the action is filed, whether declared by statute or by judicial decision. By statute, a provision in a noncompetition covenant signed by a Washington-based employee or independent contractor is void and unenforceable if it requires adjudication of the covenant outside Washington, and the same section voids it "[t]o the extent it deprives the employee or independent contractor of the protections or benefits of this chapter" or "[i]f it allows or requires the application of choice of law principles or the substantive law of any jurisdiction other than Washington state" (RCW 49.62.050).
The trap
Public policy is a real exception, not a formula: Dix held AOL's Virginia forum clause invalid because Virginia did not allow class actions for small-value CPA claims and there was no feasible alternative. Read the limit with the holding: the clause is unenforceable "if the lack of a class action procedure leaves the plaintiff with no feasible avenue for seeking relief for violations of the CPA", and "where the value of an individual claim is significant or the absence of a class action option would not, when viewed objectively, be likely to deter an individual action, public policy does not defeat a forum selection clause." Dix also affirmed the Court of Appeals "but on narrower grounds" than that court's broader public-policy holding, so the broader reading is not the law. The challenging party must present evidence; the court does not accept the pleadings as true. The statutory route has a soft edge of its own: RCW 49.62.050 reaches a provision in a noncompetition covenant signed by an employee or independent contractor "who is Washington-based", and the chapter's definitions section, RCW 49.62.010, does not define that term. It defines what a noncompetition covenant is and is not, and leaves who counts as Washington-based to be worked out from the facts.
9 authorities
The words that state the rule
A typical synthesis of the Bremen and Carnival Cruise Lines analyses that has been set out by a number of courts is as follows: (1) [A] forum-selection clause is presumptively valid and enforceable and the party resisting it has the burden of demonstrating that it is unreasonable, (2) a court may deny enforcement of such a clause upon a clear showing that, in the particular circumstance, enforcement would be unreasonable, and (3) the clause may be found to be unreasonable if (i) it was induced by fraud or overreaching, (ii) the contractually selected forum is so unfair and inconvenient as, for all practical purposes, to deprive the plaintiff of a remedy or of its day in court, or (iii) enforcement would contravene a strong public policy of the State where the action is filed.
The words that state the rule
We agree with this analysis, which is generally in agreement with statements in this state’s appellate decisions.
The words that state the rule
We agree with the United States Supreme Court that “[a] contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision.”
- statuteRCW 49.62.050enactment date not established
The words that state the rule
A provision in a noncompetition covenant signed by an employee or independent contractor who is Washington-based is void and unenforceable: (1) If the covenant requires the employee or independent contractor to adjudicate a noncompetition covenant outside of this state; (2) To the extent it deprives the employee or independent contractor of the protections or benefits of this chapter; or (3) If it allows or requires the application of choice of law principles or the substantive law of any jurisdiction other than Washington state.
The words that state the rule
Although forum selection clauses are prima facie valid, a forum selection clause may be invalid if it violates the public policy of this state. A decision regarding the enforceability of a forum selection clause is evaluated for an abuse of discretion. If a forum selection clause precludes class actions and thereby significantly impairs Washington citizens’ ability to seek relief under the CPA for small-value claims, the clause violates the public policy underlying the CPA’s dual enforcement scheme expressed in the attorney general and private rights of action under the act. Because AOL’s forum selection clause precludes class actions for small-value CPA claims and there is no feasible alternative *843 avenue for seeking relief on such claims, the forum selection clause is invalid and unenforceable and dismissal was an abuse of discretion. We affirm the Court of Appeals.
The words that state the rule
In assessing a forum selection clause for enforceability, the court does not accept the pleadings as true. Bank of Am., 108 Wn. App. at 748 ; Voicelink, 86 Wn. App. at 618 . Rather, the challenging party must present evidence to justify nonenforcement.
The words that state the rule
The trial court dismissed the action on the basis that the forum selection *829 clause requires suit to be brought in Virginia. On appeal, the Court of Appeals reversed, holding that the forum selection clause is unenforceable because the selected forum does not permit class suits, thus violating public policy underlying the CPA. We affirm the Court of Appeals, but on narrower grounds.
The words that state the rule
We affirm the Court of Appeals’ holding that the forum selection clause in the AOL contract at issue is unenforceable on public policy grounds if the lack of a class action procedure leaves the plaintiff with no feasible avenue for seeking relief for violations of the CPA. Thus, for example, where the value of an individual claim is significant or the absence of a class action option would not, when viewed objectively, be likely to deter an individual action, public policy does not defeat a forum selection clause.
- statuteRCW 49.62.010enactment date not established
The words that state the rule
(4) "Noncompetition covenant" includes every written or oral covenant, agreement, or contract by which an employee or independent contractor is prohibited or restrained from engaging in a lawful profession, trade, or business of any kind. A "noncompetition covenant" also includes an agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer. A "noncompetition covenant" does not include: (a) A nonsolicitation agreement; (b) a confidentiality agreement; (c) a covenant prohibiting use or disclosure of trade secrets or inventions; (d) a covenant entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest, but only if the person signing the covenant purchases, sells, acquires, or disposes of an interest representing one percent or more of the business; or (e) a covenant entered into by a franchisee when the franchise sale complies with RCW 19.100.020(1).
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.