Procedural Posture

Petitioners, a subsidiary and a parent, filed a petition to force respondent San Francisco County Superior Court to enforce a forum selection clause in a share exchange agreement in a breach of contract action filed by plaintiff employee.

Overview

The employee worked for the Norway salmon subsidiary. By an exchange agreement, the employee was allowed to exchange stock from the subsidiary for stock from the parent. Under the terms of the agreement, the forum selected was Hamburg, Germany. The employee later filed an action against petitioners, contending that he was owed additional shares under the terms of the agreement. The trial court denied petitioners’ motion to stay the action under the doctrine of forum non conveniens. They then petitioned the court to compel the trial court to enforce the forum selection clause. The court determined that the trial court erred in determining that the clause was merely permissive. Therefore, the forum selection clause was presumed valid and enforceable unless the employee showed that enforcement of the clause was unreasonable under the circumstances. The employee did not establish that the selected forum was unavailable or that it was unable to accomplish substantial justice. The clause did not violate Cal. Corp. Code § 25701 because there was no existing action based on a violation of California’s securities laws. Finally, the fact that an adhesion contract existed did not invalidate the clause.

Outcome

The court issued a peremptory writ commanding the trial court to enforce the forum selection clause. The court also ordered the trial court to grant petitioners’ motion to stay the action pending completion of the litigation in Germany.