Forum selection clauses are common in non-compete agreements, particularly when the employer is multi-state or multi-national. One question that often arises, however, is whether a court will actually require an employee to litigate in a distant jurisdiction with which he had minimal contacts. In a recent case from the Eastern District of Missouri, a federal judge enforced just such a forum selection clause.
Specifically, in Emerson Electric Co. v. Peter Ramos Yeo, the defendant, Peter Ramos Yeo (“Yeo”), was a former “key employee” who had signed a stock option agreement containing a non-compete clause and a Missouri forum selection clause. Because Yeo lives in the Philippines and purportedly had a “lack of minimum contacts with Missouri” (the court did not specify just how minimal his contacts with Missouri were), he challenged the enforceability of the Missouri forum selection clause, arguing, in effect, that the expense and burden of having to litigate in Missouri rendered the forum selection clause unfair and/or unreasonable. (Yeo also unsuccessfully challenged the enforceability of the non-compete on other grounds not discussed in this post.)
The Missouri court did not see it Yeo’s way, explaining that “Defendant is an educated person and is presumed to have agreed to the forum selection clause knowingly and intelligently. It is neither unfair, unjust nor unreasonable to hold Defendant to his bargain and require him to defend this matter in this Court.”
The court’s decision was sparse in certain details (e.g., the precise nature of Yeo’s former position, the extent of his contacts with Missouri, and whether there were other facts and circumstances that rendered him or his conduct unsympathetic). Nevertheless, the decision is notable for its strict enforcement of the forum selection clause.
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