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Contracts should agree to litigate disputes in N.J.

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in Compensation and Benefits,Employment Law,Human Resources

If you use independent contractors or have your employees sign any type of employment contract, make sure those agreements state that both parties agree to litigate any disputes in New Jersey. If the contract is silent on the issue—or, worse, says the lawsuit forum must be California or another inconvenient place—you may end up spending thousands of dollars on travel and lost time.

Be especially cautious if you use packaged contracts bought off the shelf or downloaded from the Internet. Instead, it's best to consult a New Jersey attorney who can ensure your contracts contain the appropriate forum language.

Recent case: Magla Products, a New Jersey company, employed Richard Chambers under an employment contract that contained noncompete, nonsolicitation and confidentiality clauses. The contract designated New Jersey as the forum for settling all disputes.

Chambers quit and went to work for a Georgia company. Magla sued in New Jersey to enforce the contract's terms. Chambers asked the court to move the case to Georgia, but the court refused, reasoning that the contract said New Jersey was the proper forum. (Magla v. Chambers, No. 06-0155, DC NJ, 2006)  

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