Forum Selection Clause May Operate As Special Contract In Violation Of Massachusetts Wage Act

Constangy, Brooks, Smith & Prophete, LLP

The Massachusetts Supreme Judicial Court held this week that, where certain criteria are met, an out-of-state forum selection clause in an employment contract will violate the Massachusetts Wage Act.

The Employment Contract – New York forum, New York law

In Melia v. Zenhire, Inc., the defendant, a developer of web-based pre-employment tools and services for the recruiting industry, entered into an employment contract with plaintiff Edward Melia to be its vice president of product and business development. Zenhire, a Delaware corporation, was based in New York, and Melia lived and worked in Massachusetts. The employment contract contained a choice-of-law clause providing that it would be governed and construed in accordance with the laws of New York. The contract also contained a forum selection clause requiring disputes to be resolved by the courts in Erie County, New York. After five months, Zenhire began to experience financial difficulties and failed to pay Melia compensation due under the contract. Melia brought suit in the Massachusetts Superior Court alleging that Zenhire violated the Massachusetts Wage Act.

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