Federal Court Finds that Parties Cannot Agree to Choose Georgia Law in California

Frank Kollman
Frank Kollman
02/10/2012

How many times have you signed a contract that says the law of another state controls the agreement?  The idea is to apply the law of a state more favorable to the person drafting the contract.  It’s a lawyer’s trick that sometimes works.

It did not work in the case of Ruiz v. Affinity Logistics Corp., No. 10-55581 (9th Cir., February 8, 2012).  The company in this case tried to get around California labor and employment law with its drivers by having them sign “independent contractor” agreements that applied Georgia law.  The Court found that the parties could not agree to circumvent the public policy of California, so Georgia law would not apply.

Although this federal court is considered one of the most liberal in the country, it is likely other courts would have reached this result.  As we have reported before, governments are scrutinizing independent contractor arrangements more critically these days.  This is another example.

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