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I do not live in California, but my employer does business, has headquarters, and is incorporated in California. Which state's laws apply to the employment agreement? In particular, does Section 2870 of the California Labor Code apply?

2870.

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

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tldr

It depends on:

  1. whether the employment agreement specifies which state's law governs contract disputes; and
  2. how your state of residence and work treats governing-law clauses.

Background

To know whether § 2870(a) applies in this instance, a good place to start would be the employment agreement itself—contracts often contain a section on "Governing Law."

This is an example of a choice-of-law problem, which is just preliminary procedural hurdle for a court to clear. Clearing the hurdle is usually easier for the court when the parties agree in advance about which state's laws will govern contract disputes.

So, if the agreement says that California law governs, then one would typically look to statutes like § 2870(a) to interpret the agreement's provisions.

But that's not always the definitive answer. Some states have laws designed to protect their residents by allowing them to void governing-law clauses that seek to have contract disputes adjudicated in a state where the employee doesn't live or work.

Without knowing where you live, and in the interest of generality, let's use California residents as an example. Section 925(a) of California's labor code allows California resident workers to void governing-law clauses in employment agreements that deprive them of the protection of California's laws. But § 925(b) implies that the governing-law clause still controls unless that California resident worker affirmatively chooses to void the clause. Non-California employees would look to see whether their states have protective jurisdictional statutes like this.

  • When does the California resident have to choose to void the clause? At the point they agree the contract, or at the point they wish to litigate? (At the point of litigation would seem to offer more protection, but ...) – Martin Bonner Jun 12 '18 at 8:44
  • @MartinBonner The employee may void the provision after the contract is signed. – Pat W. Jun 12 '18 at 13:21

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