Amended in Senate April 18, 2016

Amended in Senate March 29, 2016

Senate Bill No. 1241

Introduced by Senator Wieckowski

February 18, 2016

An act to add Section 1799.208 to the Civil Code, begin insert and to add Section 925 to the Labor Code, end insert relating to begin delete consumer end delete contracts.

LEGISLATIVE COUNSEL’S DIGEST

SB 1241, as amended, Wieckowski. begin delete Consumer contracts. end delete begin insert Contracts. end insert

Existing law, the Consumer Contract Awareness Act, defines a consumer contract as a writing prepared by a seller that provides for the sale or lease of goods or begin delete services end delete begin insert services or the extension of credit, as specified, end insert for personal, family, or household purposes, among other provisions. The act begin delete require a seller end delete begin insert requires a seller, which includes financial institutions, end insert to deliver a copy of a consumer contract to the consumer at the time the contract is signed, and it prohibits the waiver of any provisions of the act.

This bill begin delete would, in addition, provide end delete begin insert would provide, for contracts entered into, modified, or extended on or after January 1, 2017, end insert that a provision in a consumer contract that purports to designate the venue in which a controversy arising from the consumer contract is litigated, or the choice of law to be applied, is voidable by the consumer, with respect to a controversy arising in California, if the provision would deprive the consumer of the protection of California law or require the consumer to litigate the controversy out of state. begin insert The bill would prohibit a seller from requiring a consumer to agree to these voidable provisions as a condition of entering into a contract regulated by the act, and would provide that such provisions, if required, are inoperative and California law applies in its place. The bill would specify that injunctive relief is available in this context and that a court may award a plaintiff reasonable attorney’s fees. The bill would include arbitration with litigation for purposes of these provisions. end insert

begin insert

This bill also would create an analogous set of rights, prohibitions, and requirements, as described above, in connection with employment contracts.

end insert

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1799.208 is added to the Civil Code, to
read:

1799.208.  

(a) Notwithstanding any other law, a provision in
a consumer begin delete contract, as defined by subdivision (b) of Section
1799.201, end delete begin insert contract end insert that purports to designate the venue in which
a controversy arising from the consumer contract may be litigated,
or the choice of law to be applied, is voidable by the consumer if
the provision would do either of the following:

(1) Deprive the consumer of the protection of California law
with respect to a controversy arising in California.

(2) Require the consumer to litigate outside of California a claim
arising in California.

begin insert

(b) A seller shall not require a consumer to agree to a provision
as described in subdivision (a) as a condition of entering into a
contract regulated by this title, and if such a provision is required,
it shall be inoperative and California law shall apply in its place.

end insert begin insert

(c) In addition to injunctive relief and any other remedies
available, a court may award a plaintiff who is enforcing his or
her rights under this section reasonable attorney’s fees.

end insert begin delete

(b)

end delete

begin insert (d) end insert  For purposes of this section, litigation includes arbitration.

begin insert

(e) This section shall apply to a contract entered into, modified,
or extended on or after January 1, 2017.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 925 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 925. end insert   

(a) Notwithstanding any other law, a provision in an
employment contract that purports to designate the venue in which
a controversy arising from the employment contract may be
litigated, or the choice of law to be applied, is voidable by the
employee if the provision would do either of the following:

(1) Deprive the employee of the protection of California law
with respect to a controversy arising in California.

(2) Require the employee to litigate outside of California a claim
arising in California.

(b) An employer shall not require a person to agree to a
provision as described in subdivision (a) as a condition of entering
into an employment contract, and if such a provision is required,
it shall be inoperative and California law shall apply in its place.

(c) In addition to injunctive relief and any other remedies
available, a court may award a plaintiff who is enforcing his or
her rights under this section reasonable attorney’s fees.

(d) For purposes of this section, litigation includes arbitration.

(e) This section shall apply to a contract entered into, modified,
or extended on or after January 1, 2017.

end insert