Court combines choice of law, forum clauses.

• Author: Ziemer, David

Byline: David Ziemer

The validity of a choice of law clause is a prerequisite to determining the validity of a choice of forum clause, the Wisconsin Court of Appeals held on May 12.

Accordingly, the court invalidated a provision in an employment contract that named Ohio as the exclusive forum for the resolution of any disputes.

In October 2000, David Beilfuss, a Wisconsin resident, was hired as national sales manager, fixture & display assembly for Huffy, an Ohio Corporation. Beilfuss signed an employment agreement that included restrictive covenants governing confidential information and noncompetition.

Section 12 of the agreement provided, "This Agreement shall be governed and construed according to the laws of the State of Ohio without giving effect of any choice or conflict of law provision or rule (whether of the State of Ohio or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Ohio. EMPLOYEE hereto irrevocably submit(s) to the jurisdiction of the federal or state courts located in the State of Ohio over any dispute arising out of or relating to this agreement. EMPLOYEE irrevocably agrees that all claims in respect of such dispute or proceeding may be heard and determined in such Courts. EMPLOYEE hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which he or she may now or hereafter have to the laying of venue of such dispute brought in such court or any defense of inconvenient forum in connection therewith."

Beilfuss worked for Huffy until May 2002, when he was hired by National Marketing Services (NMS) as vice-president, sales new customer development. In February 2003, Huffy notified NMS and Beilfuss that Beilfuss was in violation of his employment agreement with Huffy.

In response, Beilfuss filed a declaratory judgment action in Wisconsin state court, seeking a declaration that the restrictive covenants in the employment agreement were unenforceable. Huffy moved to dismiss, contending that the employment agreement required any dispute to be resolved by the application of Ohio law in Ohio courts.

Waukesha County Circuit Court Judge Lee S. Dreyfus granted Huffy's motion. Beilfuss appealed, and the court of appeals reversed in a decision by Judge Daniel P. Anderson.

The court found that the agreement was neither ambiguous nor unconscionable, concluding "it is not unreasonable for a large multinational corporation to draft an...