Case Review: Jurisdiction Clauses in Contracts (Matijczak v Homewood Health Inc.)
In the August 23, 2021 judgment in Matijczak v Homewood Health Inc., 2021 BCSC 1658, the Court considered the validity of a jurisdiction clause in an employment contract (or arguably an independent contractor agreement).
At all times, the plaintiff resided in British Columbia and performed work in British Columbia. The defendant's administrative offices were based in Ontario (with offices scattered across BC). The plaintiff was ultimately dismissed from her employment with 30 days working notice.
The plaintiff had been required to sign a new employment contract with no mention of a change in the Governing Law provisions. The Court found that the plaintiff was not aware that the new contract would take away the plaintiff's right to litigate in BC and that she had no opportunity to negotiate the terms of the contract. The clause at issue was as follows:
18. GOVERNING LAW
18.1 This Agreement is governed by, and is to be construed and interpreted in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable in the Province of Ontario, without giving effect to conflict of laws principles. The parties hereby irrevocably attorn to the jurisdiction of the Superior Courts of the Province of Ontario for any and all disputes or matters arising out of this Agreement.
The Court, however, found that the clause in question did not preclude the plaintiff from suing in BC. Specifically, the clause did not include the word "Exclusive" to indicate that the plaintiff could not bring proceedings in BC.
Further, the Court found that the plaintiff was not provided with consideration when her employment contract was changed, negating the new contract. In other words, the plaintiff was not given any actual benefit in exchange for agreeing to limit the plaintiff's ability to sue. It is well established that where an employer seeks to impose an amended employment agreement with significant modifications consideration must be given in exchange for the detriment to the employee.
Ultimately, the Court found that the jurisdiction clause was not valid and that the plaintiff had the right to sue in BC given that there was not a "true mutual bargain" between the plaintiff and the defendant employer.
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