Boss v. American Express Fin. Advisors, Inc

In Boss v. American Express Fin. Advisors, Inc., 6 NY3d 242 [2006], lv denied 12 NY3d 716 [2009]) three financial advisors brought a putative class action based on their claim that their contracts with IDS Life Insurance Co. (IDS) violated New York's Labor Law based on IDS's requirement for each financial advisor to pay a certain amount each month in an expense allowance to cover the maintenance of office space and overhead expenses. The employment contract contained a clause that said, "this Agreement is a Minnesota Contract, governed by Minnesota law. All of the payments you make to IDS Life are payable in Hennepin County, Minnesota. You expressly waive any privileges contrary to this provision. You agree to the jurisdiction of [the] State of Minnesota courts for determining any controversy in connection with this Agreement" (Boss, 6 NY3d at 245-46). The trial court dismissed the action based on the forum selection clause over the plaintiffs' contention that the forum selection clause should not be enforced because the wage deductions contravened New York's Labor Law and were contrary to the public policy concerns of New York as the State forbids deductions of more than 10% from an employee's wages. In affirming the dismissal based on the forum selection clause, the Court of Appeals found plaintiffs' argument to be "misdirected" since the issue raised was "really one of choice of law, not choice of forum; it is the choice of law clause that, according to plaintiffs, may not be enforced" (Boss, 6 NY3d at 247). The Court reiterated the notion that forum selection clauses are enforced because they " provide certainty and predictability in the resolution of disputes,'" and expressly declined to resolve the choice of law issue presented because it could and should have been made to a court in Minnesota--the forum the parties chose by contract. If New York's interest in applying its own law to this transaction is as powerful as plaintiffs contend, we cannot assume that Minnesota courts would ignore it, any more than we would ignore the interests or policies of the State of Minnesota where they were implicated. In short, objections to a choice of law clause are not a warrant for failure to enforce a choice of forum clause (Boss, 6 NY3d at 247).