“Should I file a lawsuit in my city, or in the employer’s state of incorporation?”

Question: My former employer claims I violated a non-compete agreement, and is therefore exercising a “clawback” provision to take back my vested stock shares, which are still held by the company.

I want to stop them, and I may need to file a lawsuit for an injunction if they don’t correct this.

They operate in Pittsburgh, where I work, but are a Delaware Corporation. Where should I file the lawsuit for the injunction?

Any other guidance here? Thanks.

Pittsburgh, Pennsylvania

Answer: Dear Presley: Your question involves two legal concepts:  (1) jurisdiction, and (2) convenient forum.

1. The general rule is that you can file a lawsuit wherever a company is “present” because Courts in those places have authority over the company, or what lawyers  call “jurisdiction” to hear the case.  When talking about a company’s “presence,” we mean where the company has an office, where it does business, and/or where it was created. A Court in each of these places – which could total hundreds of cities if the company was as large as, say, Coca Cola – would have “jurisdiction” to hear the case.

2. That said, the city where you worked for the company is the best place to bring the case, because it also is a “convenient forum.” After deciding whether the Court in a particular city has jurisdiction to hear the case, the next step is to consider whether that place is convenient for the parties, too.

Imagine, for the moment, that your employer has an office in Tibet, but you worked for the company in Tallahassee. In that instance, your employer would almost surely seek to move the case to a Court in Tallahassee, because (a) the witnesses are there, (b) the documents are there, and (c) the Court in Tallahassee is almost surely more familiar with Florida law, which would almost surely be applicable to a dispute that arose in Tallahassee.

So, even if a Court has jurisdiction, it may decline to exercise that jurisdiction, on its own or at the request of one of the parties, in order to move it to a more convenient forum. (The legal argument for moving a case for this reason is called “forum non conveniens,” which, although, written in Latin, sort of explains itself.)

3. My other suggestion: obtain the assistance of an employment attorney experienced in injunctions. While I am a big fan of people helping themselves as much as possible in all sorts of problems, injunctions is a kind of what we lawyers call “equitable remedy,” which is an especially complicated area of the law. My suggestion is you should obtain guidance and/or representation by an attorney in your city who is experienced in requests for injunctions or other “equitable” relief.

If you would like to obtain a list of experienced employment attorneys in Pittsburgh to obtain the guidance or representation you seek, just [click here].

Presley, I sure hope this helps. “Clawback” of compensation that you previously earned is an especially unfair employment practice, no matter what the alleged reason. I hope you are successful in your efforts. Good luck to you!!


Al Sklover

© 2011 Alan L. Sklover, All Rights Reserved.

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