employment international california jurisdiction breach-of-contract
Small claims court jurisdication over international employment agreement?
<ol>
<li><p>I am a US citizen originally residing in state S.</p></li>
<li><p>I entered into an employment agreement with a company headquartered in country C1 (not the US), with physical offices in another country C2 and US (more specifically in California).</p></li>
<li><p>The employment agreement specifies that I will work in country C1 and C2, so I left state S for C1 and C2 to work for the company for some time.</p></li>
<li><p>There is a written promise in the agreement not fulfilled (or fulfilled too late) by my employer and in the process causing me to lose some money, around $10,000 directly, more indirectly.</p></li>
<li><p>The agreement did not contain anything specifying which laws should be applied in case of dispute.</p></li>
<li><p>The employment relationship has since ended.</p></li>
</ol>

<p>Small claims court, or possibly mediation by a third party, is the venue I am leaning to for the concerned amount is relatively small. I'm not trying to ask for legal advice, but I'm not even sure in which location I should start looking to find lawyer consultation. </p>

<p>Without considering whether my claim itself has merit or owed amount realistic:</p>

<ul>
<li><p>Who has jurisdiction in such case of violation of contract? The court in country C1/C2, state S, or California?</p></li>
<li><p>If California courts might have jurisdiction, will a small claims court have jurisdiction? I.e. does the fact that this involves a foreign controlled company, even though it is also incorporated in the US, change anything?</p></li>
</ul>

<h1>Short Answer</h1>
<p>This is a good question whose answer changed in 2014.</p>
<p>Only countries C1 and C2 have jurisdiction. Neither state S nor California do unless services were performed there or the contract was entered into there or the company with which you have a contract (and not a mere subsidiary) has a contract there.</p>
<h1>Long Answer</h1>
<blockquote>
<p>Who has jurisdiction in such case of violation of contract? The court
in country C1/C2, state S, or California?</p>
</blockquote>
<p>C1 has jurisdiction because the contract was performed in part there and because the defendant is based there.</p>
<p>C2 has jurisdiction because the contract was performed in part there.</p>
<p>State S would have jurisdiction only if the contract were entered into there.</p>
<p>Until recently, California would have jurisdiction because under the traditional rule of the <em>International Shoe</em> case of the U.S. Supreme Court, a company was subject to jurisdiction on any matter in every state where it had a regular office for the conduct of business.</p>
<p>A recent U.S. Supreme Court decision, <em>Daimler A.G. v. Bauman</em>, 134 S. Ct. 746 (2014), limited that rule, holding that a company can be sued on any matter only where it is &quot;at home&quot; (i.e. has a headquarters or near equivalent secondary headquarters, or if it is organized under that jurisdiction's laws), and otherwise can only be sued in a place that has a significant connection to the subject-matter of the particular lawsuit.</p>
<p>Another way of getting jurisdiction over a corporation in a state, called &quot;tag jurisdiction&quot; which involves serving process on the company in the state, was eliminated for corporations in the 9th Circuit, which includes California, in the case of <em>Martinez v. Aero Caribbean</em> (9th Cir. August 21, 2014).</p>
<p>Neither does designation of an agent for service of process in the state. <em>King v. Am. Family Mut. Ins. Co.</em>, 632 F.3d 570, 579 (9th Cir. 2011), held that a corporation’s designation of an agent for in-state service of process does not create general jurisdiction over the corporation, even though there has been a widespread view that this was precisely the purpose behind requiring corporations to do so in order to obtain permission to do business in a state.</p>
<p>Another recent U.S. Supreme Court decision held that that a company is not subject to suit in a jurisdiction merely because it has a subsidiary that does business there.</p>
<p>So, under this new line of cases, the California courts would probably not have jurisdiction over the case.</p>
<p>Federal courts in California would also not have jurisdiction over the case since it does not involve a federal issue and does not involve a dispute in excess of $75,000.</p>
<p>Note also that the analysis for limited liability companies and limited partnerships and REITs is different from that for corporations. In non-corporation entities, the company may be sued in any jurisdiction in which an owner of the company resides.</p>
<blockquote>
<p>If California courts might have jurisdiction, will a small claims
court have jurisdiction? I.e. does the fact that this involves a
foreign controlled company, even though it is also incorporated in the
US, change anything?</p>
</blockquote>
<p>If California court did have jurisdiction (e.g. because the contract also called for performance of work in California as well as C1 and C2), a small claims court would probably have jurisdiction.</p>
<p>If you had a contract with a foreign controlled company that was incorporated in the U.S. (a well known example of such a company would be the franchisor of the 7-11 chain of convenience stores along with its company owned stores) then you could sue in the U.S. state where it was incorporated on any matter.</p>
<p>But, if your contract was with the foreign holding company, rather than a U.S. incorporated subsidiary, then California courts would probably not have jurisdiction over it.</p>
