Title: Ex Parte Procom Services, Inc.
Citation: 884 So. 2d 827
Docket Number: 1021851
State: Alabama
Issuer: Alabama Supreme Court
Date: December 30, 2003

884 So. 2d 827 (2003)
Ex parte PROCOM SERVICES, INC., Russell Leitch, and Hal Crews.
(In re Hank Smith, Jr.
v.
Procom Services, Inc., Russell Leitch, and Hal Crews).
1021851.

Supreme Court of Alabama.
December 30, 2003.
*829 Harlan F. Winn III and R. Frank Springfield of Burr &amp; Forman, LLP, Birmingham, for petitioners.
S. Joshua Briskman of Baxley, Dillard, Dauphin, McKnight &amp; Barclift, Birmingham, for respondent.
HARWOOD, Justice.
Hank Smith, Jr., sued Procom Services, Inc. ("Procom"), a Texas corporation, and Russell Leitch and Hal Crews, both residents of Dallas, Texas, in the Jefferson Circuit Court alleging breach of contract. Procom, Leitch, and Crews filed a motion to dismiss alleging, among other grounds, that venue in Jefferson County was improper and asking the trial court to enforce the outbound forum-selection clause contained in Smith's employment contract with Procom. The motion to dismiss was supported by Leitch's and Crews's affidavits. Smith amended his complaint to add a fraud claim based upon allegedly false representations made to him by Leitch and Crews. Smith also filed a response to the defendants' motion to dismiss, along with his supporting affidavit. The trial court overruled the motion to dismiss without a written explanation. Procom, Leitch, and Crews petition this Court for a writ of mandamus "directing the trial court to dismiss the claims of Smith against petitioners" based on the outbound forum-selection clause.
Ex parte Rymer, 860 So. 2d 339, 341 (Ala.2003).
In April 2002, Smith entered into an one-year employment contract with Procom, a corporation that markets telecommunications services and equipment. The employment contract provided, in relevant part:
Smith attested in his affidavit that "[w]hen [he] negotiated [his] employment with Procom, [he] dealt with Hal Crews and Russell Leitch. The negotiations took place while [he] was in Alabama and Georgia, and while Hal Crews and Russell Leitch were in Georgia and Alabama[,] respectively."
Smith asserted in his amended complaint that Leitch and Crews "each represented to him that he would be paid at least one-thousand ($1,000.00) a week or agreed upon overrides, whichever was greater for a period of one year," but that in November 2002 he began to receive less than $1,000 a week. Smith averred that "[t]he representations were false and made with intent that [he] rely on the representations, or were recklessly made or made negligently and [Smith] did rely on them." At the time Smith entered into the employment contract with Procom, Leitch was the president of Procom; Crews stated in his affidavit that he was not "employed by [Procom]," and that his affiliation with Procom was as "an officer of a corporation which provides consulting services to [Procom]."
Concerning his employment with Procom and his contacts with the State of Texas, Smith stated in his affidavit:
In regard to their contacts with the State of Alabama, Leitch and Crews affirmed identically, in relevant part:
In their petition for a writ of mandamus, Procom, Leitch, and Crews contend that they have a clear legal right to have the outbound forum-selection clause enforced because, they say, Smith did not show that enforcement of the forum-selection clause would be unfair or unreasonable. This Court, in Ex parte Rymer, supra, stated:
860 So. 2d  at 341.
In Smith's response to the motion to dismiss, he asserted that the contract was "affected by fraud" because, he alleged, "Crews and Leitch promised [him] at least one thousand ($1,000.00) per week. When they promised [him] that wage they did not intend to abide by the agreement." Smith also stated that "[i]f permitted to proceed with discovery and trial of this issue [i.e., fraud], [he] will prove that the Defendants engaged in a consistent practice of shorting employees the agreed upon amount of wages." He stated in his affidavit that he knew "of at least two other former employees of Procom whose employment contracts were breached in the same manner as [his] own" and that he knew of "three other former employees of Procom who never received the full amount of their reserve pay."
In determining whether a contract has been "affected by fraud," this Court has stated:
Ex parte Leasecomm Corp., 879 So. 2d 1156, 1159 (Ala.2003). Smith has not alleged that the forum-selection clause itself was affected by fraud; he has alleged only that he relied upon fraudulent statements pertaining to his salary when he entered into the employment contract. Therefore, he has failed to meet his burden of "clearly establish[ing]" that enforcement of the forum-selection clause was unfair because the clause was "affected by fraud." Ex parte Rymer, 860 So. 2d  at 341.
In his response to the defendants' motion to dismiss, Smith asserted also that the contract was affected by overweening bargaining power, stating in support of that assertion that Procom, Leitch, and Crews "put the forum clause common in their Alabama employment contracts to disway [sic] employees and former employees from enforcing their employment agreements due to the cost of litigating the relatively small amounts at issue in Dallas, Texas." This conclusory statement does not establish that the employment contract was affected by overweening bargaining power; accordingly, Smith has failed to establish that enforcement of the outbound forum-selection clause would be unfair.
Smith further contended in his response to the motion to dismiss that enforcement of the forum-selection clause "would be unreasonable on the basis that Dallas, Texas would be seriously inconvenient for the trial of this action." Smith elaborated:
In Ex parte Rymer, supra, we stated:
860 So. 2d  at 342-43.
First, Procom is a corporation, which, according to its petition for a writ of mandamus, hired Smith to "supervise the activities of [its] sales force and to perform other duties to be determined from time to time by Procom." The record does not establish Smith's profession before his employment with Procom, but we can infer that he had sufficient business acumen so as to be qualified to be hired in a supervisory capacity. Second, the contract was an employment agreement between Procom and Smith. Third, Procom's headquarters are located in the chosen forum, Dallas, Texas, and according to its petition, "witnesses and documents necessary for [Procom, Leitch, and Crews's] defense are located in Dallas County, Texas." Also, Leitch and Crews are residents of Dallas, Texas. Fourth, Smith does not allege that he was unable to understand the terms of the employment contract, and the outbound forum-selection clause is clearly and unambiguously written. Fifth, Smith does not allege that extraordinary circumstances have arisen that would make Dallas, Texas, seriously inconvenient as a forum.
We conclude that a consideration of these five factors, as applied to this case, does not clearly indicate that a trial in Dallas, Texas, would be so difficult and inconvenient that it would effectively deprive Smith of his day in court. Ex parte Rymer, supra. As we have noted, the forum-selection clause also provides that *834 "the prevailing party shall be reimbursed by the other party for all costs and expenses (including, without limitation, attorney's fees and costs) incurred in connection with such action or proceeding."
Accordingly, Smith failed to clearly establish that enforcement of the outbound forum-selection clause would be either unfair or unreasonable.
Leitch and Crews state in the petition for a writ of mandamus that they "are both entitled to have the outbound forum-selection clause applied to Smith's claims asserted against them" even though they were not signatories to Smith's employment agreement with Procom. Leitch and Crews cite no Alabama cases that directly address the issue whether a forum-selection clause can apply to one who was not a signatory to the contract containing it, nor has our research revealed any Alabama case directly on point. However, federal courts have held that forum-selection clauses bind nonsignatories that are closely related to the contractual relationship or who are "transaction participants." See, e.g., Hugel v. Corporation of Lloyd's, 999 F.2d 206, 209-10 (7th Cir.1993) ("In order to bind a non-party to a forum selection clause, the party must be `closely related' to the dispute such that it becomes `foreseeable' that it will be bound."); Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 514 n. 5 (9th Cir.1988) ("We agree with the district court that the alleged conduct of the non-parties is so closely related to the contractual relationship that the forum selection clause applies to all defendants."); Brock v. Entre Computer Ctrs., Inc., 740 F. Supp. 428, 431 (E.D.Tex.1990) ("[T]he court finds that the forum selection clause applies to all parties to the contract, whether signatories or not."); and Clinton v. Janger, 583 F. Supp. 284, 290 (N.D.Ill.1984) ("a range of transaction participants, parties and non-parties, should benefit from and be subject to forum selection clauses"). This authority is persuasive, but not binding. See Weems v. Jefferson-Pilot Life Ins. Co., 663 So. 2d 905, 913 (Ala.1995), quoting Ex parte Gurganus, 603 So. 2d 903, 908 (Ala.1992)("`[t]his Court may rely on a decision of any federal court, but it is bound by the decisions of the United States Supreme Court'").
We also note an analogy between this Court's enforcement of arbitration clauses as to nonsignatories to a contract and the enforcement of the forum-selection clause in this instance. This Court has stated that "[i]f a nonsignatory's claims are `intertwined with' and `related to' the contract, arbitration can be enforced." Cook's Pest Control, Inc. v. Boykin, 807 So. 2d 524, 527 (Ala.2001); see also Stevens v. Phillips, 852 So. 2d 123, 130 (Ala.2002), quoting Pritzker v. Merrill Lynch, Pierce, Fenner &amp; Smith, Inc., 7 F.3d 1110, 1121 (3d Cir.1993) ("'"Because a principal is bound under the terms of a valid arbitration clause, its agents, employees, and representatives are also covered under the terms of such agreements."'"), and Ex parte Gray, 686 So. 2d 250, 251 (Ala.1996)("A party should not be able to avoid an arbitration agreement merely by suing an employee of a principal."). Because Smith's claims against Leitch and Crews arise out of statements Leitch and Crews allegedly made while negotiating Smith's employment contract with Procom, we conclude that Leitch and Crews are entitled to enforce the outbound forum-selection clause contained in the employment contract.
Accordingly, we conclude that Procom, Leitch, and Crews have shown a clear legal right to have the action against them *835 dismissed on the basis that venue in the Jefferson Circuit Court is, by application of the outbound forum-selection clause, improper. The trial court exceeded its discretion in denying their motion to dismiss. We direct the court to dismiss this cause, without prejudice, pursuant to Rule 12(b)(3), Ala.R.Civ.P.
PETITION GRANTED; WRIT ISSUED.
HOUSTON, LYONS, BROWN, WOODALL, and STUART, JJ., concur.
JOHNSTONE, J., concurs in part and concurs in the result.
JOHNSTONE, Justice (concurring in part and concurring in the result).
I concur in the holding and its rationale to the effect that the forum selection clause is enforceable between the parties. I note that Smith has not presented evidence that the physical attendance of all or even any of the Alabama-resident nonparty witnesses he mentions would be necessary for a fair trial or that the documents he mentions would be too cumbersome or sensitive to take to a trial in Texas. See Ex parte Wiginton, 743 So. 2d 1071 (Ala.1999). Accord Ex parte General Nutrition Corp., 855 So. 2d 475 (Ala.2003).
I concur in the result of extending the benefit of the forum selection clause to the nonsignatories. The plaintiff's claims against them are intertwined with his claims against the signatory; the nonsignatories are not excluded from the operation of the clause by its text; and the forum selection clause is being enforced in favor of the signatory itself. See Auvil v. Johnson, 806 So. 2d 343 (Ala.2001). The cases cited in the main opinion to the effect that a nonsignatory may be bound do not seem apt. The party to be bound in the case before us is Smith, a signatory. The issue is whether the nonsignatories may be benefited.