Court Opinion

ID: 6322959
Source: CourtListenerOpinion
Date Created: 2022-03-14 17:00:50.98869+00
Date Added: 2024-06-11T09:21:18.223955
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

DEPUY SYNTHES SALES, INC., a             No. 21-55126
Massachusetts corporation; JONATHAN
L. WABER, an individual,                    D.C. No.
                 Plaintiffs-Appellees,   5:18-cv-01557-
                                            FMO-KK
                  v.

HOWMEDICA OSTEONICS CORP.,                 OPINION
             Defendant-Appellant,

                 and

STRYKER CORPORATION, a Michigan
corporation,
                       Defendant.

       Appeal from the United States District Court
          for the Central District of California
      Fernando M. Olguin, District Judge, Presiding

        Argued and Submitted November 18, 2021
                  Pasadena, California

                  Filed March 14, 2022
2       DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

Before: Richard Linn, * Jay S. Bybee, and Mark J. Bennett,
                    Circuit Judges.

                      Opinion by Judge Linn

                           SUMMARY **

             Forum-Selection Clause / Transfer

    The panel affirmed the district court’s order denying
transfer under 28 U.S.C. § 1404(a); and affirmed the grant
of partial summary judgment to DePuy Synthes Sales, Inc.
and Jonathan Waber because the district court did not err in
holding the forum-selection, non-compete and non-
solicitation clauses in an employment contract void under
California law.

    Waber was hired by Howmedica Osteonics Corp., and
signed an employment contract with Howmedica’s parent
company, Stryker Corporation. The contract included a
restrictive one-year non-compete clause and forum-selection
and choice-of-law clauses requiring adjudication of contract
disputes in New Jersey. Waber left Stryker to work at
DePuy, a Howmedica competitor.

    The panel first addressed the threshold jurisdictional
issue. Howmedica was not a party to the case when
Stryker’s motion to dismiss or transfer was decided. The

    *
      The Honorable Richard Linn, United States Circuit Judge for the
U.S. Court of Appeals for the Federal Circuit, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
     DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS                 3

panel held that as the actual employer that participated in the
proceedings to enforce its parent corporation’s forum-
selection clause, Howmedica had a right to appeal the
adverse decision of the district court on that issue.
Moreover, Howmedica properly became a party to this
litigation in the district court case, albeit after the district
court denied the motion to transfer. The panel concluded
there was jurisdiction to hear Howmedica’s appeal under
28 U.S.C. § 1201.

    The panel considered whether federal or state law
governed the validity of a forum-selection clause. The panel
held that the state law applicable here, Cal. Labor Code
§ 925(b), which grants employees the option to void a
forum-selection clause under a limited set of circumstances,
determined the question of whether Waber’s contract
contained a valid forum-selection clause. Section 925 as
applied by the district court here is not a rule of state law that
removed all discretion from a federal court on questions of
venue. Rather, the provisions in § 925 circumscribing the
kinds of employment agreements permitted and allowing
parties unrepresented by counsel to void a forum-selection
cause under certain circumstances relate to the terms of the
agreement between the parties and, at least to that extent, are
contrary to or within the scope of 28 U.S.C. § 1404(a).
Waber’s voiding of the forum-selection clause in his
employment contract under § 925(b) excised the forum-
selection clause from the agreement as presented to the
district court. The panel held that § 1404(a) and Stewart
Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988), did
not broadly preempt all state laws controlling how parties
may agree to or void a forum-selection clause.

    Having found that Waber satisfied all the prerequisites
of § 925 and effectively voided the forum-selection clause
4   DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

under § 925(b), the district court turned to the traditional
§ 1404 factors under M/S Bremen v. Zapata Off-Shore Co.,
407 U.S. 1, 12–13 (1972), and held they favored denial of
transfer. The panel held there was no error in applying the
California choice-of-law rules here where there was no valid
forum-selection clause. The panel rejected Howmedica’s
challenges. There was no error in the district court’s
consideration of § 925 as part of its transfer analysis.
Howmedica was incorrect when it asserted that Bremen was
inapplicable to adjudication of § 1404(a) motions because
Stewart limited Bremen to the context of forum non
conveniens rather than transfer. Finally, the district court did
not abuse its discretion in finding that the forum-selection
clause was void and unenforceable and that the modified
Atlantic Marine Construction Co. v. United States District
Court for the Western District of Texas, 571 U.S. 49, 62 n.5
(2013), analysis was thus inapplicable. The panel found no
reason to question or overturn the district court’s analysis or
its denial of Howmedica’s motion to transfer.

    The panel held that Howmedica presented no persuasive
reason to overturn the district court’s ruling of partial
summary judgment in favor of DePuy and Waber that the
forum-selection, non-compete and non-solicitation clauses
were void under California law.

                         COUNSEL

Robert J. Carty, Jr. (argued), Nichols Brar Weitzner &
Thomas, LLP, Houston, Texas; Michael D. Wexler, Seyfarth
Shaw, LLP, Chicago, Illinois; Robert B. Milligan, Seyfarth
Shaw, LLP, Los Angeles, California; John P. Phillips,
Seyfarth Shaw, LLP, Houston, Texas; for Defendant-
Appellant.
    DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS               5

Anthony B. Haller (argued), Blank Rome, LLP,
Philadelphia, Pennsylvania; Leigh Ann Buziak, Blank
Rome, LLP, Philadelphia, Pennsylvania; Jeffrey Rosenfeld,
Blank Rome, LLP, Los Angeles, California; for Plaintiffs-
Appellees.

                         OPINION

LINN, Circuit Judge:

    Howmedica Osteonics Corp. (“HOC”) appeals from the
denial by the United States District Court for the Central
District of California of HOC’s motion to transfer this case
to the District of New Jersey based on a forum-selection
clause in an employment contract between Jonathan L.
Waber (“Waber”), a California resident, and HOC’s parent
company, Stryker Corporation (“Stryker”). HOC also
appeals from the district court’s ruling that the forum-
selection, non-compete and non-solicitation clauses in
Waber’s contract were void under California law and from
the district court’s consequent grant of partial summary
judgment in favor of DePuy Synthes Sales, Inc. (“DePuy”)
and Waber. Because the district court did not abuse its
discretion in denying transfer under 28 U.S.C. § 1404(a), we
affirm the denial of HOC’s transfer motion. Because the
district court did not err in holding the forum-selection, non-
compete and non-solicitation clauses void under California
law, we affirm the grant of partial summary judgment.

                               I

                              A

   In September 2017, Waber was hired by HOC as a Joint
Replacement Sales Associate for the Palm Springs and Palm
6       DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

Desert areas and signed an employment contract nominally
with HOC’s parent, Stryker. That contract included a
restrictive one-year non-compete clause and forum-selection
and choice-of-law clauses requiring adjudication of contract
disputes in New Jersey. 1

    On July 1, 2018, Waber left Stryker to work at DePuy,
an HOC competitor, serving the same region he previously
serviced for Stryker in apparent violation of the non-compete
clause. On July 17, 2018, Stryker threatened enforcement of
the non-compete clause and soon thereafter sent Waber a
cease-and-desist letter that threatened legal action. On July
23, 2018, Waber sent Stryker a notice stating that he was
exercising his right to void the forum-selection and choice-
of-law clauses under California Labor Code § 925. That
statute forecloses certain contracts with California
employees and renders such agreements “voidable by the
employee” under specified conditions. The key provisions
read:

               (a) An employer shall not require an
                   employee who primarily resides and
                   works in California, as a condition of

    1
        The key provision, § 8.2, reads:

           “8.2 Governing Law and Venue. Although I may work
           for Stryker in various locations, I agree and consent
           that this Agreement shall be interpreted and enforced
           as a contract of [New Jersey] . . . and shall be
           interpreted and enforced in accordance with the
           internal laws of that state without regard to its conflict
           of law rules. In such circumstance, I agree and
           consent that any and all litigation between Stryker and
           me relating to this Agreement will take place
           exclusively [in New Jersey] . . . .” (emphasis added).
    DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS          7

              employment, to agree to a provision
              that would do either of the following:

              (1) Require the employee to
                  adjudicate outside of California a
                  claim arising in California.

              (2) Deprive the employee of the
                  substantive     protection      of
                  California law with respect to a
                  controversy arising in California.

          (b) Any provision of a contract that
              violates subdivision (a) is voidable by
              the employee, and if a provision is
              rendered void at the request of the
              employee, the matter shall be
              adjudicated in California and
              California law shall govern the
              dispute.

              ...

          (e) This section shall not apply to a
              contract with an employee who is in
              fact individually represented by legal
              counsel in negotiating the terms of an
              agreement to designate either the
              venue or forum in which a
              controversy arising from the
              employment contract may be
              adjudicated or the choice of law to be
              applied.

Cal. Lab. Code § 925 (emphasis added).
8       DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

                                    B

    Having purported to void the forum-selection and
choice-of-law clauses, DePuy and Waber, through shared
counsel, filed a preemptive declaratory judgment action in
the United States District Court for the Central District of
California, seeking a ruling that the forum-selection and
choice-of-law clauses were void under § 925, that California
law governs the dispute, that the non-compete clause was
void as a violation of California Business and Professions
Code § 16600, 2 and that DePuy was not subject to a tortious
interference claim. In response, Stryker, seeking to enforce
the forum-selection clause, filed a motion to dismiss under
28 U.S.C. § 1406 or to transfer to the United States District
Court for the District of New Jersey under § 1404(a).

    In addressing Stryker’s motion, the district court, guided
by M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12–13
(1972) (“Bremen”) and Atlantic Marine Construction Co. v.
United States District Court for the Western District of
Texas, 571 U.S. 49, 62 n.5 (2013), began by considering
whether there was a contractually valid forum-selection
clause in Waber’s contract. To answer that question, the
district court turned to California state law, specifically

    2
        California Business & Professions Code § 16600 reads:

           Except as provided in this chapter, every contract by
           which anyone is restrained from engaging in a lawful
           profession, trade, or business of any kind is to that
           extent void.

California courts have said that “section 16600 prohibits employee
noncompetition agreements unless the agreement falls within a statutory
exception.” Edwards v. Arthur Andersen LLP, 189 P.3d 285, 288 (Cal.
2006). There is no dispute on appeal that no statutory exception applies.
    DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS              9

§ 925. Because Waber satisfied all the prerequisites in
§ 925, the district court concluded that the forum-selection
clause “shall not be enforced” under state law. Having found
the forum-selection clause unenforceable, the district court
applied the factors normally considered by courts in deciding
transfer motions under § 1404(a) and found both the private
factors—including the Plaintiff’s choice of forum and the
convenience to the parties—and the public factors—
including familiarity with governing law and California’s
local interest manifest in its strong public policy against
enforcing out-of-state forum-selection clauses as reflected in
§ 925—to weigh against transfer. The district court
therefore denied Stryker’s motion.

    Thereafter, DePuy added HOC as a defendant and
amended the complaint, repeating the allegations of
invalidity of the forum-selection, choice-of-law, and non-
compete clauses, deleting the request for relief from the
tortious interference claim, and requesting injunctive relief
and attorney fees. The district court followed much of the
same reasoning it relied on in its denial of HOC’s motion to
transfer or dismiss and held that § 925 rendered the forum-
selection and choice-of-law clauses “void and
unenforceable.” Applying California law, the district court
granted partial summary judgment in favor of DePuy and
Waber, holding that § 925 and § 16600 rendered the forum-
selection, non-compete and non-solicitation clauses in
Waber’s contract void and unenforceable. The only issue of
material fact left undecided was whether Stryker and HOC
were joint employers.

    The parties then filed a joint stipulation that dismissed
Stryker with prejudice as the wrong party, agreeing that this
would not prejudice HOC’s and Stryker’s rights to appeal.
That resolved the final fact issue. The district court
10 DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

thereafter entered final judgment in favor of DePuy and
Waber. HOC appealed both the order denying transfer and
the judgment.

                              II

                              A

    We first address the threshold question of our
jurisdiction over this appeal. DePuy notes that HOC was not
a party to the case on February 5, 2019, when Stryker’s
Motion to Dismiss or Transfer was decided and that based
on the stipulation entered into by the parties, Stryker has
since been dismissed from the case. While DePuy “takes no
position for or against jurisdiction here” pursuant to the
parties’ stipulation, we are obligated to consider our own
jurisdiction independently of the parties’ stipulation. See
Bank of N.Y. Mellon v. Watt, 867 F.3d 1155, 1157 (9th Cir.
2017).

    It is uncontested that HOC participated in the litigation
and filed its notice of appearance with an explanation that
HOC was “improperly named as Stryker Corporation” and
that HOC was the true party in interest. As HOC explained,
and DePuy has not contested, “HOC is a wholly-owned
subsidiary of Defendant Stryker Corporation. Because HOC
employed Waber at the time of his resignation, it is the
correct party to this action.” HOC further explained that
although the employment contract at the heart of the dispute
is between Waber and “Stryker Corporation,” the contract
defines “Stryker Corporation” to include “subsidiaries,
divisions, and affiliates,” and HOC is such a subsidiary. As
the actual employer that participated in the proceedings to
enforce its parent corporation’s forum-selection clause,
HOC has a right to appeal the adverse decision of the district
court on that issue. See also Devlin v. Scardelletti, 536 U.S.
     DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS 11

1, 7 (2002) (considering the rights of non-named class
members, noting that “[w]e have never, however, restricted
the right to appeal to named parties to the litigation.”);
Commodity Futures Trading Comm’n v. Topworth Int’l,
Ltd., 205 F.3d 1107, 1113 (9th Cir. 1999) (allowing appeal
by individual investor based on participation in the district
court, pro se participation, and formal objections to
determinations).

     Moreover, HOC properly became a party to this
litigation in the district court case, albeit after the district
court denied the motion to transfer. We are aware of no
authority requiring a party to join the litigation prior to a
decision on a motion in order to appeal the final ruling on
the issue addressed by that motion. And even if HOC’s
official joinder into the case after the district court’s
February 5, 2019 decision were deemed to preclude its
appeal of that decision, HOC was a party at the time of the
district court’s partial summary judgment decision, which
also addressed the transfer issue.

   For these reasons, we have jurisdiction to hear HOC’s
appeal under 28 U.S.C. § 1291.

                                   B

    We review the district court’s denial of transfer under 28
U.S.C. § 1404(a) for an abuse of discretion. 3 Jones v. GNC
Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). “A
district court abuses its discretion if it does not apply the
correct law . . . .” Bateman v. U.S. Postal Serv., 231 F.3d
1220, 1223 (9th Cir. 2000).

    3
      HOC does not separately challenge the district court’s denial of
dismissal under § 1406.
12 DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

    We review legal issues, including statutory
interpretation, de novo. Wash. Pub. Utils. Grp. v. U.S. Dist.
Ct. for W. Dist. of Wash., 843 F.2d 319, 324 (9th Cir. 1987).
We review factual findings for clear error. Husain v.
Olympic Airways, 316 F.3d 829, 835 (9th Cir. 2002). We
review the district court’s grant of summary judgment de
novo. Oswalt v. Resolute Indus., 642 F.2d 856, 859 (9th Cir.
2011).

                              III

                               A

    HOC challenges the district court’s denial of its motion
to transfer, arguing that the district court failed to follow
Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22
(1988), should have found the forum-selection clause
enforceable under federal law, should have applied the
analysis required by Atlantic Marine, and should have
transferred the case to the District of New Jersey. HOC
frames the majority opinion in Stewart as a wholesale
rejection of Justice Scalia’s position in his dissent that state
law governs the validity of a forum-selection clause, holding
instead that § 1404(a) preempts any state law—like § 925—
that would render a previously agreed-to forum-selection
clause void or unenforceable. HOC thus contends that the
district court abused its discretion by applying § 925 to
invalidate the forum-selection clause and deny its motion to
transfer. HOC does not contest that Waber’s employment
agreement is governed by state contract formation law, but
argues that only general contract law, rather than any state
law directed specifically to forum-selection clauses, can
render such a clause invalid and avoid the modified Atlantic
Marine analysis.
     DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS 13

    DePuy and Waber argue that in reason and result Stewart
should not be read as broadly as HOC contends. They
contend that Stewart does not occupy the entire landscape of
state contract law related to the validity and enforcement of
forum-selection provisions and dealt with a narrower
issue—whether a district court’s categorical denial of a
§ 1404(a) motion to transfer based on Alabama law was an
abuse of discretion. According to Depuy and Waber, § 925
operates at the level of how agreements are made and
voided, before the venue question addressed by § 1404(a).
Depuy and Waber argue that Bremen, Stewart, and Atlantic
Marine assumed the presence of a valid forum-selection
clause, rather than addressing how forum-selection clauses
are made or voided. DePuy and Waber consider HOC’s
contention that Stewart preempted all consideration of state
law on questions of party agreement and validity of the
forum-selection clause to be unsupported and unsustainable.

    DePuy and Waber assert that while the enforceability of
a forum-selection clause in a federal court is a well-
established matter of federal law in this Circuit following
Bremen, see Gemini Techs., Inc. v. Smith & Wesson Corp.,
931 F.3d 911, 914–15 (9th Cir. 2019); Jones, 211 F.3d at
497; Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509,
513 (9th Cir. 1988), the validity of such a clause—like any
other contract clause—is a threshold issue governed by state
law. DePuy and Waber argue that while this court has not
spoken to whether state or federal law applies to the validity
of a forum-selection clause, at least two district courts in this
circuit have applied § 925 to determine the validity of a
forum-selection clause in deciding transfer motions under
§1404(a). See Pierman v. Stryker Corp., No. 3:19-cv-
00679-BEN-MDD, 2020 WL 406679, at *3–4 (S.D. Cal.
January 24, 2020); Friedman v. Glob. Payments, Inc., No.
CV 18-3038 FMO, 2019 WL 1718690, at *3 (C.D. Cal.
14 DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

February 5, 2019). DePuy and Waber also assert that
applying state law to determine the validity of a forum-
selection clause is consistent with federal courts’ treatment
of the validity of arbitration agreements. First Options of
Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995) (“When
deciding whether the parties agreed to arbitrate a certain
matter . . . courts generally . . . should apply ordinary state-
law principles that govern the formation of contracts.”).
DePuy and Waber further argue that Waber’s voiding of the
forum-selection clause under § 925 effectively excised the
forum-selection clause from the contract and fully justified
the district court’s refusal to apply the modified Atlantic
Marine analysis and denial of HOC’s motion to transfer.

                                B

    For decades, courts in the United States frowned upon
forum-selection clauses. That all changed when the
Supreme Court in an admiralty case applied the common law
doctrine of forum non conveniens and held that forum-
selection clauses are presumptively valid and should be
enforced unless “enforcement would be unreasonable and
unjust, or . . . the clause [is] invalid for such reasons as fraud
or overreaching.” Bremen, 407 U.S. at 15. Several years
after Bremen, the Supreme Court in Stewart once again
addressed the force of a forum-selection clause, this time
deciding what law governs transfer motions in a federal
court sitting in diversity.

    In Stewart, the plaintiff, alleging breach of contract,
brought suit in the United States District Court for the
Northern District of Alabama notwithstanding the presence
of a forum-selection clause electing a New York court for
any dispute arising out of the contract. Stewart, 487 U.S. at
24. The defendant responded by moving to transfer to New
York under § 1404(a) or to dismiss under § 1406 pursuant to
    DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS 15

the forum-selection clause. Id. The district court denied
transfer, applying an Alabama policy described in an
Alabama Supreme Court decision:

       [C]ontractual agreements by which it is
       sought to limit particular causes of action
       which may arise in the future to a specific
       place, are held invalid.

See Redwing Carriers, Inc. v. Foster, 382 So.2d 554, 556
(Ala. 1980) (quoting 6 A.L.R.2d § 4, p. 306 (1957)). The
Court explained that § 1404(a) represented Congress’
mandated standard for venue transfer analysis, one that
required a “flexible and individualized” analysis of multiple
factors including the presence of the forum-selection clause.
Stewart, 487 U.S. at 29–31. The Supreme Court made it a
point to note that Alabama’s policy, unlike the flexible and
individualized approach required under federal law, was a
“categorical policy disfavoring forum-selection clauses”—a
rule of decision setting the weight a court was required to
assign to a forum-selection clause. Id. at 30–31. Because
§ 1404(a) already controls the standard by which a federal
court must analyze transfer, the Alabama policy had to give
way to federal supremacy. Id. at 30 (explaining that a federal
court considering a transfer motion must “integrate the factor
of the forum-selection clause into its weighing of
considerations as prescribed by Congress” in § 1404(a)
rather than apply “Alabama’s categorical policy disfavoring
forum-selection clauses); id. (holding that a federal court
cannot honor a state law that “refuse[s] to enforce forum-
selection clauses providing for out-of-state venues as a
matter of state public policy.”); id. at 31 (“The forum-
selection clause, which represents the parties’ agreement as
to the most proper forum, should receive neither dispositive
consideration (as respondent might have it) nor no
16 DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

consideration (as Alabama law might have it), but rather the
consideration for which Congress provided in § 1404(a).”).
In other words, Alabama law could not set the weight a
federal court must give to an extant forum-selection clause
because § 1404(a) already requires consideration of an
extant forum-selection clause in the transfer analysis.

    Following Stewart, the Supreme Court once again had an
opportunity to address venue and transfer issues in Atlantic
Marine. In that case, the Supreme Court noted that while a
determination under § 1404(a) ordinarily requires
consideration and balancing of several recognized private
and public interest factors, the existence of a forum-selection
clause in a contract alters the usual transfer analysis and calls
for the consideration of modified public and private interest
factors. Atl. Marine, 571 U.S. at 62–63. Specifically, the
Supreme Court held that in the presence of a valid forum-
selection clause, courts should give plaintiff’s choice of
forum “no weight,” should deem the parties’ private interest
factors “to weigh entirely in favor of the preselected forum,”
and should apply the choice-of-law rules of the preselected
forum. Id. at 63–65. This is referred to as the modified
Atlantic Marine analysis. The court noted that its application
of the modified Atlantic Marine analysis “presupposes a
contractually valid forum-selection clause.” Id. at 62 n.5.

                                  C

    While concerns over the enforceability of a forum-
selection clause and the law governing venue have thus been
resolved, the question remains as to whether federal or state
law governs the validity of a forum-selection clause. 4 A

    4
     Our sister circuits have recognized that the Supreme Court did not
answer whether state or federal law governs the validity of a forum-
     DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS 17

number of district courts, including several in this circuit,
have ruled that state law governs the validity of a forum-
selection clause just like any other contract clause. 5 We hold
that the state law applicable here, § 925(b), which grants
employees the option to void a forum-selection clause under
a limited set of circumstances, determines the threshold

selection clause. Barnett v. DynCorp Int’l, LLC, 831 F.3d 296, 301 (5th
Cir. 2016) (“Atlantic Marine thus did not answer under what law forum-
selection clauses should be deemed invalid—an issue that has long
divided courts.” (citations omitted)); In re Union Elec. Co., 787 F.3d
903, 906–07 (8th Cir. 2015) (noting that Atlantic Marine “assumed the
existence of a valid forum-selection clause . . . thereby providing no
direct holding as to when such clauses should be deemed invalid”);
Lambert v. Kysar, 983 F.2d 1110, 1116 n. 10 (1st Cir. 1993) (“The
Supreme Court has yet to provide a definitive resolution of the Erie issue,
which has divided the commentators and split the circuits.” (citation
omitted)).
     5
       Pierman, 2020 WL 406679, at *4 n.4 (“[T]hese matters [of forum-
selection clause validity] are fundamentally state law concerns which
must be respected by federal courts sitting in diversity under the Erie
doctrine.”); Glob. Power Supply, LLC v. Acoustical Sheetmetal Inc., No.
CV 18-3719-R, 2018 WL 3414056, at *2 (C.D. Cal. July 9, 2018)
(“Although federal law governs the interpretation and enforcement of
forum selection clauses, state law governs contract formation and the
interpretation of an agreement’s terms.”) (quoting Worldwide Subsidy
Grp., LLC v. Fed’n Int’l De Football Ass’n, No. 14-00013 MMM, 2014
WL 12631652, at *14 (C.D. Cal. June 9, 2014)); Whipple Indus., Inc. v.
Opcon AB, No. CV-F-05-0902 REC SMS, 2005 WL 2175871, at *1 n.2
(E.D. Cal. Sept. 7, 2005) (“[T]he issue of the existence of [a] forum
selection clause . . . is decided according to state contract law.”);
Kellerman v. Inter Island Launch, No. 2:14-cv-01878-RAJ, 2015 WL
6620604, at *3 (W.D. Wash. Oct. 30, 2015) (“To determine the
enforceability of a forum selection clause, a federal court must ask
whether a contract existed under state law.”).
18 DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

question of whether Waber’s contract contains a valid
forum-selection clause. 6

     Section 925 includes three provisions relevant here.
First, § 925(a) prohibits employers from requiring California
employees to agree to litigate disputes outside California and
to give up the protection of California laws. Second,
§ 925(b) protects a California employee who is not
represented by counsel from being bound by such a
provision and gives them the right to declare that provision
void. Third, § 925(e) specifies that the first two provisions
do not apply to any California employee who is represented
by counsel when signing the agreement. Such an employee
is free to negotiate whatever forum-selection clause they
want. Unlike the Alabama policy at issue in Stewart, § 925
as applied by the district court here is not a rule of state law
that would remove all discretion from a federal court on
questions of venue. Rather, the provisions in § 925
circumscribing the kinds of employment agreements
permitted and allowing parties unrepresented by counsel to
void a forum-selection clause under certain circumstances
relate to the terms of the agreement between the parties and,
at least to that extent, are not contrary to or within the scope
of § 1404(a). As discussed, infra, Waber voided the forum-
selection clause in his employment contract under § 925(b).
Waber’s voiding of that provision excised the forum-
selection clause from the agreement as presented to the
district court.

   HOC argues that § 1404(a), as interpreted by Stewart,
preempts § 925 and renders Waber’s voiding of the forum-

    6
      We need not decide whether state law would govern validity of a
forum-selection clause that had not been voided and is before the district
court for consideration in the transfer analysis.
    DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS 19

selection clause ineffective. But nothing in § 1404(a) relates
to questions of contract formation or a party’s unilateral
withdrawal of consent to a provision, and nothing in Bremen,
Stewart, Atlantic Marine or any other Supreme Court
decision creates a federal rule of contract law that preempts
a state law like § 925 from addressing the upstream question
of whether the contract sought to be enforced includes a
viable forum-selection clause. HOC overreads the Stewart
majority decision as preempting all state laws relating to
forum-selection clauses. That is not what the Supreme Court
did.

    The Supreme Court in Stewart did not adopt a sweeping
rule of preemption of all state laws relating to forum-
selection including issues of contract formation and
voidability between the parties. Instead, the Court simply
held that, on matters of venue in federal court, § 1404(a)
governed and took primacy over any state law purporting to
set a categorical rule within the scope of § 1404(a). The
Supreme Court recognized that the question before it was to
assess the effect of the Alabama law on an existing and
presumptively valid forum-selection clause. Stewart, 487
U.S. at 29 (“[T]he first question for consideration should
have been whether § 1404(a) itself controls respondent’s
request to give effect to the parties’ contractual choice of
venue and transfer this case to a Manhattan court” (emphases
added)); id. at 32 (“We hold that federal law, specifically 28
U.S.C. § 1404(a), governs the District Court’s decision
whether to give effect to the parties’ forum-selection clause
and transfer this case to a court in Manhattan.” (emphasis
added)); see also Atl. Marine, 571 U.S. at 58 (explaining
Stewart’s holding similarly).

   HOC argues that its position on preemption is supported
by Stewart’s statement that its determination under
20 DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

§ 1404(a) renders it “unnecessary to address the contours of
state law.” See Stewart, 487 U.S. at 30 n.9. This quote does
not support HOC’s sweeping contention. This footnote
addressed the question of enforcement of a forum-selection
clause in the transfer analysis itself and explained that
Alabama’s policy against enforcement need not be
considered in light of the Court’s determination that the
analytical standard for transfer in the federal court is
§ 1404(a).

    HOC next argues that Stewart’s footnote 10 stands for
the broad proposition that any state law voiding a forum-
selection clause that “makes the applicability of a federal
statute depend on the content of state law” is necessarily
preempted. See id. at 31 n.10. Again, HOC’s argument
cannot be sustained. In this footnote, the majority rejected
the dissent’s position that “if the forum-selection clause
would be unenforceable under state law, then the clause
cannot be accorded any weight by a federal court.” Id. The
point the majority was making was simply that any state law
that would prohibit the multi-factor analysis required by
§ 1404(a) must give way to the federal law. Id. (“[A] State
cannot pre-empt a district court’s consideration of a forum-
selection clause . . . by holding the clause automatically
void.” (emphasis added)).

    Finally, HOC broadly contends that, under Stewart, once
the parties agree to a forum-selection clause, that agreement
is locked in by § 1404(a). Again, nothing in Stewart
supports such an expansive view. The majority in Stewart
repeatedly presumed the validity of the forum-selection
clause and nowhere addressed the effect of any state law like
§ 925 that permits a party to unilaterally void a forum-
selection clause agreed to without the assistance of counsel.
    DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS 21

   For the foregoing reasons, we hold that §1404(a) and
Stewart do not broadly preempt all state laws controlling
how parties may agree to or void a forum-selection clause.

                               D

    Here, the district court found that Waber satisfied all the
prerequisites of § 925 and effectively voided the forum-
selection clause under § 925(b). Having found that the
forum-selection clause was void, the district court turned to
the traditional § 1404 factors under Bremen. It found that
the “plaintiff’s choice of forum weighs heavily against
transfer,” as does the convenience of the parties. It also
found that the familiarity of the forum with California laws
slightly favors denial of transfer. The district court
additionally found that § 925 represented California’s strong
public policy in adjudicating this action in California and
“preventing contractual circumvention of its labor laws.”
(quoting Karl v. Zimmer Biomet Holdings, Inc., No. C 18-
04176 WHA, 2018 WL 5809428, at *7 (N.D. Cal. Nov. 6,
2018)).

    HOC argues that the district court erred by applying
California’s choice-of-law rules because Atlantic Marine
requires applying the choice-of-law rules of the forum
selected by the parties. See Atl. Marine, 571 U.S. at 64–65.
The parties’ chosen choice-of-law rules, like the remainder
of the modified Atlantic Marine analysis, are applied only in
the presence of a valid forum-selection clause. See id. at 62
n.5. We see no error in applying the California choice-of-
law rules here. Id. at 65 (“A federal court sitting in diversity
22 DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

ordinarily must follow the choice-of-law rules of the State in
which it sits.”). 7

    HOC argues that the district court, by declining to
enforce the forum-selection clause, abused its discretion for
three reasons. First, HOC argues that state law is irrelevant
to the determination of enforcement of a forum-selection
clause under § 1404. As noted, supra, HOC is incorrect that
Stewart prohibits a federal court from considering the state
public policy in deciding a § 1404(a) motion. The majority
in Stewart only prohibited categorically “focusing on a
single concern or a subset of the factors identified in
§ 1404(a),” like the Alabama law required. 487 U.S. at 31.
That § 1404(a), rather than state law, controls the
enforcement inquiry does not imply that state law is
necessarily irrelevant as one of the multiple factors to
consider under § 1404(a). Indeed, the statutory text requires
consideration of “the interest of justice,” which, in this
circuit, includes “the relevant public policy of the forum
state.” Jones, 211 F.3d at 499 & n.21. See also Sun v. Adv.
China Healthcare, Inc., 901 F.3d 1081, 1088–90 (9th Cir.
2018) (considering, after Atlantic Marine, whether
enforcement of a forum-selection clause “would contravene
a strong public policy of the forum” in determining what
constitutes an “exceptional reason” or “extraordinary
circumstances” sufficient to avoid enforcement of the
forum-selection clause) (quoting Bremen, 407 U.S. at 15).
Consistent with Stewart, “the public policy of the forum state
is not dispositive in a § 1404(a) determination, but, rather, it
is another factor that should be weighed in the court’s
§ 1404(a) ‘interest of justice’ analysis.” Jones, 211 F.3d at
499 n.21. The district court here did not rely exclusively on

    7
      HOC does not argue that New Jersey choice-of-law rules should
apply except via application of the modified Atlantic Marine analysis.
    DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS 23

California’s public policy to deny transfer, but correctly
analyzed it as one of the multiple § 1404(a) factors. We
discern no error in the district court’s consideration of § 925
as part of its transfer analysis.

    Second, HOC argues that Bremen is inapplicable to
adjudication of § 1404(a) motions because Stewart limited
Bremen to the context of forum non conveniens rather than
transfer. See Stewart, 487 U.S. at 28–29 (noting that the first
question the district court and circuit court should have
asked was “whether § 1404(a) itself controls respondent’s
request to give effect to the parties’ contractual choice of
venue” rather than asking “whether the forum selection
clause in this case is unenforceable under the standards set
forth in Bremen.”). HOC is incorrect. When the Supreme
Court rejected the Eleventh Circuit’s framing of the question
as enforceability under Bremen, it did so to focus on the
preliminary question of whether § 1404(a) or the categorical
Alabama analysis applied in the first place. The Supreme
Court in Atlantic Marine made clear that “courts should
evaluate a forum-selection clause pointing to a nonfederal
forum in the same way that they evaluate a forum-selection
clause pointing to a federal forum,” applying the same
balancing of interests standard for both § 1404(a) and forum
non conveniens. Atl. Marine, 571 U.S. at 61.

    Third, HOC argues that even if Bremen applies, the
district court abused its discretion by denying transfer
because § 925 represents an even weaker public policy than
the policy embodied in the Alabama law in Stewart. HOC
contends that the district court should have applied the
modified Atlantic Marine factors. DePuy and Waber
respond that the Bremen analysis “controls the enforcement
of forum clauses in diversity cases,” Manetti-Farrow, 858
F.2d at 513, and that this court has repeatedly held forum-
24 DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS

selection clauses unenforceable as violating forum state
public policy, see, e.g., Doe 1 v. AOL LLC, 552 F.3d 1077,
1084 (9th Cir. 2009) (per curiam); Jones, 211 F.3d at 497–
98. DePuy and Waber argue that the district court did not
abuse its discretion in finding that the forum-selection clause
was void and unenforceable and that the modified Atlantic
Marine analysis is thus inapplicable. We agree with DePuy
and Waber.

    In Atlantic Marine, the Court explained the procedure for
addressing § 1404(a) motions in the absence of a forum-
selection clause: “In the typical case not involving a forum-
selection clause, a district court considering a § 1404(a)
motion (or a forum non conveniens motion) must evaluate
both the convenience of the parties and various public-
interest considerations.” 571 U.S at 62–63; see Gemini, 931
F.3d at 914–15 (recognizing that “Bremen continues to
provide the law for determining the validity and
enforceability of a forum-selection clause”). The district
court here considered these factors in its analysis. HOC does
not argue that the balance of private or public factors
separate from the enforcement of the forum-selection clause
required the district court to grant the transfer motion, and
we see no reason to question or overturn the district court’s
analysis or its denial of HOC’s motion to transfer.

                              IV

    HOC also appeals from the district court’s ruling on
summary judgment in favor of DePuy and Waber that the
forum-selection, non-compete and non-solicitation clauses
were void. The district court, in ruling on the cross-motions
for summary judgment, found that the forum-selection
clause satisfied all the prerequisites for voidability under
§ 925 and was properly voided by Waber. It also found the
forum-selection and non-compete clauses unenforceable as
    DEPUY SYNTHES SALES V. HOWMEDICA OSTEONICS 25

contrary to California public policy as expressed in § 925
and § 16000. Beyond the argument we have already rejected
that Stewart preempts consideration of § 925, HOC presents
no persuasive reason for us to overturn the district court’s
ruling of partial summary judgment.

                              V

    In conclusion, because the district court did not abuse its
discretion in denying transfer under 28 U.S.C. § 1404(a), we
affirm the denial of HOC’s transfer motion. Furthermore,
because the district court did not err in holding the forum-
selection, non-compete and non-solicitation clauses void
under California law, we affirm the grant of partial summary
judgment and the entry of judgment in favor of DePuy and
Waber.