Olinick v. Bmg Entertainment

• Decision Date: 27 April 2006
• Docket Number: No. B179478.,B179478.
• Citation: 138 Cal.App.4th 1286,42 Cal.Rptr.3d 268
• Court: California Court of Appeals Court of Appeals
• Parties: Martin OLINICK, Plaintiff and Appellant, v. BMG ENTERTAINMENT et al., Defendants and Respondents.

42 Cal.Rptr.3d 268

138 Cal.App.4th 1286

Martin OLINICK, Plaintiff and Appellant, v. BMG ENTERTAINMENT et al., Defendants and Respondents.

No. B179478.

Court of Appeal, Second District, Division 3.

April 27, 2006.

Marcin Barrera & O'Connor, Patricio T.D. Barrera, Los Angeles; Esner & Chang and Stuart Esner, Los Angeles, for Plaintiff and Appellant.

Proskauer Rose, Los Angeles, Harold M. Brody and Christine De Bretteville, for Defendants and Respondents.

KLEIN, P.J.

Plaintiff and appellant Martin Olinick (Olinick) appeals an order granting a motion by defendants and respondents BMG Music (BMG) et al. to stay the action on the ground of inconvenient forum. (Code Civ. Proc., § 418.10.)¹ The trial court stayed the action for six months, pending Olinick's filing suit in New York.

The essential issues presented are whether the instant action is within the ambit of the employment agreement's forum selection and choice of law provisions, which require this dispute to be tried in New York pursuant to New York law, and if so, whether those contractual provisions are unenforceable as against public policy.

We conclude Olinick's statutory cause of action for age discrimination under the Fair Employment and Housing Act (FEHA) (Gov.Code., § 12940) as well as his common law cause of action for wrongful discharge in violation of the public policy against age discrimination are subject to the agreement's forum selection and choice of law provisions, and that those provisions do not violate California public policy. Accordingly, the order enforcing the forum selection and choice of law provisions is affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

1. Facts.

Martin Olinick, a lawyer who is admitted to both the New York and California bars, began working for BMG's predecessor, RCA Records, in New York in 1971. In 1977, Olinick and his family relocated to the West Coast. In 1986, BMG acquired RCA. BMG is a New York general partnership whose worldwide headquarters and principal place of business is located in New York City. Olinick ultimately attained the level of senior vice president at BMG with a salary of over $300,000 per year.

In 1991, 1994 and 1997, Olinick and BMG entered into written three year employment agreements.

a. The instant employment agreement.

On November 10, 2000, Olinick and BMG executed the subject eight-page employment agreement covering the period between July 1, 2000 and October 31, 2004 (the Agreement). The Agreement was the product of nine months of contract negotiations, conducted almost entirely in New York. In the negotiations, Olinick was represented by a New York-based music industry law firm and BMG was represented by its New York-based in-house counsel and executives. The parties exchanged more than ten drafts before coming to an agreement.

The Agreement contains many of the usual provisions, including duties, the term of employment, compensation and benefits.

The Agreement provided Olinick could be terminated without cause, provided that certain compensation was paid to him.² The Agreement also gave BMG the right to terminate Olinick for cause and specified the compensation in that situation as well.³

The provision which is the focus of this controversy is Paragraph G, which is both a choice of law provision and a forum selection provision. Paragraph G states: "This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to conflicts of laws. The parties agree to the exclusive jurisdiction and venue of the Supreme Court of the State of New York for New York County and/or the United States District Court for the Southern District of New York for the resolution of all disputes arising under this Agreement." Thus, the first sentence of Paragraph G provides for the application of New York law. The second sentence of Paragraph G selects New York as the forum.⁴

b. Olinick's termination.

On March 26, 2003, after 32 years of employment with RCA/BMG, Olinick was terminated. At the time, he was 59 years of age.

BMG asserts it terminated Olinick as part of a wide-ranging reorganization following an acquisition, and that it was entitled to do so pursuant to its right under the Agreement to terminate Olinick's employment without cause.

Olinick, in turn, contends his age was a motivating factor in BMG's decision to terminate him, and that he was replaced by a substantially younger, less qualified attorney.

2. Proceedings.

Olinick filed a charge with the California Department of Fair Employment & Housing, alleging age discrimination in violation of FEHA.⁵ He received a right-to-sue letter.

On March 15, 2004, Olinick filed a complaint in the Los Angeles Superior Court alleging two causes of action predicated on the FEHA: (1) a statutory claim under FEHA for age discrimination; and (2) a common law tort claim for wrongful termination in violation of California public policy, namely, the public policy against age discrimination as embodied in the FEHA.

On May 4, 2004, BMG filed a motion to stay or dismiss the action on the ground of inconvenient forum. BMG asserted California was an inconvenient forum because the dispute between Olinick and BMG was governed by a written employment contract that contains a forum selection clause requiring that any action between Olinick and BMG be brought in New York. BMG asserted a reasonable basis exists for enforcing the forum selection clause because New York is: BMG's principal place of business; where the agreement was negotiated and entered into and where the attorneys who represented Olinick in connection with the Agreement are located; where Olinick regularly traveled in order to perform his duties; and where BMG made the decision to exercise its rights under the Agreement, and where all its witnesses and documents are located.

BMG further argued the New York forum is available and can accomplish substantial justice in that under the New York City Human Rights Law, which bans age discrimination, a prevailing plaintiff is entitled to economic, compensatory and punitive damages as well as attorney fees, and there is no reason to believe New York courts are less likely than California counts to enforce anti-discrimination laws.

In opposing the motion, Olinick argued BMG failed to meet its burden to show California is a seriously inconvenient forum; he lived and worked in California; one of the BMG defendants is a California citizen; many of the percipient witnesses are in California; and he presented age discrimination claims based purely on violations of California law. Further, dismissal would be improper because California has an interest in protecting the rights of its citizens, and a stay is only proper if his rights would be protected under New York law, which is not the case here because his age discrimination claims are time-barred under New York law.

After extensive briefing by the parties, the matter was initially heard on July 21, 2004, and thereafter on August 30, 2004 and October 1, 2004. At the final hearing, the trial court denied BMG's motion to dismiss and instead, issued a six-month stay to enable Olinick to file suit in New York.

In enforcing Paragraph G, the trial court essentially concluded "a deal is a deal." The trial court found did not find "anything unreasonable about the New York forum selection clause." Further, "[e]quitable balancing analysis certain underscore[s] the reasonableness of the forum selection clause. The deal was made in New York. Defendant's principal place of business is New York. It was a deal point in the negotiations, and for this court not to enforce it, would fly in the face of logic and in the face of the [principle] of orderly conduct of commerce."

Olinick appealed the order.⁶

CONTENTIONS

Olinick contends the order should be reversed because: BMG's motion was not filed timely and was not heard timely; under the narrow language of the contract's forum selection clause, this action, alleging a cause of action under the FEHA and a cause of action for wrongful discharge in violation of public policy, is not an "action on the contract;" the trial court erred in overruling his evidentiary objections; California's public policy underlying the FEHA's prohibition against age discrimination in employment overrides the forum selection/choice of law clause in the employment agreement; and California has a materially greater interest than New York, the state designated by the parties as the location to resolve contract disputes, in the subject of this litigation.⁷

DISCUSSION

1. General principles.

The procedure for enforcing a forum selection clause is a motion to stay or dismiss for forum non conveniens. (Berg v. MTC Electronic Technologies (1998) 61 Cal.App.4th 349, 358, 71 Cal.Rptr.2d 523.)

With respect to forum selection, the Agreement provides: "The parties agree to the exclusive jurisdiction and venue of the Supreme Court of the State of New York for New York County and/or the United States District Court for the Southern District of New York for the resolution of all disputes arising under this Agreement." The clause in question contains express language of exclusivity of jurisdiction, specifying a mandatory location for litigation. This constitutes a mandatory forum selection clause. (Berg, supra, 61 Cal.App.4th at pp. 357-358, 71 Cal.Rptr.2d 523.)

"Although not even a `mandatory' forum selection clause can completely eliminate a court's discretion to make appropriate rulings regarding choice of forum, the modern trend is to enforce mandatory forum selection clauses unless they are unfair or unreasonable. [Citations.] . . . [¶] If there is no mandatory forum selection clause, a forum non conveniens motion `requires the weighing of a gamut of factors of public and private convenience. . . .' [Citation.] However if there is a mandatory forum selection clause, the test is simply whether application of the clause is unfair or...