30 Jan 2020

United States: Court Finds Choice of Law Provision in Contract Unenforceable

Finding a choice of law provision in a contract of sale between two businesses was unenforceable because Pennsylvania, the state where the fatal work-related injury occurred, had a “materially greater” connection to the matter than did Texas — the state whose law had been chosen in the contract— a federal district court accordingly applied Pennsylvania’s more restrictive law on employer indemnification and found that the defendant manufacturer of a hydraulic jack could not seek indemnification from the employer of a worker who sustained fatal injuries in a workplace accident. In Pennsylvania, an employer cannot be subject to indemnification unless it expressly waives its rights to workers’ compensation immunity. In Texas, the law is not so restrictive, allowing indemnification if more general language is used. The contract had a clause that met the Texas, but not the Pennsylvania test. While Texas had some interest in the dispute — the rig had been manufactured there by a Texas corporation — the court stressed the state in which the injury occurred has a “materially greater” interest.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is co-author of Larson’s Workers’ Compensation Law (LexisNexis).

LexisNexis Online Subscribers: Citations below link to Lexis Advance.

See Jones v. SWEPI L.P., 2020 U.S. Dist. LEXIS 7390 (W.D. Pa. Jan. 16, 2020)

See generally Larson’s Workers’ Compensation Law, § 144.02.

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law

For a more detailed discussion of the case, see