Business man signing a contract on a white table. With selective focus.

The state of California has the sixth-largest economy in the world. In 2015, the state recorded $2.42 trillion in gross domestic product, beating out the economies of France, India, and Brazil. The state’s success comes from the thriving entertainment and technology industries, and has continued to grow as the economy recovers from the country’s recession.

As companies from all over the world look to California and its citizens to help them succeed, the state’s governor recently took steps to ensure that California employees can pursue employment-related legal claims inside the state.

Before Governor Brown signed S.B. 1241, many employers attempted to gain a home field advantage by requiring employees to file a lawsuit or attend arbitration in whichever state where that company was headquartered. In many cases, an employee may be unaware that such a provision was present in his or her contract until that employee had a legal issue with the company.

The new law makes sure that employers can’t deprive California citizens who live and work primarily in California of their rights under the law. Since California law is generally more pro-employee than the laws of many other states, the new bill will ensure that companies cannot skirt the law by choosing a venue in a more pro-business state. The law applies to both lawsuits and arbitration proceedings.

In addition to preventing employers from moving lawsuits out of state, the law also prohibits employers from depriving employees of any rights guaranteed to them under California law, so long as the legal controversy stemmed from a problem which occurred within the state.

The law will affect any contracts which are created, changed or extended after January 1, 2017. If an employer includes a provision that violates the law, the employee has the option to void that clause. The employee can then file suit and seek attorneys’ fees in the proper court within California.

There is one exception to the new law. If the employee was represented by an attorney during employment negotiations, then the terms of the contract may be enforced. For most employees, however, the law will fortify existing employment rights for California citizens.