Replies

In any event, can you think of any private arbitration agreement that would be enforceable under existing US federal law, or South Carolina state law in instances where contractual obligations violate "constitutionally guaranteed right(s)"?

Actually, come to think of it, I just thought of one. Lets say Joe the Software Engineer, a South Carolina citizen, does some independent contract work for a German company. His employment contract includes a choice of law clause providing that German law will apply, and a nondisclosure agreement.

Now, such an agreement is generally enforceable in the United States, but it does obviously restrain a constitutional right - freedom of speech. Under the South Carolina bill, would the German company be able to sue Joe in South Carolina court for breach of contract if Joe, say, divulged sensitive details of his work in his blog? I don't think it would be a totally unreasonable interpretation of the plain language of the bill to say that they couldn't, especially when you read section 2(C)(1) of the bill:

(C) Notwithstanding another provision of law, if any contractual provision or agreement:

(1) provides for the choice of a foreign law to govern its interpretation or the resolution of a dispute between the parties and the enforcement or interpretation of the contractual provision or agreement would result in a violation of the constitutional rights of a person, the contractual provision or agreement must be modified or amended to the extent necessary to preserve the constitutional rights of the parties.

Maybe I'm reading it all wrong, but can you see where that provision might be construed as rendering Joe's non-disclosure agreement unenforceable even though it would be perfectly enforceable if the contract chose South Carolina law?

Of course, it could mean that the term "violation" does not include rights voluntarily contracted away, but I don't know any way a contract could "violate" a right that doesn't involve some voluntary forbearance of that right by a party. And doesn't every 1L learn when reading Hamer v. Sidway one of the basic tests of consideration is the forbearance of some right, and do not all rights one could forbear in a contract in some way enjoy at least some Constitutional protection?

Perhaps I am engaging in reductio ad absurdum, but this bill seems to lend itself well to that.

"Perhaps I am engaging in reductio ad absurdum, but this bill seems to lend itself well to that. "

Does it lend itself well, or does it needlessly complicate the law, and make it less likely that foreign companies would want to contract with Joe in the first place?

Actually, it's an interesting question - and it's a question of law that I'm sure the legislators that crafted the bill didn't intend to inspire, right? Yes, clearly NDAs are fully enforceable in American law. But, would a German NDA be fully enforceable after the implementation of this law, because as you point out, the most narrow reading of that statute might be interpreted to be a "violation of the constitutional rights of a person" because of 1A considerations. It adds complication to the contract, where complication needn't be added, IMHO.

So what have we established? The statute "cures" a problem that was never a problem, but under certain circumstances, and with the right (or wrong) trial judge, at least one statutory provision could further complicate, and unnecessarily encumber legitimate contract agreements as an unintended consequence. Is that the right thing to be doing in a state with near double-digit unemployment already?

I thought Republicans were suppose to be the party that eased business regulations, not complicated them.