Eleventh Circuit Decision on Choice-of-Law Provisions

Not legal advice. Just an educational, plain-English tour of what the Eleventh Circuit’s recent choice-of-law reasoning means for real-world contracts.

Choice-of-law clauses are supposed to be the “set it and forget it” feature of contract drafting:
pick a state’s law, slap it into the agreement, and move on to the fun partslike arguing about indemnities
or whether “best efforts” means “try” or “try while crying.”

But the Eleventh Circuit (covering federal courts in Alabama, Florida, and Georgia) recently reminded everyone that
a choice-of-law provision is not a magic spell. It’s more like a GPS: if you type the address wrong, it will still
take you somewhere… just not where you meant to go.

In a headline-grabbing employment dispute involving a noncompete, the court took a close look at the exact words of
a Georgia choice-of-law clauseand found it didn’t necessarily control a claim based on a California statute.
The lesson isn’t “choice-of-law clauses don’t work.” It’s “words matter, scope matters, and courts do not grade on a curve.”

Choice-of-Law 101 (Because Contracts Don’t Come With an Owner’s Manual)

A choice-of-law provision answers one question: Which state’s substantive law governs?
That can determine everything from enforceability standards, damages, statutes of limitation (sometimes), and defenses.

Two related clauses often get mixed up with choice-of-law:

• Forum-selection clause: Where disputes must be litigated (state, federal, county, etc.).
• Arbitration clause: Whether disputes must be arbitrated and under what rules.

Think of it like this: choice-of-law is the rulebook, forum selection is the stadium,
and arbitration is choosing to play a different sport entirely. Mixing them up is how you end up
arguing baseball rules in a basketball arena. (And yes, that happens in real litigationjust with more footnotes.)

The Eleventh Circuit’s Recent Wake-Up Call: Scope Isn’t Optional

In NetRoadshow, Inc. v. Carrandi (Aug. 25, 2025), the Eleventh Circuit examined a noncompete agreement with
a Georgia choice-of-law clause. The clause didn’t say “all disputes,” “any claim,” or “arising out of or relating to.”
Instead, it tied Georgia law to the agreement and the “rights” under it.

The dispute got spicy because the employee asserted a counterclaim under a California statute
that targets attempts to enforce noncompetes that California treats as void. The employer argued that Georgia law
should govern because the contract picked Georgia law.

The Eleventh Circuit didn’t accept that as an automatic win. The court focused on two big ideas:
(1) what the clause actually covered, and (2) what kind of claim the employee brought.

1) The clause was narrow, so the court treated it as narrow

Courts often start by asking: is the choice-of-law clause written broadly enough to cover only contract interpretation,
or does it also cover tort claims and statutory claims connected to the relationship?

A clause that says the agreement “shall be governed by” a certain state’s law can be read as contract-focused,
especially when it doesn’t include broader dispute language. In NetRoadshow, the Eleventh Circuit read the clause as
aimed at contract rights and duties created by the agreement.

2) The counterclaim sounded in tort/statutory law, not contract law

The employee’s claim wasn’t “you breached paragraph 7(b).” It was “you tried to enforce a noncompete in a way that violates
a California statute.” That legal duty came from a source outside the agreement.

So the Eleventh Circuit reversed the dismissal and sent the case back for the district court to determineusing Georgia’s
ordinary choice-of-law ruleswhich state’s law actually controls that statutory/tort-style counterclaim.
In other words: the clause didn’t automatically decide the question, because the clause didn’t clearly reach the question.

If you’re an employer, in-house counsel, or contract drafter, the practical takeaway is simple:
a choice-of-law clause can’t govern what it doesn’t cover.

Why Federal Courts in the Eleventh Circuit Obsess Over State Choice-of-Law Rules

Here’s the part that surprises non-lawyers: in many business disputes, the federal court isn’t free to invent its own
“best” conflict-of-laws rule. In diversity cases (common in employment and commercial contract disputes), a federal court
generally applies the forum state’s choice-of-law framework.

That means the path to the governing law often looks like this:

1. Step 1: Read the contract clause. Is it broad? Is it narrow? What does it sayexactly?
2. Step 2: Classify the claim. Contract? Tort? Statutory? Mixed?
3. Step 3: If the clause doesn’t clearly control the claim, apply the forum state’s conflict rules.

NetRoadshow is a classic “Step 1 meets Step 2” decision: the clause didn’t clearly cover the claim type, so Step 3
stayed on the table.

Public Policy: The Trapdoor Under Your “Perfect” Clause

Even a beautifully drafted choice-of-law clause may face a public-policy objection. Many states will generally enforce
party choiceuntil enforcing it would undermine a strong public policy of the forum or a state with a
compelling interest.

Employment restrictions (especially noncompetes) are a frequent battleground because states vary wildly:
some enforce reasonable restraints; others treat most noncompetes as void. California, in particular, is famously hostile
to most noncompeteswith limited exceptions.

California has also enacted and updated statutes designed to prevent employers from using out-of-state contracts as an end-run
around California’s approach to employee mobility. That’s why “we chose Georgia law” may not end the conversation if the dispute
is tied to California’s statutory protections.

Drafting Lessons: How to Make a Choice-of-Law Clause Do What You Think It Does

If you want your clause to govern only the contract’s interpretation, a narrow clause might be fine. But if you want your
chosen law to govern relationship disputes (including tort and statutory claims), you have to say so.

Upgrade your scope language

Compare these two styles:

• Narrow style: “This Agreement shall be governed by the laws of State X.”
  
  Often read as contract-focused.
• Broader style: “This Agreement and all claims arising out of or relating to the parties’
  relationship, including tort and statutory claims, shall be governed by the laws of State X.”
  
  More likely to reach non-contract claimsthough public policy may still limit it.

Pair it with forum selection (carefully)

If you pick State X law but litigate in State Y, you’ve created an “expectation gap.” Courts can apply State X law from a State Y
courtroom, but now State Y’s conflict rules and public policy are in the mix. If predictability is the goal, many agreements pair:

• Choice-of-law (rulebook)
• Forum selection (stadium)
• Venue/jurisdiction language (where and how the stadium is chosen)

That said, forum selection isn’t always a cure. Some states scrutinize “outbound” clauses in certain contexts, and employment
agreements can face additional statutory limits.

Don’t forget severability and survival

Many disputes turn into a pile-up: if the restrictive covenant is invalid, does it drag the whole agreement down with it?
Good severability language can help keep the rest of the contractand key procedural clausesstanding.

Eleventh Circuit Context: This Isn’t the First Time Scope Has Decided the Outcome

NetRoadshow fits a broader pattern: courts in and around the Eleventh Circuit often treat “governed by” clauses differently from
“arising out of or relating to” clauses. Older decisions in the circuit have similarly evaluated whether a clause reaches beyond
the four corners of the contract to cover related tort claims or statutory claims.

Another frequent scenario is fraud-based litigation around settlement releases: parties fight not only about what the release says,
but also whether the choice-of-law clause controls claims that the settlement itself was fraudulently induced. Those cases can turn
on state-law nuanceexactly the kind of nuance that makes boilerplate dangerous.

What Businesses Should Do Now (A Practical Checklist)

If you have multi-state contractsor employees who relocateNetRoadshow is a good reason to run a quick “clause audit.”
Here’s a business-friendly checklist:

1) Inventory your agreements that matter most

• Employment agreements (noncompetes, nonsolicits, confidentiality)
• Equity and incentive plans
• Customer/vendor master service agreements
• Settlement agreements and releases

2) Flag narrow choice-of-law language

• Clauses that mention only “this Agreement” without “relationship” or “claims” language
• Clauses that omit “arising out of or relating to”
• Clauses that never mention statutory or tort claims

3) Stress-test against likely claim types

• Trade secret claims (often statutory)
• Wage-and-hour claims (statutory and public-policy heavy)
• Unfair competition claims
• State-specific employee mobility statutes

4) Align your “rulebook” with your “stadium”

• If you choose Georgia law, do you also choose Georgia courts (or federal courts in Georgia)?
• If you litigate elsewhere, are you prepared for that state’s conflict rules and public policy review?

5) Create a relocation protocol

When an employee moves (especially into a state with strict mobility laws), consider:
updating agreements, revisiting restrictive covenant scope, and confirming compliance with the employee’s new work location.

A Note on “Uniform” Rules: Maritime Contracts Are a Different Animal

It’s also worth knowing that some areas of law treat choice-of-law clauses differently.
In maritime contracts, for example, federal maritime law may supply its own enforceability framework that is
designed for uniformity and predictability in maritime commerce.

For most everyday commercial and employment contracts, however, you’re usually living in the world NetRoadshow highlights:
clause scope + claim type + state conflict rules + public policy.

Conclusion: The Clause Didn’t FailThe Assumption Did

The Eleventh Circuit’s message is not “stop using choice-of-law provisions.” It’s:
stop assuming the clause is broader than the words you wrote.

If you want your chosen law to govern more than contract interpretationsay, statutory claims and tort claims tied to the relationship
you should draft for that explicitly, and then evaluate whether public policy or statutory limits might still override the clause in a
high-interest state. In cross-border employment disputes, that’s not pessimismit’s adult supervision.

Experiences & Field Notes: What Choice-of-Law Fights Look Like in Real Life (and How to Avoid the Worst Parts)

“Experience” in choice-of-law disputes usually means one thing: someone thought their clause was a force field, and then discovered it
was more like a screen doorfine for keeping bugs out, not great for stopping a hurricane.

Here are the most common patterns practitioners see when these disputes reach a breaking pointwritten in practical terms, without the
dramatic courtroom music:

Experience #1: The “Two-Sentence Clause” That Was Asked to Do a Ten-Page Job

Many contracts still use the minimalist classic: “This Agreement shall be governed by State X.” Everyone assumes it covers everything:
tort claims, statutory claims, unfair competition claims, you name it. Then the lawsuit arrives with a claim that isn’t “breach of contract.”
Suddenly, the other side argues the clause is limited to interpreting the agreement and doesn’t reach the broader relationship disputes.
Courts often take that argument seriouslyespecially when the clause never says “all claims” or “arising out of or relating to.”

Experience #2: The Relocation Plot Twist

In employment matters, the facts change fast. An employee signs in Georgia, transfers to California, works there for years, then leaves for a competitor.
The employer tries to enforce the old agreement and is shockedshocked!to learn that the employee’s current location may trigger additional statutory
protections. The “experience lesson” is operational, not just legal: companies that track relocations and refresh agreements thoughtfully tend to face fewer
nasty surprises than companies that let a 10- or 15-year-old contract run forever.

Experience #3: The Public Policy Ambush

Even when a choice-of-law clause is broad, a strong public policy can act like an escape hatch. Parties often underestimate how willing courts can be to
scrutinize enforcement when the case touches wage laws, consumer protection, or employee mobility. In practice, the best approach is not blind confidence,
but a “Plan A / Plan B” mindset: draft a broad clause, pair it with an aligned forum-selection clause, and still evaluate where the counterparty lives,
works, and litigatesbecause that’s where policy arguments will come from.

Experience #4: The Clause ClashGoverning Law vs. Arbitration vs. Forum Selection

A surprisingly common problem is internal inconsistency:
an agreement chooses State X law, mandates arbitration in State Y, and contains a forum clause pointing to State Z for injunctive relief.
When a dispute hits, the parties spend time litigating the “procedure about the procedure.”
The practical fix is coordination: treat dispute-resolution terms as a single system, not unrelated boilerplate copied from five different templates.

Experience #5: The “We’ll Fix It in Litigation” Budget Explosion

When a choice-of-law clause is unclear, litigation becomes a multi-round fight:
motions to dismiss, choice-of-law briefing, maybe limited discovery to determine contacts and interests, and sometimes an interlocutory appeal.
That’s real money spent before the case even reaches the merits. The most cost-effective time to fix ambiguity is drafting timewhen the only thing at stake
is a few extra lines of text, not six months of motion practice.

The overall “experience” takeaway is simple: the strongest choice-of-law provision is not just a clauseit’s a strategy.
It anticipates claim types, aligns the forum, accounts for relocation risk, and acknowledges that public policy can override private ordering in sensitive areas.
If NetRoadshow has a moral, it’s that careful drafting doesn’t guarantee victory, but careless drafting practically guarantees an expensive detour.