Clarifying Tennessee’s “Material Connection” Requirement for Contractual Choice-of-Law Clauses: Commentary on Jorge Andujar v. Hub Group Trucking, Inc.

I. Introduction

The Sixth Circuit’s published decision in Jorge Andujar & Franklin Pena Batista v. Hub Group Trucking, Inc., No. 25-5130 (6th Cir. Dec. 16, 2025), is an important development in American conflict-of-laws doctrine as applied to employment and wage disputes. It sharply constrains the ability of nationwide employers to impose Tennessee law through boilerplate contracts when Tennessee has little or no connection to the underlying work relationship.

The case arises out of a putative class action by long-haul delivery drivers based in New Jersey. They allege that Hub Group Trucking, Inc., a large interstate trucking and logistics company, violated New Jersey’s Wage Payment Law and Wage and Hour Law by making unlawful deductions, shifting business expenses to drivers, and denying overtime pay. Hub Group invoked contract clauses selecting both a Tennessee forum (Memphis courts) and Tennessee substantive law and succeeded in having the case transferred and then dismissed in the Western District of Tennessee, because Tennessee law would not recognize the New Jersey statutory wage claims.

On appeal, the Sixth Circuit (Judge Mathis, joined by Judges Nalbandian and Ritz) reversed. Applying Tennessee’s choice-of-law rules, the court held that the Tennessee choice-of-law clauses are unenforceable because Tennessee has no material connection to the transactions or relationships at issue. The opinion also clarifies that Tennessee has not adopted § 187(2) of the Restatement (Second) of Conflict of Laws, notwithstanding some earlier loose language suggesting otherwise.

The decision has significant implications for:

How Tennessee courts (and federal courts sitting in Tennessee) analyze contractual choice-of-law provisions.
Nationwide employers’ use of a single, employer‑friendly state’s law for workers located elsewhere.
Wage-and-hour litigation, particularly where “independent contractor” agreements are used to limit statutory protections.

II. Summary of the Opinion

The key holdings of the Sixth Circuit’s opinion can be summarized as follows:

Applicable choice-of-law framework: Because the Western District of Tennessee exercised diversity jurisdiction, it had to apply Tennessee’s substantive law and Tennessee’s choice-of-law rules under Klaxon Co. v. Stentor Elec. Mfg. Co. The enforceability of the contractual Tennessee choice-of-law clause is thus governed by Tennessee law, as interpreted by Tennessee courts and prior Sixth Circuit precedents.
Tennessee has not adopted Restatement (Second) § 187(2): Although plaintiffs urged application of the Restatement’s “substantial relationship or reasonable basis” standard, the panel held that Tennessee instead follows its own three-part test (derived from Goodwin Brothers and later cases), and Tennessee courts have never expressly adopted Restatement § 187(2).
Three-part Tennessee test reaffirmed: A contractual choice-of-law provision is enforceable under Tennessee law only if:
1. it was executed in good faith;
2. the chosen state has a material connection to the transaction; and
3. the chosen state’s law is not contrary to a fundamental policy of a state with a materially greater interest whose law would otherwise apply.
No “material connection” between Tennessee and the transactions: The court held that Tennessee lacked any direct and relevant connection to the drivers’ work or contracts. The drivers lived and worked in New Jersey and nearby states; they never worked in Tennessee or reported to Tennessee personnel; and the contracts were executed in New Jersey (with Hub Group signing in Tennessee and New Jersey). Hub Group’s corporate presence and facilities in Tennessee were not enough.
Choice-of-law clauses unenforceable: Because the second element (material connection) failed, the Tennessee choice-of-law clause could not be enforced. This made it unnecessary to reach the “fundamental policy” / “materially greater interest” prong.
Result: The district court’s dismissal is reversed, and the case is remanded for further proceedings. On remand, the district court must disregard the Tennessee choice-of-law clause and determine the governing law using Tennessee’s default choice-of-law principles for wage-related claims—very likely leading to the application of New Jersey law.

III. Detailed Analysis

A. Factual and Procedural Background

Hub Group Trucking, Inc. is a nationwide logistics and transportation company, incorporated in Delaware with its principal place of business in Illinois. It operates multiple terminals and facilities across the United States, including three in Tennessee (two terminals and a fulfillment center), and acquired a Tennessee-based trucking operation, Comtrak, over a decade ago.

Plaintiffs Jorge Andujar and Franklin Pena Batista worked for Hub Group for over ten years as delivery drivers operating out of Hub Group’s New Jersey terminal. Their duties focused on picking up and delivering rail containers for retail clients (Home Depot, Costco, Best Buy) mainly in New Jersey, occasionally in neighboring states such as New York and Connecticut. They never performed services in Tennessee and reported exclusively to New Jersey Hub personnel.

They entered into contracts titled “Independent Contractor and Equipment Lease Agreement.” These agreements:

Classified them as independent contractors and contained terms relating to equipment leasing and payment.
Included a forum-selection clause requiring disputes to be brought in state or federal courts sitting in Memphis, Tennessee.
Included a choice-of-law clause stating that:
“any and all claims or disputes arising out of, in connection with, or relating to this Agreement, or the transactions or relationship between the parties contemplated and established by this Agreement, shall be governed and interpreted by the laws of the State of Tennessee, without regard to the choice-of-law rules of that State or any other jurisdiction.”

In September 2023, the plaintiffs filed a putative class action in the District of New Jersey alleging:

Unlawful withholding from pay (for fuel, tolls, insurance) in violation of the New Jersey Wage Payment Law.
Unlawful cost-shifting of business expenses to drivers (gas, vehicle repairs).
Failure to pay overtime, violating the New Jersey Wage and Hour Law.

On Hub Group’s motion, the District of New Jersey transferred the case to the Western District of Tennessee based on the forum-selection clause. Once there, Hub Group moved to dismiss, arguing that:

Tennessee law governs under the contractual choice-of-law provision; and
Under Tennessee substantive law, plaintiffs have no cognizable claims under New Jersey wage statutes, warranting dismissal under Rule 12(b)(6).

The Western District of Tennessee agreed, upheld the choice-of-law clause, and dismissed the case. The plaintiffs appealed to the Sixth Circuit, challenging only the choice-of-law ruling.

B. Tennessee’s Choice-of-Law Framework for Contracts

Under Tennessee law (as interpreted by the Tennessee Supreme Court and Court of Appeals), contractual choice-of-law provisions are generally respected, but not automatically enforced. Instead, Tennessee applies a structured test—articulated most notably in Goodwin Bros. Leasing, Inc. v. H & B Inc., 597 S.W.2d 303 (Tenn. 1980), Vantage Tech., LLC v. Cross, 17 S.W.3d 637 (Tenn. Ct. App. 1999), and Town of Smyrna v. Municipal Gas Authority of Georgia, 723 F.3d 640 (6th Cir. 2013) applying Tennessee law.

That test asks:

Good faith: Was the choice-of-law provision executed in good faith, or is it a sham or subterfuge?
Material connection: Does the chosen state have a material connection (i.e., a direct, relevant, and logical connection to the consequential facts) with the transaction or the parties?
Fundamental policy / materially greater interest: Would applying the chosen state’s law contradict a fundamental policy of another state that has a materially greater interest and whose law would otherwise govern the dispute?

The choice-of-law clause is enforceable only if all three prongs are satisfied.

C. Rejection of Restatement (Second) § 187(2)

The plaintiffs argued that Tennessee courts apply § 187(2) of the Restatement (Second) of Conflict of Laws to contractual choice-of-law clauses. That section says, in relevant part, that the parties’ chosen law will be applied unless:

(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice, or
(b) application of the chosen state’s law would be contrary to a fundamental policy of a state with a materially greater interest, whose law would otherwise apply.

The Restatement’s approach is, in some respects, more permissive:

It allows choice-of-law where there is either a substantial relationship or “some other reasonable basis” for the choice.
It does not, on its face, use Tennessee’s more specific “material connection” language, which Tennessee courts have interpreted as requiring a logical, direct nexus with the consequential facts of the dispute.

Plaintiffs relied on a footnote in Goodwin Brothers referencing § 187(2), and on a later unpublished Sixth Circuit opinion (Muhammad v. Deutsche Bank Nat’l Tr. Co., 2023 WL 3067756) commenting that “Tennessee abides by the Restatement (Second) of Conflict of Laws.”

The Sixth Circuit decisively rejected that reading:

The Goodwin Brothers footnote shows that Tennessee’s test may be inspired by § 187(2), but is not an adoption of it.
When Tennessee courts adopt Restatement provisions, they say so expressly, as in:
- Hataway v. McKinley, 830 S.W.2d 53 (Tenn. 1992) (adopting the “most significant relationship” test of various Restatement sections for torts);
- Bowen ex rel. Doe v. Arnold, 502 S.W.3d 102 (Tenn. 2016) (adopting certain Restatement provisions on nonmutual collateral estoppel);
- Street v. Calvert, 541 S.W.2d 576 (Tenn. 1976) (adopting Restatement’s “last clear chance” tort doctrine).
No Tennessee appellate decision has expressly adopted § 187(2), and the Tennessee Supreme Court has not done so.
An unpublished Sixth Circuit interpretation of Tennessee law (Muhammad) cannot override binding Tennessee precedent (Goodwin Brothers, Hataway) or published Sixth Circuit decisions applying that law (Town of Smyrna).

Thus, the court holds that Tennessee’s own three-part framework, as restated in Town of Smyrna, governs. This clarification is itself an important doctrinal development: it removes ambiguity about Tennessee’s relationship to the Restatement in the contractual context.

D. Application of the “Material Connection” Requirement

The core of the opinion lies in its application of the “material connection” requirement to the facts of this case.

1. What does “material connection” mean?

The court draws on Tennessee authority, particularly Blackwell v. Sky High Sports Nashville Operations, LLC, 523 S.W.3d 624 (Tenn. Ct. App. 2017), to define “material” as:

“having some logical connection with the consequential facts.”

Further, in Goodwin Brothers, the Tennessee Supreme Court emphasized that the chosen state must have a “direct and relevant connection with the transaction,” and Vantage Tech. adds that the choice must be reasonable, not “merely a sham or subterfuge.”

In practical terms, this means:

There must be more than a purely formal or strategic link.
It is not enough that the chosen state is favorable to one party’s legal interests.
Something about the performance, negotiation, execution, or subject matter of the contract, or the parties’ relationship, must significantly touch the chosen state.

2. Facts pointing away from a material connection with Tennessee

The court identifies three main factual points showing an absence of material connection:

Residence and location of work:
- Plaintiffs resided in New Jersey throughout their work with Hub Group.
- Their driving work was performed almost entirely in New Jersey, with some work in neighboring states (New York, Connecticut).
- Their day-to-day supervision and operational contacts were with New Jersey Hub personnel.
No services in Tennessee:
- Plaintiffs never performed services in Tennessee.
- They never reported to Tennessee-based Hub staff.
Execution and negotiation of contracts:
- Plaintiffs executed their agreements in New Jersey.
- Hub Group executed them in Tennessee and New Jersey, but there was no evidence of meaningful negotiations in Tennessee.
- The agreements appear to be form contracts, not “highly negotiated” individualized arrangements.

Based on these facts, the panel concludes there is no “direct and relevant connection” between Tennessee and the actual work relationship or dispute. Tennessee is, in effect, a jurisdiction picked in the contract but not substantively related to the work.

3. Hub Group’s arguments: corporate presence and partial execution in Tennessee

Hub Group advanced two main arguments to show a material connection with Tennessee:

Corporate presence in Tennessee: Hub Group has multiple facilities in Tennessee (three locations) and acquired a Tennessee-based trucking company (Comtrak).
Execution of contracts in Tennessee: Hub Group signed at least some of the relevant contracts in Tennessee.

The court finds these arguments insufficient.

a. Corporate presence and past acquisition

Hub Group’s Tennessee presence, including its acquisition of Comtrak and ongoing operations with about 250 workers in Tennessee, does not create a material connection because:

Hub Group is a large, multi-state enterprise with “dozens” of facilities across North America.
The existence of some operations in Tennessee tells us little about this particular relationship (New Jersey drivers, New Jersey terminal, New Jersey wage claims).
The Comtrak acquisition occurred over a decade ago; Comtrak itself is now defunct.

The court draws a key analogy to Blackwell. In Blackwell, the defendant’s parent company was founded in California and still operated several facilities there, yet the Tennessee Court of Appeals refused to enforce a California choice-of-law clause because California lacked a material connection to the trampoline-park accident in Tennessee. The Sixth Circuit notes that the rationale of Blackwell “applies here”:

The Blackwell court declined the request of a Nevada-based defendant to enforce a choice-of-law provision requiring the application of California law to the parties' dispute . . . even though the defendant's “parent company was founded in California over a decade ago and now operates several facilities there.”

By parity of reasoning, Hub Group’s origin and operations in Tennessee cannot, without more, establish the required connection.

b. Partial execution in Tennessee and the EPAC Technologies case

Hub Group also invoked EPAC Technologies, Inc. v. HarperCollins Christian Publishing, Inc., 810 F. App’x 389 (6th Cir. 2020), where the Sixth Circuit (applying Tennessee law) enforced a New York choice-of-law clause. In EPAC:

The contract was “highly negotiated,” not boilerplate.
EPAC’s president/CEO, a contract signatory, worked from the New York office and negotiated the contract there.
Negotiations and communications regarding the contract and its termination involved New York-based officers.

From those facts, the court in EPAC found a material connection between New York and the transaction.

In Andujar, by contrast:

There was no evidence of meaningful negotiation, let alone negotiation in Tennessee.
Plaintiffs did not interact with Tennessee-based personnel in forming or performing the contract.
The mere fact that Hub Group signed the contract in Tennessee is a thin, formalistic connection, not a substantive one.

Thus, the panel distinguishes EPAC and holds that partial execution of a standard-form contract in Tennessee, without more, does not amount to a “material connection.”

4. Consequence: Choice-of-law clause unenforceable

Because Tennessee lacks a material connection with the transactions or the parties’ actual relationship, Tennessee’s choice-of-law test is not satisfied. The clause is therefore unenforceable. Once that second prong fails, the court has no need to analyze:

Whether the clause was executed in good faith (the parties did not dispute this); or
Whether applying Tennessee law would contravene a fundamental New Jersey policy in light of New Jersey’s materially greater interest.

Importantly, this prevents Hub Group from using Tennessee law as a vehicle to erase New Jersey statutory rights through contract. The plaintiffs now may pursue their New Jersey wage claims, subject to the district court’s separate choice-of-law analysis in the absence of an enforceable clause.

E. Precedents Cited and Their Influence

The opinion is built on a network of conflict-of-laws and Tennessee authority. The most significant precedents are:

1. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487 (1941)

Under Klaxon, a federal court sitting in diversity must apply the forum state’s conflict-of-laws rules. Here:

The Western District of Tennessee is the forum.
Tennessee’s choice-of-law rules therefore control, both as to contract (enforceability of the clause) and substantive law.

This is crucial because if New Jersey had remained the forum, its own choice-of-law rules might have applied, potentially producing a different analysis of the Tennessee choice-of-law clause.

2. Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996)

Gasperini reiterates the core Erie principle: in diversity cases, state substantive law applies. This frames the entire exercise: the Sixth Circuit must determine and apply Tennessee substantive law on choice-of-law clauses, not its own preferred conflict-of-laws approach.

3. Ohio Casualty Insurance Co. v. Travelers Indemnity Co., 493 S.W.2d 465 (Tenn. 1973)

This Tennessee Supreme Court case recognized that parties can contractually choose governing law, subject to limitations. It is the foundation for the enforceability of choice-of-law clauses in Tennessee.

4. Goodwin Brothers Leasing, Inc. v. H & B Inc., 597 S.W.2d 303 (Tenn. 1980)

Goodwin Brothers is the key Tennessee case establishing:

That contractual choice-of-law provisions are generally enforceable.
But only where there is a material connection between the transaction and the chosen state.
And the agreement is not a sham or subterfuge for evading otherwise applicable law.

Although Goodwin Brothers references Restatement § 187(2) in a footnote, the Sixth Circuit treats that citation as informative, not constitutive of adoption. Goodwin Brothers is thus the doctrinal anchor for the “material connection” prong.

5. Vantage Technology, LLC v. Cross, 17 S.W.3d 637 (Tenn. Ct. App. 1999)

Vantage Tech. elaborates on this principle, stressing the requirement that:

the choice to apply the foreign state’s law must be “reasonable and not merely a sham or subterfuge.”

This reinforces the anti–forum-shopping rationale: a choice-of-law clause cannot merely be a tool for evading protective local law if the chosen state has no real stake in the transaction.

6. Town of Smyrna v. Municipal Gas Authority of Georgia, 723 F.3d 640 (6th Cir. 2013)

In Town of Smyrna, the Sixth Circuit synthesized Tennessee’s rule into the three-part test cited in Andujar. It is the immediate source for the framework the court now applies. The Andujar panel uses Town of Smyrna as binding precedent on how Tennessee’s test should be articulated in federal court.

7. Blackwell v. Sky High Sports Nashville Operations, LLC, 523 S.W.3d 624 (Tenn. Ct. App. 2017)

Blackwell is a Tennessee Court of Appeals decision refusing to enforce a California choice-of-law clause in a Tennessee personal injury case involving a trampoline park. California had no material connection other than:

The defendant’s parent company was founded there;
The parent still had operations in California.

The Blackwell court concluded those facts were insufficient to show a material connection. The Andujar court treats Blackwell as directly analogous: Hub Group’s corporate origins and facilities in Tennessee do not establish a material connection to New Jersey drivers’ wage disputes.

8. EPAC Technologies, Inc. v. HarperCollins Christian Publishing, Inc., 810 F. App’x 389 (6th Cir. 2020)

EPAC applied Tennessee law and found a material connection to New York where:

The contract was the product of substantial negotiation.
Key negotiating parties and decision-makers were in New York.
Performance and communications relating to the contract involved New York-based officers.

Andujar uses EPAC as a contrast: there, negotiation and relationship facts provided a robust connection to New York; here, the absence of any Tennessee-centered negotiation or performance underscores the lack of a material connection.

9. Restatement citations and other Tennessee cases

The opinion also cites:

Hataway v. McKinley, 830 S.W.2d 53 (Tenn. 1992) (express adoption of Restatement’s “most significant relationship” test for torts).
Bowen ex rel. Doe v. Arnold, 502 S.W.3d 102 (Tenn. 2016) (explicit adoption of certain Restatement (Second) of Judgments provisions).
Street v. Calvert, 541 S.W.2d 576 (Tenn. 1976) (explicit adoption of Restatement (Second) of Torts §§ 479, 480).
Lindenberg v. Jackson Nat’l Life Ins. Co., 912 F.3d 348 (6th Cir. 2018) (stressing that in diversity cases, federal courts must follow the decisions of state courts, not their own unpublished opinions, in interpreting state law).

These cases are cited primarily to support the interpretive point: Tennessee is deliberate when it adopts Restatement provisions, and the absence of such an explicit adoption for § 187(2) confirms that Tennessee retains its independent test.

10. Lubinski v. Hub Group Trucking, Inc., 690 F. App’x 377 (6th Cir. 2017)

Hub Group attempted to analogize this case to Lubinski, another Sixth Circuit case involving Hub Group. The panel expressly declines to address those arguments, noting that Lubinski “has no bearing on our material-connection analysis.” This signals that whatever Lubinski held, it did not decide the contractual choice-of-law issue under the Tennessee test in a way that controls here.

F. Legal Reasoning and Structure

The court’s reasoning follows a classic Erie/choice-of-law structure:

Identify the governing conflict rule: Because the case is in federal court in Tennessee under diversity jurisdiction (28 U.S.C. § 1332(d)), Tennessee’s choice-of-law rules apply (Klaxon, Gasperini).
Identify Tennessee’s rule on contractual choice-of-law: Use Goodwin Brothers, Vantage Tech., and Town of Smyrna to restate the three-part test. Explicitly reject Restatement § 187(2) as binding Tennessee law.
Apply the three-part test: Accept that the contract was executed in good faith (undisputed). Focus on whether Tennessee has a material connection. Because that prong fails, no need to examine the “fundamental policy” prong.
Conclude that the clause is unenforceable: Without a material connection, the choice-of-law provision cannot be used to displace otherwise applicable law. Remand the case to be litigated under the law determined without that clause.

The opinion’s strengths lie in:

Its faithful adherence to Tennessee precedent as required by Erie.
Its careful parsing of prior Tennessee cases distinguishing genuine connections from mere corporate geography.
Its narrow, fact-specific holding: the court does not say Tennessee can never be chosen, only that it cannot be chosen for this kind of New Jersey-based relationship with no Tennessee touchpoints.

G. Impact and Future Implications

1. Constraints on nationwide “one-size-fits-all” choice-of-law clauses

The most immediate impact is on large, multi-state employers (particularly in transportation and logistics) that use standardized agreements selecting Tennessee law for relationships nationwide, simply because Tennessee is perceived as relatively employer-friendly.

After Andujar:

Such choice-of-law clauses will be vulnerable in Tennessee-based litigation unless the employer can show a material connection between Tennessee and the specific relationship or dispute.
A mere corporate presence (offices, terminals, warehouses) or a historical acquisition will not suffice.
Boilerplate clauses in independent-contractor agreements that have no other substantive tie to Tennessee are at high risk of being disregarded.

2. Reinforcing the anti–forum-shopping function of “material connection”

The decision underscores that Tennessee’s “material connection” requirement is a substantive check against forum shopping by contract. It ensures:

Parties cannot simply opt into a state’s law to avoid the protective statutes of states where workers live and work, absent genuine ties.
States with significant interests in the employment relationship (such as the location of the work and the workers’ residence) retain the ability to apply their own wage laws and protections.

This is especially significant for wage-and-hour and worker-classification litigation, where employers have sometimes sought to blunt plaintiffs’ rights by choosing law from states with weaker worker protections.

3. Clarification of Tennessee’s relationship to the Restatement

By clarifying that Tennessee has not adopted Restatement (Second) § 187(2), the opinion:

Removes doctrinal uncertainty for courts and litigants about whether a “substantial relationship or reasonable basis” test applies.
Reaffirms that Tennessee’s more specific, somewhat stricter “material connection” standard governs.
Signals that future attempts to import Restatement rules without clear Tennessee adoption will face skepticism.

4. Practical guidance for drafting enforceable Tennessee choice-of-law clauses

For lawyers drafting contracts that select Tennessee law, Andujar indirectly offers guidance on what kinds of facts might create a material connection:

Negotiation or execution largely conducted in Tennessee by both parties (not just unilateral signing by the Tennessee party).
Performance duties meaningfully taking place in Tennessee (e.g., drivers based in Tennessee, key terminals or logistics operations in Tennessee for that specific relationship).
Ongoing relationships centered in Tennessee (e.g., primary corporate contacts, account management, or decision-making in Tennessee relevant to that contract).

Absent such facts, reliance on Tennessee choice-of-law clauses will be risky.

5. Implications for wage-and-hour and misclassification litigation

In the wage-and-hour context, Andujar prevents an employer from using choice-of-law clauses to strip workers of statutory protections of their home state when there is no real nexus with the chosen state. Concretely:

New Jersey’s Wage Payment Law and Wage and Hour Law are specifically designed to regulate wages earned in New Jersey and protect New Jersey workers from certain abusive practices (unlawful deductions, expense shifting, denial of overtime).
If employers could freely select Tennessee law with no Tennessee connection, they could effectively nullify those New Jersey protections for all workers willing (or forced) to sign the standard contract.
Andujar blocks that outcome by requiring a substantive connection before Tennessee law can displace otherwise applicable New Jersey law.

While the Sixth Circuit does not decide what law will ultimately apply on remand, the likely consequence is that:

The district court, applying Tennessee’s non-contract choice-of-law rules (probably a “most significant relationship” test akin to Hataway, adapted for statutory/employment claims), will find that New Jersey has the dominant relationship with the dispute.
New Jersey wage statutes will therefore govern, allowing the class action claims to proceed on the merits.

6. Influence beyond Tennessee

Although the opinion formally interprets Tennessee law, it may influence other jurisdictions in several ways:

Other courts applying similar “material connection” or “substantial relationship” standards may cite Andujar as persuasive authority in cases involving nationwide standard-form employment contracts.
The opinion’s careful analysis of corporate geography versus transaction-specific contacts could inform how other courts police against overbroad choice-of-law clauses.
Within the Sixth Circuit, it becomes a central precedent on how to assess the enforceability of choice-of-law clauses when Tennessee law is the chosen law, even if the dispute arises in another forum that applies Tennessee’s rule through its own conflict-of-laws analysis.

IV. Complex Concepts Simplified

1. Choice-of-Law Clause vs. Forum-Selection Clause

A forum-selection clause says where disputes will be litigated (which court or jurisdiction).
A choice-of-law clause says which state’s law will apply to solve the dispute.

In Andujar:

The forum-selection clause (requiring Memphis courts) was enforced; that’s why the case was transferred from New Jersey to Tennessee.
The choice-of-law clause (requiring Tennessee law to govern all disputes) was not enforced, because Tennessee lacked a material connection with the dispute.

Thus, a case can be litigated in a Tennessee court, but under non-Tennessee law, when the choice-of-law clause is invalid.

2. “Material Connection” vs. “Substantial Relationship”

These terms sound similar but are used in different legal frameworks:

Material connection (Tennessee test): A direct, logical, and relevant nexus between the chosen state and the actual transaction or relationship. Think: where the work is done, where the contract is negotiated and performed, where the parties are based in relation to the specific deal.
Substantial relationship (Restatement § 187(2)): A somewhat broader concept—if the chosen state has a reasonably important tie to either the parties or the transaction, or there is another reasonable basis for the choice, the parties’ choice is generally respected.

Tennessee’s insistence on a “material connection” and rejection of § 187(2) means that simply having a corporate office or a general commercial presence in a state may not be enough. There must be a closer link to the particular contract or dispute.

3. “Fundamental Policy” and “Materially Greater Interest”

Even when a chosen state has a material connection, its law can still be displaced if:

Another state has a materially greater interest in the determination of the particular issue; and
That other state has a fundamental policy that would be undermined by applying the chosen state’s law.

In employment and wage cases, the “fundamental policy” often centers on:

Protecting workers’ right to be paid lawfully earned wages.
Preventing employers from circumventing local wage-and-hour protections through contract.

While the Sixth Circuit did not reach this prong, it is clearly lurking in the background: had Tennessee had a material connection, the court would then have considered whether enforcing Tennessee law would violate New Jersey’s fundamental wage policies.

4. Diversity Jurisdiction and the Erie Doctrine

Because the plaintiffs and the defendant are citizens of different states and the amount in controversy exceeds $5 million, this case falls under diversity jurisdiction (here specifically under CAFA, 28 U.S.C. § 1332(d), for class actions).

Under the Erie doctrine (Erie R.R. v. Tompkins and its progeny like Gasperini):

Federal courts must apply state substantive law in diversity cases.
That includes the state’s conflict-of-laws rules.
Federal courts do not create federal common law of contracts or conflicts in such cases; instead, they predict and apply the relevant state law.

This is why the Sixth Circuit is carefully parsing Tennessee decisions rather than simply imposing its own preferred choice-of-law approach.

5. Independent Contractor Agreements and State Wage Laws

The plaintiffs’ contracts labeled them “independent contractors” and included an “Equipment Lease Agreement.” These labels are common in the trucking industry and are often used to:

Shift costs of equipment, fuel, and maintenance to the driver.
Avoid some statutory obligations that apply to employees, such as overtime and certain wage protections.

However:

State wage statutes like New Jersey’s Wage Payment Law and Wage and Hour Law can apply regardless of contractual labels if, in substance, the workers are employees under state law tests.
Employers sometimes seek to neutralize such statutes by choosing the law of a more employer-friendly state, hence the importance of scrutinizing choice-of-law clauses.

Andujar does not decide whether the drivers are employees or independent contractors under New Jersey law; it simply preserves their ability to pursue New Jersey statutory claims by invalidating the Tennessee choice-of-law clause.

V. Conclusion

Jorge Andujar v. Hub Group Trucking, Inc. is a significant, published Sixth Circuit decision clarifying and reinforcing Tennessee’s “material connection” requirement for contractual choice-of-law provisions. The court:

Confirms that Tennessee has not adopted Restatement (Second) § 187(2).
Reiterates and applies Tennessee’s three-part test requiring good faith, a material connection, and consistency with fundamental policy of more-interested states.
Holds that there is no material connection between Tennessee and New Jersey-based drivers’ wage disputes, despite Hub Group’s operations and contract signing in Tennessee.
Invalidates the Tennessee choice-of-law clause and remands for further proceedings, thereby allowing plaintiffs to pursue their New Jersey wage claims in a Tennessee federal court applying non-Tennessee substantive law.

The opinion’s broader significance lies in its message that nationwide employers cannot use uniform Tennessee choice-of-law clauses to sidestep the wage protections of the states where their workers actually live and work, unless Tennessee has a genuine, transaction-specific connection to the relationship. It strengthens the principle that choice-of-law clauses must reflect substantive reality, not merely contractual drafting preferences, and provides a clear roadmap for courts and practitioners navigating conflict-of-laws issues in multi-state employment arrangements.