A former pilot instructor for Boeing Corp. in Saudi Arabia has presented sufficient evidence to show he was forced to agree to file any employment claims in that country, says an appellate court in overturning a lower court ruling that said he would have to file his breach of contract litigation in Saudi Arabia.

According to Friday's ruling by the 9th U.S. Circuit Court of Appeals in San Francisco in Robin P. Petersen v. Boeing Co. et al., before leaving for a job as a flight instructor for a unit of Chicago-based Boeing, Mr. Petersen was required to sign a preliminary employment agreement that did not contain a forum selection clause.

Upon arriving in Saudi Arabia, however, he was forced to sign a second employment agreement that he was not given time to read, and which he was told he must sign or else return immediately to the United States at his own expense. This agreement said any contractual disputes must be resolved in the labor courts of Saudi Arabia, according to the appellate ruling.

Mr. Petersen's passport was then confiscated and “he was effectively imprisoned in his housing compound under miserable living conditions; and his work environment was marked by rampant safety and ethics violations,” said the ruling.

When he tried to resign and return to the United States, Boeing refused to return his passport for almost three months.

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During his time in Saudi Arabia, Mr. Petersen also contracted an upper respiratory infection because of his living conditions, and was “permanently maimed” as a result of receiving inadequate surgical treatment for an Achilles tendon tear, which he would have had treated in the United States had he been permitted to leave Saudi Arabia, according to the unanimous ruling by the three-judge appellate court panel.

When he finally returned to the United States after the U.S. consul in Jeddah, Saudi Arabia, intervened, he filed suit against Boeing and a subsidiary charging breach of contract as well as several statutory and common law claims, said the ruling.

He filed a sworn affidavit stating he was not financially capable of returning to Saudi Arabia to bring proceedings against his employer; he would be subjected to harsh conditions if he traveled there; and that the forum section clause “was foisted on him through fraud and financial pressure.”

He also submitted a U.S. State Department report that tended to demonstrate he would not be permitted to legally travel to Saudi Arabia and would not receive a fair trial there, and that Boeing would detain him there for the entire duration of any legal proceedings, said the appellate court.

The U.S. District Court in Phoenix dismissed the entire lawsuit on the grounds of improper venue. In overturning that ruling, the 9th Circuit panel said Mr. Petersen “provided specific evidence sufficient to demonstrate that he would be wholly foreclosed from litigating his claims” against Boeing and its subsidiary in Saudi Arabia.

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“His sworn affidavit states that he lacked the resources to litigate in Saudi Arabia and that he was concerned about returning to Saudi Arabia (even if possible) in light of having been held as a 'virtual prisoner' there,” said the ruling.

The 9th Circuit also agreed that his affidavit, if true, demonstrated that the inclusion of the forum selection clause in the employment agreement “was obtained via fraud or overreaching by taking undue advantage of Petersen's vulnerable position as a newly arrived employee in Saudi Arabia.”

It held that the federal district court had abused its discretion in dismissing the case and remanded the case for an evidentiary hearing on whether the forum selection clause is enforceable. It also told the federal court to separately analyze whether the clause requires dismissal of Mr. Petersen's noncontract claims.