Beware: Remote Workers Can Sue Under Employer’s State Law
Since the dawn of the COVID-19 pandemic, employers in Massachusetts have resorted to employing workers that live and work remotely outside of the Commonwealth. While employers may assume that these remote employees cannot sue or will not be able to use the law of the Commonwealth to pursue potential claims, courts have said the opposite, allowing remote employees to make use of the laws of the state in which the employer is headquartered.
Frances Yvonne Schulman v. Zeotis, Inc. et al.
In a recent case out of the U.S. District Court for the District of New Jersey, the Plaintiff Frances Yvonne Schulman (“Schulman”), a remote worker, sued her employer in New Jersey, alleging that she received less pay than certain male co-workers, making for a potential gender discrimination case under New Jersey anti-discrimination laws. However, the Defendant employer, Zeotis, Inc. (“Zeotis”) moved to dismiss Schulman’s lawsuit, stating that she could not make use of New Jersey’s anti-discrimination laws because she did not live or work in New Jersey. In fact, Schulman lived and worked exclusively in New Hampshire during her entire employment with Zoetis.
Despite Schulman’s lack of connection to New Jersey, the court denied Zeotis’ motion to dismiss. The court’s reasoning centered on the fact that the New Jersey Law Against Discrimination (“NJLAD”) protected “all persons” and did not limit the definition of person to New Jersey residents or employees. The NJLAD is additionally a remedial legislation that drafters intended courts to liberally construe in favor of employees. So, if a New Jersey company, through its New Jersey officials, discriminates in the workplace, those decisions can impact anyone regardless of location. These were actions that the NJLAD was designed to protect, and the main reasoning for the court’s denial of Zeotis’ motion to dismiss.
Though the court ruled the NJLAD could apply to Schulman, the court also noted that there were other factors that should be considered before applying the NJLAD. If the law of the state that the remote worker works in does not conflict with the employer’s state law, then this choice of law does not need to be considered. However, if they are materially different, then the court needs to apply choice of law factors to determine which state’s laws would apply to a remote worker’s claims. These choice of law factors include the state law’s coverage based on number of employees, statutory caps on damages, statutes of limitations and definitions that would limit the coverage of remote workers under the law.
Massachusetts Employer Implications
M.G.L. 151(b), Massachusetts’ anti-discrimination law, similar to the NJLAD, does not limit its application to only Massachusetts employees. Indeed, M.G.L. 151(b) defines a person protected under the act to be “one or more individuals, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy, receivers, and the commonwealth and all political subdivisions, boards, and commissions thereof.” M.G.L. 151(b(1). Therefore, the reasoning in Schulman could be used to enforce M.G.L. 151(b) for remote workers who do not live or work in Massachusetts. However, given that there could be a choice of law question between Massachusetts and the remote worker’s state laws, it is prudent to consult an attorney to determine which state’s law would apply if any of the company’s remote employees were to file suit.
If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.
