Employers are requiring employees to return to offices or creating hybrid remote/in-office arrangements with employees. Yet, legal questions arising from remote work remain, including an employer’s exposure when employees choose to work from home in a different jurisdiction from the employer’s primary location.
Choice of Venue in California Court
The California Court of Appeals for the Second Appellate District recently answered the jurisdiction question for violations of Fair Employment and Housing Act (“FEHA”) and the Pregnancy Disability Leave Law (“PDLL”). In Malloy v. Superior Court (2022) 2022 WL 4298371, Petitioner and Plaintiff Eleanor Malloy brought her petition for writ of mandate against Respondent Los Angeles County Superior Court. She initially sued her former employers in Los Angeles County Superior Court, the county in which she lived. However, her employer successfully moved the case to Orange County, California, where their offices were located.
Malloy filed a writ of mandate alleging that her employer violated her pregnancy disability rights under FEHA and PDDL while she lived and worked in Los Angeles County, arguing that the lawsuit should be heard in Los Angeles County. The appellate court held that Cal.Gov.Code § 12965(c)(3) allows for lawsuits alleging violations of FEHA and PDLL and the county where the former employee lived and worked from home for approximately one year prior to her termination was a proper venue. This venue provision under FEHA applies to cases with both FEHA and non-FEHA claims with the same set of facts. Brown v. Superior Court (1984) 37 Cal.3d 477, 487.
Choice of Venue Federal Courts
On the federal level, for the purposes of evaluating remote work, employers could be submitting to another jurisdiction by “purposefully availing” themselves to that jurisdiction. Employers taking deliberate actions within the foreign state or creating continuing obligations with the foreign state’s residents, such as hiring an employee for remote work, can trigger purposeful availment.
In Cossart v. United Excel Corp., 804 F.3d 13, 21 (1st Cir. 2015), the court found purposeful availment where the defendant “recruited” the plaintiff “at his home” in Massachusetts. The resulting contract “contemplated” that the plaintiff “would continue to work” from home, and “the company would facilitate that work by providing the requisite office equipment.” New York was able to assert jurisdiction over the defendant in Williams v. Preeminent Protective Services, Inc., 81 F.Supp.3d 265 (E.D.N.Y. 2015), because the plaintiff and defendant had a “significant continuing relationship” over the months plaintiff worked for defendant. The plaintiff generated significant amounts of work and productivity for the defendant from New York: marketing and communications.
In contrast to Cossart and Williams, a Maryland court declined personal jurisdiction in Perry v. National Association of Home Builders of United States, 2020 WL 5759766 (D. Md. 2020). In Perry, although the plaintiff worked remotely from home, the defendant never recruited the plaintiff for long-term, remote-based work in the forum state. A court’s analysis can be highly fact-intensive and dependent on the foreign state’s long-arm statute.
Recommendations for Employers
Employers should consider the reason why the employee is requesting remote work. For those employers whose employees re-located during the pandemic, consider revisiting the full-time remote work arrangements with those employees. Consider if forum selection and choice of law clauses are feasible. Generally, forum selection and choice-of-law provisions are enforceable and courts tend to look upon them favorably. See Atlantic Marine Construction Co., Inc. v. U.S. District Court for the Western District of Texas, 571 U.S. 49 (Dec. 3, 2013). Employers who see full-time remote work as part of their business plan post-pandemic can consider inserting forum selection and choice-of-law provisions into employment contracts. However, employees who live and work primarily in California must be mindful of California Labor Code Section 925. Section 925 prohibits employers from forcing California-based employees, as a condition of their employment, to litigate outside of California any claim arising in California. These employers must be prepared to litigate in California.
Tressler’s Employment Law practice group has significant experience in ensuring that companies comply with state and federal labor regulations, as well as identifying forum selection issues. Tressler’s Employment Law practice group is ready to design and implement corporate labor and employment policies so that employers may successfully navigate the post-COVID world. If you have any questions or would just like to talk, please contact Bicvan Brown at email@example.com.
Jihoon Kim is an associate in Tressler’s Labor & Employment Practice Group in the Orange County office. He advises employers in management-side labor and employment litigation involving discrimination, harassment and wage and hour claims. Having also established and managed corporate human resource departments, Jihoon has drafted and reviewed personnel policies, employee handbooks and other employment-related materials and has conducted investigations and counseled employers in connection with a broad array of employee relations issues, including wage and hour, disability leave and harassment.