Can out-of-state remote workers handpick the most favorable state employment laws for a lawsuit?

In the evolving landscape of remote work, many employees believe they are shielded by the laws of the state they reside in. However, a recent decision from the United States District Court for the District of New Jersey — of all places !!! — reveals a harsh reality: working remotely from another state does not necessarily entitle employees to the protections of that state’s laws. This case serves as a critical reminder of the complexities surrounding jurisdiction in employment law.

The Case That Shatters Remote Work Assumptions

Consider this scenario: a New Jersey resident is employed by a group of healthcare organizations based in Pennsylvania. Initially hired in 2007, the employee transitions to a hybrid remote work schedule in 2013 and later to a fully remote arrangement during the COVID-19 pandemic. Despite working from New Jersey, the employment is fundamentally tied to Pennsylvania.

In 2023, after invoking disability-leave rights and complaining about a supervisor’s harassment and discrimination, the employee is fired. Believing they are protected by New Jersey’s employment laws, the employee files a lawsuit under the New Jersey Conscientious Employee Protection Act (CEPA) and the New Jersey Law Against Discrimination (NJLAD). (Pennsylvania’s whistleblower and anti-discrimination laws are not as employee-friendly.) But here’s the kicker: the court dismisses the claims, ruling that Pennsylvania law governs the case.

The Court’s Decision: A Wake-Up Call

The court’s decision was a stark reminder that the state law governing employment disputes is generally the law of the state where the employment is based, not where the employee resides or works remotely. In similar cases, courts consistently ruled that a resident’s claims related to out-of-state employment are governed by the law of the state where the employment is based. The court emphasized that merely working remotely from New Jersey for convenience did not entitle the employee to the protections of New Jersey law — unless the employer conducts business there or targets New Jersey in any purposeful way. That was especially true in this case where the employer hired the employee to work in Pennsylvania, and she received a promotion there. Plus, the employee alleged no facts suggesting she had any work responsibilities outside of the PA headquarters.

Although your mileage may vary, at least in New Jersey a/k/a the California of the East, out-of-state employers can rest easier knowing that the state law governing employment disputes is generally the law of the state where the employment is based. This principle helps avoid the complexity of complying with multiple state laws.