Companies that hire remote workers generally assume those telecommuters will be covered by the employment laws, including discrimination law, of the states in which they live. But a recent ruling by a New Jersey appellate court may force at least some businesses to reconsider that assumption.

The unpublished decision from the Superior Court of New Jersey, Appellate Division, says Massachusetts resident Susan Trevejo may be entitled to protection under the New Jersey Law Against Discrimination (LAD) because she worked remotely for a company that is located in that state.

From May 2003 until February 2015, Trevejo worked from her Massachusetts home for Legal Cost Control Inc. (LCC), a company located in Haddonfield, New Jersey. During that time, LCC provided Trevejo with a company computer, which she used to connect to the company’s server. She also had a company-paid telephone. She visited New Jersey on company business “a few times” between 2003 and 2008, the ruling said, but did not travel to the state between 2009 and 2015.

After she was fired, Trevejo filed an age discrimination suit against LCC. A New Jersey trial judge limited discovery in the case and granted summary judgment, saying Trevejo was “not an inhabitant. … Not even close. … The point is, New Jersey doesn’t even have an interest. In this case, from the plaintiff’s perspective, she did not perform her work her

[e]. She did not do anything of any consequence that was job related here and that’s the [c]ourt’s determination. … There is not sufficient contact to—even under the most liberal of constructions that are permitted, [to] have her avail herself of the LAD statute.”

Trevejo appealed that ruling, and Appellate Division judges Robert Gilson and Jessica Mayer decided she “should at least be allowed a chance to prove her ties to New Jersey and thus avail herself of the state’s broad anti-discrimination statute,” according to an article from the New Jersey Law Journal.

In its ruling, the appeals court notes that the goal of the LAD is “the eradication of the cancer of discrimination in the workplace.” And while LCC argues that the term “inhabitant” is used in the legislative findings and declarations section of the law, that term is not defined within the statute itself.

“Nor is there any published case issued by a New Jersey court defining the term ‘inhabitant’ under the NJLAD,” the appeals court ruling said. “Contrary to defendants’ argument, the NJLAD prohibits unlawful employment practices and unlawful discrimination against ‘any individual.'”

Because the law frequently uses the term “person,” the ruling says, “limiting protection of the statute to ‘inhabitants’ of this State would be an overly restrictive reading of a statute with an expressly broad purpose—the elimination of discriminatory conduct. We conclude that discovery is required to determine where the discriminatory conduct took place—in New Jersey or Massachusetts—and to explore whether plaintiff was employed in New Jersey or Massachusetts.”

The judges also weighed in on the broader issue of telecommuting and its impact on the enforcement of labor laws.

“Based upon current computer technology and the forward-thinking concept of ‘telecommuting,’ we are satisfied that determining who may be entitled to protection under the NJLAD is a novel question of law that involves highly significant policy considerations,” the ruling said. “Discovery yet to be completed may shed light on the matter.”

In the New Jersey Law Journal article, Trevejo’s attorney, Deborah Mains, said the ruling shouldn’t be read as overly broad, especially since it is not published. “It is a novel issue, but we’re not there yet,” said Mains, of Costello & Mains in Mount Laurel. “We don’t know what’s going to happen at the end of the day.”

Companies that hire remote workers in other states already focus considerable attention on compliance issues. They need to make sure their HR departments are aware of those states’ regulations for everything from payroll and taxes to immigration and workers’ compensation. The New Jersey case wouldn’t change that need for oversight, but it could affect how it looks for some companies.

Even though the final outcome of the Trevejo case is still up in the air, it’s worth watching for anyone interested in the future of flexible work. Check back for continuing coverage of the issue in the 1 Million for Work Flexibility blog.

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