New Jersey Employers Beware: Out-of-State Telecommuting Employees May Be Covered By New Jersey's Law Against Discrimination

Labor and Employment Law Alert

An out-of-state telecommuting employee whose only connection with New Jersey is the location of her employer, a computer, and a company supplied telephone may be covered by the New Jersey Law Against Discrimination (“NJLAD”) according to an unpublished decision issued by the Appellate Division last week. Trevejo v. Legal Cost Control, Inc., et al., No.: A-1377-16 (App. Div. Apr. 2, 2018). 

In Trevejo, the plaintiff, who lived and worked out of her home in Massachusetts, brought an age discrimination claim under NJLAD, alleging, among other things, the NJLAD applied because she was “an inhabitant” of New Jersey. In fact, she was never a resident of New Jersey and, aside from visiting the company’s New Jersey office a few times between 2003 and 2008, she did not travel to New Jersey on company business. Plaintiff’s only connection with New Jersey was the computer on her desk, which she used to connect remotely from her home to a company server in New Jersey, her company-supplied phone, and the daily conference calls she participated in with her co-workers.  Based on these facts, the trial court found that these contacts were insufficient to show that plaintiff was an “inhabitant” of New Jersey covered by the NJLAD and dismissed the case.

The Appellate Division reversed, observing that a “person” as defined by NJLAD is not restricted to “inhabitants” of New Jersey.  Therefore, it reasoned that limiting NJLAD’s protections to “inhabitants” “would be an overly restrictive reading of the statute with an expressly broad purpose—the elimination of discriminatory conduct.” Because the statute was meant to protect “persons” who experience discrimination in New Jersey, the appellate court concluded the employee was entitled to further develop the record on remand to determine whether she is entitled to the NJLAD’s protections. According to the court,

Nowhere in the NJLAD statute is the term “inhabitant” defined or otherwise expressed. Nor is there any published case issued by a New Jersey court defining the term “inhabitant” under the NJLAD. Contrary to defendants’ argument, the NJLAD prohibits unlawful employment practices and unlawful discrimination against “any individual.”  . . .  As defined in the statute, the term “person” is not restricted to “inhabitants” of this State. 

Id. at *7-8. As the substantive provisions in the NJLAD consistently use the term “person[],” “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.”  Id. at *9. The court further noted that “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.” Id. at *10. Therefore, the Appellate Division remanded the case for additional discovery to determine where the discriminatory conduct took place—in New Jersey or Massachusetts—and to explore whether the plaintiff was employed in New Jersey or Massachusetts.

The Bottom Line

While the Appellate Division did not actually decide the issue of whether out-of-state employees  working for New Jersey-based companies are entitled to the protections of the NJLAD, the decision raises yet another challenge for New Jersey employers who use out-of-state telecommuters. There is no “one size fits all” solution to this problem, but employers who do not want out-of-state employees to enjoy the protections of the NJLAD, inarguably one of the broadest and most liberal in the country, should consider written agreements with well-drafted choice of law and forum selection clauses. This type of solution may be more attractive for employees in some employer friendly states, e.g., Florida, and unattractive in employee friendly states, e.g., California. The time to consider this issue is now, before your next lawsuit.