Since the Covid-19 pandemic, the shift to a remote workplace has increased across employment fields. Although a remote environment has provided an ease of functionality for many companies and organizations, it has also provided some complexities regarding applicability of state employment laws. Remote employees who live and work in different states than where their employer is located cannot always take advantage of specific state employee-friendly laws.
Recently, a federal court lawsuit in Massachusetts got to the heart of this issue. In Wilson v. Recorded Future, Inc., an employee of the company, who resided in Virginia, brought claims against their former employer, a Massachusetts company, under specific Massachusetts anti-discrimination law and wage act laws. The Massachusetts company attempted to get the case dismissed arguing that the employee should be bringing the case in Virginia, but to no avail.
The employee argued that absent a choice-of-law provision, Massachusetts had a greater connection to the dispute at hand. The court addressed this by determining the strength of the relationship between the employee and the state of Massachusetts. Regarding the Massachusetts Wage Act, there is no provision that limits the statutes applicability extraterritorially, and in fact in a previous Massachusetts case, Viscito v. Nat’l Plan Corp., the court ruled without a choice-of-law provision in place in an employment agreement or employment offer, employees from other states can invoke protections under the Massachusetts Wage Act so long as the employee maintains a significant relationship with Massachusetts.
In determining what constitutes a “significant relationship” between the employee and Massachusetts, the court looked at several factors. Those factors include: the location of the employer’s headquarters, the location of the work performed, the frequency of interactions between the employee and the employer in Massachusetts, and any other vital connections the employee had with the state.
In this case, the geographic location of the company headquarters was in Massachusetts. Second, the employee habitually traveled to the Massachusetts headquarters. Third, the employee commonly communicated with the company’s executives in Massachusetts and lastly, the employee’s compensation originated from Massachusetts. Given these connections between the employee and the state of Massachusetts, the court determined a dismissal would be improper since the complaint contained sufficient facts for it to be heard in Massachusetts.
Although the case remains in its early procedural stages, it is important for Massachusetts-based employers to consider and review their offer letters and employment agreements to ensure a solidified choice-of-law provision. Such a review can limit or prevent any potential litigation issues that could arise regarding the applicability of employment laws.