In Minnesota, employees who believe in good faith that their employers have violated a contract, and who object or complain about the violation, may have a claim under the state’s whistleblower law if the employer retaliates. In Florida, such a claim would be dead on arrival because the whistleblower statute there requires an actual violation of a law or regulation. So, which state’s law applies to a potential claim can be vitally important. For employees who work remotely in a state different from their employer’s home state, the so-called “choice of law” question can sometimes become both very significant and very complicated. Different rules may apply depending on the specific issue. For example, the rule on what state’s tax or workers compensation law applies may be different from the rule for other kinds of cases.
Choice of Law in Remote Worker Discrimination and Retaliation Cases
This blog focuses on choice of law for discrimination or retaliation cases for employees working remotely. The general rule favors the law of the state where the employee works, but there are important exceptions. Consider the case of Rinsky v. Cushman & Wakefield, Inc., in which the 63-year-old plaintiff, who had worked for many years in New York City, moved and began to work remotely from Boston. The defendant employer terminated him shortly thereafter, and he filed a claim under Massachusetts law in Massachusetts state court. After the case was removed to federal court, the defendant argued successfully that New York law should apply because that state was most closely connected to the relevant events. For example, the termination occurred in New York.
In Calabotta v. Phibro Animal Health Corp., the New Jersey Appellate Division similarly applied the law of the employer’s home state (New Jersey) in a failure to promote and wrongful discharge case involving an employee who worked in Illinois. Notwithstanding the New Jersey statute’s explicit reference to “inhabitants,” the court went through a choice of law analysis and applied it to the non-resident plaintiff.
The Rule in Minnesota
Minnesota also sometimes applies the law of a state different from where an employee works remotely. In Counters v. Farmland Industries, Inc., the plaintiff claimed under the Minnesota Human Rights Act that the defendant terminated him because of his marital status. Though he had worked in Minnesota for the defendant (a Kansas company), when his Minnesota position was eliminated, he took a similar position in North Dakota and moved there even though his wife did not. The termination was based on his wife’s refusal to move, and in affirming a Minnesota trial court verdict in his favor the Minnesota Court of Appeals ruled that “given significant aggregation of contacts with the parties’ employment relationship . . . the [Minnesota] trial court’s exercise of jurisdiction is neither arbitrary nor fundamentally unfair.“ Moreover, the application of Minnesota law was permissible under choice of law principles.
The Federal District Court for the District of Minnesota similarly applied Minnesota law in a case involving an employee who worked in another state. In Lapushner v. Admedus Ltd., the plaintiff worked primarily in New York for an Australian company whose U.S. operations were headquartered in Minnesota. Because most of the sexual harassment alleged by the plaintiff occurred in Minnesota, as well as the decision to terminate her, New York law did not apply.
Making Informed Choices in Multistate Employment Disputes
The takeaway lesson from the four cases discussed above is that choice of law rules may trump the general rule that remote worker claims are resolved under the law of the state where the plaintiff works. Plaintiffs who work outside of the state for Minnesota companies should consider bringing claims under Minnesota law if it is more favorable. Likewise, plaintiffs who work in Minnesota for out-of-state companies may want to consider bringing their claims in the employer’s home state. And plaintiffs who take the typical approach of claiming under the law of the state in which they work may have to face efforts by the employer to apply another state’s law.
