New Ways of Working Raise New Legal Issues
Most legal concepts and rules were developed long before the internet changed the ways in which we work, play, shop, pay bills and do other things. The availability of real-time online communication has resulted in an explosion of telecommuting employees, whether part-time, fulltime or split-time. Many employees would like to avoid traffic jams or inclement weather to telecommute, but employers are often reluctant, understandably, to permit something they fear may result in inadequate supervision, reduced productivity, inadequate grounding of the telecommuter in the company culture, or other ill effects.
When the telecommuter and the employer are located in the same community, no one disputes that national, state and local labor laws and regulations apply to the employment relationship. If an employee wants to sue his employer in a contract, wage-and-hour, unlawful termination or other dispute, he can file suit in the local courthouse – same for the employer. On the other hand, when such a dispute arises between an employer and a telecommuting employee located in another state or country, it is not so simple. Different jurisdictions have different rules, and it may be unclear which ones apply.
If an employment agreement is used, it should include a forum selection clause by which the parties agree to start any legal proceeding against each other in a particular jurisdiction. Employment agreements are generally prepared by the employer, so the required jurisdiction is usually where the employer or its primary office is located. If there is no employment agreement, or one which is silent as to forum selection, however, the traditional rules apply.
For a New Jersey court to have jurisdiction over any person, that person must have contacts with New Jersey – living here, working here, doing business here, owning property here, traveling here. In a recent case, the New Jersey Appellate Division applied the traditional rules to the new world of telecommuting.
The case involved an employee living in California who was hired to work as a computer systems analyst by a an Indian company which also maintained an office in Edison, New Jersey. The employee was hired through the firm’s Indian office and never went to New Jersey. At the employer’s behest, she relocated to Illinois and provided computer consulting services to two of the employer’s clients there. She emailed her time sheets to the Edison office and was paid by direct deposit to her bank in Illinois. Although there was an employment agreement, it did not contain a forum-selection clause.
After less than a year of employment, the employee quit and went to work directly for one of the frrm’s clients. The employer filed suit against her in New Jersey, claiming that by working directly for its customer she violated her employment agreement.
The court dismissed the suit, finding the employee’s contacts with New Jersey insufficient to support jurisdiction. Merely sending electronic communications back and forth did not constitute sufficient contact with New Jersey on the part of the employee, the court said, and it would unfair to require her to defend a lawsuit here. Of course, the employer could always file suit in Illinois.
Another matter pertaining to telecommuting employees involves the application of labor laws and regulations to the employment relationship. The scope of rights and degrees of protection of employees vary considerably from state to state. If an employee’s home state is one which has more robust requirements as to wage-and-hour, records and record retention, permitted deductions and similar matters, its officials will feel a strong interest in applying its laws and regulations to protect its citizens. However, enforcing those laws and regulations against an employer located elsewhere may be problematic. If the employer has no contacts with the telecommuter’s state except for the presence of that employee, officials in the telecommuter’s state may not be able to hale the employer into court in their state.
Many New Jersey businesses employ residents of other states, notably New York and Pennsylvania. Whether an employee is a telecommuter or a road commuter, if there is an employment agreement, it should contain a forum selection clause.
This entry was posted in MMJ Commentary. Bookmark the
permalink. Comments are closed, but you can leave a trackback:
Trackback URL.
Telecommuting
New Ways of Working Raise New Legal Issues
Most legal concepts and rules were developed long before the internet changed the ways in which we work, play, shop, pay bills and do other things. The availability of real-time online communication has resulted in an explosion of telecommuting employees, whether part-time, fulltime or split-time. Many employees would like to avoid traffic jams or inclement weather to telecommute, but employers are often reluctant, understandably, to permit something they fear may result in inadequate supervision, reduced productivity, inadequate grounding of the telecommuter in the company culture, or other ill effects.
When the telecommuter and the employer are located in the same community, no one disputes that national, state and local labor laws and regulations apply to the employment relationship. If an employee wants to sue his employer in a contract, wage-and-hour, unlawful termination or other dispute, he can file suit in the local courthouse – same for the employer. On the other hand, when such a dispute arises between an employer and a telecommuting employee located in another state or country, it is not so simple. Different jurisdictions have different rules, and it may be unclear which ones apply.
If an employment agreement is used, it should include a forum selection clause by which the parties agree to start any legal proceeding against each other in a particular jurisdiction. Employment agreements are generally prepared by the employer, so the required jurisdiction is usually where the employer or its primary office is located. If there is no employment agreement, or one which is silent as to forum selection, however, the traditional rules apply.
For a New Jersey court to have jurisdiction over any person, that person must have contacts with New Jersey – living here, working here, doing business here, owning property here, traveling here. In a recent case, the New Jersey Appellate Division applied the traditional rules to the new world of telecommuting.
The case involved an employee living in California who was hired to work as a computer systems analyst by a an Indian company which also maintained an office in Edison, New Jersey. The employee was hired through the firm’s Indian office and never went to New Jersey. At the employer’s behest, she relocated to Illinois and provided computer consulting services to two of the employer’s clients there. She emailed her time sheets to the Edison office and was paid by direct deposit to her bank in Illinois. Although there was an employment agreement, it did not contain a forum-selection clause.
After less than a year of employment, the employee quit and went to work directly for one of the frrm’s clients. The employer filed suit against her in New Jersey, claiming that by working directly for its customer she violated her employment agreement.
The court dismissed the suit, finding the employee’s contacts with New Jersey insufficient to support jurisdiction. Merely sending electronic communications back and forth did not constitute sufficient contact with New Jersey on the part of the employee, the court said, and it would unfair to require her to defend a lawsuit here. Of course, the employer could always file suit in Illinois.
Another matter pertaining to telecommuting employees involves the application of labor laws and regulations to the employment relationship. The scope of rights and degrees of protection of employees vary considerably from state to state. If an employee’s home state is one which has more robust requirements as to wage-and-hour, records and record retention, permitted deductions and similar matters, its officials will feel a strong interest in applying its laws and regulations to protect its citizens. However, enforcing those laws and regulations against an employer located elsewhere may be problematic. If the employer has no contacts with the telecommuter’s state except for the presence of that employee, officials in the telecommuter’s state may not be able to hale the employer into court in their state.
Many New Jersey businesses employ residents of other states, notably New York and Pennsylvania. Whether an employee is a telecommuter or a road commuter, if there is an employment agreement, it should contain a forum selection clause.