New Jersey Employment Attorneys Blog
The New Jersey Law Against Discrimination (LAD) prohibits employers from discriminating against employees by treating them hostilely or differently based on the employee’s race/color, sex/gender, age, national origin/ancestry, religion/creed, disability (temporary or permanent), sexual orientation, and gender identity, among other protected class characteristics. Earlier this year, the New Jersey Division of Civil Rights (NJDCR) along with the Office of the New Jersey Attorney General (NJDAG) issued a guidance clarifying how the LAD applies to out-of-state employees who work for New Jersey-based employers (hereafter referred to as the “the Guidance”). The COVID-19 pandemic prompted New Jersey companies to adopt telework and hybrid working models allowing some employees to work from out of state locations. This rise in remote work created confusion as to whether the LAD applies to these out-of-state workers. The Guidance makes clear the LAD should be applied to all workers employed by New Jersey companies regardless of whether they perform their work inside New Jersey. The Guidance draws on the broad statutory language of the LAD and notes the terms “person” and “employee” are defined broadly and contain no geographical restriction in scope throughout the statute.
While the Guidance is not legally binding, legal precedent exists supporting the stance taken by the NJDCR and NJDAG. Specifically, the Guidance relies on two New Jersey cases: Calabotta v. Phibro Animal Health Corp., 460 N.J. Super. 38 (App. Div. 2019) and Schulman v. Zoetis, Inc., 684 F. Supp. 3d 275 (D.N.J. 2023). In Calabotta, an Illinois resident working for a subsidiary of a New Jersey employer brought a LAD claim after the employer failed to consider him for a promotion. Calabotta, 460 N.J. Super. at 45. In its analysis, the Appellate Division reasoned that the plain language of the LAD did not limit the definition of “person” to only New Jersey residents or employees working inside the borders of New Jersey and thus protects “all persons” employed by a New Jersey-based company. Id. The Calabotta court also recognized that “special rules of interpretation” applied to the LAD because it serves as, “remedial social legislation whose overarching goal is to eradicate the cancer of discrimination. As such, it should be liberally construed….” quoting Nini v. Mercer Cnty. Cmty. Coll., 202 N.J. 978, 108-09 (2010).
Similarly in Schulman, a case brought before the District Court of New Jersey, a remote worker residing in New Hampshire filed a LAD claim against their New Jersey-based employer. Schulman, 684 F. Supp. 3d at 277. Because the New Jersey Supreme Court has yet to decide the issue of whether the LAD applies to out-of-state workers employed by New Jersey companies, the District Court in Schulman had to predict how the New Jersey Supreme Court would likely decide the issue. Id. at 278. In doing so the District Court relied on the Calabotta decision and that court’s statutory interpretation of the LAD’s plain language and its broad remedial purposes. Id. at 279-280. Ultimately, the District Court concluded that the New Jersey Supreme Court would likely extend LAD protections to out-of-state workers of New Jersey companies. Id. at 281. Additionally, the District Court in Schulman pointed to an analogous New Jersey Appellate decision that extends whistleblower protections under New Jersey’s Conscientious Employee Protection Act (CEPA) to out-of-state employees as further proof the LAD would also extend to remote workers. Id; Halliday v. Bioreference Labs., 2022 N.J. Super. Unpub. LEXIS 1394 (Super. Ct. App. Div. Aug. 3, 2022). In Halliday, our Appellate Division reversed the dismissal of a CEPA case for lack of subject matter jurisdiction and remanded the case for further fact-finding because the trial level court had failed to sufficiently analyze all factors relevant to determining if New Jersey had a substantial relationship with the parties and facts at issue.
A year before the Guidance was issued, the attorneys at Mashel Law relied on both Calabotta and Halliday to successfully defeat a motion to dismiss brought in a New Jersey Superior Court where the Defendants argued our client’s whistleblowing claim brought under CEPA lacked subject matter jurisdiction and should be dismissed. In that case, our client, a Human Resources Manager, worked remotely from North Carolina for a New Jersey-based company. The Defendants claimed that because the Plaintiff lived and worked in North Carolina she did not have sufficient minimum contacts with New Jersey to avail herself of the protections of New Jersey’s LAD. However, Mashel Law persuaded the trial court that Plaintiff and her claims had a substantial relationship with New Jersey based on, but not limited to, the fact that the Corporate Defendant’s business was headquartered in New Jersey. Moreover, Mashel Law argued that since the individual named defendants worked for the Corporate Defendant in New Jersey and the Corporate Defendant deducted New Jersey specific payroll taxes from the Plaintiff’s paycheck jurisdiction for the case New Jersey was the proper venue for the case. Applying the rationale of Calabotta and Halliday, the trial court agreed with Mashel Law and denied the defendants’ motion to dismiss, thereby permitting Mashel Law’s out-of-state client to continue litigating her CEPA claims against her former New Jersey-based employer in the New Jersey Superior Court. This case eventually settled.
Notwithstanding the foregoing, the Guidance does caution remote workers residing in New Jersey but working for companies headquartered or based outside of New Jersey, that the LAD may not offer the same protections it would if the company were based in New Jersey. The Guidance states that an employee of an out-of-state company would have to establish a nexus between their employer and New Jersey for the LAD to apply to their discrimination claims. See Buccilli v. Timby, Brown & Timby, 283 N.J. Super. 6, 10-11 (App. Div. 1995). The Guidance notes that in such instances, remote workers may still be protected from discrimination under federal and state laws where the company is located.
If you believe you are or have been a victim of unlawful workplace discrimination and/or workplace retaliation you are urged to call the attorneys at Mashel Law (732) 536-6161 or fill out the contact form on this page for immediate help. Mashel Law located in Marlboro, New Jersey is dedicated to protecting the rights of employees.