Employees who telecommute to work for a New Jersey employer from out-of-state may be covered under the New Jersey Law Against Discrimination, a recent New Jersey appellate decision suggests.

In its April 2, 2018 decision in Trevejo v. Legal Cost Control, the New Jersey Superior Court Appellate Division found that NJLAD protects “persons” from unlawful employment practices, and that the term “persons” is not limited to “inhabitants” of New Jersey. As a result, the court said that if the nonresident telecommuter can show that she was effectively working in New Jersey, she may be covered under the NJLAD.

The defendant-employer in the suit is a New Jersey corporation located in Haddonfield. The plaintiff-employee is not a resident of and has never lived in New Jersey. She lives in Massachusetts, pays property taxes there and has a MA drivers’ license. She worked from home using a company-provided computer to telecommute to the office in New Jersey by connecting to the company’s server. She occasionally traveled to the Haddonfield office for business.

The plaintiff brought a claim under NJLAD for age discrimination. The employer moved for summary judgment, arguing that she was not an “inhabitant” of New Jersey and therefore was not covered under the NJLAD. The lower court agreed and granted summary judgment because the employee did not physically perform her work in New Jersey and failed to show that she was an “inhabitant” of the state.

The Appellate Division reversed. It found that the NJLAD explicitly uses the term “person” to identify who is protected from unlawful employment practices, and that the term “person” is not limited to “inhabitants.” The lower court applied an overly narrow interpretation of the statute by hinging its ruling on the finding that the employee was not an “inhabitant” of New Jersey, the appellate court said.

Factors for Sufficient Contacts

The case was remanded for further discovery on whether the employee had sufficient contacts with New Jersey to be entitled to protection under the NJLAD. Discovery will focus on seven factors:

• work location of the plaintiff’s co-employees
• whether those co-employees worked from home
• the nature of the software used by plaintiff and other employees to conduct business on behalf of the employer
• the location of the server used to connect the plaintiff and other employees to the employer’s office in NJ
• the location of the internet service provider allowing plaintiff and other employees to connect to the employer’s office in NJ
• the location of the decision-makers
• other relevant factors through which the plaintiff can demonstrate her contacts with NJ

These factors do not appear to be insurmountable hurdles for out-of-state employees, and if enough contacts are shown, the court may extend NJLAD coverage to them.

Takeaway

Employers may no longer assume that an employee is only entitled to protection under the NJLAD if he or she works in and/or is a resident of NJ. Although Trevejo is currently nonbinding authority, it is a good indication of where courts may be headed in the near future. Before making employment decisions related to an out-of-state employee who telecommutes to a New Jersey office, contact legal counsel to determine whether that employee has sufficient contacts with the state to be covered under the NJLAD.