Tuesday, August 31, 2010

Which State Law Applies?: Multijurisdictional Conduct and State Employment Law Statutes (Update)

In our May 28, 2010 blog entitled “Which State Law Applies?:  Multijurisdictional Conduct and State Employment Law Statutes”, we took a look at how courts apply state employment law statues when an employment-related decision or activity occurs in one state, the effects of which are only felt in another state.  We have two updates to that posting—a decision from the Federal District Court of Massachusetts and a decision from the New York State Court of Appeals.

First, in Gonyou v. Tri-Wire Engineering Solutions, 2010 U.S. Dist. LEXIS 51379 (D. Mass. May 25, 2010), Judge Nathaniel Groton found that Massachusetts’ overtime law applies to employees who work outside the state. 

In Gonyou, the plaintiff-employee, a Massachusetts citizen who alleged that he was owed some 350 hours of overtime pay, worked for the defendant-Massachusetts corporation in Connecticut.  The defendant moved to dismiss on the grounds that:  “1) statutes are presumed not to apply extraterritorially and 2) in deciding which state’s law to apply, the place of employment is the critical factor.”  The court denied each of these arguments, as follows. 

Regarding the defendant’s “presumption against extraterritoriality” argument, the court found that (i) Massachusetts has no such clearly pronounced policy (cf. Hadfield v. A.W. Chesterton Co., 2009 Mass. Super. LEXIS 230 (Mass. Super. Ct. Sept 15, 2009), and that in fact (ii) Massachusetts has “applied its statutory law to conduct outside its borders if sufficient contacts with the Commonwealth exists, as they do here” (see O’Connell v. Chasdi, 511 N.E.2d 345, 351 n.3 (Mass. 1987).  The court found the latter especially persuasive given that the plaintiff was a Massachusetts resident during all relevant times. 

The court also turned to the language of the state’s overtime statute, which provides:  “no employer in the commonwealth shall employ any of his employees in an occupation . . . for a work week longer than forty hours, unless such employee receives compensation for his employment in excess of forty hours at a rate not less than one and one half times the regular rate at which he is employed.”  Upon this language, the court found that the phrase “employer [not “employee”] in the commonwealth” is most reasonably “interpreted in this case as encompassing a Massachusetts corporation that operates in the Commonwealth and elsewhere, such as [defendant]”; basically, the question does not merely turn on the employee’s “place of employment.”  And again, the court found this especially persuasive given that the plaintiff lived in Massachusetts.   

Thanks to the Wage and Hour Counsel Law Blog for bringing this decision to our attention. 

Second, in Hoffman v. Parade Publ’ns, 2010 N.Y. LEXIS 1346 (N.Y. July 1, 2010), rev’g, 2009 N.Y. App. LEXIS 3559 (N.Y. App. Div. May 7, 2009), the Court of Appeals of New York in a 4-3 decision, overturned the decision of the Supreme Court, Appellate Division, adopting the so-called “impact” test.  The Court of Appeals stated:

The Appellate Division’s rule that a plaintiff need only plead and prove that the employer’s decision to terminate was made in the City is impractical, would lead to inconsistent and arbitrary results, and expands NYCHRL protections to nonresidents who have, at most, tangential contacts with the City.  Indeed, the permutations of such a rule are endless, and, although the locus of the decision to terminate may be a factor to consider, the success or failure of an NYCHRL claim should not be solely dependent on something as arbitrary as where the termination decision was made.  In contrast, the impact requirement is relatively simple for courts to apply and litigants to follow, leads to predictable results, and confines the protections of the NYCHRL to those who are meant to be protected—those who work in the City.

Id. at *7 (citing Administrative Code of City of N.Y. § 2-201 (defining the territory of the City as constituting the five boroughs, and declaring that the ‘jurisdictions and powers of the city are for all purposes of local administration and government . . . co-extensive with the territory . . . described”)).

The Court of Appeals also overturned the Appellate Division’s decision under the NYSHRL, finding that the intent of the statute is to “protect ‘inhabitants’ and persons ‘within’ the State, meaning that those who work in New York fall within the class of person who may bring discrimination claims in New York.”  Id. at *8.

The Court of Appeals concluded that under both the NYSHRL and NYCHRL, a non-resident must “plead and prove that the alleged discriminatory conduct had an impact” within the State of New York or New York City, respectively.  Id. (citing Pearce v. Manhattan Ensemble Theater, Inc., 582 F. Supp. 2d 175, 185 (S.D.N.Y. 2007); Lucas v. Pathfinder’s Personnel, Inc., 2002 U.S. Dist. LEXIS 8529, at *2 (S.D.N.Y. May 13, 2002); Duffy v. Drake Beam Morin, Harcourt Gen., Inc., 1998 U.S. Dist. LEXIS 7215, at *12 (S.D.N.Y. May 19, 1998)).    

Tip of the hat to the Adjunct Law Prof Blog for bringing this decision to our attention.

Please be sure to visit our website at http://RobertBFitzpatrick.com


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