Jurisdiction and the new ‘home’ office
Gavel to Gavelpublished in The Journal Record | September 2, 2021
The COVID-19 pandemic brought many changes to the workplace, including a sudden shift to a remote workforce. This forced experiment has demonstrated that, in some instances, remote work is both practical and desirable. As a result, many companies are allowing some of their employees to work remotely on an ongoing basis.
But what happens when the remote workforce becomes more “remote” than originally planned? Does an employee’s decision to move to – and work in – a different state cause the company to be subject to jurisdiction in that state? The answer is “it depends.” But several recent opinions provide guideposts that can help employers as they navigate the new normal.
First, an employer need not stick its head in the sand and ignore where employees are located. Courts have generally held that a defendant’s knowledge that an employee lives in a particular jurisdiction, without more, will not support a finding that the employer purposefully availed itself of doing business in a state.
Second, an employer should feel reasonably secure in extending identical support services to its in-state and out-of-state remote workers. Several courts have concluded that the facilitation of remote work does not necessarily constitute a purposeful effort to do business in the employee’s state of residence.
Third, employers should be aware that courts will look at both the goal of the employer and the actions taken by the remote employee when evaluating jurisdiction. If the employer is merely accommodating the employee’s unilateral choice to work in his or her chosen state, the risk of being subject to jurisdiction is relatively low; if, however, the employer uses the employee’s presence to provide services in the employee’s state or expand the company’s geographic reach, the risk of being subject to jurisdiction in the employee’s state of residence increases.
The courts will continue to provide guidance in this area as they review the jurisdictional challenges that are sure to arise in the wake of the pandemic. For now, employers can protect their interests by being aware of where their workers are living, taking inventory of the amount of work being performed in each jurisdiction, developing a remote-work policy specifying that any out-of-state work is permitted solely for the convenience of the employee, and watching the forthcoming opinions on personal jurisdiction in jurisdictions of interest.