A recent California Court of Appeal ruling in Saberin v. Alation, Inc. clarifies how state employment laws apply to remote staff working outside the state. The court determined that California employment statutes do not automatically govern employees based in other states, even if their employer maintains headquarters in California. This decision provides a critical framework for companies navigating remote work policies and multistate operations.
In the specific case, a former employee working from Utah alleged that California law should govern his termination regarding the use of arrest records. The court rejected this, noting that a choice-of-law provision in an employment contract does not force the application of California statutes if the underlying employment relationship lacks a sufficient geographic nexus to California. Factors such as the location of the worker, the location of the arrest, and the physical location of the decision-makers all weigh into the court's analysis of whether California law applies.
Employers should focus on where employment decisions are made and by whom. The involvement of California-based HR staff or the existence of a California headquarters does not alone trigger the application of California labor codes for remote workers in other jurisdictions. Legal teams must now evaluate each specific statute on a case-by-case basis, as there is no universal test for extraterritorial reach.
For companies managing distributed teams, this ruling underscores the need to monitor the laws of the states where employees actually perform their work. While California law serves as a baseline for internal operations, it does not act as a blanket regulation for every worker employed by a California firm. Businesses should assess their current remote work agreements and ensure that decision-making processes regarding discipline or termination align with the legal requirements of the employee’s specific work location.