Reported / Citable
Background
Pejman Saberin worked remotely from Utah for California-headquartered software company Alation. After he was arrested in Florida and missed work, company personnel learned of the arrest and terminated him; the criminal matter was later dismissed. He claimed the company violated California laws limiting an employer’s use of arrests that do not result in conviction.
The dispute went to arbitration. Evidence showed the principal decisionmakers were in Illinois, although a California human-resources employee provided input. The arbitrator ruled that California law could not be applied outside the state on those facts, and the superior court declined to vacate the award.
The Court’s Holding
The Court of Appeal affirmed. California’s Fair Chance Act provision and Labor Code section 432.7 did not govern a Utah resident working in Utah where the arrest occurred in Florida and the termination decision was made by managers outside California. The company’s California headquarters and input from a California HR employee were not a sufficient California connection.
A California choice-of-law clause did not change the result. Choosing California law for an agreement does not eliminate the presumption that California statutes operate only within California, particularly where the employee, challenged conduct, and injury are centered elsewhere.
Key Takeaways
- Remote employment for a California company does not by itself bring an out-of-state worker within every California workplace protection.
- Courts will focus on where the employee worked and where the allegedly unlawful employment decision was made.
- California-based HR input may be insufficient when the actual decisionmakers act elsewhere.
- A contractual California choice-of-law clause ordinarily does not expand the territorial reach of California regulatory statutes.
Why It Matters
The ruling gives multistate employers useful guidance on which law may govern remote workers, but it also makes careful documentation important. The location and authority of each participant in an employment decision may determine whether California protections apply.
Employees and counsel should investigate where the operative decision occurred rather than relying on headquarters, payroll, or a general choice-of-law clause. Employers should still evaluate the laws of the worker’s state and any other jurisdiction tied to the decision.