An Employment Law Update on Remote Employees and Employer Liability

Can an employee working remotely sue their employer under a state’s law against discrimination, even if the employee does not live or work in that state?

That’s exactly what happened in a recent case when a Massachusetts resident began working remotely for a company in New Jersey. She never lived in New Jersey and only visited the company’s headquarters a few times. She lived and worked from home in Massachusetts.

The Massachusetts resident claimed she was discriminated against and sued under New Jersey’s robust anti-discrimination law—even though she never lived or worked in New Jersey!

The court ruled that the Massachusetts resident could continue her case against the New Jersey company for discrimination under New Jersey law because she was an employee of a New Jersey company and “telecommuted” into New Jersey for work.[1]

What This Means for You

All companies, no matter how big or small, are at risk of being sued by an employee. Depending on your state, your company has up to a 40% chance of facing an employment practices lawsuit. When settlements are paid out, they average $125,000. [2]

If the case ends up in court, the median judgment is approximately $200,000, plus defense costs. 25% of cases result in a judgment of $500,000 or more.[3] Even if the case is baseless, it can still cost over $100,000 to defend.

Without Employment Practices Liability Insurance (EPLI), your business will pay these expenses out of pocket. A big claim can put your entire company at risk. With EPLI, however, all your company will pay is the deductible for a covered claim. Insurance covers the rest. If you have employees, you should have employment practices liability insurance.

About The Author

Michael Levenson has extensive experience working for insurance companies and in the health care field. Prior to joining InsureYourCompany.com, Michael was an attorney with one of the largest insurance defense firms in the country where he specialized in health care law and previously served as the judicial law clerk to a judge presiding in the New Jersey State Superior Court.

Mr. Levenson earned his Juris Doctor degree from Albany Law School with honors. While in law school, he served as a Constitutional Law Teaching Fellow and worked at Albany Law School’s Civil Rights and Disabilities Law Clinic, where he dealt with a myriad of health care law issues.

[1] Trevejo v. Legal Cost Control, Inc., N.J. Super. App. Div., 2018
[2] 2015 Hiscox Insurance Employee Charge Trends Across the United States
[3] Ibid.

Dan Levenson

See Full Bio