By: Ty Hyderally, Esq., Francine Foner, Esq., and Adela Barbura

The New Jersey’s Law Against Discrimination, N.J.S.A., § 10:5-1 et seq., (“LAD”) provides powerful protections for employees who have suffered unlawful discrimination and retaliation. Thus, when filing a lawsuit for discrimination and retaliation, if the LAD is applicable, it is often preferred by employees over other applicable state or federal anti-discrimination laws.  However, just who is covered by the NJLAD can be a point of contention. In a recent decision, the New Jersey District Court reviewed whether the LAD should extend to a remote worker who was employed by a New Jersey company but worked and resided outside of New Jersey. Schulman v. Zeotis, Inc., 2023 U.S. Dist. LEXIS 121702 (D.N.J. July 14, 2023).

Frances Schulman (“Schulman”) sued Zoetis, Inc. and Zoetis Reference Labs, LLC (collectively, “Zoetis”) for their alleged violation of the LAD. Schulman at *2. In her lawsuit, Schulman claimed that she received less pay than certain male co-workers. Id. at *1.  Zoetis argued that because Schulman worked remotely from a location outside of New Jersey, and did not reside in New Jersey, the LAD’s protections did not extend to her. On that basis, Zoetis moved to dismiss Schulman’s Complaint. Id. at *1-2

The New Jersey District Court disagreed, predicting that “the New Jersey Supreme Court will hold that the New Jersey LAD can apply to the case of a non-New Jersey resident who works for a New Jersey-based company, but remotely outside of New Jersey.”  2023 U.S. Dist. LEXIS 121702, *20. The New Jersey District Court based its prediction on five considerations: (1) the Appellate Division’s decision in Calabotta v. Philbro Animal Health Corp., 460 N.J. Super. 38 (App. Div. 2019): (2) statutory interpretation principles; (3) analogous decisions; (4) federal district court cases; and (5) to not “disregard” opinions of intermediate appellate state courts. Id. at *5, 10, 13.

First, the New Jersey District Court observed that in Calabotta, the New Jersey Appellate Division held that the LAD protected nonresident workers and job applicants because the LAD protects “all persons … [and] does not limit the definition of ‘person’ to New Jersey residents or employees.” Calabotta, 460 N.J. Super. at 61. The Schulman Court then cited various cases which noted that decisions of the intermediate appellate courts should be given significant weight and serious consideration in prediction analysis. Schulman at *5 (citations omitted).

Second, the New Jersey District Court noted that because the Calabotta Court based its holding on statutory interpretation principles, there is an increased likelihood that the New Jersey Supreme Court will rule the same way. Id. at *5-6, 9.

Third, the New Jersey District Court referenced an analogous case in which the New Jersey Appellate Division considered “whether a New Jersey workplace-protection statute, [the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14,] can be invoked by a non-New Jersey plaintiff who worked outside of New Jersey, for a New Jersey company.” Id. at *10, citing Halliday v. Bioreference Lab’ys, Inc., 2022 N.J. Super. Unpub. LEXIS 1394, 2022 WL 3051348 (App. Div., Aug. 3, 2022). Like the Calabotta Court, the Halliday Court ruled in favor of the New Jersey statute applying to a non-New Jersey plaintiff who worked outside of New Jersey. Id. at *12.

Fourth, the Schulman Court explained that “in predicting how a matter would be decided under state law we examine … federal … district court cases interpreting the state law.” Schulman at *13 (quoting Boyanowski v. Cap. Area Intermediate Unit, 215 F.3d 396, 406 (3d Cir. 2000). The New Jersey District Court noted that a number of federal courts have suggested that “the New Jersey LAD can reach the case of a worker based outside of New Jersey who worked for a New Jersey company.” Id.

Fifth, the Schulman Court highlighted that “opinions of intermediate appellate state courts are ‘not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise.’” Id. at *13-14, citing Nationwide Mut. Ins. Co. v. Buffetta, 230 F.3d 634, 637 (3d Cir. 2000) (quoting West v. AT & T Co., 311 U.S. 223, 237(1940). Although Zoetis cited various cases to undermine the persuasiveness of Calabotta, the New Jersey District Court noted that the cases cited by Zoetis were neither relevant to the question asked in Calabotta, nor did they use methods of interpretation similar to those used by the Calabotta Court. Id. at *16. Therefore, the New Jersey District Court disregarded the cases cited by Zoetis. Id. at *19-20.

This decision is a win for remote workers employed by New Jersey companies. Hopefully, the New Jersey Supreme Court will take up a case in the near future involving this issue and make a definitive ruling that the protections of the LAD extend to out-of-state remote workers.

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