California Employment Laws Apply to Nonresident Employees Working in California

Winter 2009Newsletters California Update - Employment Law

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In Sullivan v. Oracle Corporation, the United States Court of Appeals for the Ninth Circuit held that out-of-state employees sent to work on assignments in California may be governed by the provisions of the California Labor Code. Specifically, in Oracle, the company dispatched three non-California software instructors to California to teach for between one to five weeks. The instructors later sued alleging violations of the California Labor Code.

Initially, the district court agreed with Oracle that California law did not apply to nonresidents. But the Ninth Circuit reversed: "Contrary to Oracle's assertions, the California Labor Code is clearly intended to apply to work done in California by nonresidents. "Arguably, the logic of this opinion reaches employees who work less than a full workweek in California. Given the many unique features of the California Labor Code (e.g., the treatment of accrued vacation, the meal and rest period requirements, the employer indemnity obligations), employers now must consider these distinctions before sending employees into California, even for short periods of time.