In this new remote/hybrid world, there are significant questions about what law applies. Maryland has a presumption against "extraterritoriality," which means the application of a law outside of its jurisdiction. On August 15, 2024, the Fourth Circuit held that an individual has to perform some work within Maryland to be covered by Maryland's wage laws.
In Poudel v. Mid Atlantic Professionals, Inc., two employees worked for a Maryland-based company as interpreters in Afghanistan. All of the employees' work was performed in Afghanistan. The employees filed a lawsuit against the company for unpaid wages under Maryland's wage laws. The district court dismissed their claims and they appealed to the Fourth Circuit. On appeal, the employees argued that Maryland law applied to their claims because the company is based in Maryland, Maryland has a public policy in favor of its wage laws' application, and their employment agreements had Maryland choice-of-law provisions. The Fourth Circuit rejected their claims, and held that the employees were required to perform some work within Maryland in order for the state's wage laws to apply. The court also rejected their argument that a choice-of-law provision in their employment agreements was sufficient to overcome the presumption against extraterritoriality.
This analysis might be different when considering different laws and different states. This case serves as a good reminder to update offer letters and other employment documents to help control for some of these ambiguities. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the Shulman Rogers Employment and Labor Law Group.
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