Does California Employment Law Follow Workers Across State Lines? Key Frameworks and the Latest from the California Court of Appeal in Saberin v. Alation, Inc.

As remote and distributed workforces become more common, employers increasingly need to understand when California’s employment protections reach employees who live and work outside the state. The question arises across wage-and-hour rules, anti-discrimination protections, arrest-record restrictions, restrictive covenant provisions, and other employment statutes whenever a workforce, employer, or employment decision crosses state lines.

California courts generally recognize a presumption against extraterritoriality and presume that state statutes are intended to operate only within state borders. In the employment context, however, courts have not applied that presumption uniformly. Whether a particular California employment statute may reach out-of-state workers or conduct depends on the specific statute at issue. This remains a continuously evolving area of law that has generated significant judicial attention, including multiple California Supreme Court decisions, and may continue to develop as courts apply existing frameworks to new factual scenarios.

Most recently, on July 30, 2026, the California Court of Appeal in Saberin v. Alation, Inc. addressed the reach of two California statutes (Government Code §12952 and Labor Code §432.7) that restrict an employer’s use of arrest records. The court held that these statutes did not apply to a remote employee who lived and worked outside California, even though the employer was headquartered in California and had entered into an employment-related agreement with the employee containing a California choice-of-law provision. The decision is the latest significant development in this area, but its importance is best understood against the broader legal landscape. This Legal Update first traces that landscape and then examines Saberin and its practical implications.

The Statute-Specific Nature of California’s Extraterritoriality Doctrine

California’s extraterritoriality analysis in employment law begins with Sullivan v. Oracle Corp.,51 Cal. 4th 1191 (2011), where the California Supreme Court first confronted the geographic limits of employment statutes in a multistate context. Sullivan held that California’s overtime provisions apply to work performed in California by nonresident employees of California-based employers, including full days or weeks worked in the state. But Sullivan also foreshadowed the complexity ahead: different types of employment claims raise different policy concerns, so a rule designed for overtime cannot be assumed to control every other extraterritoriality question.

From there, in Ward v. United Airlines, Inc., 9 Cal. 5th 732 (2020), the California Supreme Court articulated the governing statute-specific framework. The threshold question is not whether a statute operates extraterritorially in the abstract, but what kinds of connections to California suffice to trigger the specific statutory protections at issue. Courts must examine each statute on its own terms, including the statutory text, the statute’s purpose and role in the surrounding statutory scheme, and its legislative history. Those indicators identify which contacts matter and how California’s interests should be balanced against interstate comity and the avoidance of conflicts of law. A connection sufficient for one statute may not be sufficient for another. Ward therefore supplies a disciplined methodology, not a one-size-fits-all answer for interstate employment relationships.

Ward’s application to wage statements illustrates the framework in action. Under California’s wage statement statute, Labor Code §226, coverage turns on whether the employee’s principal place of work is in California: the test is satisfied if the employee performs a majority of work in California, or, for multistate workers who do not work primarily in any one state, if California is the employee’s base of work operations—generally, the physical place where the worker presents to begin work. Ward declined to treat the employee’s residence, receipt of wages, or payment of taxes as controlling.

Oman v. Delta Air Lines, Inc.,9 Cal. 5th 762 (2020) refined that rule, holding that §226 generally does not reach employees who work in California only episodically and for less than a day at a time, while recognizing that it may apply during pay periods when an employee predominantly works in California. Courts have extended the same framework to wage-payment timing during employment and upon termination under Labor Code §§201–204, as well as expense reimbursement, but even within this family of provisions, the particular statute and the employee’s work pattern remain determinative. The framework underscores why employers cannot assume a blanket answer based on where the employer is headquartered, where the employee resides, or how another California statute has been interpreted.

A different analysis applies to claims under the California Fair Employment and Housing Act (“FEHA”). In Campbell v. Arco Marine, Inc. 42 Cal. App. 4th 1850 (1996), an out-of-state resident who had been employed by a California-headquartered company sued for sexual harassment in violation of FEHA. In assessing whether the FEHA applied, the court examined where the alleged harassment occurred and whether any employees in the California headquarters participated in or ratified the conduct. That analysis differs from Ward’s principal-place-of-work approach. California’s extraterritoriality doctrine is therefore not a single rule, but an evolving set of statute-specific inquiries, and the framework governing one employment protection cannot be assumed to control another.

The extraterritoriality question has also begun to arise more frequently in the restrictive-covenant context, particularly following the enactment of Business & Professions Code §16600.5, effective January 1, 2024, which expanded California’s prohibition on non-competes “regardless of where and when the contract was signed” and has prompted its own geographic-reach disputes. In DraftKings, Inc. v. Hermalyn, 118 F.4th 416 (1st Cir. 2024), the First Circuit held that §16600 did not apply extraterritorially to void a non-compete between a Massachusetts corporation and a New Jersey-based employee who had moved to California following the termination of his employment, applying Massachusetts choice-of-law principles and finding that Massachusetts had a materially greater interest in the employment relationship. By contrast, recently, in BioSkryb Genomics, Inc. v. Aclarity Genomics Inc., 2026 NCBC 51 (N.C. Super. Ct. June 8, 2026), a North Carolina Business Court found sufficient California connections—including the employer’s California business ties and the employee’s travel to California for company business—to uphold a California choice-of-law provision and apply §16600.5 to void a customer non-solicitation covenant. That dispute involved a Delaware-incorporated company headquartered in North Carolina and an employee who worked in North Carolina.

Saberin v. Alation, Inc.: Applying the Framework to Arrest Record Protections

Facts

Plaintiff Pejman Saberin worked remotely from Utah for Alation, Inc., a data analysis and software corporation headquartered in California. Saberin signed two employment documents: an Offer of Employment, which did not include a choice-of-law provision, and a Proprietary Information and Inventions Assignment Agreement (the “Inventions Agreement”), which contained both a general California choice-of-law provision and a specific arbitration clause stating that employment-related claims would be arbitrated “pursuant to California law.” Saberin’s direct supervisor worked remotely from Washington.

In October 2023, while returning from vacation, Saberin was arrested in Florida. Upon his release from detention, Alation terminated Saberin’s employment. The termination decision was made by two Alation executives while both were physically located in Illinois, with input from an HR employee working from California. One of the decisionmakers normally worked from home in California, but was in Illinois when the termination decision was made. The criminal case was subsequently dismissed in March 2024.

Saberin filed suit, alleging violations of California Government Code §12952 and California Labor Code §432.7, which restrict an employer’s use of arrest records that did not result in convictions in making employment decisions. The parties proceeded to binding arbitration, where the arbitrator ruled that the California statutes did not apply extraterritorially to Saberin and dismissed the plaintiff’s claims. The trial court denied Saberin’s petition to vacate, and the Court of Appeal affirmed.

The Court’s Analysis

The Court of Appeal first rejected Saberin’s argument that the California choice-of-law provision resolved the geographic question. Specifically, the court held that a contractual provision selecting California law incorporates all of California law, including the presumption against extraterritorial application of California statutes to out-of-state conduct, unless the provision states otherwise. The threshold question remained whether the Legislature intended the statute to reach the conduct at issue.

The Court of Appeal conducted a statute-specific analysis of the two statutes at issue, considering each statute’s text, purpose, surrounding statutory scheme, and legislative history. The court reasoned that Labor Code §432.7 was enacted to protect workers from adverse employment consequences based on arrests that did not lead to convictions and to prevent employers from misusing criminal-record information. Those purposes contemplated protecting workers and regulating employer conduct in California. The legislative history of Government Code §12952 reflected an intent to reduce employment barriers and regulate employer inquiries into applicants’ records and was similarly aimed at applicants and employer conduct in California.

Based on these indicators, the court concluded that, for either statute to reach a non-California worker extraterritorially, the allegedly unlawful conduct would need a sufficient connection to California. In practice, the opinion indicates, this inquiry focuses on the location and substance of the employer’s conduct—including who made or substantively participated in the challenged decision—rather than merely the employer’s headquarters or a contractual choice-of-law provision.

The Court of Appeal found that connection to be lacking. Saberin and his arrest had no connection to California—he lived and worked in Utah, was supervised from Washington, and was arrested in Florida. The termination decision was made by two executives, both of whom were in Illinois at the time. That one of the decisionmakers normally resided in California was insufficient because he was physically in Illinois when the decision was made. Similarly, the HR representative’s input from California was not substantive enough to establish the requisite connection because the record did not show that she was a substantive participant in, or ratified, the decision. Nor was her communication of the termination decision enough, because the unlawful conduct was the termination decision itself rather than the communication of it. Saberin appears to be the first published California appellate decision to analyze the extraterritorial application of Government Code §12952 and Labor Code §432.7.

Practical Takeaways for Employers

Saberin carries several implications for employers with workforces across California and other states, but employers should treat it as a focused decision about arrest-record statutes under the specific facts of the case—not as a universal rule governing every California employment protection. The following principles provide a practical starting point for evaluating multistate workforces:

• A California choice-of-law provision does not automatically extend the protections of California employment statutes to out-of-state workers. Under Saberin, a California choice-of-law provision incorporates California’s presumption against extraterritoriality unless the agreement indicates otherwise.
• The location of the employer’s conduct may matter more than where the employer is headquartered. The Saberin court focused on the location of the actual employment decision or other conduct at issue, rather than treating corporate headquarters alone as dispositive.
• The analysis is statute-specific. Saberin addressed arrest-record statutes and should not be read as a blanket rule. Under Supreme Court precedent, each statute requires its own analysis, and anti-discrimination, wage-and-hour, or whistleblower protections may have different geographic reach based on the statute’s text, purposes, and legislative history.
• Employers with distributed or remote workforces should audit compliance obligations on a statute-by-statute basis, documenting where employees are located, where work is performed, where they are based for work purposes, and where key employment decisions are made. The facts may differ by employee, work pattern, pay period, and type of claim.
• The legal framework continues to evolve. Employers should monitor developments closely as courts apply the framework to additional California employment statutes and as remote-work arrangements create new combinations of employee, workplace, and decisionmaking contacts.