Question: Hi, Alan. I was terminated by a company here in the U.S. that is based in Massachusetts. I live in New Jersey and have worked out of my home office from the beginning I am currently negotiating a settlement.
If I need a lawyer, how do I determine if they should be from Massachusetts or New Jersey?
Morristown, New Jersey
Answer: Dear D.M.: Your question is quite common, increasingly so as people increasingly work distant from the their employers’ headquarters. Unfortunately, as you will see, the answer to your question is not as simple, clear and definite as you might like. But you asked, so here is the answer:
1. As a general rule, you will likely want to hire an attorney who is familiar with the laws that are applicable to any issues that now exist (or may arise) in the course of your discussions and negotiations. Simple common sense would suggest that you would be wise to use an attorney licensed in Massachusetts if the issues in your negotiation are ones that require analysis under Massachusetts law, and the same goes for hiring a New Jersey lawyer to resolve legal issues of New Jersey law.
Unfortunately, that simple, common-sense approach is often quite difficult to follow and does not really apply to severance or settlement negotiations, as will be further explained below.
2. The laws that apply to any issues that might arise in your severance negotiations may be determined by an agreement you signed. Quite often, employers say to themselves, “Let’s make sure that if any employee takes us to Court, or gets into a legal hassle with us, it is our home state’s laws that apply, because this is where our lawyers are and they are most familiar with this state’s laws.”
For this reason, it is common for employers to write into their employment-related documents, including (a) employment agreements, (b) job offer letters, (c) bonus agreements and plans, (d) stock and stock option agreements and plans, (e) retirement plans, and even (f) employee handbooks that “Any and all disputes that arise between the employer and the employee will be decided under the laws of the state where the employer’s corporate headquarters or home office is located,” or words to that effect.
Thus, issues that arise related in some fashion to those documents would be resolved under the state’s laws that is noted in the document, and a lawyer licensed to practice in that state would likely be most familiar with that state’s laws.
3. However, even if you signed an agreement like the one described above, the laws that apply to any issues that exist may be determined, instead, by the laws of the state where you worked. Most states have laws that provide that, if the employee worked in their state, certain issues arising in that employment relation must be decided under that state’s laws, no matter what agreements may have been signed.
This started a long, long time ago, when the individual states became associated with each other as the United States. The idea was that each state is free to set standards for certain conduct within its own borders, and in the employment context those state standards include: (a) whether you need a license and a supervisor to act, for example, as a mortgage broker, (b) what workplace safety standards must be met by construction-company employers, (c) whether you are entitled to be paid for accrued but unused vacation days if you resign or are terminated, and (d) what the minimum hourly wage may be that is paid to workers. These “state-standard” laws vary considerably from state to state.
So, an employee working in New Jersey, who believes she is due (a) payment for accrued but unused vacation, and (b) was also denied the legal minimum hourly wage, can file a legal claim using New Jersey law against an employer headquartered in Massachusetts, even if she signed an agreement that said, in effect, “I promise to use only Massachusetts law to resolve any and all disputes.”
4. To further complicate matters, it is quite possible that the laws that apply to any issues that might arise in your negotiations may be federal laws, which would make which state your lawyer was licensed in entirely irrelevant. As an example, the primary laws that affect entitlement to overtime pay anywhere in the United States is the federal Fair Labor Standards Act (commonly known as “FLSA”).
If the issues that arise in your settlement negotiations arise under or are related to FLSA, it would not matter in what state in the U.S. your lawyer was licensed to practice. So long as he or she was licensed to practice law, he or she could advise you on issues related to these laws, and with certain technical requirements met, could appear for you in any Federal Court.
5. And – hold onto your seat – the issues that exist in your settlement negotiations may be those of (a) New Jersey law, AND (b) Massachusetts law, AND (c) federal law, all at the same time. D.M., it has happened to me many times: I am licensed to practice law in New York, I am assisting a client who worked in Texas, the company is headquartered in Connecticut, and then I discover that some of the issues involve Illinois law, as well.
What an attorney does in these circumstances is to (a) try first to figure out what laws, IF ANY (see below) are applicable to the matter at hand, and (b) then determine whether he or she needs to consult a “local” attorney to assist on that issue. Frankly, it is not usually necessary.
A few years ago, I was representing a man working in the African country of Namibia (the country immediately north of South Africa), and I had to determine how much notice, if any, was required to be given to terminate an employee. I contacted a Namibian attorney, luckily for me who spoke English, and conferred with him on that particular issue. I have done that same thing in states all over the U.S. and in countries all over the world.
6. All of these confusing and at times contradictory issues aside, it usually does not matter: an experienced severance attorney from either of those two jurisdictions, or any other jurisdiction for that matter, should prove just fine. I say this because in severance negotiations, most of the issues that require negotiation are truly “business” issues, not necessarily “legal” ones. Even as to truly “legal” issues, most employers do not think about “Who is right according to the law?” or even “Who is going to win in Court?” That is just not how business people usually think.
Rather, what business people really think about is what really concerns them, as business people: “What will this cost me in terms of legal fees, the company’s reputation, employee morale, distraction from our main business focus?” and the like. These “business” issues, believe it or not, are far more prevalent and central in severance negotiations than are truly “legal” issues. It is this type of “legal” experience you need on your side.
The reason you need an attorney in such discussions is more for his or her business and negotiation experience and acumen, and how well he or she can spot issues, negotiate resolutions, and draft agreements, and far less his or her “legal knowledge.”
We offer a Model Letter entitled “To Employment Attorney – Seeking Information for Retention.” If you would like to obtain a copy for your use, just [click here.]
If, as I did in my Namibian case, your attorney ends up needing local legal knowledge, or local court experience, he or she can then locate and secure it for you which, quite frankly, does not happen often.
For your negotiations, you might be interested in our Master 94-Point Severance Negotiation Checklist, to give you the peace of mind and freedom from worry that you have forgotten to raise or entertain certain points of discussion and negotiation. To obtain a copy, just [click here]. Delivered by Email – Instantly!
D.M., I warned you that this was not going to be “easy.” That said, I hope I did clarify a bit for you the real things you need to know and bear in mind when you hire an attorney in this field. Go with experience and compassion: the rest will fall into place.
P.S.: Since you will soon be looking for a new job, one of our most popular “Ultimate Packages” of forms, letters and checklists is entitled “Ultimate New Job Package” consisting of 9 items, including Resume Cover Letter, Thank You After Interview, Memo Confirming Terms Offered, Response to Offer Letter, our Master Checklist of Items to Negotiate, and 50 Good Reasons to Explain Your Departure from Your Last Job. To obtain a complete set, just [click here.]
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