Arbitration
California Job Protections and Remote Workers Terminated Out of State
In Saberin v. Alation, Inc., the First District Court of Appeal held that California’s employment protections against using a non-conviction arrest did not reach a worker who lived and worked remotely in Utah and was terminated by decision makers acting from Illinois. The court affirmed the trial court’s denial of the worker’s petition to vacate the arbitration award. The opinion was certified for publication.
Background
Pejman Saberin worked remotely as an engineer for Alation, Inc., a software company headquartered in California. He lived in Utah and had worked from there since September 2021. In October 2023 he was arrested in Florida while returning from a vacation; the criminal case was later dismissed in March 2024.
After Alation learned of the arrest, it terminated Saberin. He sued in San Mateo County Superior Court, alleging violations of the Fair Employment and Housing Act (FEHA; Government Code section 12952) and Labor Code section 432.7, both of which restrict an employer’s use of an arrest that did not lead to a conviction.
The parties stipulated to binding arbitration. The arbitrator ruled that neither California statute applied extraterritorially, because Saberin worked remotely from Utah and the termination decision was made in Illinois. The parties then stipulated to an award for Alation after agreeing that no non-California law would let Saberin pursue the claim.
Saberin petitioned to vacate the award under Code of Civil Procedure section 1286.2, subdivision (a)(4), arguing the arbitrator exceeded his powers. The trial court denied the petition, and Saberin appealed.
What the Court Held on Extraterritoriality
The court first confirmed that judicial review was available, following Pearson Dental Supplies, Inc. v. Superior Court, because the arbitrator’s ruling deprived Saberin of a hearing on the merits of his FEHA claim. Reviewing the legal question de novo, the court then turned to the reach of the two statutes.
Drawing on Ward v. United Airlines, Inc., the court explained that each statute requires its own analysis of text, statutory scheme, and legislative history to determine its geographic scope. It also held that a California choice-of-law clause in Saberin’s agreement did not defeat the presumption against extraterritorial application; that presumption is itself part of California law.
Examining the purposes of section 12952 and Labor Code section 432.7, the court concluded that both aim to reach California workers and employer conduct within the state. Because Saberin and his arrest had no connection to California, applying the statutes required a sufficient California connection in the unlawful conduct—here, the termination decision.
The court deferred to the arbitrator’s findings that the actual decision makers acted from Illinois and that a California human-resources employee’s “input” was too tenuous and non-substantive to trigger the statutes. It found no legal error and affirmed.
For Government Code section 12952 and Labor Code section 432.7 to reach a non-California worker, the unlawful conduct must have a sufficient connection to California. Where the employee and his arrest have no California connection and the termination decision was made out of state, the statutes do not apply, and a California choice-of-law clause does not overcome the presumption against extraterritorial application.
The Arbitration and Waiver Questions
The court rejected Alation’s argument that the award was insulated from review. Under Moncharsh v. Heily & Blase and Pearson, an arbitrator’s legal error that prevents a hearing on the merits of a FEHA claim can justify vacatur under section 1286.2, subdivision (a)(4).
The court also rejected Alation’s waiver theory. Saberin had presented his governing-law arguments to the arbitrator and reiterated them in his petition to vacate; he was not required to add a specific objection that a ruling against him would exceed the arbitrator’s powers. On the merits, though, the court found the arbitrator committed no error and affirmed the order in full.
What This Means for You
This decision holds that California’s FEHA and Labor Code protections against using a non-conviction arrest reach a non-California remote worker only when the unlawful conduct has a sufficient connection to California, and that a California choice-of-law clause does not by itself supply that connection. It touches disputes over the extraterritorial reach of California employment law for remote and out-of-state workers, as well as the scope of judicial review of arbitration awards involving FEHA claims.
I write these summaries as general information about developments in California employment law. They are not legal advice and don’t create a mediator–client relationship. For guidance on a specific matter, consult a qualified attorney.