Does The Wage Act Apply To Employment In A Foreign Country?

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The answer is: it depends.  A Superior Court recently addressed that issue in Lockley v. Studentcity.com (Suffolk Superior Court, No.201801293-BLS2). Ms. Lockley, a resident of Colorado, brought a putative class action lawsuit alleging violation of the Wage Act against Studentcity.com, Inc. ("Student City"), a foreign corporation doing business in Massachusetts.

 

Student City offers vacation packages for college students in resorts outside the country. For some students, Student City offers to pay all of their expenses in exchange of an agreement to work as an "on site" staff member at a resort location. The "on site" staff member also receives a daily stipend from Student City.  

 

While Ms. Lockley exchanged emails with representatives located in Massachusetts, she did not come to Massachusetts at any relevant time. She went to the Bahamas where she worked as an "on-site representative" of Student City for three weeks. All of her expenses were paid for and she received a stipend of $200 per week. She did not receive minimum wage or was not paid for overtime, "which would be due to her as an employee." The contract stated that she was an "independent contractor." Nonetheless, as the Court noted, the fact that Student City retained considerable control over the students supported Ms. Lockley's allegation that her position had been misclassified under the Wage Act.

 

Does the Wage Act apply to govern Ms. Lockley's terms of employment even though she worked in the Bahamas and not Massachusetts?  

 

Student City argued that it does not apply under "the general presumption against the international extraterritorial application of domestic laws, where there is no clearly expressed legislative intent to regulate conduct abroad." The Court declined to apply this presumption in the absence of any Massachusetts appellate decision directly on point. Relying on Dow v. Casale, 83 Mass.App.Ct. 751 (2013), the Court also noted, the mere fact that "the employee performs work outside of Massachusetts is not determinative." 

 

Nevertheless, the Court (Sanders, J.) concluded that the Wage Act did not apply under the circumstances. The contract contained no choice of law provision. Therefore, the Court relied on the Restatement (Second) Conflict of Laws (1971), which directs courts to apply the law of the state which has "the most significant relationship to the transaction and the parties."  Several factors are considered, such as where the contract was executed/negotiated/performed, where the subject matter of the contract is located and where the parties do business or resides.  These factors need to be considered in light of several principles, including the "relative interests of the states in the determination of that particular issue."

 

Doing business in Massachusetts is not a sufficient connection between Student City and the Massachusetts. 

The Court also found that Ms. Lockley could not reasonably expect Massachusetts law to apply to her claims because she resides Colorado, the contract was sent to her in Colorado, her work was entirely performed in the Bahamas and her presence in Massachusetts was not required.  There was also no allegation that she even stepped foot in Massachusetts. Moreover, while it recognized that "Massachusetts has an interest in regulating the conduct of employer companies who operate within its borders," the Court found that "Colorado would seem to have an even greater interest in protecting its residents from unlawful employment practices."

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