Volume I

Issue : 1: July 10, 2003

• The Dangers of Text Messaging
• Pop Up Purveyor Prevails in District Court
• Intel Loses Email Trespass Case on Appeal in California
• U.S. Court of Appeals Upholds Aimster Decision
• U.S. Federal Court of Appeal Reverses "Must Carry" Java Order Against Microsoft
• New York Court of Appeals Releases Key Decision in Telecommuting Case
• Quebec Court Upholds Websites Terms of Use Based on Implied Consent
• Adware Company Wins U.S. Summary Judgment Against U-Haul
• Government of Canada Wins Back Dot-Ca Domain Names in CDRP Proceeding
• Industry Canada Releases Authentication Consultation Report
• U.S. Supreme Court Upholds CIPA in Software Filtering Case
• U.S. Supreme Court Declines to Hear Two Key Cases
• Doctor Suspended Over Prescribing Medication For Customers of Online Pharmacies
• U.S. Court of Appeals Overturns Texas Online Wines Sales Law

Home > Volume I > Issue 1: July 10, 2003 > New York Court of Appeals Releases Key Decision in Telecommuting Case

New York Court of Appeals Releases Key Decision in Telecommuting Case

In a groundbreaking decision on telecommuting, the New York Court of Appeals held that physical, not virtual, presence governs eligibility for unemployment insurance benefits. The Court concluded that "[i]n our view, physical presence is the most practicable indicium of localization for the interstate commuter who inhabits today's 'virtual' workplace linked by Internet connections and data exchanges."

The case involved Maxine E. Allen, an employee of Reuters America, Inc. who from July 1997 to March 1999 worked from her home office in Florida via electronic access to Reuters mainframe computer located at their head office in New York . Allen's telecommuting agreement was terminated in March 1999 and she filed a claim for unemployment benefits in New York . The Unemployment Insurance Appeal Board, in a determination upheld by the Appellate Division (Third Department), held that Allen was not eligible because all of her work was performed in Florida .

The ruling of the Appeals Court hinged on the definition of employment in § 511 of the U.S. Labor Law . The Court explained one of their earlier decisions and stated that "§ 511 sets out four tests: (1) localization, (2) location of base of operations, (3) source of directions or control, and (4) employee's residence, to be applied successively to an employee's entire service performed for the employer within and without the State." Therefore the initial inquiry is whether Allen's entire service for Reuters was localized in New York or some other state.

Allen claimed that physical presence in New York was not required for purposes of unemployment benefits because her entire services were realized and therefore localized at Reuters' mainframe in New York .

The Court rejected that reasoning and held "that physical presence determines localization for purposes of interpreting and applying 511 to an interstate telecommuter. Because [the] claimant was regularly physically present in Florida when she worked for her employer in New York , her work was localized in one state, Florida . The other three tests specified in 511 are not reached, and [the] claimant was ineligible for unemployment insurance benefits from New York ."

For a copy of the case, visit:

http://www.courts.state.ny.us/ctapps/decisions/83opn03.pdf