Teleworker Job Benefits?

Out of town and out of luck

First the reported* facts. Maxine Allen was employed in New York as a technical specialist by Reuters America, Inc. from October 1996 to July 1997 when she moved to Florida after her husband changed jobs. Reuters continued to employ her as a telecommuter, paying for a phone line, laptop computer and software. But in March 1999 Reuters terminated the arrangement and required her to move back to New York if she was to continue working for the firm. She turned down the offer and became unemployed. Subsequently she applied for unemployment insurance from Florida. Florida turned her down because her employer was in New York. She then applied to the state of New York for unemployment benefits. New York turned her down because she worked in Florida. Catch 22. Ms. Allen appealed the decision (without the aid of an attorney) and ultimately was denied New York benefits by a 6-0 vote of the Court of Appeals. No reports we have read indicate the state to which she and/or her employer paid unemployment insurance.

The case seems to hinge on whether Ms. Allen quit or was fired. If she quit, then she was not entitled to unemployment benefits. If she was fired, then unemployment benefits should be paid to her. In an interview on National Public Radio** Jonathan Rosen, Director of the New York Unemployment Project, said: "...we would argue that she didn't actually quit. She was effectively's perfectly legitimate to quit a job to follow a spouse for any number of reasons and still qualify for benefits." Mr. Rosen went on to say: "They've let her work in Florida for years and years, said she had to come back or forfeit the job. So, yeah, in a sense she quit but it's effectively a discharge." Ms. Allen does not plan to appeal the ruling.

Some of our colleagues state that this is no different from the case of an out-of-state salesperson who is called back to the head office. If the salesperson chooses to stay put and resigns, then no unemployment compensation is due. But is it the same? Ms. Allen's job apparently was location independent; there was no apparent need for her to be in New York since there was no report of her failure to do her work or of any changes in the work requirements. What does this portend for other telecommuters?

One thing is certain: the law is very vague on this issue. Since the law generally takes years, even decades, to catch up with reality this is likely to be a hot topic in years to come.


*As reported in the New York Times on 3 July 2003 in an article by Al Baker.

**"All Things Considered", 3 July 2003; interview by Robert Siegel

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