Remote From Utah, Fired From Illinois: Saberin v. Alation, Inc.

What Happened

Pejman Saberin was an engineer at Alation, a software company doing business in California. He worked remotely from Utah. At some point the company learned of an arrest that had not led to a conviction — discovered, according to the declarations in the record, through a public search by a supervisor working remotely from Utah.

Saberin was terminated. He sued in San Mateo County Superior Court, alleging that Alation had unlawfully considered an arrest not followed by conviction, in violation of FEHA section 12952 and Labor Code section 432.7. The case went to arbitration. On a governing-law motion, the arbitrator ruled that the California statutes could not be applied extraterritorially, because Saberin had been working remotely from Utah and the termination decision was made in Illinois.

Having lost that ruling, the parties stipulated to an award in Alation’s favor — they could not identify any other state’s law that would allow a claim for unlawful termination based on an arrest without conviction. Saberin petitioned to vacate the award under Code of Civil Procedure section 1286.2(a)(4), arguing the arbitrator had exceeded his powers. The trial court denied the petition, and the Court of Appeal affirmed.

The Part of This Decision That Helps Employees

Before reaching the merits, the court addressed whether it could review the arbitrator’s legal ruling at all. Here the analysis favors employees.

California courts generally do not review arbitrators’ legal errors. But an exception applies where a clear legal error deprives an employee of a hearing on the merits of a FEHA claim. That is exactly what happened to Saberin: the governing-law ruling ended his case without any determination on the merits. The court held judicial review was justified.

It also rejected the employer’s waiver argument. A party does not forfeit a section 1286.2(a)(4) challenge simply by agreeing to arbitrate, and Saberin was not required to make a specific objection during the arbitration that a ruling against him would exceed the arbitrator’s powers. He had presented his argument that California law governed, and that was enough to preserve it. Employees who lose a threshold ruling in arbitration — on limitations, on coverage, on governing law — should read this section closely. Saberin lost the case but won the procedural point.

Where the Decision Is Made Is What Counts

On the merits, the court applied the framework from Ward v. United Airlines, Inc. (2020) 9 Cal.5th 741. Ward instructs that there is no single, all-purpose answer to when California law reaches an interstate employment relationship. Each statute must be analyzed on its own terms — its text, its place in the surrounding statutory scheme, and its purpose.

Neither statute here specified a geographic scope, so the court looked to purpose. Labor Code section 432.7, enacted in 1975, aims both to protect California workers from the employment consequences of arrests that never produced a conviction and to prevent employers from misusing criminal offender record information. Section 12952, enacted in 2017, was accompanied by legislative findings about reducing barriers to employment for Californians with an arrest or conviction record. In both, the Legislature meant to reach workers in the state and employer conduct in the state.

From that, the court drew its test: for these statutes to extend to a non-California worker, the unlawful conduct at issue must have a sufficient connection to California. And the unlawful conduct is the termination decision itself — not the communication of it, and not peripheral involvement in it. Applied here, the connections ran out. Saberin was in Utah. The arrest was in Florida. The supervisor was in Washington. The decision-makers were in Illinois when they decided.

A California Choice-of-Law Clause Doesn’t Import California’s Reach

Saberin also pointed to a California choice-of-law provision in his Inventions Agreement. The court held that a contractual choice-of-law provision incorporating California law presumably incorporates all of California law — including California’s presumption against extraterritorial application. Choosing California law therefore does not, by itself, extend a California statute beyond the state’s borders. The relevant question remains what the Legislature intended.

That aligns California’s appellate law with federal decisions that have declined to apply Labor Code provisions extraterritorially notwithstanding a California choice-of-law clause. It is worth knowing because the clause is exactly the thing an out-of-state remote worker points to when told California law does not protect them.

What the Court Expressly Did Not Decide

Two reservations in the opinion matter nearly as much as the holding. First, in a footnote, the court said it was not deciding whether section 12952 or Labor Code section 432.7 applies to California residents working remotely for employers that have no offices in California, and expressed no opinion on that question. Second, the court declined to decide whether an employer’s deliberate shuttling of decision-makers out of state to avoid these statutes would create sufficient California connections. The employee raised the concern; the court found no evidence it had happened here.

Both questions remain open, and neither was resolved against employees. California-headquartered employers now have workforces scattered across the country, and they will cite Saberin whenever an out-of-state remote worker invokes California law. The decision does set a real limit. But it is a statute-specific limit, reached through a statute-specific analysis, and it turns on where the challenged conduct occurred — which means the analysis has to be run again for every statute at issue.