Tuesday, June 03, 2008, 9:24 AM

COA limits Wage and Hour Act to N.C. residents/employees

Today, in Sawyer v. Market America, the Court of Appeals limited the reach of the North Carolina Wage and Hour Act by holding that it does not apply to someone who neither lives nor works in the state. (Womble Carlyle represented the defendant, Market America.)

Steve Sawyer was an Oregon resident who worked from Oregon for a Greensboro-based company. After the employment relationship soured, Sawyer sued under the Wage and Hour Act for allegedly unpaid salary and bonuses. The trial court held that the Act did not apply to someone who "resides and primarily works outside of the State of North Carolina."

The Court of Appeals affirmed. As a preliminary matter, the Court held that even though the employment contract's choice of law provision selecting North Carolina law was valid, that North Carolina law applied did not necessarily mean that Sawyer would be covered by the Act. Rather, it meant that all of North Carolina law would apply - including extraterritoriality principles that determine the reach of North Carolina statutes. Turning to the main issue, the Court held that such general principles, along with the stated purposes of the Act, limit the Act to the territority of North Carolina. Hence someone who neither lived nor worked in the state could not corral the Act to his benefit. The opinion seemingly does not address whether someone who either lived or worked in the state, but not both, is covered by the Act.

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