A California Court of Appeal recently held that California's no-arrest-record protections did not extend to a remote employee who lived and worked in another state, even though the employer was headquartered in California.
Background
The plaintiff lived and worked remotely in Utah for Alation, Inc., a company headquartered in California. While on vacation in Florida, the plaintiff was arrested. The charges were later dismissed, meaning the arrest did not result in a conviction.
Alation learned about the arrest while investigating the plaintiff's absence from work. The employee who located the arrest record worked in Utah. The plaintiff's direct supervisor worked in Washington, and the termination decision was made by two employees working in Illinois. One of those decision-makers ordinarily worked from home in California. A California-based employee also provided input regarding the termination, but the arbitrator found that this input was not substantive to the termination. Alation terminated the plaintiff following his arrest and what the company characterized as dishonesty regarding his absence.
The plaintiff asserted that the termination violated California Labor Code section 432.7 and Government Code section 12952. The matter proceeded to arbitration, where the employer prevailed. The trial court denied the plaintiff’s request to vacate the arbitration award, and the Court of Appeal affirmed.
California's Arrest-Record Protections
Labor Code section 432.7 broadly prohibits employers from asking applicants to disclose information about an arrest or detention that did not result in a conviction. The statute also bars employers from seeking or using such records as a factor in any employment decision, including hiring, promotion, or termination. Government Code section 12952 separately restricts an employer's consideration of criminal-history information during the hiring process. Together, these provisions reflect California's policy of limiting the employment consequences of arrests that do not lead to convictions.
The question in this case was not whether those protections exist. The issue was whether they applied to this plaintiff's circumstances, given that he worked in Utah, was arrested in Florida, and was terminated based on a determination made primarily by individuals located outside California.
The Court's Statute-Specific Geographic Analysis
The Court of Appeal explained that California courts must conduct a statute-specific analysis to determine whether a state statute applies to conduct occurring outside California's borders. California courts generally do not presume that state statutes regulate conduct taking place entirely outside the state.
The Court concluded that the Legislature intended the Labor Code to reach both employees and employers in California. However, the Court emphasized that for the statute to apply based on the employer's location, the unlawful conduct at issue must have a "sufficient connection" to California. The Court reached the same conclusion regarding the corresponding provision in Government Code section 12952, which falls under the Fair Employment and Housing Act.
In this case, the Court determined that the connection to California was too limited. The plaintiff worked in Utah, the arrest occurred in Florida, and the termination was directed by individuals located in Illinois at the time. Although one California-based employee provided input, the arbitrator found it was not substantive. The employer's California headquarters, standing alone, was not enough to establish the necessary connection.
A California Choice-of-Law Clause Is Not Automatically Decisive
The plaintiff also relied on the parties' agreement to apply California law. The Court of Appeal did not treat that contractual provision as determinative.
A choice-of-law provision may identify the law governing an agreement, but it does not necessarily require every California employment statute to apply to conduct occurring in another state. The geographic reach of a particular statute still depends on the statute's language, purpose, and connection to the conduct at issue. Employers should not assume that a California choice-of-law provision automatically extends California's employment protection to every employee working remotely outside the state.
Practical Considerations for Employers
Because the Court of Appeal did not rely solely on the plaintiff's residence in Utah and instead examined the particular facts surrounding the decisionmakers' locations and involvement, the opinion signals that the outcome could differ when those facts change. A case involving an employee who works in California, a termination directed from California, or California-based personnel who substantively participate in the process could produce a different result.
Employers considering action based on arrest-related information should carefully evaluate the geographic connections involved. An arrest is not a conviction, and the distinction carries legal weight. Before taking action, employers should assess the source and accuracy of the arrest-related information, whether the arrest resulted in a conviction, the locations of the employee and the individuals involved in the termination, the role each person played in making or influencing that determination, and whether California, local, or other state fair-chance laws apply.
The California Civil Rights Department has been aggressively asserting the rights of individuals with a history of contact with the criminal justice system, and local fair-chance laws continue to expand. Employers should also consider whether the employee participated in a pretrial or posttrial diversion program, as Labor Code section 432.7 extends protection to that information as well.
Saberin v. Alation, Inc. (California Court of Appeal, First District, July 30, 2026).
Takeaway
Saberin v. Alation, Inc. makes clear that a California employer's headquarters and a California choice-of-law clause do not automatically bring California's no-arrest-record protections into play for a remote employee working in another state. The Court focused on the specific connections between California and the challenged employment action, and found them insufficient under the facts presented.
Employers should proceed cautiously. The analysis is fact-intensive, and the employee's location alone may not resolve the question. When California-based personnel are involved in the process in any capacity, the risk of a different outcome increases.
For questions regarding this topic or other employment law matters, contact us at Eanet, PC.
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About the Author
Matthew L. Eanet, Esq.
Matt is managing shareholder at Eanet, PC, a Los Angeles litigation boutique he founded in 2012. He's an expert in complex commercial litigation matters involving real estate, employment, trade secret, trademark and trade dress, data breach, privacy and general business disputes, served as a U.S. Army JAG prosecutor, and has been selected by Super Lawyers (California) every year from 2015-2026.
Reviewed August 2026