High Court Limits Employee Forum Shopping

Corporations doing business throughout the U.S. subject themselves to employment lawsuits in various states.  Recent U.S. Supreme Court guidance, however, prevents employees from forum shopping their claims to a more favorable jurisdiction, especially when the employee does not live in the jurisdiction and the alleged injury did not occur in the jurisdiction.

On May 30, 2017, the U.S. Supreme Court issued its decision in BNSF Ry. Co. v. Tyrell, ---S.Ct.--, 2017 WL 2322834 (2017), reversing the Montana Supreme Court, which allowed two railroad employees to bring claims against BNSF Railway Company (BNSF) under the Federal Employers’ Liability Act (FELA)[1] for injuries they allegedly sustained outside the State of Montana.   The Montana Supreme Court allowed the case to proceed even though the employees did not live and were not injured in Montana and BNSF was neither incorporated in nor had a principal place of business in Montana. The Montana Supreme Court held that the injured workers could exercise personal jurisdiction over BNSF, thereby allowing them to pursue their claims against BNSF in Montana courts.

In reversing the case, the U.S. Supreme Court found that FELA did not authorize state courts to allow injured workers to proceed with their claims solely because the railroad does some business in the State.  Even though BNSF had over 2,000 miles of railroad track in Montana and employed more than 2,000 workers in Montana, BNSF was not “at home” in Montana and therefore could not be subject to suit there.  The Court noted that a corporation that does business in many places cannot be deemed to be “at home” in all of such places.  The Court, in its reasoning, indicated the proper analysis is to look at an appraisal of the entire corporation’s activities across the country in comparison to the corporation’s activities within the State where the action is pending to determine if personal jurisdiction can properly be exercised.  Justice Ginsberg authored the decision and the newest Supreme Court Justice, Neil Gorsuch, joined the opinion.

Corporations operating in multiple states may now be able to limit the States in which they are forced to defend employment lawsuits and, as a practical matter, when employees file lawsuits against companies, employers should pay close attention to where the Plaintiff employee lives, where the alleged injury (whether physical work injury or alleged discrimination) occurred and whether a significant portion of the company’s business takes place within the State where the lawsuit is pending.

[1]  FELA holds railroads responsible for paying money damages to their employees for on the job injuries. 45 U.S.C. § 51, et. seq. 

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