The North Carolina Wage and Hour Act does not apply to out-of-state employees working for North Carolina companies even if their employment agreements provides that the law of North Carolina applies, per the ruling of the North Carolina Court of Appeals today in Sawyer v. Market America, Inc.
Sawyer, a resident of Oregon, worked for Market America, a North Carolina based company, under an independent contractor agreement. All of Sawyer’s work was done outside of North Carolina.
The Agreement between Sawyer and Market America provided that it should be "governed and construed under the laws of the State of North Carolina."
When Sawyer sued, he made claims under the North Carolina Wage and Hour Act. He argued that since the parties had agreed to the application of North Carolina law, there was no reason for the Court to reach the issue whether the Act has extraterritorial effect.
The Court of Appeals rejected this argument, relying on venerable North Carolina Supreme Court precedent that "every statute is confined in its operation to the persons, property, rights, or contracts, which are within the territorial jurisdiction of the legislature which enacted it. The presumption is always against any intention to attempt giving to the act an extraterritorial operation and effect.”
The conclusion of the Court of Appeals was that summary judgment had been properly entered by the trial court, because "the North Carolina Wage and Hour Act does not apply to the wage payment claims of a nonresident who neither lives nor works in North Carolina."