Name that state: referencing applicable state law in employment contracts

Choosing which state law applies can make a huge difference in winning some of the battles in employment litigation. In a recent decision, the Appellate Division, Second Department held that because Texas state law was referenced in the employee’s offer letter, the former employee’s claims were cut off. Understand the advantages—and limitations—of specifying state law in employment agreements and related documents.

Background

New York resident Cristina Dutra sued her former employer Sunday Riley Modern Skincare, LLC (SRMS) for promissory estoppel (breaking a promise, even if a legal contract doesn’t exist) when she was dismissed after relocating from New York to Texas based on SRMS’s job offer.

The New York State Supreme Court dismissed Dutra’s complaint based on “documentary evidence.” Specifically, it cited the offer letter that referenced her “at-will” employment under Texas law. She appealed to the Second Department.

Applicable state law specified in offer letter

On appeal, the Second Department agreed with the supreme court, finding the offer letter—without more—was conclusive proof SRMS had a defense to Dutra’s complaint: