California Labor Code section 432.2 is the governing labor code section. It states:

432.2. (a) No employer shall demand or require any applicant for employment or prospective employment or any employee to submit to or take a polygraph, lie detector or similar test or examination as a condition of employment or continued employment. The prohibition of this section does not apply to the federal government or any agency thereof or the state government or any agency or local subdivision thereof, including, but not limited to, counties, cities and
counties, cities, districts, authorities, and agencies. 

(b) No employer shall request any person to take such a test, or administer such a test, without first advising the person in writing at the time the test is to be administered of the rights guaranteed by this section.

Therefore, employers may administer polygraph tests if the employees voluntarily agree to the test and are informed of their rights under Labor Code section 432.2. Employers need to be careful, however, as federal law may also apply. It also raises a difficult issue for the employer: What if the employee refuses to take the test? Under section 432.2 the employer cannot use this refusal to take the test as grounds to terminate the employee. If there is a termination, the employee would likely argue that it violated his or her rights under this section, and this would leave the employer in a difficult position in explaining why the termination occurred.
 

I think Guy Kawasaki had a great perspective on this issue when I recently interviewed him. He said he would be worried about a job applicant who did not have a Facebook page: what is wrong with this person? Is he anti-social? Is he not with the times or just simply does not understand simple technology? As Mat points out as well, with some common sense a job applicant can easily manage the results of an online search by being careful about which information he or she provides to the employer. For example, an internet search for the job applicant’s private email address might turn up more personal information than if the applicant has a separate email they only use for work purposes and lists on their c.v.

From the employer’s perspective I don’t think the analysis changes much for searching employees background on the Internet:

• If using an outside company, make sure the background check complies with the Federal Fair Credit Reporting Act and any state equivalent
• Do not create fake identities in order to gain access to individual’s social networks
• Rely on common sense and make the determination about hiring or firing based on the same criteria that employers already use and not on any illegal criteria.

Generally, under Federal law, employers may utilize social networking sites to conduct background checks on employees if:

1. The employer and/or its agents conduct the background check themselves;
2. The site is readily accessible to the public;
3. The employer does not need to create a false alias to access the site;
4. The employer does not have to provide any false information to gain access to the site; and
5. The employer does not use the information learned from the site in a discriminatory manner or otherwise prohibited by law.

There is nothing in California law that prohibits family members from working together. However, many companies institute non-fraternization or anti-nepotism policies as a safety measure to prevent work-place disputes that boil over from non-work relationships as well as to avoid claims of sexual harassment or discrimination. In fact, it is advisable for companies to have such policies.

One of the most problematic areas that arises is when two employees are dating, but the relationship goes sour. As you can imagine, this creates an awkward working environment that will take away from the employees’ productivity, in addition to exposing the company to a sexual harassment claim if one of the employees continues to pursue the other while at work. Also, if the relationship was between a supervisor and a subordinate, the company faces liability if the supervisor favors the person he/she is having the relationship with over other employees when making decisions about bonuses or promotions.

To avoid this problem, many companies have policies in place the either prohibit relationships at work, or some companies require the employees to disclose the relationship. Then the company can work with the employees to see if moving one or both employees to different divisions and/or locations within the company could prevent any potential problems should the relationship not workout in the future. Employers have to walk a fine-line however, because employees have an expectation of privacy about their personal lives while away from work, so employers cannot have too evasive policies. It is best to have a knowledge CA employment lawyer review the policy in advance.
 

In Ross, the California Supreme Court held that it is not a violation of California law for an employer to terminate an employee who tests positive for marijuana, even though the employee was prescribed the marijuana for medical purposes under California’ Compassionate Use Act of 1996.

The conflict in Ross v. Ragingwire Telecommunications, Inc. was between California's Compassionate Use Act, (which gives a person who uses marijuana for medical purposes on a physician’s recommendation a defense to certain state criminal charges and permission to possess the drug) and Federal law (which prohibits the drug’s possession, even by medical users). The employer in this case terminated plaintiff’s employment based on a positive test for marijuana even through the plaintiff provided a doctor’s note explaining that he was prescribed marijuana to alleviate back pains. 

The Supreme Court explained that the employer's decision to terminate plaintiff was not illegal:

Nothing in the text or history of the Compassionate Use Act suggests the voters intended the measure to address the respective rights and duties of employers and employees. Under California law, an employer may require preemployment drug tests and take illegal drug use into consideration in making employment decisions. (Loder v. City of Glendale (1997) 14 Cal.4th 846, 882-883.)

Plaintiff’s position might have merit if the Compassionate Use Act gave marijuana the same status as any legal prescription drug. But the act’s effect is not so broad. No state law could completely legalize marijuana for medical purposes because the drug remains illegal under federal law (21 U.S.C. §§ 812, 844(a)), even for medical users (see Gonzales v. Raich, supra, 545 U.S. 1, 26-29; United States v. Oakland Cannabis Buyers’ Cooperative, supra, 532 U.S. 483, 491-495). Instead of attempting the impossible, as we shall explain, California’s voters merely exempted medical users and their primary caregivers from criminal liability under two specifically designated state statutes. Nothing in the text or history of the Compassionate Use Act suggests the voters intended the measure to address the respective rights and obligations of employers and employees.

The Court also provided that a reasonable accommodation, as required under California’s FEHA, does not include an employer’s permission to use illegal drugs:

The FEHA does not require employers to accommodate the use of illegal drugs. The point is perhaps too obvious to have generated appellate litigation, but we recognized it implicitly in Loder v. City of Glendale, supra, 14 Cal.4th 846 (Loder). Among the questions before us in Loder was whether an employer could require prospective employees to undergo testing for illegal drugs and alcohol, and whether the employer could have access to the test results, without violating California’s Confidentiality of Medical Information Act (Civ. Code, § 56 et seq.). We determined that an employer could lawfully do both. In reaching this conclusion, we relied on a regulation adopted under the authority of the FEHA (Cal. Code Regs., tit. 2, § 7294.0, subd. (d); see Gov. Code, § 12935, subd. (a)) that permits an employer to condition an offer of employment on the results of a medical examination. (Loder, at p. 865; see also id. at pp. 861-862.) We held that such an examination may include drug testing and, in so holding, necessarily recognized that employers may deny employment to persons who test positive for illegal drugs. The employer, we explained, was “seeking information that [was] relevant to its hiring decision and that it legitimately may ascertain.” (Id. at p. 883, fn. 15.) We determined the employer’s interest was legitimate “[i]n light of the well-documented problems that are associated with the abuse of drugs and alcohol by employees — increased absenteeism, diminished productivity, greater health costs, increased safety problems and potential liability to third parties, and more frequent turnover . . . .” (Id. at p. 882, fn. omitted.) We also noted that the plaintiff in that case had “cite[d] no authority indicating that an employer may not reject a job applicant if it lawfully discovers that the applicant currently is using illegal drugs or engaging in excessive consumption of alcohol.” (Id. at p. 883, fn. 15.) The employer’s legitimate concern about the use of illegal drugs also led us in Loder to reject the claim that preemployment drug testing violated job applicants’ state constitutional right to privacy. (Id. at pp. 887-898; see Cal. Const., art. I, § 1.)

(footnote omitted).

The Plaintiff also alleged a cause of action for wrongful termination in violation of public policy. Generally, at-will employees can terminate or be terminated from their job at any time, but an employer cannot terminate an employee for reasons that violate a fundamental public policy of the state. The Court rejected plaintiff’s position that there was a fundamental public policy that permitted him to use medical marijuana and be under its influence while at work explaining: “Nothing in the [Compassionate Use Act’s] text or history indicates the voters intended to articulate any policy concerning marijuana in the employment context, let alone a fundamental public policy requiring employers to accommodate marijuana use by employees."

In California, a court has ruled that postings so social networking sites are not private (click here for post).  So while it would be difficult for an employee to have a claim for violation of privacy, employers should consider what they can and cannot do regarding information they learn about employees on the internet as well as conducting background checks on the internet. Some employers have even gone as far as asking prospective employees for their login information for social networking sites as part of the interview process. 

The lesson:

Social networking sites are here to stay.  It is time for employers to manage this issue by learning what they can legally do to protect the company's interest on the Internet.  Employees and individuals have to realize that the information posted on the Internet is usually discoverable by everyone - it is not only a conversation between friends. 

Parties to lawsuits have not realized this new phenomenon either.  In almost every case I have litigated in over the last two years the parties' emails have played a critical role.  Why is that?  First, almost all communications are done through email.  Email drafted three years ago, and produced in the course of litigation has a lot of credibility because it recorded the facts as they existed at the time the writer sent the email.  It is is very hard to dispute those facts. 

Is This Good Or Bad?

It is good because it is that much easier to catch a lair these days.  It is also bad, because if you do not take the time to accurately draft an email - and your words could have two meanings - it could come back to bite you.  Seth Godin had some good advice today, and provided 8 tips that are well worth a review:

1. Change your settings so that email from you has a name, your name, not a blank or some unusual characters, in the from field. (ask a geek or IT person for help if you don't know how).
2. Change your settings so that the bottom of every email includes a signature (often called a sig) that includes your name and your organization.
3. Change your settings so that when you reply to a note, the note you're replying to is included below what you write (this is called quoting).
4. Don't hit reply all. Just don't. Okay, you can, but read this first.
5. You can't recall an email you didn't mean to send. Some software makes you think you can, but you can't. Not reliably.
6. Email lives forever, is easy to spread and can easily show up in discovery for a lawsuit.
7. Please don't ask me to save a tree by not printing your email. It doesn't work, it just annoys the trees.
8. Send yourself some email at a friend's computer. Read it. Are the fonts too big or too small? Does it look like a standard email? If it doesn't look like a standard, does this deviation help you or hurt you? Sometimes, fitting in makes sense, no?

It is also worth remembering how useful email can be as a tool to record facts as they exist on a certain day and time.  It is very easy to send yourself an email to record a discussion that took place - and this email will have a lot of credibility should that discussion ever be the center of lawsuit.

As layoffs sweep across industries, employees' personal information is winding up in the dustbin, as well. Most workers know better than to store personal files on their office computer. But employees who spend the majority of their time at the office often treat the company PC as their personal gadget, filling it with music, photos, personal contacts -- even using the computer's calendar to track a child's soccer schedule. That makes it all the more distressing when a newly laid-off worker learns that his digital belongings are company property.

The author correctly notes that what information is the employee’s as opposed to the employers is probably going to be set forth in and governed by the employer’s policies. Often times these policies will be provided to the employee when he or she first starts:

Employees worried about their job security should review the forms they signed when they were hired. They should look at the company's electronic communications policy, employee guidelines and non-compete agreements to make sure they understand everything properly. When employees sign these agreements, they should also make copies to save at home, too, Ms. Yancey says. Those that break these agreements risk being fired or sued by their employer, she adds.

It is important to note that in California, it is extremely difficult for employers to enforce non-competition agreements due to a California Supreme Court ruling in Edwards v. Arthur Andersen last year. California employers can still protect company information through other means, such as establishing that the information is a trade secret, or is proprietary information.

Steps California Employers Should Take To Avoid Litigation Over Electronic Data

• California employers need to establish a clear policy that establishes that the employee does not have any privacy expectation in any data stored on company owned computers or devises.
• The policy should establish that all aspects of an employee’s use of company equipment can be monitored.
• Employers need to have the employees sign an acknowledgment of electronic data and monitoring policy.
• The employer should remind employees of the electronic data policy at least every year.
• If employers do have trade secrets, they need to maintain strict protocols to ensure that only employees with a “need to know” have access to the information and take steps to ensure that the information is protected.
• If an employee who has been laid off requests personal information from his or her computer such as family pictures, an employer’s accommodation of this request will be somewhat of a step towards minimizing the employee’s ill-will towards the company (and less likely to pursue litigation against the company).
   

Slander

The trial court focused on two statements made by the employer in this case for Regalia's slander claim. The first statement made by the employer was that Regalia demanded a finder’s fee for assisting the museum in acquiring a classic Talbot-Lago car worth $2.3 million, and that Regalia was not entitled to the fee. Second, the employer stated that other employees would not work for Regalia and would leave if he had remained employed.

Civil Code section 46 provides:

Slander is a false and unprivileged publication, orally uttered, and also communications by radio or any mechanical or other means which: 1. Charges any person with crime, or with having been indicted, convicted, or punished for crime; 2. Imputes in him the present existence of an infectious, contagious, or loathsome disease; 3. Tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits; 4. Imputes to him impotence or a want of chastity; or 5. Which, by natural consequence, causes actual damage.

A slander that falls within the first four subdivisions of Civil Code section 46 is slander per se and require no proof of actual damages. A Slander that does not fit into those four subdivisions is slander per quod, and special damages are required for there to be any recovery for that slander.

The appellate court rejected Regalia’s argument that the two statements at issue in the case are slander per se:

A person can make a claim for money that is rejected as not being justified, and still not be viewed as having committed an act that reflects negatively on that person. Thus a statement about such a claim does not necessarily “directly injure him in his profession, trade or business” (Correia v. Santos, supra, 191 Cal.App.2d at p. 852) so as to fit within subdivision (3) of Civil Code section 46. (See Gang v. Hughes (9th Cir. 1954) 218 F.2d 432 [alleged statements that a plaintiff’s attorney refused to settle a case until he was paid and that he was paid because he demanded immediate payment not slander or libel per se].) Likewise, the statement that Regalia was fired because other employees would not work for him and would leave if he remained employed does not, on its face, clearly fall within subdivision (3) of Civil Code section 46. That one or more employees do not want to work for someone, without more, again, does not necessarily reflect adversely on the person. The employee or employees might not want to work for a person because of the person’s work ethic or rectitude, or legitimate business policies. Those statements may by “natural consequence” cause plaintiff actual damages. (Civ. Code, § 46, subd. (5).) But that makes them slander per quod and requires proof of actual damages.

Therefore, the appellate court overturned the trial court because the jury specifically found that Regalia did not suffer actual damages.

Even though the employer succeeded in this case, it presents a good reminder to employers to be careful in communications to others about the reasons why certain employees were terminated. The best approach is to not discuss the reasons for an employee's termination with any employees in the organization unless they have a need to know.

The case can be viewed from the court's website for a short period of time in PDF or Word. 
 

The odds against winning discrimination cases have some employee lawyers reluctant even to try. "We will no longer take individual employment-discrimination cases, because there's such a high likelihood of losing," New York plaintiffs' attorney Joe Whatley Jr. says. Job-discrimination case filings declined by 40% from 1999 to 2007, federal court records show.

The article also points out that discrimination cases are dismissed more often at the summary judgment stage:

Even the federal courts have detected the pattern of more dismissals in discrimination cases, though they surmise different reasons for it than do plaintiffs' lawyers. A report last year by the Federal Judicial Center, the research arm of the federal courts, found that judges nationwide terminated 12.5% of employment-discrimination cases through summary judgments, before the suits reached trial. In 90% of those cases, it was the employers who requested the summary judgment. In contrast, the study found, 3% of contract cases and 1.7% of personal-injury and property-damage suits were dismissed via summary judgments.

There can be a number of reasons for this as the article points out: employers settle bad cases before litigation and employers have implementing better policies and maintain better documentation to defend themselves against discrimination claims.

It is interesting to note that during this same time period that discrimination class are declining, there is a noticeable increased amount of wage and hour litigation. In fact, wage and hour lawsuits more than doubled in federal courts from 2001 to 2006.  No matter what the cause, discrimination cases are harder to bring, and harder to win. What replaced discrimination claims during this same time period? Wage and hour claims for violations of overtime pay, non-payment of wages, and not providing meal and rest breaks. 
 

Nothing in the statute requires a freakish rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when asked a question.

The Court explained Title VII’s two anti-retaliation provisions:

The Title VII antiretaliation provision has two clauses, making it “an unlawful employment practice for an employer to discriminate against any of his employees . . . [1] because he has opposed any practice made an unlawful employment practice by this subchapter, or [2] because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.” 42 U. S. C. §2000e–3(a). The one is known as the “opposition clause,” the other as the “participation clause,” and Crawford accused Metro of violating both.

The lower court in the Sixth Circuit in this case held that the plaintiff could not satisfy the opposition clause because she had not “instigated or initiated any complaint,” but had “merely answered questions by investigators in an already-pending internal investigation, initiated by someone else.”

The Supreme Court rejected the lower court’s rational. The Court reiterated that under the Farragher/Ellerth defense, when no tangible employment action is taken against an employee, the employer may invoke a defense to the employee’s claim if it took reasonable care to prevent/correct and discrimination, and the employee failed to take advantage of the opportunities offered by the employer to prevent or to correct the discrimination. The Court explained that the lower court’s rational, if applied here would create a catch-22 for the employee:

The appeals court’s rule would thus create a real dilemma for any knowledgeable employee in a hostile work environment if the boss took steps to assure a defense under our cases. If the employee reported discrimination in response to the inquiries, the employer might well be free to penalize her for speaking up. But if she kept quiet about the discrimination and later filed a Title VII claim, the employer might well escape liability, arguing that it “exercised reasonable care to prevent and correct [any discrimination] promptly” but “the plaintiff employee unreasonably failed to take advantage of . . .preventive or corrective opportunities provided by the employer.”

The Take-Away for Employers:

1. Investigate all employee workplace complaints;
2. Document the investigation well (such as who was spoken to, who conducted the investigation, and what was said);
3. Take all reasonable steps to stop improper workplace conduct discovered during the investigation; and
4. Ensure that no one who participates in the investigation is retaliated against for providing information during the investigation.

The Ohio Employment Law Blog and the Connecticut Employment Law Blog have also posted their great analysis on this case. 

This graph is courtesy of Seth Godin.  Generous and calm are good business practices to abide by everyday, but I think employers need to especially remind themselves of this practice during these times. 

I would also like add another quality in the upper right hand corner - less litigation.  Angry and selfish employers leave employees no choice but to seek out a lawyer because they think they've been wronged (mistakenly or not). 

UPDATE: I revised the original image to include my comments:

The employer and supervisor won summary judgment, ending the case. Lopez, the supervisor personally sued by plaintiff, filed a motion for attorney fees under Government Code section 12965, contending that Exxon, on behalf of Lopez, incurred substantial attorney fees defending Young’s “unreasonable, frivolous, and meritless claims against Lopez individually.” Lopez sought $18,750 in attorney fees (which comprised ¼ of the total attorney’s fees in the case). The court agreed that plaintiff’s claims against the supervisor were frivolous, which entitled the supervisor reimbursement of attorney’s fees.  However, the trial court only awarded nominal attorney fees of $1.00. The supervisor appealed this ruling, seeking additional attorney’s fees.

In only allowing Lopez to recover $1.00 in attorney’s fees, the trial court noted that an award to Lopez “would actually be an award to Exxon, which does not claim [Young’s] claims against it were frivolous.” The trial court concluded this “does not seem right,” and awarded nominal attorney fees of $1.00.

The appellate court here up held the trial court’s nominal attorney fee award of $1.00. The court stated:

In actions under the FEHA, the court, in its discretion, may award reasonable attorney fees to the prevailing party. (Gov. Code, § 12965, subd. (b).) California courts have followed federal law, and hold that, in exercising its discretion, a trial court should ordinarily award attorney fees to a prevailing plaintiff, unless special circumstances would render an award of fees unjust. A prevailing defendant, however, should be awarded fees under the FEHA only “in the rare case in which the plaintiff’s action was frivolous, unreasonable, or without foundation.” (Rosenman v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro (2001) 91 Cal.App.4th 859, 864 (Rosenman).) Rosenman cites the high court’s observation that the strong equitable considerations supporting an attorney fee award to a prevailing plaintiff – including that fees are being awarded against a violator of federal law, and that the federal policy being vindicated by the plaintiff is of the highest priority – are not present in the case of a prevailing defendant. (Id. at p. 865, citing Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412, 418-419 (Christiansburg).)

The appellate court approved that the trial court has discretion to set the amount of attorney's fees recoverable to a prevailing defendant, providing the following four reasons:

1. That the Rosenman case sets the standard by which to measure the exercise of the trial court’s discretion in awarding attorney fees to a prevailing defendant in an FEHA case: namely, only in the “rare case” in which the plaintiff’s action was frivolous, unreasonable or without foundation.
2. As Exxon argued, there are many cases in which the courts have awarded attorney fees to prevailing parties who, like Lopez, are not actually liable for or have not incurred or paid fees. But in all those cases, the attorney fee award actually benefits the prevailing party or an entity which has provided the services and would otherwise not be compensated for them.
3. There was no evidence that Exxon incurred fees on Lopez’s behalf that it would not have incurred had Lopez not been named as a defendant.
4. As the Rosenman case instructs, the trial courts should “make findings as to the plaintiff’s ability to pay attorney fees, and how large the award should be in light of the plaintiff’s financial situation.”

The case, Young v. Exxon Mobil Corporation, can be downloaded from the court’s website here.
 

I am often asked about the amounts appropriate amounts of severance. The Connecticut Employment Law Blog recently quoted a study about the average weeks of severance for every year of employment offered to employees:

Voluntarily Separated:

• Top Executives - 2.76 weeks
• Senior Executives - 2.23 weeks
• Department Heads/Managers - 1.55 weeks
• Professional/Technical - 1.39 weeks
• All other employees - 1.23 weeks

Involuntarily Separated:

• Top Executives - 3.04 weeks
• Senior Executives - 2.49 weeks
• Department Heads/Managers - 1.78 weeks
• Professional/Technical - 1.60 weeks
• All other employees - 1.44 weeks

Also, employers in California usually ask the employee for a release of any known and unknown claims the employee may have against the employer. Under California Civil Code section 1542, an employee must specifically waive their right under section 1542 in order to be a valid release of unknown claims.  The agreement itself must recite Civil Code section 1542 and that the employee is waiving their right under this section.  It is also important that the document clearly specify the extent of the release.  For example, does it apply to the employment relationship or to specific claims the employee has asserted against the employer?