California Labor Defense Lawyer & Attorney : Van Vleck Turner & Zaller Law Firm : Employment Litigators : Serving Los Angeles, San Diego, San Jose

The California Supreme Court issued its ruling today in Jones v. The Lodge At Torrey Pines.  The Court held:

In Reno v. Baird (1998) 18 Cal.4th 640 (Reno), we held that, although an employer may be held liable for discrimination under the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.), nonemployer individuals are not personally liable for that discrimination. In this case, we must decide whether the FEHA makes individuals personally liable for retaliation. We conclude that the same rule applies to actions for retaliation that applies to actions for discrimination: The employer, but not nonemployer individuals, may be held liable.

The opinion can be read here.

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Today, the Court will hear argument in Gomez-Perez v. Potter, on whether the Age Discrimination in Employment Act bars retaliation by public employers for the filing of age discrimination complaints.  For more information about the facts of the case, click here.

On Wednesday, the Court is scheduled to hear oral argument in CBOCS West v. Humphries, on whether a race retaliation claim can be brought under 42 U.S.C. § 1981 (Section 1981).  Section 1981 provides that any “person within the jurisdiction of the United States” has the same right to “make and enforce” contracts, regardless of their skin color.  Section 1981 protects parties to a contract (both at the time of formation and post-formation).  The argument arises that Section 1981 applies to aspects of the employment relationship because that relationship is considered contractual, but courts have not defined to what extent this protection exists in the employment context.  Employees who have not filed a lawsuits within the time limits proscribed by Title VII (which allows for retaliation claims), often revert to Section 1981 in order to keep their claim alive. 

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Last week, 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. “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."

The opinion can be viewed at the Court’s website (WRD) (PDF).

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Any company that has had to defend a case against the EEOC knows of the special aggravation associated with litigation against the Federal Government. Unlike private litigants, who are motivated primarily by money, the EEOC often pursues political, ideological or bureaucratic agendas that can seem downright baffling to private sector lawyers. For example, the EEOC will often pursue claims that the supposed “victim” does not even wish to pursue – the EEOC lost a case recently against Universal where the individual on behalf who the EEOC was litigating the case settled out of court privately, but the EEOC still litigated the case.  Read more about the EEOC's loss here. 

Furthermore, as noted recently by Judge Frederick J. Martone of the Federal District Court of Arizona (who had distinguished career on Arizona’s Supreme Court prior to being appointed to Federal Court) in E.E.O.C. v. Serrano's Mexican Restaurants, LLC, that the EEOC should not utilize press releases as a litigation tool – a common practice by the EEOC. Judge Martone stated:

Our denial of the defendant’s motion is not an expression of our view on the underlying merits or the propriety of the EEOC in using press releases as part of its approach to litigation. Lawyers have a professional obligation to avoid extrajudicial statements that may prejudice a proceeding, see ER 3.6, and an obligation to be truthful in statements to others, see ER 4.1. LRCiv 83.2(d). There is a big difference between promoting the public’s right to know through keeping proceedings public, on the one hand, see Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th Cir. 2003), and affirmatively issuing press releases, on the other. The United States, and its employees, have a special duty not to injure the reputations of its citizens. Nor should it use press releases as a bargaining tool in litigation.

Judge Martone’s comments are refreshing for employers and individuals who have had to litigate cases against the EEOC and to provide some good language for parties disputing the EEOC’s usual practice of issuing press releases upon settling a case. Hopefully many more judges in the Ninth Circuit follow Judge Martone’s example. 

[Hat tip to Jottings By An Employment Lawyer.]

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Mike Dillon, a General Counsel and Corporate Secretary for Sun Microsystems, Inc. has some great thoughts about litigation posted on his blog, The Legal Thing.  He notes:

No. 1 - You only litigate when you have an important interest to protect. Litigation is costly. Incredibly costly. But it is not the expense that is the real issue, it's the diversion of resources. Time employees spend reviewing e-mails and documents, educating lawyers and preparing for depositions is time away from the business. That's the real cost of litigation.

No. 2 - A non-judicial resolution is almost always preferable. When you file a complaint, you are turning over resolution of an issue to a third party - be it a judge, arbitrator or jury. To a great degree you lose control of the outcome.

No. 3 - You litigate when you have a high degree of confidence that you will prevail. Bluffing is for weekend games of Texas Hold'em . When you file suit, you need to have fully evaluated all aspects of the case to ensure that the outcome will be favorable.

No. 4 - You litigate to win. This means that your employees, board and management team fully understand and support the commitment (both financial and time) required to prevail. It also means having seasoned litigation counsel who understand your business and objectives.

While his perspective is towards enforcing a company's intellectual property rights, his analysis can easily be applied to defending employment litigation.  Most notably different is that employers do not chose when to be sued for wrongful termination or wage and hour claims.  However, the company should be completely prepared to defend itself in litigation - in California it is only a matter of when.  In order to develop a strong defense, the company should work with experienced employment attorneys to establish policies that (1) comply with the law and (2) assist the company when a lawsuit is filed.  I mention the second point because while companies have policies that comply with the law, when litigation starts the fact that you have complied with the law is good, but the company needs PROOF that it complied with the law.  An experienced employment litigator can help companies set up policies to document the areas that will most likely be areas of contention during litigation.  For example, California companies should have a clear "at-will" policy signed by the employee, should have a system (preferably computer based) for recording when employees take their meal breaks, and have a clear policy on rest breaks that is in some way acknowledged by employees.

Also, this process of working with an attorney in establishing solid policies is a great period to see if the company likes working with the attorney and (hopefully) develops a good relationship that is critical in any attorney-client relationship.  This also allows the attorney to become familiar with the company and its business and objectives as Mike mentions in No. 4 above.

Finally, companies need to understand Mike's point No. 4 - You litigate to win.  Once a case is filed against a company, the message communicated throughout the company should be that it is extremely important to spend the time necessary to assist the outside counsel in defending the case.  Owners, executives and employees must give their undivided attention to the litigation.  To do otherwise is a costly mistake.

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The U. S. Department of Labor’s Wage and Hour Division website provides a self assessment tool for restaurants that employ minors. The assessment covers common violations of the Fair Labor Standards Act (FLSA ). Restaurant owners should note that this assessment does not cover California state law items. The assessment covers items that the DOL found in the past to be some of the most common problems encountered in restaurants, and therefore, are likely issues a DOL investigator will look for in a restaurant.

Here is a list of a few of the items covered in the assessment:

Do any workers under 18 years of age do the following:
1. Operate or clean power-driven meat slicers or other meat processing machines?

2. Operate or clean any power-driven dough mixer or other bakery machines?

3. Operate, load, or unload scrap papers baler or paper box compactors?

4. Drive a motor-vehicle on the job?

Do any workers under 16 years of age do the following:
5. Cook?

6. Bake?

7. Clean cooking equipment or handle hot oil or grease?

8. Load or unload goods from a truck or conveyor?

9. Work inside a freezer or meat cooler?

10. Operate power-driven bread slicers or bagel slicers?

11. Operate any power-driven equipment?

12. Work from ladders?

13. Work during school hours?

14. Work before 7:00 a.m. on any day?

15. Work past 7:00 p.m. between Labor Day and June 1?

16. Work past 9:00 p.m. between June 1 and Labor Day?

17. Work more than 3 hours on a school day, including Fridays?

18. Work more than 8 hours on any day?

19. Work more than 18 hours in any week when school was in session?

20. Work more than 40 hours in any week when school was not in session?

21. Do you employ any workers who are less than 14 years of age?

22. Do you fail to maintain in your records a date of birth for every employee under 19 years of age?

Click here to take the entire assessment. At the end of the assessment, there is a rules summary that explains an employer’s responsibility under the FLSA for the issues on the assessment.

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