The Los Angeles Times recently reported on a new bill headed to Governor Schwarzenegger for possible signature (though I believe it is likely to be vetoed) generally prohibiting California employers from requiring applicants to allow them to examine their credit report as part of the application process.

The new California employment law would allow employers to do checks on employees who handle large amounts of money or other sensitive positions.  While I recognize that in these situations there may be some correlation between a history of poor financial choices and the ability to do certain jobs, in today’s economy the usefulness of this information is, in my opinion, declining at the same time employers’ use of it as a hiring tool seems to be increasing.

I talk to potential clients every day with tragic stories of loss about being unemployed for months while desperately searching for new employment.  Many of these people are about to lose their homes, have had their automobiles repossessed and even have experienced the demoralizing reality of sending their children off to college this fall without being able to give them any assistance with their tuition or living expenses.

When I hear from these people that their recent poor credit history, which itself is usually a direct result of either unemployment or serious illness, is now the reason they cannot find a job, it makes me angry.  The problem is that many of these employers now receive dozens, if not hundreds of applications for a handful of positions, so the applicant never gets a chance to explain their situation before they are eliminated early in the process based solely on their credit report.

Studies have shown in the past that the average employee’s credit scores has no correlation with their job performance, but as a matter of public policy I think that when unemployment is in the double-digits throughout much of California this is an issue that needs to be dealt with sooner rather than later.

Apparently there is a new game show out called "Moment of Truth" that gives contestants a lie detector test before the show and then the host asks them the same questions on the air. If the contestant's answer on the air is different from the results of the polygraph, they lose (up to $500,000).

Questions include topics such as whether the contestant has cheated on their spouse, wishes to cheat on their spouse, has various addictions and other very personal areas.

I have no idea who would volunteer to go on this show, especially after knowing the questions in advance. If you know that you could be about to reveal on national television that you cheated on your spouse, why would you go through with it?

Employment Law Issues

I want to clarify that I myself have never actually seen the show, because the ads alone made me cringe. However, an article yesterday on CNNMoney.com questioned the employment law implications for those who go on the show and may be disciplined at work for what is revealed.

Past questions have included whether a personal trainer ever touches female clients more than necessary. He answered "no," but apparently the lie detector revealed that the true answer was "yes". On the same episode, a contestant admitted to looking through their co-workers' desks.

CNN Got Bad Legal Advice

Unfortunately for the author of the CNN article, the attorneys he spoke to gave extremely bad legal advice when asked whether employers could legally discipline these employees based on the show.

The responses from the lawyers included that the information would be "fair game" for discipline and that "It would be neither illegal nor unfair" to do so.

However, these answers are just plain wrong. The Employee Polygraph Protection Act (29 USC 2001-2009) specifically makes it illegal to:

discharge, discipline, discriminate against in any manner, or deny employment or promotion to, or threaten to take such action against...any employee or prospective employee on the basis of the results of any lie detector test."

There is no requirement that the employer itself administer the test and any employer who violates this law is liable to the employee for lost wages, benefits, costs, attorney's fees, and a $10,000 civil penalty.

It Could Happen

It is not unprecedented for an employee to be terminated from a job for what they say or do on a TV show. For example, on the second season of The Apprentice, one of the candidates was terminated (from her "real life" job, not by Trump) for describing some elderly women as "two old Jewish ladies".

If an employee is "caught" in a lie on Moment of Truth and the employer terminates the employee for it, then it would be a clear violation of the prohibition of adverse action "on the basis of the results of any lie detector test".

Should it be legal to terminate an employee for essentially admitting on national TV that he likes to touch his female clients a little too much? Probably.

Is it legal? No.

Well, the California Supreme Court finally released its opinion in Ross v. Ragingwire Telecommunications, Inc., S138130, today and I have to say I am disappointed with the opinion, although I think the dissenting opinion was completely on the mark.

The Decision

The Court decided that employers can terminate employees in California who use medical marijuana with a doctor's prescription for a valid medical reason and not be held liable for doing so under state employment discrimination laws.

The majority spent almost all of their opinion talking about how the Compassionate Use Act of 1996 (the referendum that decriminalized medical marijuana under California law) does not explicitly say employers are prohibited from terminating an employee for using medical marijuana at home.

However, the majority seems to have forgotten that the case was brought under California's Fair Employment and Housing Act ("FEHA") and not the Compassionate Use Act ("CUA"), seemingly concluding that because the CUA was not violated, neither was the FEHA.

The only reason that the CUA has any application here at all is by virtue of the fact that it is the reason that the plaintiff can say he was not breaking state law. Arguably, if state law says something is illegal, then state anti-discrimination laws cannot be held to protect an employee who breaks it. However, the fact that the plaintiff broke no California law should mean that the legality or illegality of the conduct is a non-issue.

FEHA Disability Discrimination Analysis

In California, employers are required to "reasonably accommodate" individuals with disabilities, which basically means that they need to work with the employee and their doctor to determine what the employee needs to be able to do their job and treat their disability. In Ragingwire, the employee simply wanted his employer to allow him to use medical marijuana at home during non-work hours.

The employer generally must allow any accommodation that does not cause it to suffer an "undue hardship". In order avoid liability for refusing a particular accommodation, the employer must demonstrate what sort of undue hardship it would suffer.

Here, the Defendant pointed to virtually no undue hardship it would suffer by letting Ross use his medical marijuana at home during non-work hours. Instead, it pointed to "red herrings" (which the majority readily adopted as some of its justifications) such as:

• We cannot be forced to allow him to use drugs at work--The Court admits that Ross explicitly stated he was not asking for the right to use medical marijuana at work.
• We cannot be held responsible for him coming to work under the influence--Again, Ross was not asking to be allowed to be under the influence at work. This is exactly the same as if an employee had an Oxycotin or Vicodin prescription and could potentially show up at work under the influence of their medication.
• We cannot condone our employees violating the law--If you let your employees bet on sports such as running football pools, this is essentially the same thing. Under federal law simple possession of a small quantity of marijuana is a misdemeanor punishable with a maximum $1,000 fine and/or a year in jail, whereas gambling in California is punishable by a $1,000 fine and/or six months in jail. However, this argument is irrelevant where an employee is only using medical marijuana at home during non-work hours because an employee breaking a law on their own time does not create an undue hardship.

None of these arguments proves that the employer would suffer an undue hardship under these circumstances. Under the FEHA, a claim of hardship generally must be based on either (1) the fact that the accommodation would cost the employer too much to implement, or (2) it would be too inconvenient to implement the accommodation. (See Cal. Gov. 12940(m).)

The majority in this case simply glosses over this whole analysis (which is really the only question they needed to answer here) by conclusively stating "The FEHA does not require employers to accommodate the use of illegal drugs" with virtually no support for that statement. (p. 5)

The majority tries to support this statement by going into a long analysis of cases where it has held that (1) employees can be drug tested under certain circumstances, and (2) employees can be terminated for "abusing" drugs that have no "legitimate medical explanation". Of course, neither of these arguments really has any application to this case, but I guess it sounds good.

Me and the Dissenters Make 3

The dissenting opinion, written by Justice Kennard (who was joined by one other justice to make the decision 5-2) gets the analysis right and reaches the right conclusions, in my opinion. Of course, my earlier post about this case makes his same points, but because we both seem to be in the minority it will probably be quite some time before our opinions are adopted.

It will, however, be interesting to see what the rest of the blawgosphere things about this decision.

Sometimes employees use their employer's e-mail address or computer to contact us. This is understandable, especially for long-term employees who spend most of their waking time at work or using a company-issued computer at home.

The problem is that using an employer's computer or e-mail address to communicate with your attorney might mean these communications are not confidential and may have to be divulged in future litigation.

The Sacred "Attorney-Client Privilege"

The "attorney-client privilege" is sacred in our legal system. This rule of evidence assures that anything you say to your attorney is confidential and nobody can make you or your attorney disclose what was discussed.

There are, of course, narrow exceptions to this rule that communications between an attorney and their client are privileged. The major exception is that any communications also involving a third party are not.

For example, if you and your attorney have a conversation about your case in a crowded elevator and someone overhears it, the conversation is not privileged.

This is because in a crowded elevator you have no reasonable "expectation of privacy", which is a requirement for the attorney-client privilege to apply. If the conversation is not "private", it is not "privileged.

The Problem

Most of our clients come to us after they have been terminated by their employer, so these issues do not arise, but occasionally an employee is savvy enough to come to us when things start to go wrong at work (which is always a good idea, by the way).

The problem is that if you use a company computer or e-mail address to communicate with your attorney, you could accidentally destroy the attorney-client privilege, much like if you had the same conversation in a crowded elevator.

The reason for this is that most employers have agreements they make their employees sign when they are hired giving their employer permission to monitor their e-mail and other activities on corporate computers.

The theory goes that if you know someone might be monitoring your e-mail, then the e-mail is not private and therefore not privileged. However, the main question here is whether the employee "knows" they might be monitored when they send the e-mail.

The Law

California Evidence Code 917(b) states that "electronic communications" do not lose their privilege "sole[ly]" because they are electronic in nature and third parties (e.g. Yahoo, Google) involved in their transmission "may" be able to access them. However, the privilege still might be lost if the e-mails in question are not considered "private".

I am unaware of any California case that deals with this issue directly (please let me know if you are). However, the case of In re: Asia Global Crossing, Ltd, et. al, a New York federal case, is one of the leading opinions on the subject. It also happens to mention Evidence Code 917(b), which was modeled after an identical New York Statute.

The Court in Asia Global Crossing established a number of factors to examine in cases such as these, many of which subsequent courts have used to analyze similar cases. These primarily include whether the company warns its employees that their e-mail or computer use may be monitored and whether the company actually does monitor its employees' use.

Every Situation is Different

Analyses in these situations are extremely fact-intensive. For example, employees are often told by their employers to sign a stack of documents upon hiring and there might be a one-sentence warning buried in the employee handbook stating that e-mail might be monitored.

If there are no further notices to an employee that their employer may monitor them and ten years later that employee sends their attorney an e-mail on their company computer, it is quite possible that the employee has a legitimate expectation of privacy.

However, if an employer regularly reminds its employees that e-mail traffic is monitored, such as a warning that appears every time an employee signs into their computer, it is possible that no legitimate expectation of privacy exists.

Conclusion

We have a bold warning against communicating with us using corporate e-mail or hardware on our "Ask Us a Question" page, but sometimes clients come to us from other sources or simply do not read the warning before submitting their question.

The best way to avoid all of the headache involved in fighting over these sorts of things in litigation is to simply make sure any electronic communication with your attorney is done from home using a personal computer and e-mail account.

Yesterday the California Supreme Court heard arguments in Ross v. Ragingwire Telecommunications, Inc.

In this case, the employee was refused employment because his pre-employment drug test came back positive for marijuana. The employee had been using medical marijuana at the direction of his physician to deal with lower back strain and muscle spasms.

Case Background

Under California's Compassionate Use Act, patients cannot be prosecuted under state law for using or possessing medical marijuana.

However, while federal authorities do not usually pursue prosecution against those who simply use marijuana and do not sell it, the federal Controlled Substances Act still makes possession of marijuana illegal.

California's Fair Employment and Housing Act ("FEHA") makes it illegal for an employer to terminate an employee as a result of their disability or to fail to "reasonably accommodate" their disability.

The collision of these three laws is messy and the answer as to which should prevail is very unclear.

Criminal Law Meets Employment Law

The Supreme Court now has to interpret the FEHA while considering the two drug laws as a backdrop.

To simplify the discrimination issues in terms of a "normal" disability discrimination case, just substitute the word "Vicodin" for "marijuana". Generally, an employer could not terminate an employee for using Vicodin in connection with their disability.

Under these facts, the employee would have a fairly sound disability discrimination case under California law. However, the fact that marijuana use or possession is illegal under federal law complicates things considerably.

Employment Law Meets Criminal Law

For the Court to hold in Ross' favor, they would essentially prohibit employers from terminating employees for engaging in what is essentially criminal conduct.

The FEHA does not really address whether employers must allow employees to engage in illegal conduct outside of work as part of a "reasonable accommodation" for a disability.

Basically, the law is silent on this issue, but this analysis could turn on the word "reasonable". Is allowing an employee to break the law at home on their own time reasonable?

I do not pretend to know the answer to that question.

My Opinion

If I was deciding this case, I would say that the question of legality or illegality on the part of the employee does not enter into the analysis for the purposes of FEHA liability. Illegality should only be considered if it affects the employer.

It is important to note that Ross only used the marijuana at home and did not bring it to or use it at work. As long as the employee does not use the medical marijuana during work hours, I think it is no concern of the employer. I bring this caveat up because if they were to use at work, the employer would essentially be helping the employee commit a crime if they provide a place or time to use it.

I also think that employers would not have to allow the employee to work if they are under the influence at work and doing tasks that would make them dangerous to themselves or others.

Many of the opponents to Ross point to this as a major issue. How can an employer know if the employee has recently used and is safe to have at work? However, I think this is a red herring, because this would also be a problem where an employee has to use Vicodin, which arguably can impair function much more than marijuana does.

The Court's Opinion

Of course, my opinion does not matter much. What really matters here is what the California Supreme Court thinks.

Based on the transcripts from the arguments yesterday, it roughly seems to be a 3-3 tie among the justices present in deciding the case.

In a dramatic twist, Justice Carol Corrigan was out with the flu and could not attend oral arguments. She will be watching a videotape of the arguments to help her decide, but we have no way of guessing what she thinks of the case.

The Court has 90 days to issue a ruling. It should be very interesting reading.

What do you think? Let us know in the comments below...

Q: There are rumors circulating at work that our boss is spying on employees with video surveillance. Is that legal?

--Private Eyes are Watching Me (CA)

A: The answer to your question is: it depends. Whether or not video surveillance at work is illegal depends largely upon the facts in a given situation. The main question is whether or not you have a "reasonable expectation of privacy" in the area that is being taped.

Examples

If the surveillance is occurring in a large open area where many people are working or passing through, such as a warehouse, a parking lot, or a retail checkout counter, it is less likely that an employee would have a right to privacy from surveillance there.

On the other end of the spectrum, it is very unlikely that an employer could argue there is no reasonable expectation of privacy in the employee bathroom or changing room.

The "Grey Areas"

The real "grey area" in these types of situations is locations like inside of an employee's private office, cubicles and other, more private areas.

A recent California court decision (Hernandez v. Hillside, Inc.) has helped clarify the situation, but the issue still depends largely on the specific facts of a case.

In cases dealing with such locations, an employer's policies become very relevant. If an employer has a clear, well-communicated policy that you may be videotaped at any time in any area of the building, this would be strong evidence in the employer's favor that you do not have a reasonable expectation of privacy anywhere in the building.

These types of policies are currently pretty rare, but other factors also come into play. For example, whether there is a door to your office, whether there is a lock on the door and the number and position of windows in the office are important factors.

A Simple Test

All of these factors basically are parts of the same basic question: does an employee have a reasonable expectation of privacy in a particular area at work.

One simple way to look at it is ask yourself whether or not you would reasonably expect to be able to change your clothes to go to the gym in a certain location and not expect to be interrupted or seen, such as in your private office with the door closed and the window blinds drawn.

If you would be surprised or offended to be watched or seen changing there, it is likely that you have a reasonable expectation of privacy there and video surveillance under those circumstances would be illegal.