Cal-Peculiarities: How California Employment Law is Different - 2023 Edition

©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 61 1 Gerawan Farming, Inc. v. Lyons, 24 Cal. 4th 468, 490 (2000) (citing People v. Hannon, 19 Cal. 3d 588, 607, fn. 8 (1977)). 2 Cal. Const., art. I, § 1 (“All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.”). 3 Lab. Code §§ 96(k), 98.6(a). Section 96 provides: “The Labor Commissioner and the deputies and representatives authorized by the commissioner in writing shall, upon the filing of a claim therefor by an employee, or an employee representative authorized in writing by an employee, with the Labor Commissioner, take assignments of: ... (k) Claims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.” Section 98.6 provides: “(a) A person shall not discharge an employee or in any manner discriminate, retaliate, or take any adverse action against any employee or applicant for employment because the employee or applicant engaged in any conduct delineated in this chapter, including the conduct described in subdivision (k) of Section 96 … . (b)(1) Any employee who is discharged, threatened with discharge, demoted, suspended, retaliated against, subjected to an adverse action, or in any other manner discriminated against in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in this chapter, including the conduct described in subdivision (k) of Section 96 ... shall be entitled to reinstatement and reimbursement for lost wages and work benefits caused by those acts of the employer.” 4 Lab. Code § 98.6(c)(2)(A). 5 Lab. Code § 98.6(c)(2)(B). 6 Rulon-Miller v. IBM, 162 Cal. App. 3d 241, 248 (1984) (observing “close question of whether those rules or regulations permit IBM to inquire into the purely personal life of the employee. … [T]he right of privacy, a constitutional right in California … , could be implicated by the IBM inquiry.”). In upholding a jury verdict for the employee, the Rulon-Miller court relied on the implied covenant of good faith and fair dealing, with the constitutional discussion as background, rather than relying directly on the constitutional right to privacy itself. 7 Barbee v. Household Auto. Finance Co., 113 Cal. App. 4th 525, 535 (2003) (supervisor could be terminated for violating company policy against dating subordinates; Labor Code section 96(k) does not describe any public policy but rather “simply outlines the types of claims over which the Labor Commissioner shall exercise jurisdiction”). 8 Grinzi v. San Diego Hospice Corp., 120 Cal. App. 4th 72, 77, 84-86 (2004) (case manager fired on suspicion of participating in Ponzi scheme has no public policy claim for wrongful termination based on First Amendment of the United States Constitution or on Labor Code sections 96(k) or 98.6). 9 Health & Safety Code § 11362.1 (“it shall be lawful under state and local law” for persons at least age 21 to use cannabis up to certain quantities depending on the form of cannabis). 10 Health & Safety Code § 11362.45(f) (section 11362.1 does not affect “[t]he rights … of public and private employers to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of cannabis in the workplace, or affect the ability of employers to have policies prohibiting the use of cannabis by employees and prospective employees, or prevent employers from complying with state or federal law”). See also § 14.7, “Drug Free Workplace,” herein (California employers can deny employment to users of medical marijuana, notwithstanding the 1996 Compassionate Use Act). 11 Assembly Bill 1256, introduced on February 19, 2021, was aimed at prohibiting an employer, subject to exemptions, from discriminating against a person in the hiring, termination, or any term or condition of employment because a drug test revealed the presence of THC. The bill was not passed in the State Assembly. 12 The new statute reads as follows (codified at Gov’t Code § 12594 (a)): “(a) It is unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalizing a person, if the discrimination is based upon any of the following: (1) The person’s use of cannabis off the job and away from the workplace. This paragraph does not prohibit an employer from discriminating in hiring, or any term or condition of employment, or otherwise penalize a person based on scientifically valid preemployment drug screening conducted through methods that do not screen for nonpsychoactive cannabis metabolites. (2) An employer-required drug screening test that has found the person to have nonpsychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.” (Emphasis added.) 13 Lab. Code § 232. 14 E.g., Grant-Burton v. Covenant Care, Inc., 99 Cal. App. 4th 1361, 1376-77 (2002) (upholding wrongful termination claim of employee fired after telling co-workers she had not received bonus because her supervisor did not believe in them; Labor Code section 232, protecting disclosure of “wages,” covers bonuses). 15 Lab. Code § 1197.5(k)(1). 16 Id. 17 Lab. Code § 232.5. 18 Davis v. O’Melveny & Myers, 485 F.3d 1066, 1079 & n.5 (9th Cir. 2007). 19 Luke v. Collotype Labels USA, Inc., 159 Cal. App. 4th 1463 (2008) (federal labor law preempts claim for wrongful termination in violation of public policy stated in Labor Code sections 232.5 and 923). 20 29 U.S.C. § 157 (“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other

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