Category: Constitutional Law

U.S. Supreme Court Stresses Importance of Commonality in Decertifying Massive Sex Discrimination Class of 1.5 Million Wal-Mart Employees

 Barnes & Thornburg LLP‘s Labor and Employment Law Department recently posted in the National Law Review an article about the U.S. Supreme Court’s reversing the largest employment class certification in history

In Wal-Mart, Inc. v. Dukes, reversing the largest employment class certification in history, the U.S. Supreme Court appears to have limited the circumstances in which federal courts can certify class actions – and not just in employment cases. The Court held that the lower federal courts had erred by certifying a class that included 1.5 million female employees from virtually every part of the country. The plaintiffs sought injunctive and declaratory relief, punitive damages, and backpay as a result of alleged discrimination by Wal-Mart against female employees in violation of Title VII of the Civil Rights Act of 1964. 

The Supreme Court held that class certification was improper because the class failed to meet the “commonality” requirement of Federal Rule 23(a)(3), which provides that a class can be certified “only if…there are questions of law or fact common to the class…” The Court noted that the mere allegation of “common questions” is insufficient under Rule 23. “Th[e] common contention… must be of such a nature that it is capable of classwide resolution – which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the [individual class members’] claims in one stroke.” 

The Court held that the Wal-Mart class did not meet the standard for commonality, because the evidence showed that Wal-Mart gave discretion to its supervisors in making employment decisions. The named plaintiffs “have not identified a common mode of exercising discretion that pervades the entire company… In a company of Wal-Mart’s size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction.” The Court concluded that, “Because [the named plaintiffs] provide no convincing proof of a company-wide discriminatory pay and promotion policy, we have concluded that they have not established the existence of any common question.”

The lack of commonality found in Wal-Mart can arise in class actions of many kinds. Under Wal-Mart, a question is “common” under Rule 23(a)(3) only if it can be decided on a class-wide basis. In the past, many named plaintiffs, and some lower courts, have overlooked this essential point. And, as in Wal-Mart, in many cases a claim of commonality will fail precisely because there is no way to rule on the question without addressing the individual facts relating to each purported class member. Wal-Mart makes clear that such a lack of commonality is sufficient to defeat class certification.

In addition to meeting all of the requirements of Rule 23(a), a class must comply with one of the three subparts in Rule 23(b). The trial court in Wal-Mart had certified the class under Rule 23(b)(2), which allows a class where the defendant’s alleged conduct “appl[ied] generally to the class, so that final injunctive or declaratory relief is appropriate respecting the class as a whole…”   Another issue before the Supreme Court was whether such certification was proper where the class sought recovery of substantial backpay based on Wal-Mart’s alleged discrimination.

The Court ruled that the purported class could not be certified under Rule 23(b)(2),  holding that “claims for individualized relief (like the backpay at issue here) do not satisfy the Rule.” The Court said that Rule 23(b)(2) “does not authorize class certification when each class member would be entitled to an individualized award of monetary damages.”

Under the analysis in Wal-Mart , in the vast majority of class actions seeking a monetary recovery, the class can be certified (if at all) only under Rule 23(b)(3). Class certification under that provision is often more difficult, because a class plaintiff must prove that common questions “predominate” over individual questions and that a class action is “superior” to individual actions.  In addition, under Rule 23(c)(2)(A), individual notice must be given to all members of a Rule 23(b)(3) class at plaintiff’s expense, while such notice is optional, within the trial court’s discretion, if the class is certified under Rule 23(b)(2).

Wal-Mart is an important case in the area of employment law; but the Supreme Court’s holdings on the requirements of Rule 23 are likely to be helpful in defending class actions of all kinds

© 2011 BARNES & THORNBURG LLP

Employers are Watching Your Facebook: Worker Privacy Significantly Diminished in the Digital Era

Congrats to Michael Carlin  of University of Minnesota Law School winner of the Spring 2011 National Law Review student legal writing contest winner!   Michael’s topic explores the legal basis for privacy in and out of the workplace, specifically off- duty employee monitoring in the private sector.    

  Introduction

As surveillance technology improves, employers increasingly monitor their employees, both in and out of work.  Public sector employees enjoy First and Fourth Amendment protections, but private sector employees lack these fundamental protections.  State and federal common law and statutory protections developed during the past twenty years provide a handful of remedies for private workers when employers unduly infringe upon their right to be let alone.  Nevertheless, these laws fail to provide adequate protection in light of technological advances that make employer monitoring simple, cheap, and surreptitious.   Employees, with limited exceptions, should be given greater protection of their privacy and freedom of expression both in and especially out of the workplace.

This paper explores the legal basis for privacy in and out of the workplace, specifically off- duty employee monitoring in the private sector.  Part I details this history, discusses disturbing trends in employee monitoring, and explores open legal and ethical questions stemming from the increase in employee monitoring.  Part II reviews the interests implicated by employee monitoring and suggests a balancing point to stem employer invasiveness but protect against employee malfeasance.  The current common law protections described in Part III as well as the statutory protections covered by Part IV demonstrate that, in practice most law misses the mark and leaves employees with insufficient rights against invasive monitoring.  Finally Part V proposes new federal legislation to close the gaps in employee privacy law.

I.  Social and Historical Context of Off Duty Monitoring

A.  History of Worker Monitoring

The separation between work and home life is a recent phenomenon, developed during industrialization and urbanization.[1] The typical family in preindustrial society received little privacy; “business was conducted in the house, and the house was a crowded bustling place with little opportunity for the family to retreat in isolation.”[2]  It was not until city dwellers started working predominantly in offices that the home life was thought of as separate from work life.[3]  As Justices Warren and Brandeis stated, “[t]he intensity and complexity of life, attendant upon advancing civilization, have rendered necessary some retreat from the world. . .”[4]

Today privacy is taken, albeit mistakenly, for granted.[5]  However, even in the early Twentieth Century, the concept of privacy was challenged by the desire to monitor employees in and out of the workplace.  For example, Henry Ford created a “Sociology Department . . . . responsible for ferreting out immoral and undesirable behaviour on the part of Ford employees.”[6]  Today news stories frequently describe how employees are disciplined for their off duty behavior.[7]  Underlying these stories is a private employer’s right to substantially monitor their employees.  Employers are given broad discretion, with some exceptions, to log and monitor an employee’s phone use, voicemail,[8] and much more.

B.  Recent Developments of Off Duty Monitoring

An American Management Association study found sixty six percent of employers monitor workers’ Web site connections; forty three percent review e-mail; forty percent of companies analyze the contents of outbound e-mail; forty five percent track content, keystrokes, and time spent at the keyboard; and thirty percent have fired for misuse of the internet.[9]  RFID is another tool many employers use to track the location of their employees in and out of work, although not much is known about the extent to which this is used for off-duty monitoring.[10]  Eight percent of employers now use GPS technology to track wherever their employees go.[11]

Aligo’s WorkTrack is a technology that allows employers to monitor the location of their employees over the internet using employer provided cell phones.[12]  Technologies like Aligo promise to increase productivity, efficiency, and overall cost savings.[13]  However there are serious invasion of privacy concerns. First, the product has an “on break” mode, which allows employers to know when an employee is not working.[14]  These monitoring features often do not shut off at the end of the workday, allowing the employer to monitor even off duty behavior.[15]  Aligo and similar technologies are used by large employers such as Sun Microsystems, Lucient Technologies, and Motorola.[16]

The trend in monitoring appears to be increasing.[17]  As technology becomes more accessible, monitoring becomes easier. The social networking revolution is one prime example of how, if given easy means, employers will pry into the lives of their employees.  Employers increasingly use social networks to screen job applicants,[18] “Forty-five percent of employers use social networking sites to research job candidates.”[19]  Employers now have the power “to gather enormous amounts of data about employees, often far beyond what is necessary to satisfy safety or productivity concerns.”[20]  It is very likely that without greater privacy protections, as GPS and RFID monitoring become less expensive that more employers will begin utilizing it.

C.  Unanswered Legal Questions

Underlying the employer’s power to collect data on employers is the long line of court decisions upholding an employer’s right to monitor.  The Supreme Court’s latest of decision was City of Ontario v. Quon. Although concerning public employees, and the First and Fourth Amendments, the Quon decision raised interesting policy concerns regarding the potential importance of electronic communications as essential means of for self expression.[21]  However, the court also mentioned that these devices are so easily and cheaply available that one could easily purchase a device for personal use, defeating any expectation of privacy.[22]  This decision failed to analyze the basis for which an employee has a reasonable expectation of privacy,[23] so the expectation of privacy regarding digital monitoring is still not clear.[24]

II.  Should There Be a Line Between Work and Private Life Online? If so Where Should We Draw the Line?

A.  Employer’s Perspective

First, from an employer’s perspective, monitoring of employees is within their discretion because of the nature of at-will employment.  Generally, with the exception of Montana, employment is considered at will in the U.S,[25]  meaning employees can be fired, or leave, at any time for whatever or even no reason.[26]  Employers argue that if employees do not want to be monitored they can leave.

Employers also need to protect the integrity of their business and prevent unlawful activity.  Never before has so much damage been accomplished by low level employees through mindless behavior and social media.  One example of this occurred in April 2009 when two Domino’s Pizza employees posted several videos of disgusting, and unsanitary activities in preparation of a customer’s pizza.[27]  The video went viral and was responsible for a steep decline in stock values.[28]

Employers also need to protect against the leaking of confidential data.  In February 2010 the personal information of Shell employees in dangerous parts of the work was leaked to a blogger and published.[29]  This leak posed a great threat to the lives of these individuals; Shell employees have been attacked, and kidnapped in places like Nigeria.[30]  Similarly, the risk of liability is high for leaking of trade secrets and for initial public offerings before they are public.[31]

Productivity concerns also cause many employers to monitor employees. Even minor personal internet use in the workplace can lead to millions in lost profits.[32]  Off-duty, employers can claim fewer interests in monitoring, but in a world where telecommuting is on the rise, the line between office and home is blurring and this means that an employer may need to monitor an employee while working remotely.  Additionally, employers may want to check against irresponsible drinking, and negligent driving as evidenced by traffic tickets, especially if the worker is in a driving profession.[33]

B.  Employee’s perspective

When employers monitor their workers morale can decrease substantially.[34]  Monitoring may also undermine intended purposes of increasing productivity by spurring stress related ailments such as increased illness and absenteeism.[35]  Information gleaned from social media may also be inaccurate, forgeries of facebook accounts are commonplace.  Moreover, monitoring is usually inequitable where employees are not represented by unions, “[b]ecause of the substantial interests individuals have in both employment and in privacy, invasive monitoring puts employees in a ‘catch-22’ situation, forcing them to sacrifice reasonable expectations of privacy because of their need to work.”[36]

Technological advances exacerbate the invasiveness of monitoring and allow employers to know intimate details about an employee’s life, as one commenter notes “what happens when an employer virtually observes the employee stopping during her lunch hour at Planned Parenthood and fires her based on assumptions about her position on family planning methods?”[37]  Further, technology like social networking has become such an integral part of self expression.  Although in the context of cell phones, the Supreme Court acknowledged that it may be that some forms of communication are “essential means or necessary instruments for self expression, even identification.”[38]  This is just as true of social media.[39]

Employer monitoring has already altered the online behavior of many bloggers and social networking users, “29% of employees have become more conservative online because they fear that ‘employers can use anything and everything as an excuse to fire” them in a down economy.”  Social networking and blogging merits protection because not only is it integral to self expression, it serves a socially useful purpose by keeping people connected, and sharing and breaking news in a more effective way than traditional means ever could.[40]  Although First Amendment protection does not extend to workers in the private sphere, employer monitoring can affect speech in ways that would be unconstitutional if done by a government employer.  Most Americans spend nearly a quarter of their lives at work;[41] do we want constitutional protections to extend to only three quarters of a person’s life?  Do we want to allow employers to treat their employees like sex offenders, under constant surveillance?

Most social networking users begin using in their teens; because of this many of these users have material from their youth that depicts less than mature behavior.  Young people’s past lawful, but unfortunate conduct should not harm their employment prospects later.[42]  Even those with private profiles, as discussed in Part IV may still be at risk for having their profiles hacked by employers. Without protections we allow employers to be voyeurs and produce a chilling effect to use of online communications.[43]  Finally, the right to adequate livelihood is an international human right; one should not have to waive expression rights to enjoy the right to a livelihood.[44]

C.  Other Policy Considerations Make Line Drawing Difficult.

On one hand the free flow of information should not be impeded to protect what is usually discriminated against: misconduct and unpopular speech.  We should not have to protect people from making public fools of themselves.  Nevertheless, as the lifestyle discrimination statutes and case law discussed in Part IV attest to, employers who monitor off duty scrutinize a great deal of legal and socially important behavior including political speech.

Another issue is that the internet is by definition public, and speech is not being infringed by any unconstitutional means by employers checking social media.  However, off-duty social networking use merits privacy protections because employees have a higher expectation of privacy off the clock.[45]  Although any manager could check out an employee’s Facebook, there is a difference when this action is done with the intention to dig up dirt.  This argument also fails to consider that employers may find ways to view even non public profiles.

Finally, we must also consider whether employers should be punished just because they are using information for actions socially disapproved of.  After all, there are many anti-discrimination and collective bargaining labor laws designed to prevent employers from the really harmful discrimination.  However, anti-discrimination lawsuits are not a simple means of protecting the worst forms of discrimination; they are among the most difficult cases to prove.[46]  Employers who reserve the right to monitor of social network use and GPS location off duty can relatively easily use any information they gather as pretext for more heinous action.  Finally, the low interest the employer has in off-duty behavior, and the high value of privacy in U.S. culture, tips the balance in favor of the employee.  Although when employers suspect serious misconduct that would expose the employer to liability or lost profits, they should be allowed to monitor the employee with proper notice.

III.  Common Law Protections Are Generally Not Available for Digital Off-Duty Monitoring

Private sector privacy actions are typically based in the common law tort of intrusion upon seclusion.[47]  The elements for an intrusion claim are “[1] [intentional] intru[sion], physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns . . . [and] [2] the intrusion would be highly offensive to a reasonable person.”[48] In other words, did an individual have a reasonable expectation of keeping a matter private which the employer intruded upon.  Voluntary disclosure of information is a problem for social networking users.[49]  Some jurisdictions allow for an employer to use “intrusive and even objectionable means to obtain employment-related information about an employee.[50]  Generally, invasion of privacy actions will not be available to bloggers and social network users given the public nature of these activities.[51]  However, invasion of privacy claims may be available for monitoring off-duty personal cell phones,[52] home computer use, and location via GPS.  Still, these claims will probably fail if the employer reserves the right to monitor in an employee handbook.[53]

One recent exception to waiver of a reasonable expectation of privacy via employer notice has been found if the communication is privileged.  In Stengart v. Loving Care Agency, Inc., a home care nursing professional used her employer provided laptop to communicate with her attorney via a web-based yahoo mail account.[54]  The employer collected these emails in preparation for a lawsuit the employee filed against it. Although the employer use policy stated that employees can expect to be monitored, the New Jersey Supreme Court held that the employee had a reasonable expectation of privacy in her attorney-client privileged emails even on a work computer.[55]

IV.  Current Statutory Causes of Action Provide Little Protection.

A.  ECPA Claims Against Off-Duty Monitoring Fail.

The Electronic Communications Privacy Act (ECPA) was enacted “to provide greater protection of an individual’s privacy from emerging communication technologies in the private sector.”[56]  The Act “prohibits the intentional or willful interception, accession, disclosure, or use of one’s electronic communication.”[57]  It extends the protections of the Wiretap Act to electronic communications; it allows for criminal prosecution as well as civil action.[58]  However, “[c]ase law interpreting ECPA is virtually uniform in finding that employers can monitor with or without consent, even without notice.”[59] Further, courts disagree as to whether the interception of emails stored on a centralized server are prohibited by ECPA.

All that is necessary for a party to waive their privacy is to give so called consent, which can easily be done by the employer providing a poster or notice in a policy handbook that communications will be monitored.[60]  Further, consent or notice is not required in many federal jurisdictions when equipment is used in the course of business.[61]  Because the EPCA effortlessly allows employers to skirt the statute’s requirements, off-duty monitoring suits do not succeed against employers.[62]

B.  SCA Claims Require Employers to Behave Extremely Irresponsibly.

The Stored Communications Act (SCA) prevents communications companies from turning over communications to the government, but also prohibits hacking and exceeding authorization to view information.[63]  In Konop, an employee of Hawaiian Airlines created a blog, requiring authorization and terms of use that prohibited the airline management from reading and any disclosure of the contents of the blog.[64]  Hawaiian Airlines used the usernames and passwords of other employees to access Konop’s blog.  The company then terminated Konop after reading his critical commentary of the airline’s president and labor practices. The court held that because only a website user or provider could authorize a third party’s access under SCA, summary judgment should not have been granted for this claim.[65]

Although the employee here was given a cause of action, the remedy was limited because the court decided that “for a website such as Konop’s to be ‘intercepted’ in violation of the Wiretap Act, it must be acquired during transmission, not while it is in electronic storage.”[66]  The First Circuit disagreed with this in United States v. Councilman, holding that communications in storage can be intercepted in violation of the ECPA.[67]

Another shortcoming of these statutes is that neither EPCA or SCA would not protect all instances of employer digital snooping.  The following alteration of Konops facts illustrates this.  If Hawaiian Airlines was given the Facebook login information of Konop’s Facebook friend, and used it to login and see Konop’s critical wall posts of the company; the employer would avoid liability under SCA because there is no Facebook policy prohibiting the use of another’s login information.[68]  ECPA and SCA weaknesses points to the need for stronger statutory protections in the area of employee privacy.

C. CFAA Generally Does not Apply to Employers.

The Computer Fraud and Abuse Act (CFAA) is a criminal statute that prohibits the unauthorized access of computers involved in interstate or foreign commerce.[69]   However, unless an employer hacked into an employee’s personal computer, an action would not be possible against a monitoring employer.

D. State Protections, Statutory Privacy and Lifestyle Discrimination Statutes Mostly Miss the Mark.

Though as many as ten state constitutions explicitly provide privacy protections, nine of these provisions are interpreted to require government invasion of privacy.[70]  California is exceptional in that the state constitution provides a remedy for invasion of privacy actionable against private individuals.[71]

Twenty five states protect against employee discrimination for the use of tobacco and other legal products off-duty.[72]  However, these laws would not protect against employer monitoring and adverse action based on political or other lawful expression gleaned from social network use.  Five states prohibit adverse action based on political behavior.[73] Only California, Colorado, New York, and North Dakota protect against discrimination from legal off-duty behavior in general,[74] but these statutes may be limited where an employer declares a policy that prohibits blogging about work.[75]  Limiting employee monitoring is not a popular option even when tailored narrowly; Michigan and Illinois are the only states that prevent an employer from monitoring political activity.[76]  Only eleven states have some form of RFID use restrictions, and none have GPS monitoring restrictions.

V.  “Privacy Protection in Employment Act” a Proposal to Close Privacy Gap

Congress made two attempts to pass employee privacy legislation, the broad Privacy for Consumers and Workers Act in the 1990s and the toothless Notice of Electronic Monitoring Act in 2000.[77]  Though these failed, federal legislation is necessary for several reasons. The courts are too slow and lack the technological expertise to adequately keep privacy up to date with technological changes.  Moreover, “providing protections for employees on a state-by-state basis can cause “a race to the bottom” with states purposefully providing low protections to encourage business.”[78]  To close the gaps in employee privacy law Congress should pass what some have call the “Privacy Protection in Employment Act”.[79]  This Act would generally prevent all off-duty monitoring of employees in the home, and in any secluded area. Employers would only be permitted to monitor off-duty behavior if the employer has “reasonable grounds to believe the employee is engaging in behavior that will cause a significant concrete harm to the employer.”[80]  However, the employer must carry the burden to prove reasonable grounds.  An employer also must put the employee on notice of the scope and duration of any monitoring, and provide them an opportunity to review all information collected. The Department of Labor would also monitor compliance with these provisions, and a violation of the Act would allow a civil action with an allowance for plaintiff’s attorney fees.[81]

VI.  Conclusion

Statutory and common law protections show that there should be a line between work and private life even in this age of diminishing privacy.  However, these protections are inadequate to keep up with monitoring techniques.  Although there are important interests in promoting the free flow of information and the profitability of businesses; the risk for discriminatory use of information is great.  Interests in privacy must be balanced against interests in security of employment and reflect well reasoned normative views of society.  This can be accomplished by enacting legislation like the Privacy Protection in Employment Act.

[1] Daniel J. Solove, Conceptualizing Privacy, 90 Cal. L. Rev. 1087, 1138 (2002) (documenting the history of the concept of privacy and exploring new ways to think of it).

[2]Id. (“homes were primarily devoted to work, a shop with a place in the back or above to eat and sleep.”)

[3]Edward Shils, Privacy: Its Constitution and Vicissitudes, 31 Law & Contemp. Probs. 281, 289 (1966). See also Tamara K. Hareven, The Home and the Family in Historical Perspective, 58 Soc. Res. 253, 259 (1991) (“Following the removal of the workplace from the home as a result of urbanization and industrialization, the household was recast as the family’s private retreat, and home emerged as a new concept and existence.”).

[4]Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4 Harv. L. Rev. 193, 196 (1890).

[5]C.f. Solove, supra note 1.

[6]Donald V. Nightingale, Workplace Democracy: An Inquiry into Employee Participation in Canadian Work Organizations 9 (1982).

[7]See Stephanie Chen, CNN International, Can Facebook get you fired? Playing it safe in the social media world, http://edition.cnn.com/2010/LIVING/11/10/facebook.fired.social.media.eti… (reviewing story of woman fired for posting about her boss reprimanding her for union activity); Don Aucoin, MySpace vs. WorkPlace, Boston Globe, May 29, 2007, at D1 (describing an Olive Garden employee fired for posting MySpace pictures of herself); Hyoung Chang, Bud Man: Canned for Coors?, USA Today, May 18, 2005, http://www.usatoday.com/money/industries/food/2005-05-18-beer-man_x.htm (finding a Budwieser employee was fired for drinking a Coors in public).

[8]Jane Kirtley, Privacy Protection, Safety and Security, Intellectual Property Course Handbook Series PLI Order No. 23334 15, 119 (Practising Law Institute, 2010) (citing Fact Sheet 7: Workplace Privacy and Employee Monitoring, Privacy Rights Clearinghouse, June 30, 2010, http://www.privacyrights.org/fs/fs7-work.htm#2c) (finding exceptions in California, where in state callers must be informed of monitoring, and in the Eleventh Circuit where the employer realizes the call is personal).

[9] American Management Association, 2007 Electronic Monitoring & Surveillance Survey: Many Companies Monitoring, Recording, Videotaping and Firing Employees, Feb. 8, 2008, http:// www.amanet.org/press/amanews/ems05.htm.

[10]Although less is known, RFID presents the largest potential invasion of privacy issues; RFID can be placed in Id badges, clothing, cell phones, and just about anything without being detectible by employees. Jeremy Gruber, RFID and Workplace Policy, (last visited, Dec. 1, 2010)  http://www.workrights.org/issue_electronic/RFIDWorkplacePrivacy.html#_ft….

[11]Id.

[12]Aligo – The Mobile Enterprise Software Company, WorkTrack, http://aligo.c3design.jp/products/workTrack/ (last visited Dec. 1, 2010).

[13]Id.

[14]This feature is marketed to help reduce unnecessary billing time, but it has troublesome invasion of privacy implications.  Jill Yung, Big Brother Is Watching: How Employee Monitoring in 2004 Brought Orwell’s 1984 to Life and What the Law Should Do About It, 36 Seton Hall L. Rev. 163, 173 (2005).

[15]Id.

[16]Aligo Inc., Aligo Customers, (last visited December 1, 2010), http://aligo.c3design.jp/customers/.

[17] Friedman, Barry A. and Lisa J. Reed, Workplace Privacy: Employee Relations and Legal Implications of Monitoring Employee E-Mail Use, 19 J. Bus. Ethics 75 (2007) (describing the follies of employer use of social networks as a monitoring tool).

[18] Jenna Wortham, More Employers Use Social Networks to Check Out Applicants, New York Times, http://bits.blogs.nytimes.com/2009/08/20/more-employers-use-social-netwo… (finding an increasing trend in use of social networks to screen applicants).

[19]Career Builder, Press Release, Forty-five Percent of Employers Use Social Networking Sites to Research Job

Candidates, CareerBuilder Survey Finds, August 19, 2009, http://uncw.edu/stuaff/career/documents/employersusingsocialnetworkingsi…

[20]Frederick S. Lane III, The Naked Employee: How Technology Is Compromising Workplace Privacy 3-4 (2003).

[21] Id. (“Cell phone and text message communications are so pervasive that some persons may consider them to be essential means or necessary instruments for self-expression, even self-identification.”)

[22]Id. (“[E]mployees who need cell phones or similar devices for personal matters can purchase and pay for their own.”).

[23]City of Ontario v. Quon, 130 S.Ct. 2619, 2630 (2010).

[24]The court also did not address whether employers can monitor their employees while off duty. C.f. Gregory I. Rasin & Ariane R. Buglione, Social Networking and Blogging: Managing the Conversation, N.Y.L.J., July 27, 2009, available at http://www.law.com/jsp/nylj/PubArticleNY.jsp?id=1202432487473&slreturn=1….

[25]See, e.g., Ariana R. Levinson, Carpe Diem: Privacy Protection in Employment Act, 43 Akron L. Rev. 331, 338 (2010).

[26]See generally, James A. Sonne, Monitoring for Quality Assurance: Employer Regulation of Off-Duty Behavior,43 Ga. L. Rev. 133, 140 (2008).

[27]Paul E. Starkman, What You Need to Know about Monitoring Employees’ Off-Duty Social Networking Activity (last accessed Dec. 2, 2010), http://chiefexecutive.net/ME2/Audiences/dirmod.asp?sid=&nm=&type=Publish….

[28]Id. (receiving over a million views in two days).

[29]Id.

[30]James Herron, Shell Data Leak May Compromise Safety Of Staff –Emails, Feb. 4, 2010 http://royaldutchshellplc.com/2010/02/04/shell-data-leak-may-compromise-….

[31]See Starkman, supra note 27.

[32]See, Association of  Local  Government Auditors, Monitoring  Internet  Usage, Spring  2010, http://www.governmentauditors.org/index.php?option=com_content&view=arti… This potential loss may only get worse as the average gen-y’er spends upwards of thirty four percent of their time online doing personal tasks, as opposed to the twenty five percent found in the rest of the working population.  Burst Media, “Online At Work”, Nov. 11, 2007,http://www.burstmedia.com/pdfs/research/2007_11_01.pdf.

[33]Ronald J. Rakowski, Employee Off-Duty Conduct: Be Careful!, Sep 7, 2010, http://www.suite101.com/content/employee-off-duty-conduct-be-careful-a28….

[34]See Mia Shopis, Employee Monitoring: Is Big Brother a Bad Idea?, Dec. 9, 2003, http://searchsecurity.techtarget.com/news/interview/0,289202,sid14_gci94….

[35]Jay P. Kesan, Cyber-Working or Cyber-Shirking?: A First Principles Examination of Electronic Privacy in the Workplace, 54  Fla. L. Rev. 289, 319-20 (April 2002)

[36]S. Elizabeth Wilborn, Revisiting the Public/Private Distinction: Employee Monitoring in the Workplace, 32 Ga. L. Rev. 825, 835 (1998).

[37]Yung, supra note 14at 174.

[38] City of Ontario v. Quon, 130 S.Ct. 2619, 2630 (2010).

[39]See Peggy Orenstein, The Way We Live Now: I Tweet, Therefore I Am, August 1, 2010, available at http://www.nytimes.com/2010/08/01/magazine/01wwln-lede-t.html

[40]I use social media broadly: it includes blogs, YouTube, and any other internet based means of conveying information.

[41]See supra note 36.

[42] Leigh A. Clark & Sherry J. Roberts, Employer’s Use of Social Networking Sites: A Socially Irresponsible Practice, 95 J. Bus. Ethics 507 (2010) (exploring the ethical concerns of employer use of social networking to monitor employees and screen applicants in the private workplace).

[43] Friedman, Barry A. and Lisa J. Reed. 2007. Workplace Privacy: Employee Relations and Legal Implications of Monitoring Employee E-Mail Use, 19 J. Bus. Ethics 75.

[44]Nevertheless, the U.S. does not recognize the International Covenant on Economic, Social and Cultural Rights, or the optional protocol, which would give rise to a claim for damages for the right to work. G.A. Res. 2200A (XXI), U.N. Doc. A/6316 (Dec. 16, 1966), Dec. 16, 1966, 993 U.N.T.S. 3, entered into force Jan. 3, 1976.

[45] Compare withthe following “the use of computers in the employment context carries with it social norms that effectively diminish the employee’s reasonable expectation of privacy with regard to his use of his employer’s computers.” TBG Ins. Servs. Corp. v. Superior Court, 96 Cal. App. 4th 443, 452 (2002) (holding that an employee who used a computer designated for working at home did not have sufficient privacy interests to prevent an employer from monitoring his computer use).

[46]See generally Michael Selmi, Why are Employment Discrimination Cases So Hard to Win?, 61 La. L. Rev. 555, (2001), see also Jonah Gelbach et al.,Passive Discrimination: When Does It Make Sense To Pay Too Little?, 76 U. Chi. L. Rev. 797 (2009) (“federal antidiscrimination law inadequately addresses either intentional or unintentional passive discrimination”)

[47] Tanya E. Milligan, Virtual Performance: Employment Issues in the Electronic Age, 38 Colo. Law. 29, 34 (2009) (exploring defamation, invasion of privacy, wiretap, EPCA, and SCA causes of action as a result of employer monitoring).

[48]Restatement 2d. Torts § 652B.

[49] Robert Sprague, Fired for Blogging, 9 U. Pa. J. Lab. & Mp. L. 355, 384 (2007) (exploring legal protections bloggers may be able to assert as a result of monitoring off duty conduct).

[50] Kelly Schoening & Kelli Kleisinger, Off-Duty Privacy: How Far Can Employers Go, 37 N. Ky. L. Rev. 287, 290-292 (2010) (exploring the limits of employer peering into the private lives of employees using technology under several privacy statutes as well as common law tort claims) (citing Baggs v. Eagle-Picher Indus., Inc., 957 F.2d 268 (6th Cir. 1992)).

[51]Sprague supra note 49at 363.

[52] But see Karch v.  Baybank FSB, 794 A.2d  763  (N.H.  2002) (refusing to find a cause of action against an employer who uses information surreptitiously intercepted from a cell phone conversation by a third party to reprimand an employee).

[53]See e.g. Thygeson v. U.S. Bancorp, 2004 WL 2066746 (D. Or. 2004).

[54]990 A.2d 650 (N.J. 2010)

[55]Id. at  663-664 (“e-mails she exchanged with her attorney on her personal, password-protected, web-based e-mail account, accessed on a company laptop, would remain private.”).

[56] Michael Newman, Shane Crase, What in the World is the Electronic Communications Privacy Act? An Overview of the ECPA Hurdles in the Context of Employer Monitoring, 54 Fed. Law. 12 (2007).

[57]  18 U.S.C. §§ 2510-2520.

[58]18 U.S.C. §§2510 to 2712.  Although an employer cannot violate the wiretap act because of a deficiency in language of the statute, they could be liable under the ECPA).  Jill Yung, supra note 14at 182 n.90.

[59]Corey A. Ciocchetti, The Privacy Bailout: State Government Involvement in the Privacy Arena, 5 Entrepreneurial Bus. L.J. 597, 605 (2010).

[60]See United States v. Rittweger, 258 F. Supp. 2d 345, 354-55 (S.D.N.Y. 2003) (finding a handbook made monitoring policy clear).

[61]Arias v. Mutual Cent. Alarm Serv. Inc., 202 F.3d 553, 559 (2d Cir. 2000).

[62]Cf. Konop v. Hawaiian Airlines, Inc., 302 F.3d 868 (9th Cir. 2002) cert denied, 537 U.S. 119 (2003) (dismissing the 18 U.S.C.A. § 2511(1)(a) claim).

[63] 18 U.S.C. § 2701, et. seq.

[64]Konop 302 F.3d at 876.

[65]Id.

[66]302 F.3d 868, 878-879.

[67]See Newman supra note 56at 14 (quoting 418 F.3d 67, 79-81 (1st Cir. 2005)).

[68]See Facebook terms http://www.facebook.com/terms.php.

[69] 18 U.S.C. §1030.

[70]See, Corey A.Ciocchetti, The Privacy Bailout: State Government Involvement in the Privacy Arena, 5 Entrepreneurial Bus. L.J. 597, 620.

[71]Chico Feminist Women’s Health Ctr. v. Butte Glenn Med. Soc’y, 557 F. Supp. 1190, 1203

(E.D. Cal. 1983) (finding an action against defendants for an infringement of the state’s constitutional privacy right to prevent procreative choice interference).

[72]Corey A.Ciocchetti, The Eavesdropping Employer: A Twenty-First Century Framework For Employee Monitoring, 17 (2010)http://www.futureofprivacy.org/wp-content/uploads/2010/07/The_Eavesdropping_Employer_%20A_Twenty-First_Century_Framework.pdf

[73]Id.

[74]Id.See also e.g., Colo. Rev. Stat. § 24-34-402.5 (“[i]t shall be a discriminatory or unfair practice for an employer to terminate the employment of any employee due to that employee’s engaging in any lawful activity off the premises of the employer during nonworking hours. . .”); N.D. Cent. Code §§ 14-02.4-03 (“[i]t is a discriminatory practice for an employer to fail or refuse to hire a person; to discharge an employee; or to [otherwise discriminate with respect to] participation in lawful activity off the employer’s premises during nonworking hours . . . .”).

[75] Levinson,supra note 25at 372.

Jessica Jackson, Colorado’s Lifestyle Discrimination Statute: A Vast and Muddled Expansion of Traditional Employment Law, 67 U. Colo. L. Rev. 143 (1996).

[76]Ciocchetti, supra note 72.

[77]Levinson,supra note 25at 343.

[78]Id.

[79]Id. at 331.

[80]Id. at 402 (These would exclude activities that merely reduce office morale, and injury to reputation and would include, but are not limited to activity such as: competition with employer’s business, reduction in the employees work or that of co-workers, harassment, obscene behavior if the employee is a child’s role model, financial harm, and complaints).

[81]Id. at 411.

© Copyright 2011 Michael Carlin

Racial Discrimination and the Hostile Work Environment: Employers May Be Responsible for the Actions of Their Customers and Vendors

Recently posted by Robert Neiman of Much Shelist Denenberg Ament & Rubenstein P.C.:  details of a recent Seventh Circuit Appellate court ruling that a nursing home, by catering to a resident’s preference for white nurses, had created a hostile work environment for its employees based upon race.

All employers know that they must protect their employees from a hostile work environment based upon discrimination and harassment by other employees. A recent federal appeals court decision, however, clarified the steps that employers should take when their customers and vendors discriminate against or harass company employees.

In Chaney v. Plainfield Healthcare Center, the United States Court of Appeals for the Seventh Circuit held that a nursing home, by catering to a resident’s preference for white nurses, had created a hostile work environment for its employees based upon race. This Seventh Circuit decision reversed the trial court’s summary judgment ruling in the nursing home’s favor, ultimately remanding the case for a trial.

Understanding the Issues

In the Chaney case, the resident told the nursing home’s managers that she only wanted white nurses to care for her. Plainfield Healthcare Center acknowledged that it maintained a policy of complying with its residents’ racial preferences. The nursing home also argued that it expected employees to respect these preferences because it otherwise risked violating state and federal laws that grant residents the right to choose providers, as well as the right to privacy and bodily autonomy.

Chaney, an African American nurse’s aide, followed Plainfield’s policy, even though the prejudiced resident continued to appear on her assignment sheet. Chaney reluctantly refrained from assisting the resident, even when she was in the best position to help. However, after Chaney had worked for Plainfield for just three months, the nursing home fired her for alleged misconduct on the job.

Chaney then brought a race discrimination claim against the nursing home, alleging that Plainfield allowed a hostile workplace to exist in violation of Title VII of the Civil Rights Act of 1964. The federal appeals court had “no trouble” ruling that a reasonable person would find the nursing home’s work environment hostile or abusive. The court found that the nursing home fostered a racially charged environment through its assignment sheet, which daily reminded Chaney and her coworkers that certain residents preferred not to receive care from African American nursing assistants. Unlike her white counterparts, Chaney was restricted regarding the rooms she could enter, the care that she could provide and the patients she could assist.

The appellate court ruled that “a company’s desire to cater to the perceived racial preferences of its customers is not a defense under Title VII for treating employees differently based on race.” The court rejected Plainfield’s argument that laws designed to protect residents’ choices and autonomy justified its conduct, holding that residents’ privacy interests did not excuse the nursing home’s disparate treatment of its employees based upon race. Furthermore, the court suggested that Plainfield could have insisted that the racially biased resident employ a white nursing aide at her own expense.

The nursing home also argued that by preventing its African American nurses from treating the prejudiced resident, it was protecting those nurses from harassment, and that it could not simply discharge the resident to avoid exposing its employees to racial hostility. But the court noted that Plainfield had a range of other options, such as warning all residents of the facility’s non-discrimination policy prior to admission, securing written consent to the non-discrimination policy and attempting to reform the behavior of the racially biased resident after admission. The court further noted that the facility could have assigned staff based on race-neutral criteria that minimized the risk of conflict.

Notably, the court also suggested that Plainfield could have advised its employees that the resident was racially prejudiced, and informed them that they could ask the nursing home for protection from this and any other prejudiced residents. That way, the court explained, the nursing home would have allowed all employees to work in a race-neutral, non-harassing environment as the law requires, rather than imposing an unwanted, race-conscious work limitation on its African American employees.

Protective Steps for Employers

The Chaney case offers several lessons that employers should bear in mind. For starters, ensure that your discrimination and harassment policy clearly states that employees have the right to work in an environment free of hostility based on any legally protected class, even if that hostility is generated by customers, vendors or other non-employees. You should also consider informing customers and vendors of your non-discrimination policies where appropriate. If customers or vendors express a preference to deal only with certain employees—to the exclusion of others who belong to a legally protected class—then you should not tacitly cooperate. Instead, theChaney decision suggests that you should remind these third parties of your non-discrimination policy, warn employees that the customer or vendor is prejudiced, protect those employees from any hostility created by the customer or vendor, and help ensure that your employees have an easy way to communicate any hostile work environment to management.

Ultimately, you must measure the benefit of doing business with a prejudiced customer or vendor against the risk that your employees will suffer a hostile work environment, possibly leading to expensive discrimination or harassment claims. The Chaney decision suggests that employers don’t necessarily have to choose one over the other, but that they are required to take steps to protect their employees from racial prejudice.

© 2011 Much Shelist Denenberg Ament & Rubenstein, P.C.

 

Out of Work? Out of Luck

Great posted added today at the National Law Review about the EEOC’s hearing about the impact of employers considering only those currently employed for job vacancies.  

EEOC Examines Employers’ Treatment of Unemployed Job Applicants at Hearing

WASHINGTON—In a public meeting held today, the U.S. Equal Employment Opportunity Commission (EEOC) examined the impact of employers considering only those currently employed for job vacancies.

“Throughout its 45 year history, the EEOC has identified and remedied discrimination in hiring and remains committed to ensuring job applicants are treated fairly,” said EEOC Chair Jacqueline A. Berrien. “Today’s meeting gave the Commission an important opportunity to learn about the emerging practice of excluding unemployed persons from applicant pools.”

According to Helen Norton, Associate Professor at the University of Colorado School of Law, employers and staffing agencies have publicly advertised jobs in fields ranging from electronic engineers to restaurant and grocery managers to mortgage underwriters with the explicit restriction that only currently employed candidates will be considered. “Some employers may use current employment as a signal of quality job performance,” Norton testified. “But such a correlation is decidedly weak. A blanket reliance on current employment serves as a poor proxy for successful job performance.”

“The use of an individual’s current or recent unemployment status as a hiring selection device is a troubling development in the labor market,” said Fatima Goss Graves, Vice President for Education and Employment of the National Women’s Law Center. She noted that this practice “may well act as a negative counterweight” to government efforts to get people back to work. Women, particularly older women and those in non-traditional occupations, are disproportionately affected by this restriction, testified Goss Graves.

Denying jobs to the already-unemployed can also have a disproportionate effect on certain racial and ethnic minority community members, Algernon Austin, Director of the Program on Race, Ethnicity, and the Economy of the Economic Policy Institute, explained. Unemployment rates for African-Americans, Hispanics and Native Americans are higher than those of whites. When comparing college-educated workers, the unemployment rate for Asians is also higher. Thus, restricting applications to the currently employed could place a heavier burden on people of color, he concluded.

The use of employment status to screen job applicants could also seriously impact people with disabilities, according to Joyce Bender, an expert in the employment of people with disabilities. “Given my experience, I can say without a doubt that the practice of excluding persons who are currently unemployed from applicant pools is real and can have a negative impact on persons with disabilities,” Bender told the Commission.

Dr. William Spriggs, Assistant Secretary of Labor for Policy, offered data supporting this testimony. Spriggs presented current national employment statistics showing that African-Americans and Hispanics are overrepresented among the unemployed. He also stated that excluding the unemployed would be more likely to limit opportunities for older applicants as well as persons with disabilities.

“At a moment when we all should be doing whatever we can to open up job opportunities to the unemployed, it is profoundly disturbing that the trend of deliberately excluding the jobless from work opportunities is on the rise,” said Christine Owens, Executive Director of the National Employment Law Project. In addition to presenting statistical evidence, she recounted stories unemployed workers have shared with her organization where they were told directly that they would not be considered for employment due to being unemployed.

James Urban, a partner at the Jones Day law firm, who counsels employers, expressed doubt as to the extent of the problem. Fernan Cepero, representing the Society of Human Resource Professionals, told the Commission that his organization is not aware of this practice being in regular use. But both Mr. Urban and Mr. Cepero noted that the automatic exclusion of unemployed persons from consideration does not constitute “due diligence” in the screening of job applicants.

© Copyright 2011 – U.S. Equal Employment Opportunity Commission

Georgia Voters Approve Dramatic Changes to Employment Restrictive Covenant Laws

This week’s featured blogger at the National Law Review is Jon M. Gumbel of Ogletree Deakins.  Jon writes about how this month’s elections in Georgia approved a measure which would amend the Georgia constitution to dramatically alter the law as it pertains to employee non-compete, customer non-solicitation, confidential information and similar contractual provisions between Georgia employers and their employees. 

The long-awaited and often debated results are in! On Tuesday, November 2, 2010, Georgia voters decided (quite convincingly) to amend the Georgia Constitution, which allowed for the previously passed House Bill 173 to become law (now O.C.G.A. §13-8-50, et seq.). This new statute dramatically alters the law as it pertains to employee non-compete, customer non-solicitation, confidential information and similar contractual provisions between Georgia employers and their employees. The new law became effective on November 3, 2010 and as such, is deserving of prompt attention by Georgia employers.

Until November 2, Georgia’s restrictive covenant laws were governed by published court decisions issued by a wide variety of Georgia judges and based on an even wider variety of specific factual situations, creating a somewhat muddled, very complex and highly unpredictable area of the law. Furthermore, as this case law developed over the past 60 plus years, Georgia courts applied an increased level of scrutiny to employee restrictive covenants, making Georgia one of the most difficult states in which to enforce such covenants. For example, Georgia courts previously required employers to undertake the extremely challenging task of tailoring restrictive covenants executed at the onset of the employment relationship to the employee’s post-employment competition restrictions. In addition, Georgia courts would automatically invalidate a customer non-solicitation provision upon the finding of one technical problem within a noncompete covenant and vice versa. Finally, Georgia courts would not, under any circumstances, modify an otherwise unenforceable covenant so as make it reasonable in the court’s eyes and therefore, enforceable (the “blue penciling” process).

The new statute specifically states Georgia’s new public policy favoring enforcement of these agreements and provides specific guidelines for drafting enforceable agreements. For example, the new statute expressly authorizes a more general description of prohibited, post-employment activities, thus mitigating the requirement that such covenants be narrowly tailored at the onset. The new statute eliminates the prior rules invalidating one covenant based on the unacceptable language of another separate covenant within the same contract. Perhaps, most significant is the new statute’s specific approval of blue penciling, the practice by which Georgia courts are allowed to modify and enforce an otherwise unenforceable covenant.

It is important to note that this new statute only applies to restrictive covenants executed on or after the date the statute was passed – November 2, 2010. The previous, more rigorous legal standards will still apply to agreements entered into before that date. Re-drafting restrictive covenants in line with Georgia’s new statute may be the best option for many Georgia employers. However, Georgia employers should consult with counsel to determine whether they can benefit from this new law. This is especially true when it comes to covenants contained in more complex management and executive agreements that are tied to more generous severance or other compensation plans or those associated with the sale of a business.

Update! For more recently posted information about this topic, please see:  Important Notification Regarding the Effective Date of The New Georgia Restrictive Covenant Statute

© 2010, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

About the Author:

Jon M. Gumbel has concentrated his practice in the field of management labor and employment law since 1987.  He has represented employers with respect to litigation and other employment law disputes involving race, gender, age, religious, and disability discrimination claims under Title VII, the ADEA, the ADA, the FMLA, and comparable state laws.  Jon has also represented employers with respect to their employment litigation matters involving pregnancy discrimination, breach of compensation agreements, breach of non-compete agreements, breach of fiduciary duty, joint employment, wage and hour matters, OSHA citations, and wrongful discharge laws.  Finally, Jon has represented numerous employers with respect to ERISA claims/litigation including those involving health, disability and pension claims.  404-881-1300 /www.ogletreedeakins.com

 

Public Defenders as Effective as Private Attorneys

This week’s featured blogger at the National Law Review is Tom Jacobs of Miller-McCune – who discusses a recent study done comparing the relative effectiveness of public defenders and private attorneys in the Cook County criminal court system. The research team led by Richard Hartley of the University of Texas at San Antonio came up with some interesting and somewhat startling results.  Read on:

Perhaps it’s time for someone to come to the defense of public defenders. A newly published look at Chicago-area courts finds that, when you consider the actual outcomes of judicial hearings, these underpaid and underappreciated attorneys do just as well as their private-sector counterparts.

“This study suggests that there is little difference in the quality of legal defense provided to defendants by private attorneys and public defenders,” a research team led by Richard Hartley of the University of Texas at San Antonio writes in the Journal of Criminal Justice. “The type of attorney representing the defendant was not influential on any of the four decision-making points examined here.”

The researchers examined a random sample of 2,850 offenders convicted of felonies in Cook County Circuit Court, “a large Midwestern jurisdiction which is similar to other large, urban jurisdictions in the country.” They compared cases where the defendant was represented by a private attorney or public defender, focusing on four stages of the judicial process:

  • The decision to grant bail. The researchers looked at whether bail was set rather than whether it was made, since the latter is more a function of ability to pay rather than quality of legal representation.
  • Plea-bargaining decisions. This served as a measure of whether an attorney was successful in getting the initial charge reduced.
  • Whether the defendant, once convicted, served jail time.
  • The length of sentence imposed on those convicts who were incarcerated.

“The overall results of this study generally support the idea that there is no difference between private attorneys and public defenders regarding case outcomes,” the researchers conclude. “The type of attorney representing the defendant was not influential on any of the four decision-making points examined here.”

Two important caveats. The researchers did not look at convictions vs. acquittals. And they found that retaining a private attorney is apparently beneficial “for certain offenders and at certain stages” of the process. Specifically, they noted some interestingly varied outcomes when looking at a defendant’s race.

“White defendants are the only defendants who benefit from having a private attorney at the release decision,” they write. Specifically, they found whites with private attorneys are 2.7 times more likely than whites with public defenders to have bail granted.

For people of color, private attorneys may not help in getting bail, but they do facilitate plea bargains. “Black defendants who retain a private attorney are almost two times more likely to have the primary charge reduced than black defendants who are represented by a public defender,” the researchers write.

Why are public defenders so effective at representing their clients? One theory, according to Hartley, involves the “courtroom workgroup” model of justice, where the public defender, prosecutor and judge work together to dispose of cases.  He notes that when the system functions in this way, “public defenders are in better positions than private attorneys to negotiate favorable plea bargains and to mitigate punishment.”

These findings are not likely to put any law firms out of business. But given the negative media coverage of public defenders offices, they do offer some reassurance that the system is reasonably fair, even for those who can’t afford an attorney.

“This study provides evidence that contradicts the idea that you get what you pay for, at least in Cook County,” Hartley and his colleagues conclude. In Chicago courtrooms, “Public defenders are as effective as private attorneys.”

Miller-McCune © 2010 

About the Author:

Tom Jacobs is a veteran journalist with more than 20 years experience at daily newspapers. He has served as a staff writer for The Los Angeles Daily News and the Santa Barbara News-Press. His work has also appeared in The Los Angeles Times, Chicago Tribune and Ventura County Star.

TheEditor@miller-mccune.com / www.miller-mccune.com / 805-899-8620

What are the Possible Legal Implications of the Passage of California’s Proposition 19?

The National Law Review’s featured blogger Donna Bader discusses the legal implications of legalizing marijuana in California.  

As the November election approaches in California, the proponents and opponents of Proposition 19 are preparing for battle.  Proposition 19, also known as the Regulate, Control and Tax Cannabis Act of 2010, is an initiative to legalize certain marijuana-related activities. It purports to do the following:

  • Allow people 21 years of age or older to possess, cultivate, or transport marijuana for personal use;
  • Permit local governments to regulate and tax commercial production and sale of marijuana; 
  • Prohibit people from possessing marijuana on school grounds, using it in public, and smoking it while minors are present or providing it to anyone under 21; and
  • Maintain current prohibitions against driving a vehicle while impaired.

(See http://www.taxcannabis.org/index.php/pages/initiative/ for the text of Proposition 19.)

The findings in the initiative make fascinating reading because the initiative acknowledges that laws criminalizing cannabis have failed, millions are using it, and the percentage of citizens using it is double that of the percentage of citizens using in the Netherlands, which allows the sale of cannabis.  In essence, criminalization has had no effect on usage.  The findings also note that cannabis has fewer side effects than alcohol or cigarettes, California wastes millions in trying to enforce laws against it, and its illegality has spawned an illegal drug trade that makes over a $15 billion in California a year.  It does not ignore the fact that that money in the form of taxes and permits could then go to the cities, counties, and states.

While the initiative addressing the implementation of a “legal regulatory framework,” certain activities are left to the cities.  For instance, if a city decides not to tax and regulate the sale of cannabis, then buying and selling – not possessing and consuming – would remain illegal.  If the city decides it is willing to tax and regulate the buying and selling of cannabis, then it must implement “a strictly controlled legal system” to oversee and regulate cultivation, distribution and sales, including relating how much cannabis can be bought and sold.  It would also allow the California Legislature to adopt a “statewide regulatory system for a commercial cannabis industry.”  The initiative proposes a number of activities that a local government may regulate.  Finally, it permits amendment either by a subsequent initiative or statute “but only to further the purposes of the Act.”

The supporters of Proposition 19 seem to fall into two general camps:  The first camp includes those who would like to use cannabis and see it be available to others, possibly because they believe it to be harmless, no different than alcohol (with less damage to the body), and that the criminalizing it has not worked.  The second camp is composed of individuals who do not use cannabis and are generally not in favor of its use, but they too recognize the war on drugs and failed, and given the critical financial condition of our State, would welcome a thriving business that would put money into government coffers.

Two major questions arise from passage of Proposition 19.  The first question is what will the federal government do?  Possession of marijuana is still illegal under the federal Controlled Substances Act.  The Obama Administration has seemingly turned a blind eye to prosecuting the little guy, but passage of Proposition 19 will dramatically increase the commercial and business opportunities to produce and sell marijuana.  The bigger the business, the more attention it will receive from the DEA.  Because the proposition covers commercial production and sale, the federal government may intervene and attempt to enjoin enactment of the measure.

The second question is how will passage of Proposition 19 affect other areas  of law.  Here are just a few areas that could be affected:

  • Counties and cities will have to scramble to make decisions on where they stand and how they want to regulate cannabis under the law.
  • The impact on interstate commerce because one can easily imagine what will happen if legal marijuana is purchased here and then brought over the border into a state that forbids it.
  • Dealing with taxing authorities.
  • Attorney ethical concerns in advising a client about activities that are still considered illegal under federal law.
  • Land use issues and restrictions.
  • Anti-discrimination laws.
  • Employment laws, particularly in the areas of drug-testing and wrongful termination.
  •  Landlord-issues, including a revisions of leases and rental agreements to cover marijuana use, both personally and commercially.
  • Criminal convictions and the effect of Proposition 19 on pending criminal cases.
  • Insurance law, particularly homeowners and health insurance.
  • Impact on federal funding in specific areas touched by Proposition 19.

If the criminalization of marijuana has provided full-time for certain lawyers, then certainly the passage of Proposition 19 will present new and different opportunities for other lawyers as everyone tries to resolve the issues raised by its implementation.

© 2010 Donna Bader 

Donna Bader is a Certified Specialist in Appellate Law in Laguna Beach, California. For over thirty years, she has specialized in handling civil writs and appeals, and has written more than 350 appellate briefs. Donna is the former editor in chief of several legal publications, including Plaintiff, The Advocate, The Forum, and The Gavel. She is the author of Rutter’s Civil Litigation Guide, California Summary Judgment and Related Termination Motions. Donna is also a frequent lecturer and contributing writer for various legal organizations. Donna’s blog, AnAppealtoReason.com, is written for California trial attorneys and advises them on how they can protect their appeals at the trial court level.  949-494-7455 / www.AnAppealtoReason.com