California.s Supreme Court recently addressed the constitutionality of drug testing in the workplace. Loder v. City of Glendale (1/6/97) 14 Cal.4th 846. At issue was the City of Glendale.s drug testing program which required all individuals conditionally offered new positions with the City (either as a new hire or a current employee up for promotion) to undergo drug testing. The Court upheld the testing of the applicants but declared the current employee testing unconstitutional.
The Court found that employers have a legitimate basis for testing job applicants prior to making final hiring decisions in order to avoid "significant problems such as absenteeism, increased safety concerns, reduced productivity and increased risk of turnover, posed by an employee who abuses drugs or alcohol." By contrast, an employer does not have a legitimate basis for testing current employees seeking promotions without regard to the nature of the position sought.
Several aspects of the case are worth noting. First, the Court.s approval of applicant drug testing was in the context of a pre-employment physical exam, which included urine testing for general medical purposes. The Court did not comment on whether drug testing would be constitutional outside the context of a pre-employment physical. Second, while the Court struck down testing of current employees without reasonable suspicion of drug use, it did suggest that such testing may be justified if the job is a safety-sensitive position.
Job References
Recent Decisions Confirm Prudence Of Minimal Job References
Breaking new ground, the state high court held recently that employers may be liable for misrepresenting a former employee.s character and qualifications if such statements present a substantial foreseeable risk of physical injury to others. Randi W. v. Muroc Joint Unified School District, (1/27/97) 14 Cal.4th 1066. The case was brought by a 13-year-old girl, a student in the Livingston Union School District, who alleged that Robert Gadams had sexually molested her. The girl claimed that Gadams. previous employers. favorable job recommendations led to Gadams. hiring and to her molestation after he became Vice Principal at her school.
The California Supreme Court agreed with the girl, holding that authors of employment reference letters owe to prospective employers "a duty not to misrepresent the facts in describing the qualifications and character of a former employee, if making these misrepresentations would present a substantial, foreseeable risk of physical injury to the prospective employer or third persons." In this case, the reference letters were false and misleading because the former employers knew of Gadams. previous sexual improprieties, but the recommendations "implied [that] Gadams was fit to interact appropriately and safely with female students." The Court specifically found that an employer.s "misleading half-truths" regarding a former employee in these circumstances could result in liability.
At first glance, the opinion applies only to references where there is a "foreseeable risk of physical injury." However, the holding could have wide implications. For example, it would clearly apply where an employee had been terminated for sexual harassment of a physical nature. Because of the "foreseeable risk of physical injury," an employer in such a situation would be wise to provide only minimal information (i.e., title and dates of employment) when giving a job reference.
The appropriateness of such a conservative approach was further reinforced by the United States Supreme Court.s recent decision in Robinson v. Shell Oil Co. (2/18/97) 97 Daily Journal D.A.R. 1609. In Robinson, a former employee filed suit under Title VII, alleging that his former employer gave a negative reference about him to a prospective employer in retaliation for his having filed an EEOC charge against the former employer. The Court did not address the content of the reference, but it held that former employees may sue their employers for alleged retaliatory actions occurring after employment ends. Given the potential for this additional liability, an employer is well advised to limit its job references to the bare minimum confirming the dates of employment, the position held, the area of responsibility, and, if authorized by the employee, the salary level.
Arbitration
"Egregiously One-Sided" Arbitration Agreement Struck Down
California.s Court of Appeal recently refused to enforce a compulsory arbitration clause in an employment agreement on the grounds that it was against public policy and unconscionable. In Stirlen v. Supercuts (1/9/97) 51 Cal.App.4th 1519, Stirlen was employed by Supercuts as its Vice President and Chief Financial Officer from January 1993 until March 1994, when he was terminated. He filed suit, alleging wrongful termination. When Supercuts moved for arbitration, Stirlen objected, arguing that his employment agreement (which contained a mandatory arbitration clause) was unfair. He pointed to arbitration provisions limiting his remedies to actual damages and not punitive damages; precluding him from seeking relief under state and federal laws against discrimination; and allowing only the company to seek specific performance or injunctive relief, but not allowing him to do so.
The court found that, even though Stirlen was a sophisticated and educated executive employee, the agreement unilaterally deprived him of many of his legally-entitled remedies and did not similarly restrict Supercuts. The fact that the agreement.s terms were presented to Stirlen on a non-negotiable "take-it-or-leave-it" basis, also convinced the court that the agreement was unfair. To safeguard the enforceability of arbitration agreements, employers should provide rights and remedies equally to both the employer and the employee, and the employer should not foreclose the possibility of individually negotiating the terms of the arbitration provision with employees.