In 2002, Metropolitan Government of Nashville and Davidson County, Tennessee (Metro), began looking into rumors of sexual harassment by one of its employees, Gene Hughes. A member of Metro’s human resources department asked plaintiff Vicky Crawford (a 30-year Metro employee) whether she had witnessed any of Hughes’ “inappropriate behavior.” Crawford, who was not the subject of the investigation and who had not previously complained of sexual harassment by Hughes, responded that Hughes had actually engaged in inappropriate behavior with her, which she described in detail. A few months after the investigation was completed, Crawford was terminated allegedly for embezzlement.

Crawford filed suit against Metro, alleging that Metro retaliated against her in violation of Title VII for her participation in the sexual harassment investigation. To state a prima facie claim for retaliation under Title VII, an employee must show that she either “opposed” a discriminatory employment practice or “participated” in a statutorily covered activity under Title VII. Metro moved for summary judgment arguing that Crawford could not sustain a claim for retaliation because she neither “opposed” a discriminatory employment practice (since she had never complained about Hughes’ conduct) nor had she “participated” in a statutorily covered activity under Title VII. Crawford argued that although she never reported Hughes’ conduct, her response to Metro’s human resources employee during the investigation constituted “protected activity” under Title VII’s prohibition against retaliation because she “opposed” the harassment by describing it in response to her employer’s questions.

The United States District Court for the Middle District of Tennessee entered summary judgment in favor of Metro and the Six Circuit Court of Appeal affirmed. The Supreme Court granted certiorari.

In finding for Crawford, the Supreme Court found that the primary objective of the anti-retaliation provision under Title VII is avoiding harm to employees. The Court held that for the purposes of Title VII’s anti-retaliation provision, an employee can “oppose” discrimination in the workplace by responding to an employer’s question about the discrimination at issue. The Court made clear that in order to “oppose” a discriminatory act, an employee need not engage in “active” or “consistent” resistance to it. In fact, Justice Souter who wrote for the majority, said that the required opposition would encompass “someone who has taken no action at all to advance a position beyond disclosing it.”

Justice Alito wrote a separate concurring opinion emphasizing his understanding that “the Court’s holding does not and should not extend beyond employees who testify in internal investigations or engage in analogous purposive behavior.” Justice Alito stressed that the Court’s holding should not extend Title VII protection to an employee’s “silent opposition” to harassment or to mere conversations with a co-worker “at the proverbial water cooler” that may be subsequently relayed to the employer.
WHAT IS EXPECTED FROM THE RULING?

It is anticipated that the Supreme Court’s holding in Crawford will now open the door for retaliation claims by investigation participants claiming they were “retaliated” against during or after an investigation. The lesson for employers is to treat all information it receives from employees (whether through a report/complaint, or in response to questions during an investigation) seriously and act upon it appropriately. Employees who participate in a workplace investigation should not suffer any adverse employment action because of such participation.

The recent economic lull has lead to increased layoffs across different industries. Employers may be required to give advance notice to affected employees and certain government entities. There are Federal and State laws which discuss the issue of notice owed to employees before large layoffs. The Federal law is known as the Worker Adjustment and Retraining Notification or ‘WARN’ Act. California’s version of the WARN act (AB 2957, the ‘baby’ WARN Act) contains additional provisions employers should be aware of. The baby WARN Act applies to “mass layoffs”, “terminations” and “relocations” at “covered” establishments. There are no regulations interpreting the California version which makes it difficult to understand.

Continue Reading California ‘Baby’ WARN Act may Surface During Recession

Quan v. Arch Wireless involved the use of employer-provided pagers in the Ontario Police Department in California. The official city policy stated that the department had the right to review messages officers sent using the pagers. The policy clearly stated that there was no privacy for any electronic messages at work, including email and text messages. Supervisors, however, told employees that if they paid overage charges themselves, the messages would not be audited. Quan, who is a member of the SWAT team, sent many sexually explicit text messages to his wife during work hours. He also neglected to pay the overage charges. The police department eventually read the text messages in connection with an audit for text message overage charges. The text messages ultimately lead to disciplinary action against Quan. Quan and other employees sued the department for violation of their constitutional right to privacy. At trial, the department relied upon its formal computer use policies and procedures, which Quan had signed a written acceptance, to justify its actions. Quan argued that his supervisor had implemented a different informal policy causing him to have a reasonable expectation that his text messages would not be reviewed. The Ninth Circuit held that this “operational reality” trumped the “formal written policies.” Thus, employer’s review of the employee’s text messages violated the employee’s privacy rights, and that of his wife.

Kevin Gagnon, doing business as “Mister Computer,” alleged that his former customer, Asset Marketing Systems (AMS), infringed his copyright in six computer programs that he wrote for AMS by continuing to use and modify them without his consent and that AMS misappropriated trade secrets contained in the programs’ source code. After AMS terminated its contract with Gagnon, it hired seven of Gagnon’s twelve employees to provide directly to AMS the same services they previously provided to AMS through Gagnon. The Ninth Circuit affirmed summary judgment in AMS’s favor, holding that the non-compete covenants contained in the employment contracts of Gagnon’s former employees were unenforceable under Cal. Bus. & Prof. Code §16600.

In Edwards v. Arthur Andersen, LLP, Case No. BC294853 (August 7, 2008) the California Supreme Court holds that non-solicitation of customer agreements are per se unenforceable unless they fall within the statutory or other exception permitted under the law. California law has long protected the rights of employees to lawfully pursue any trade or profession. For more than 100 years California law has invalidated any agreement between an employer and an employee which purports to limit or restrict an employee’s ability to work in their trade or profession following the employment. Many other states permit such “non-compete” agreements between employers and employees as long as the restraints on competition are reasonable. In the Arthur Andersen case, the California high court rejected arguments that more narrow agreements – those that limit a former employee’s ability to solicit the former employer’s customers for some specified period of time – did not run afoul of Business and Professions Code §16600 and thus, were valid.

California’s Business and Professions Code §16600 provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void, except as provided in this Chapter [§§16600-16602.5].”
 

Continue Reading California Supreme Court Rejects Contracts Restricting Former Employee’s Ability To Solicit Customers: Edwards v. Arthur Andersen, LLP