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MCLE Self Study
By Nate Kowalski and Chris Milligan
      Edited by Barbara Kate Repa

      Employment Law
      Banning Off-Duty Smoking
      In an effort to curb escalating health care costs, some employers have turned to controversial measures in recent years, including workplace policies that ban smoking off duty. These employers assert that employees' smoking outside work hours contributes to a number of job-related problems: decreased productivity, higher rates of absenteeism, more disability claims, and attendant increases in health insurance and workers compensation costs. Many simply defend the policies as beneficial in impressing the virtues of employee fitness and conveying a healthy corporate image.
      However, employers who implement so-called antismoker policies face a number of potential legal challenges, including claims of invading privacy and discrimination based on disability, race, gender, and national origin. So far, the handful of federal courts that have heard these claims have concluded that they are without merit. And there is good reason to believe that analogous California claims asserting discrimination and invasion of privacy would also fail, as would challenges based on California's "lifestyle discrimination" statutes. (Cal. Lab. Code §§ 96(k) and 98.6.)
      Yet many employers are still hesitant to put such policies in place, expressing concerns about testing, monitoring, and compliance. And from a practical perspective, employers in certain industries and geographical regions realize that antismoker policies will eliminate a significant percentage of the job-applicant pool.
      On a more theoretical level, many employers also question whether it is helpful or legitimate to impose lifestyle restrictions on a workforce. Some fear that employees will perceive employers who implement such policies as overbearing or intrusive. Others are wary that such restrictive policies may be the first step onto a slippery slope leading to similar prohibitions against obesity, alcohol consumption, and high cholesterol.
     
      Disability Discrimination Claims
      The Americans With Disabilities Act, or ADA (42 U.S.C. §§ 12102 and following), and the California Fair Employment and Housing Act, or FEHA (Cal. Lab. Code §§ 12900—96), forbid employers from discriminating against qualified disabled individuals in various aspects of employment, from hiring through firing. Neither smoking nor nicotine addiction are enumerated as disabilities in the ADA or FEHA. Furthermore, the statutes and their legislative histories are silent on whether nicotine addiction is a drug addiction covered by either law.
      Even if smoking were deemed to be an addiction, not all smokers are addicts, and the ADA and FEHA protect only addictions that constitute disabilities. For smokers to successfully claim they are disabled, they would have to prove that their nicotine addiction "limits" under the FEHA or "substantially limits" under the ADA a major life activity.
      Several federal courts have specifically found that smoking is not a disability within the meaning of the ADA. For instance, in Brashear v. Simms, a federal court in Maryland held that smoking, whether denominated as nicotine addiction or not, is not a disability under the ADA. Specifically, the court noted: "Congress could not possibly have intended the absurd result of including smoking within the definition of 'disability,' which would render somewhere between 25% and 30% of the American public disabled under federal law because they smoke. In any event, both smoking and 'nicotine addiction' are readily remediable, either by quitting smoking outright through an act of willpower (albeit easier for some than others), or by the use of such items as nicotine patches or nicotine chewing gum. If the smokers' nicotine addiction is thus remediable, neither such addiction nor smoking itself qualifies as a disability within the coverage of the ADA, under well-settled Supreme Court precedent." (138 F. Supp. 2d 693, 695 (D. Md. 2001); see also, United States v. Happy Time Day Care Ctr., 6 F. Supp. 2d 1073, 1082 (W.D. Wis. 1998) (smokers are not considered disabled absent medical or physical problems that accompany or are caused by smoking, such as heart disease, asthma, or lung cancer.)
     
      Disparate-Treatment Claims
      Although smokers do not constitute a protected category under either Title VII of the 1964 Civil Rights Act (42 U.S.C. §§ 2000e and following) or the FEHA, these statutes prohibit discrimination by employers based on race, color, gender, religion, sex, or national origin. Employers who implement an antismoker rule therefore could be confronted with claims that the rule has a disparate impact on a protected category because of the higher percentage of smokers in that category.
      Although there are often substantial disparities between the smoking habits of various races and ethnic groups, they are probably not sufficient to establish a prima facie case of disparate impact. The state and federal agencies charged with enforcing Title VII and the FEHA have adopted the "80 percent rule," which finds a disparate impact if members of a protected class are selected at a rate less than 80 percent of that of another group. For example, if 50 percent of white applicants receive a passing score on a test, but only 30 percent of African Americans pass, the relevant ratio would be 30/50, or 60 percent, which would violate the 80 percent rule. (29 C.F.R. §§ 1607.4 (D) and 1607.16 (R).) However, because the 80 percent rule is a guideline and not a regulation, the courts consider it to be only instructive, not binding.
      Nevertheless, statistics compiled by the American Lung Association reveal that the comparative smoking habits of Caucasians, African Americans, Asians, and Hispanics do not constitute evidence of disparate impact under the 80 percent rule. Though a challenge to an antismoker policy could be predicated on evidence that does not meet the 80 percent threshold, there is no established statistical analysis of comparative smoking habits that would otherwise establish a prima facie case of disparate impact. And though there are no published decisions involving disparate-impact claims brought by smokers, at least one court has addressed the issue by analogy. The decision in Garcia v. Gloor (618 F. 2d 264 (5th Cir. 1980)) held that an English-only policy was not discriminatory and noted that "there is no disparate impact if the rule is one that the affected employee can readily observe and nonobservance is a matter of individual preference."
      The Garcia court further noted that "save for religion, the discriminations on which [federal law] focuses its laser of prohibition are those that are either beyond the victim's power to alter or that impose a burden on an employee on one of the prohibited bases." The court analogized the English-only policy to a rule forbidding smoking on the job, reasoning that federal law "would not condemn that rule merely because it is shown that most of the employees of one race smoke, most of the employees of another do not and it is more likely that a member of the race more addicted to tobacco would be disciplined." (618 F. 2d 270.)
     
      Lifestyle-Discrimination Claims
      In the past decade, a number of courts have considered whether an employer may lawfully discipline an employee for lawful off-duty conduct. For instance, in City of San Diego v. Roe (543 U.S. 77 (2004)), an off-duty police officer sold a videotape over the Internet showing himself stripping and masturbating. The court affirmed the San Diego Police Department's right to restrict moonlighting that was "detrimental to the mission and functions of the employer."
      Many states have adopted laws that prevent employers from regulating off-duty conduct. In fact, most states either explicitly protect off-duty smoking or protect the off-duty use of tobacco and other lawful products. California's pertinent statute purports to be broader than those others, but ultimately it does not provide the same protection. California Labor Code sections 96(k) and 98.6 state that an employer cannot discharge employees or reject applicants because they engage in lawful conduct occurring during nonworking hours away from the employer's premises. But section 98.6 also specifically creates an exception for firefighters, allowing their employers to limit "consumption of tobacco products on and off the job."
      In October 2000, California's attorney general issued an opinion letter regarding whether California Labor Code section 96(k) abrogated existing law that permitted disciplining police officers for lawful off-duty conduct when the conduct conflicted with their duties. The attorney general opined that the statute instead provides employees with a "supplemental procedure" to assert rights that are already protected elsewhere in the law.
      In Barbee v. Household Automotive Finance Corporation (113 Cal. App. 4th 525 (2003)), the court held that there was no violation of Labor Code section 96(k) when an employer fired a supervisor for dating a subordinate. The court held that section 96(k) "does not set forth an independent public policy that provides employees with any substantive rights, but rather, merely establishes a procedure by which the Labor Commissioner may assert, on behalf of employees, recognized constitutional rights." (113 Cal. App. 4th at 533.) The court also found that the employee could not establish that he had a reasonable expectation of privacy in pursuing the relationship with his subordinate.
      In Grinzi v. San Diego Hospice Corporation (120 Cal. App. 4th 72 (2004)), an employee claimed she was discharged because of her membership in a pyramid investment scheme and that her termination violated Labor Code sections 96(k) and 98.6. The appellate court upheld the trial court's dismissal of the lawsuit and reaffirmed Barbee's holding that the statutory provisions do not provide an independent basis for a public-policy claim. Thus, smokers cannot rely on those statutes to back claims for wrongful termination in violation of public policy.
     
      Constitutional Privacy Protections
      Employers who adopt antismoker rules may also face challenges based on privacy rights afforded by the California and U.S. constitutions. However, federal courts have previously held that the privacy interest protected by the U.S. Constitution includes only marriage, contraception, family relationships, and rearing and educating children. Under federal law, very few private acts by individuals qualify as fundamental privacy interests-and smoking is not one of them.
      For example, in Grusendorf v. City of Oklahoma City, a firefighter trainee challenged a fire department requirement that trainees must refrain from smoking cigarettes at all times, by arguing that "although there is no specific constitutional right to smoke, [there is an] implicit ... right of liberty or privacy in the conduct of ... private life, a right to be let alone, which includes the right to smoke." The court held that smoking was not a fundamental privacy right and found that the fire department's requirement met the constitutional standard for regulating nonfundamental rights because there was a rational reason for the regulation: the need for a healthy firefighting force. (816 F. 2d 539, 541 (10th Cir. 1987); see also, Town of Plymouth v. Civil Serv. Comm'n, 426 Mass. 1 (1997) (citing Grusendorf and upholding a police officer's termination for smoking while off duty).)
      Although there are no California cases on point, it is likely that a state court would find that the state constitution's right to privacy does not encompass smoking. In so doing, a California court could rely on similar cases from other states, such as City of North Miami v. Kurtz (653 So. 2d 1025, 1028 (Fla. 1995)).
      In Kurtz, the city of North Miami required applicants for city jobs to affirm that they had not used tobacco in the preceding year. The court found that, even though Florida's constitution specifically enumerated a right to privacy and was therefore more expansive than the U.S. Constitution, smoking was not among the activities protected by the state constitution's privacy provision. California's constitution also enumerates such a right to privacy, though it is even less strongly worded than Florida's.
     
      Wellness Programs
      One alternative to imposing antismoker rules is instituting an employee-wellness program. Wellness programs typically are voluntary, but they offer employees a variety of incentives designed to reward healthy lifestyle choices. Proponents point to studies showing direct correlations between wellness programs and reductions in employer health care costs. The programs are also believed to augment an employer's bottom line in other ways—by reducing absenteeism, lowering disability claims, and boosting employee morale.
      However, employers implementing wellness programs must be aware that the Health Insurance Portability and Accountability Act, or HIPAA (Pub. Law 104—199), protects employee participants in group health insurance plans from discrimination based on health status. HIPAA's nondiscrimination provisions have been interpreted to mean that employees cannot be denied health care benefits or charged higher premiums, contributions, copayments, or deductibles based on a health factor.
      Many wellness programs contain financial incentives or rewards. For example, some employers reward employees for performing certain activities, such as attending a smoking-cessation class. Others reward employees who attain or maintain a specific health standard, such as being tobacco-free for a year.
      Though such rewards arguably discriminate against employees who do not participate, or whose health prevents them from meeting the program's requirements, HIPAA provides a safe harbor for employers who satisfy four requirements: The incentive cannot be more than 10 percent to 20 percent of the total cost of the coverage; the program must be designed to promote healthy living; the program must be available to all similarly situated participants; and a reasonable alternative must be available for individuals for whom it is unreasonably difficult or medically inadvisable to meet the standard.
      In addition, the Employee Retirement Income Security Act of 1974, or ERISA (29 U.S.C. §§ 301 and following), prevents an employer from terminating an employee from an ERISA plan because he or she incurs higher health care costs than do other employees. However, the pertinent language of ERISA suggests—and recent federal decisions have confirmed—that this prohibition does not apply to job applicants. Therefore, an employer can refuse to hire an applicant based on the anticipation of higher health care costs.
     
      Nate Kowalski (nkowalski@aalrr.com), a partner in the Cerritos office of Atkinson, Andelson, Loya, Ruud & Romo, represents both private- and public-sector clients in labor and employment matters. Chris Milligan (cmilligan@aalrr. com), an associate in that office, also concentrates on labor and employment matters, including wage-and-hour class actions.
     
      Certification
      The Daily Journal Corp., publisher of California Lawyer, has been approved by the State Bar of California as a continuing legal education provider. This self-study activity qualifies for Minimum Continuing Legal Education credit in the amount of one hour of general credit.
     
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