Employers may bar coworker relationships, appellate court says.

A company's policy regarding intimate relationships between coworkers invalidated an employee's reasonable expectation of privacy, a California appeals court has ruled. (Barbee v. Household Auto. Fin. Corp., 6 Cal. Rptr. 3d 406 (Ct. App. 2003).) The court unanimously affirmed a lower court's grant of summary judgment for the employer; the judge had found that terminating the employee because of his relationship with a subordinate violated neither his constitutional right to privacy nor the state labor code.

"The extent of a privacy interest under the California constitution is not independent of the circumstances," Justice Cynthia Aaron wrote. "Even when a legally cognizable privacy interest is present, other factors may affect a person's reasonable expectation of privacy."

One of the primary factors in the court's decision was the employer's non-fraternization policy.

"We always hear that the privacy protections in the California constitution are better than they are in the U.S. Constitution and that California is better than most states in protecting those rights," said David Strauss of San Diego, who represented the plaintiff. "Obviously in this area [of the law, California is] no different from anywhere else." The ruling shows that "your right to cohabit with people in your personal life" does not "outweigh an employer's supposed concern over morale in the workplace or perceptions of nepotism," he said.

Plaintiff Robert Barbee was the national sales manager for Household Automotive Finance Corp. (HAFC) when he began dating Melanie Tomita, a member of the sales force.

"At some point in time, [John] Vella, the CEO, came and told Barbee something to the effect of, 'It's a bad idea to date the help,' without saying that it was a violation of policy," Strauss said.

A few months later, Barbee admitted to Vella and HAFC's national director of human resources, Pat Boney, that the relationship was ongoing. Vella and Boney informed him that either he had to end the relationship or he or Tomita had to resign. Barbee later told Vella and Boney that both he and Tomita wanted to stay at HAFC. Soon after, the couple were seen attending a basketball game together, and Barbee was fired.

Barbee claimed that dating within the company was common, no other employees had been disciplined, and the company policy was not well known. He also claimed that he limited his interaction with Tomita to nonwork hours. The court, however, found that the CEO's warning constituted "advance notice" and diminished any expectation of privacy Barbee might have had.

In addition to alleging a privacy violation, Barbee claimed that his termination violated public policy, specifically [section] 96(k) of the California Labor Code, which allows the labor commissioner to "take assignments of ... [c]laims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer's premises."

"Those of us in the plaintiffs' employment bar said, 'Well, the statute says what it says: Employees are ill-equipped to pursue their constitutional rights,'" Strauss said. "It sounded like a public policy to us."

The court, however, did not view [section] 96 (k) as an independent public policy, instead interpreting it as merely establishing "a procedure by which the labor commissioner may assert, on behalf of employees, recognized constitutional rights." That section of the labor code "simply outlines the types of claims over which the labor commissioner shall exercise jurisdiction," the court wrote. Because the provision did not grant employees new substantive rights, the court concluded that Barbee's termination did not violate any civil rights guaranteed by the state constitution.

The most interesting part of the decision, Strauss said, is a footnote in which the court stated that it need not consider an amended section of the labor code that the parties had not raised.

"We note that Labor Code [section] 98.6 was amended in 2001 and provides in relevant part: '(a) No person shall discharge an employee or in any manner discriminate against any employee or applicant for employment because the employee engaged in any conduct delineated in this chapter, including the conduct described in subdivision (k) of [section] 96,'" Aaron wrote in the footnote. "Neither party has relied upon this provision, and we do not consider it in this appeal."

According to Strauss, the amended labor code would have provided a better foundation for Barbee's case because it included a stronger pronouncement of an employee's rights, arguably making [section] 96 (k) public policy. "Unfortunately for our guy, he was fired during the window before the statute was amended."