California Law Limiting Private Employers' Restriction on Employee Speech

applied by a federal court in a case involving Juul Labs.

I've written about this statute before, most recently with regard to the employee allegedly fired for being at the (she says) non-riot protest that led to the Capitol riot. (See also this 2012 article of mine discussing such statutes throughout the country.) But Wednesday, Judge Edward M. Chen issued an interesting decision about the law arising in a different context. From Hamilton v. Juul Labs, Inc. (N.D. Cal.):

Plaintiff Marcie Hamilton worked at Juul … as its Director of Program Management. Plaintiff Jim Isaacson served as JUUL's Senior Director of Design Assurance …. This [Private Attorneys General Act] suit is brought on behalf of more than 3,000 aggrieved employees….

[Plaintiffs'] Claim 7 is brought under Labor Code § 1101, which forbids employers from adopting any rule, regulation, or policy which: (a) "[f]orbid[s] or prevent[s] employees from engaging or participating in politics or from becoming candidates for public office" or (b) "[c]ontrol[s] or direct[s], or tend[s] to control or direct the political activities or affiliations of employees." It is also brought under Labor Code § 1102, which provides that no employer shall "influence or attempt to coerce or influence his employees through or by means of threat of discharge or loss of employment to adopt or follow or refrain from adopting or following any particular course or line of political action or political activity."

Labor Code §§ 1101 and 1102 are "designed to protect the fundamental right of employees in general to engage in political activity without interference by employers." The purpose of these sections is to prevent employers from "misus[ing] their economic power" to interfere with their employees' political activities, namely their "espousal of a candidate or a cause." …

The provisions of the [Juul External Communications Policy] … exhibit the strict control over Juul employees' political opinions which the Labor Code forbids. Section 6.4.6.3 provides "[a]ll JUUL Labs Personnel must be aware that any communication about the Company or its products, staff, policies, research, relationships, or competitors generally constitutes a Company Communication and is covered by this Policy." Section 6.2.1 provides "[a]ll Company Communications must receive internal approval," and Section 6.2.2 provides "[c]onfidential information, any information marked or intended only for internal communication or use within the Company, and any other information obtained during the course of employment must not be disclosed or used in any Company Communication or personal communication without prior approval."

Together, these provisions operate to place prior restraints on Juul employees' communications about any matter related to the company, including their espousal of causes relating to vaping products. The ECP thereby interferes with the opinions of Juul employees' in a manner that violates the Labor Code ….

Juul's day-to-day policies and practices are just as restrictive. Plaintiffs allege that "JUUL's Non-Contractual Policies and Practices … establish that JUUL made, adopted, and enforced a policy that prevented employees from engaging in political activity in violation of Labor Code § 1101 and 1102. This illegal policy is evidenced by JUUL's written instruments, employee training, and JUUL's culture of concealment." For instance, Juul instructs employees "that they cannot—among other things—correct political candidates spreading alleged 'misinformation' about JUUL, 'engage with youth on the topics of tobacco and nicotine,' 'engage in social media,' discuss vaping, cigarettes, drinking, or any age-restricted products in the 'earshot of youth,' share or laugh at JUUL Labs-related memes, or help a young family member quit smoking."

Accepting these allegations as true and drawing all reasonable inferences in Plaintiffs' favor, the Court finds that these allegations state a plausible claim for unlawful suppression of protected political activities …. Even without the ECP, these policies and practices operate as a prior restraint on Juul employees' espousal of a candidate or a cause. These policies and practices prevent Juul employees from promoting (or even engaging with) a political candidate, and they prevent employees from engaging with vaping-related causes on the internet…..