Unharmed Plaintiffs Cannot Sue for Improper Marijuana Conviction Inquiries
By Connor Moyle
A recent appellate decision, Starbucks Corp. v. Superior Court (Lords), determined that three plaintiffs could not bring suit on behalf of an estimated class of 135,000 unsuccessful applicants at Starbucks locations based on an allegedly illegal question in the Starbucks application that arguably sought information regarding marijuana-related convictions more than two years old in violation of California law.
The plaintiffs in Starbucks had applied unsuccessfully for positions at Starbucks locations and had filled out the standard application form used by Starbucks throughout the country. Starbucks’ standard application form contained the following question: “Have you been convicted of a crime in the last seven (7) years? . . . If Yes, list convictions that are a matter of public record (arrests are not convictions). A conviction will not necessarily disqualify you for employment.” The plaintiffs claimed that this question violated California Labor Code section 432.8, which prohibits employers from soliciting disclosure from applicants of most marijuana convictions that are more than two years old. Plaintiffs sought recovery of actual damages or $200, whichever is greater, for all unsuccessful California applicants pursuant to Labor Code sections 432.7 and 432.8.
Starbucks argued that its application did not violate the California Labor Code because it included a disclaimer that clarified the application of the challenged question to California applicants. The disclaimer, printed in bold type at the end of the application, read: “CALIFORNIA APPLICANTS ONLY: Applicant may omit any convictions for the possession of marijuana (except for convictions for the possessions of marijuana on school grounds or possession of concentrated cannabis) that are more than two (2) years old, and any information concerning a referral to, and participation in, any pretrial or post trial diversion program.”
The trial court certified a class of all California applicants who had submitted an application to Starbucks since June of 2004 and who sought no more than $200. The trial court further found that the mere offering of the application violated the Labor Code and that damages could be calculated simply by multiplying the probable number of applicants during the class period times $200. Based on the estimated class size, the court’s reasoning implied potential damages of $27,000,000 even before inclusion of any interest or attorneys’ fees. The trial court also denied Starbucks’ motion for summary judgment, finding that (1) there was a material issue of fact as to whether the disclaimer was sufficient to avoid a violation of the Labor Code and (2) plaintiffs had standing to assert the statutory violation based on the fact that they were given the job application containing the improper question. The trial court determined that none of the plaintiffs had to prove any damage in order to recover the statutory penalty of $200 per applicant.
On appeal, the Fourth District first addressed the legal sufficiency of the Starbucks job application form. The court found that, although it was printed in bold type, the language of the disclaimer was not sufficiently “conspicuous, plain and clear” to make it sufficient as a matter of law. The court pointed out that the disclaimer was placed at the end of the application, rather than near the question about marijuana convictions. Furthermore, the disclaimer was part of a larger boldface paragraph that included similar disclaimers applicable to Maryland and Massachusetts applicants, as well as one directed at U.S. applicants generally. The court explained that the disclaimer would have made the application proper if it had been included immediately after the question about marijuana convictions. However, with the disclaimer at the end, the court held that there was a question of fact as to whether it was sufficient and Starbucks was not entitled to summary judgment on the legal sufficiency of its application form.
The court next addressed whether plaintiffs could properly bring their claim on behalf of all unsuccessful California applicants within the statutory period. The court first noted that two of the three named plaintiffs had testified that they understood the disclaimer in the application form and knew that they were not required to answer the improper question. The court reasoned that ignoring the plaintiffs’ actual understanding of the application would open the door to suits by “professional job seekers, whose quest is to voluntarily find (and fill out) job applications which they know to be defective solely for the purpose of pursuing litigation.” Instead, the court determined, the fact that the individual plaintiffs were in no way harmed by the allegedly improper application mandated that they could not proceed with their claim.
Viewing the matter more broadly, the court also determined that the plaintiffs’ claim was precluded because the plaintiffs were not similarly situated to persons that Labor Code section 432.8 was intended to protect. The court emphasized that, “[w]here civil liability is predicated upon a legislative provision . . ., plaintiffs must establish that they fall within the class of persons for whose protection the legislative provision was enacted.” The court reasoned, based on the language of section 432.7(c), that only an individual with a marijuana-related conviction falls within the class of people the legislature sought to protect. Thus, the plaintiffs, who had not been convicted of any marijuana offenses, did not fall within the protected class and were not proper representatives of a potential class suing for violations of Labor Code section 432.8. The court emphasized disapproval of the “use of the very process of litigation to precipitate payoffs by private businesses for alleged violations of law having no real relationship to a true public interest.” Thus, the trial court should have granted summary judgment for Starbucks.
If applied consistently in other cases, the reasoning of Starbucks could limit the ability of plaintiffs to bring lawsuits for technical violations of the Labor Code where they have not suffered demonstrable harm due to the alleged violation. The decision’s reasoning affirms that the scope of such potential suits should be limited to the class of persons who have actually suffered the harm that the relevant statute is intended to prevent. However, employers should note that the court upheld the denial of summary judgment on the threshold issue of the legal sufficiency of the disclaimer in the Starbucks application. Because the disclaimer language was not placed in close proximity to the question relating to marijuana convictions, and because it was only part of a larger paragraph setting forth similar disclaimers applicable to applicants in other states, the court found that a triable issue existed as to whether the application form clearly directed applicants not to disclose protected marijuana convictions. Thus, had plaintiffs been able to demonstrate that they fell within the class of persons protected by Labor Code section 432.8 because they did have such convictions, they might have been able to proceed with a claim that the application form was ambiguous and could be read to require disclosure of protected convictions. Employers should ensure that their application forms do not inquire about marijuana-related convictions more than two years old. If the form must include such a question, it should make absolutely clear that California applicants need not provide such information, and the disclaimer should be conspicuous and located immediately following the relevant question.