“Off-the-clock” conduct is increasingly resulting in costs to employers. Additionally, off-duty conduct that has long added to cost for employers (such as smoking or other unhealthy conduct) is now being identified and measured. In an attempt to control costs, employers are responding by implementing policies to limit their costs related to off-duty conduct. In doing so, however, employer interests are colliding with interests and values of their employees. At what point do employer attempts to limit their own liability reach too far into the personal lives of their employees.
Many types of off-duty conduct can result in increased costs to an employer. It is hardly “news” to human resource professionals that many sexual harassment claims are based on conduct that occurred away from the employer’s premises and/or after hours. However, sexual conduct (or conversation) between employees is not the only type of conduct that can result in significant employer cost.
Let’s move just one step away from the conduct described above. What about sexual conduct of an employee away from work that does not involve a co-worker? When known by an employer, any inappropriate sexual conduct, especially predatory conduct, puts the employer on notice that its employee has a propensity to engage in such conduct. The employer may then be expected to take whatever action is necessary to ensure that potential victims not be exposed to this individual, and failure on the part of the employer to do so could lead to liability for negligent hiring. For example, if a child care center learned that one of its employees was convicted of child molestation that occurred in the employee’s home, the employer would (of course) terminate that employee to protect the children in their care.
Even when an employee’s conduct does not pose a similar risk of abuse directly related to work, many employers recognize harm to the reputation of the employer as a cost justifying adverse employment action. For example, this year Marion County, Indiana, terminated the employment of a 53 year-old, married Deputy Prosecutor and Assistant Chief of the Sex Crimes Division.¹ What was his infraction? While acting in a local theater group on his own time, the employee found himself smitten by a 16-year-old girl who also acted in the play. He sent her an email expressing his love for her, met with the girl, turned the lights down, lit a candle, and shared non-alcoholic Bananas Foster with her while playing music from “The Phantom of the Opera.” (There is no report of any inappropriate physical contact between the two, no allegation of illegal conduct, and the employee denied any sexual or otherwise illegal conduct.) Marion County apparently decided that the harm to the reputation of the Prosecutor’s office was sufficient “cost” to justify termination.
Non-sexual off-duty conduct can also cost employers. Consider the situation when a supervisory employee posts a racially insulting and derogatory statement on his personal weblog on the internet. Although the posting itself would not result in liability for his employer if it was not related to his job, it could have ramifications in the workplace if coworkers know of the comment. Further, in a civil suit against the employer alleging job-related discrimination or harassment, a sharp plaintiff’s attorney could argue that the derogatory statement is evidence that the supervisory employee and his employer held a known bias. Other off-duty conduct that can increase costs for employers include smoking2 and other unhealthy lifestyle choices that lead to increased medical benefit costs for employers.
These off-duty behaviors and their resulting costs have not gone unnoticed by employers. In attempts to lower costs and avoid potential liability, many employers are implementing policies that address off-duty conduct by employees.
Many employers have policies that regulate romantic relationships between employees.3 At least one employer, Guardsmark, LLC, a company that provides uniformed security personnel to commercial entities, goes further and prohibits all fraternization among its employees. (There goes the company bowling team!) Several employers have policies that prohibit tobacco use by their employees, on or off duty, and conduct random tests to detect whether the policy is being violated. Other employers require that smokers pay an increased premium to participate in their medical insurance benefit programs. In other situations, employers have simply terminated the employment of the individual whose off-duty conduct did not meet their approval.
Can Employers Do That?
Many people seem surprised to learn that in some situations an employer can, indeed, regulate or take adverse employment action because of off-duty conduct. The basic premise of non-contractual employment in the United States is that employment is “at-will.” “At-will” employment means that either the employee or the employer can terminated the employment relationship for any legal reason. Stated another way, an employer can terminate an employee for any reason that is not specifically prohibited by law. So the answer is: Yes, an employer can regulate off-duty conduct (by refusing to hire or by terminating individuals who engage in that conduct) unless there is an applicable law that prohibits the employer from doing so.
What Laws Protect Off-Duty Conduct of Employees?
There are very few federal laws that protect off-duty conduct or lifestyle choices from action by an employer. The Americans with Disabilities Act prohibits discrimination on the basis of an individual’s association with a person with a disability.4 Additionally, some courts have held that it is a violation of Title VII of the Civil Rights Act of 1964 for an employer to discriminate against an individual because they are involved in a mixed-race marriage or relationship. However, federal law does not prohibit employers from discriminating on the basis of other off-duty conduct such as smoking or fraternizing with co-workers.
Most states do not have statutes that prohibit discrimination on the basis of off-duty conduct.5 There are some states that do.6 For example, California, Colorado, and North Dakota have enacted very broad statutes that protect employees’ right to engage in any lawful activity. (Thus the Marion County Deputy Prosecutor could not have been terminated had he lived in one of these states, as long as his conduct with the 16 year old did not break any laws.) Some other states have narrower “lifestyle discrimination” laws, such as statutes prohibiting discrimination against individuals for using any legal product, or statutes prohibiting discrimination against individuals specifically for using tobacco. Issues regarding the scope and coverage of these statutes, such as whether an employer’s anti-nepotism policy violates the broad “lawful activity” protection statutes, will be clarified as specific cases are considered and decided by that state’s courts.
What Other Issues Exist?
Many Americans view employer regulation of their off-duty conduct as contrary to the freedoms that Americans enjoy and have come to expect. Employers should recognize that the perception that their employer has become “Big Brother” will adversely affect morale. As the Baby Boomers reach retirement age and employers are forced to compete for qualified employees, these issues may become “deal breakers” for some employees.
When employers consider policies that regulate off-duty conduct or consider taking an adverse employment action because of something an employee has done off-duty, they should carefully consider the answers to the following questions:
- Is the conduct that we are addressing lawful or illegal conduct?
- Is there an applicable state law that protects the employees’ off-duty conduct? (A question best asked of an attorney.)
- What is the risk or cost that we are seeking to avoid or lower?
- Are we willing to apply this policy consistently, or are there possible fact situations in which we would not be able or want to do so? Do we want to be in a position of being required to enforce the policy if a violation is brought to our attention?
- What affect will this have on employee morale? Is it worth it?
Only after careful evaluation of all of the pros, cons, and possible ramifications should an employer foray into the area of regulation of lawful, off-duty conduct.