Starbucks Narrowly Escapes $26 Million in Penalties for Impermissible Question on Job Application

December 11, 2008

Summary

In a surprisingly practical decision issued yesterday, a California Court of Appeal held that an illegal question on a job application regarding prior criminal convictions does not automatically subject employers to statutory penalties.  In Starbucks Corporation v. Superior Court of Orange County, the Court held that job applicants must prove they were actually harmed by an illegal question in order to recover money from employers.  In its decision, the Court also provided guidance to employers on where to place California law disclaimers on job applications.

Details

Starbucks uses the same two-page job application nationwide.  On the first page, the application violated California conviction law by asking:  “Have you been convicted of a crime in the last seven (7) years?”  A disclaimer that clarified California conviction law and told applicants not to include specific convictions was placed on the reverse side of the application.  It was buried in a 346-word paragraph the Court described as a “veritable sea of boldface type,” which also included disclaimers on Maryland and Massachusetts law.

A class of 135,000 unsuccessful job applicants sued Starbucks, alleging that the illegal question entitled each plaintiff to the statutory penalty of $200.  In total, Starbucks faced estimated damages of 26 million dollars for the illegal question.  That’s a lot of lattes.

After finding that none of the three lead plaintiffs had actually been harmed by the question – indeed two of the three plaintiffs had refused to answer it – the Court dismissed the case.   In its strongly-worded decision, the Court said it would not create a class of “professional job seekers” whose sole purpose was to fill out defective job applications in order to sue and collect damages.

Starbucks’ victory, however, was a narrow escape.  The Court found its “one-size-fits-all” job application to be defective because the California conviction disclaimer was on the back page, within a sea of disclaimer information on other state laws.  Instead, the disclaimer should have immediately followed the conviction question. 

What This Means

Even though Starbucks “lucked out” in this case because the plaintiffs were not injured by the illegal question, California employers must review their job applications to ensure they comply with California law.  If an employer uses a “one-size-fits-all” job application, clearly-worded California disclaimers must be located immediately following any question that may violate California law.

This e-update was authored by Brenda Kasper and Denise Brucker.  For more information, or questions, please contact Ms. Kasper, Ms. Brucker or any Paul, Plevin attorney at (619) 237-5200.

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