In a case involving an issue of first impression, the California Court of Appeal has held that violations of Labor Code section 432.2, which bans mandatory polygraph testing for employees, can form the basis for a wrongful termination claim in violation of public policy. This recent decision in McDoniel v. Kavry Management, LLC underscores the importance of employee privacy rights and serves as a cautionary tale for employers conducting internal investigations.
The Facts of the Case
Plaintiff Steven McDoniel was employed as an assistant grower at Kavry Management, LLC, a licensed marijuana cultivation facility. Shortly after his hire, thieves stole cash and marijuana products. In response, Kavry’s owner arranged for a polygraph examiner to test several employees, including McDoniel. Employees were instructed to participate, but McDoniel received no written notice of his rights under Labor Code section 432.2, which prohibits employers from requiring such tests as a condition of continued employment and mandates informing employees of their right to refuse.
McDoniel ultimately failed the polygraph and was terminated as a result. A year later, McDoniel sued Kavry, alleging wrongful termination in violation of public policy, among other claims.
A jury sided with McDoniel, finding Kavry liable for breaching section 432.2 and awarding him $100,000 in noneconomic damages. Kavry appealed.
The Appellate Court’s Ruling
The court found that section 432.2 satisfied the requirements to support a wrongful termination claim. Enacted in 1963 and amended in 1981 to include the notice requirement, the statute protects nearly all private-sector employees and applicants from coercive polygraph testing. This broad protection advances public interests in privacy and prevents workplace abuse. The court emphasized the statute’s long-standing history and referenced California Supreme Court precedent highlighting the invasive nature of polygraphs on personal privacy.
Substantial evidence supported the jury’s finding that the test was mandatory for continued employment and that no proper notice was given. Accordingly, the court upheld the $100,000 damages award.
However, the appellate court reversed the trial court’s $212,000 attorney fee award under Labor Code section 432.6, which permits fees in certain employment disputes but applies only to contracts entered, modified, or extended on or after January 1, 2020. Since McDoniel’s employment predated this, retroactive application was improper.
Implications for California Employers
This decision reinforces the risks associated with polygraph testing in the workplace. Employers must provide clear, written notice to employees about their rights under section 432.2 before any polygraph or similar test, and should understand that requiring employees to take a polygraph test as a condition of continued employment can lead to a wrongful termination claim. Employers should audit their practices and policies and consult legal counsel to mitigate exposure.
