Barbee v. Household Auto. Fin. Corp., 113 Cal. App. 4th 525 (2003)

Household Automotive Finance Corporation (HAFC) terminated the employment of its national sales manager, Robert Barbee, after learning that Barbee had a “special relationship” with one of his subordinate employees and after giving Barbee the choice of either ending the relationship or effecting his or the subordinate employee’s resignation. Barbee sued HAFC for violation of his right to privacy and wrongful termination in violation of the public policy contained in Labor Code § 96(k), which prohibits employers from taking adverse action against an employee for any “lawful conduct occurring during nonworking hours away from the employer’s premises.” The trial court granted HAFC’s motion for summary judgment, and the Court of Appeal affirmed. The Court held that although Barbee may have had a legally protected right to privacy in pursuing an intimate or sexual relationship (relying upon Lawrence v. Texas, 539 U.S. 558 (2003)), Barbee had failed to establish that he had a reasonable expectation of privacy in this instance given HAFC’s express policy requiring a supervisor to disclose to the company the existence of a “consensual intimate relationship” with a subordinate employee. Further, the Court held that Labor Code § 96(k) could not support a public policy claim because (at least prior to its amendment in 2001) it did not create any new public policy, but merely provided a procedure by which the Labor Commissioner could vindicate existing public policies in favor of individual employees.