A reporter interviewed me on the radio a couple of weeks ago, about a health care employer’s decision to refuse to hire smokers for its Arizona facilities. The reporter was incredulous that an employer could decide not to hire an applicant based on conduct away from work. The principal question: Is that legal?

Under Arizona state law, it probably is. Arizona law does not protect smokers from “discrimination,” or from employers’ judgments about employees’ lawful activities away from work.

Companies around the country have imposed such bans for a number of years. But the interviewer’s question caused me to consider anew whether an employer’s ban on hiring smokers in California would fly.

Like Arizona, California does not have in place a “smokers’ rights” law. A majority of states, however, protect smokers to one degree or another from adverse employment decisions. Some state laws simply prohibit employers from making an employment decision based on whether someone smokes cigarettes. Others protect only public sector employees, or limit the industries in which employers may take action against smokers.

Some states prohibit employers from making employment decisions based on “lawful activities” away from work. New York Labor Law Section 201-d, for example, prohibits employers from taking negative actions based on “an individual’s legal recreational activities outside work hours, off of the employer’s premises and without use of the employer’s equipment or other property . . . .”

But California’s “legal activities” law, Labor Code Sections 98.6 and 96(k), probably does not cover smoking. “Neither section 96(k), nor section 98.6 adequately supports a public policy against a private employer’s termination of an employee for the employee’s lawful conduct, otherwise unprotected by the Labor Code, occurring during nonworking hours away from the employer’s premises.” Grinzi v. San Diego Hospice Corp., 120 Cal. App. 4th 72, 88 (2004) (emphasis added). Smoking is not protected by the Labor Code and, therefore, falls outside the statute’s protections.

The state constitution’s right to privacy could provide protection for job seekers who smoke. Employers seeking to disqualify smokers from employment propose to test applicants’ urine for nicotine. Drug testing raises privacy concerns.

It is settled in California that employers may test applicants for the presence of illegal drugs. The state Supreme Court held in Loder v. City of Glendale, 14 Cal. 4th 846, 882-883 (1997): “an employer, private or public, clearly has a legitimate (i.e., constitutionally permissible) interest in ascertaining whether persons to be employed in any position currently are abusing drugs or alcohol.” The court based this decision on “the well-documented problems that are associated with the abuse of drugs and alcohol by employees–increased absenteeism, diminished productivity, greater health costs, increased safety problems and potential liability to third parties, and more frequent turnover.”

Other than the concern about health insurance costs, these justifications do not fully apply to smokers. It is not obvious that smokers cause increased safety problems, turnover, or “potential liability to third parties.” It therefore is an open question whether the intrusion of a urine test for nicotine is sufficiently legitimate to overcome the employee’s right to privacy. At the same time, it may be that employers in the health care industry, or employers whose employees have direct contact with the public, have a sufficient business justification for the privacy intrusion.

Some may be thinking: smokers are addicted to nicotine and are susceptible to a number of medical conditions like cancer. Would not the anti-discrimination provisions of the Fair Employment and Housing Act prevent the no-hire policy?

Probably not. Prisoners unsuccessfully have challenged smoking bans in California prisons, claiming they are “disabled” by addiction to nicotine. Employees, equally unsuccessfully, have claimed nicotine addiction under the Americans With Disabilities Act. The courts generally have refused to find that addiction to smoking is a disability, protecting the smoker from discrimination or mandating an employer’s “reasonable accommodation.” Of course, it would be illegal for an employer to refuse to hire someone with a medical problem caused by smoking, such as heart disease or cancer.

Having said that, even Arizona smokers may hold out hope that the Equal Employment Opportunity Commission butts in. The Commission and state governments are scrutinizing seemingly benign hiring practices that, the government claims, are lawful on their face but adversely affect members of a protected group.

For example, the Commission recently has challenged employers’ practice of favoring currently employed applicants over the unemployed. Employers may believe someone who is unemployed was “not worth retaining,” or that someone who still has a job in this economy must be a good employee. The Commission says that employers’ preferring the employed over the jobless may have an unduly lopsided impact on minorities or people over 40.

Along the same lines, the Commission and state governments have cracked down on employers who automatically exclude applicants with criminal convictions, or who rely on applicants’ good credit as an indication of job performance. Why? Studies show that minorities have lower credit ratings and higher occurrences of arrests and convictions.

Perhaps the Commission will challenge an employer’s ban on smokers, too. The Centers for Disease Control and Prevention recently estimated that smoking in the U.S. is more common among men than women (23-18%, respectively). Also, some 32.4% of American Indians or Alaska natives smoke. About 22% of Whites and African-Americans indulge. But only about 9% of Asians smoke. Further statistical analysis might show that a policy of hiring only non-smokers unduly burdens males, Native Americans/Alaskans, African-Americans and even Caucasians, as compared with Asians. It remains to be seen whether an exclusion of smokers results in a statistically significant exclusion of men or minorities who smoke.

The defense to an adverse impact discrimination claim is that a practice is “job-related and consistent with business necessity.” This standard will be tough for employers to meet, insofar as they seek to ban off-duty conduct.

As of now, California law probably does not prohibit employers from refusing to hire smokers, but testing for nicotine may be an unresolved issue. To avoid a class of unemployed smokers’ claims for adverse impact discrimination or invasion of privacy, employers may wish to consider alternatives to an outright ban on applicants who smoke.

These might include financial incentives to employees who quit and consent to testing, or charging higher medical insurance co-pays for smokers. And no law prevents an employer from firing or disciplining employees who smell of tobacco smoke at work. Such a policy may address employers’ concerns that employees’ smoking is incompatible with the environment they wish to present to the public.

X