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...

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