Starbucks Wins Ruling on Disclosing Job Applicants With Marijuana Records

Starbucks Corp. (SBUX) won a court ruling that it doesn’t have to disclose the identities of potential plaintiffs in a lawsuit filed originally by three job seekers claiming the company illegally required applicants to disclose marijuana convictions.

A California appeals court overturned a lower-court ruling that Starbucks, the world’s largest coffee shop operator, must disclose the identities of former job applicants who might be covered by the plaintiffs’ lawsuit.

Three plaintiffs sued in 2005 seeking class-action, or group, status and as much as $26 million in damages over claims the company violated a California law barring employers from asking prospective hires about convictions for minor marijuana offenses that are more than two years old.

After the appeals court said in 2008 that the three had no basis to sue because they didn’t have marijuana convictions themselves, a lower-court judge ordered Starbucks to review its job applications for possible candidates to lead the lawsuit. Starbucks was ordered to randomly sort through about 135,000 job applications until it found 25 candidates, who were then to be told in a letter that they had a right to opt out of the suit.

The appeals court panel in Santa Ana reversed that order on April 25, saying that requiring the Seattle-based company to disclose the applicants’ identities “ironically violates” the legislation meant to protect them from being stigmatized.

Photographer: Mark Ralston/AFP/Getty Images

Starbucks Corp. can’t be required to identify job applicants who had a prior marijuana conviction to help lawyers bring a class-action lawsuit on their behalf, a California appeals court said. Close

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Photographer: Mark Ralston/AFP/Getty Images

Starbucks Corp. can’t be required to identify job applicants who had a prior marijuana conviction to help lawyers bring a class-action lawsuit on their behalf, a California appeals court said.

Applicants ‘Outed’

“One can only imagine the potential consternation in a household where a Starbucks applicant with a marijuana-tinged past is ‘outed’ to a spouse, child, or roommate who opens the letter and reads about a lawsuit involving job applicants with prior marijuana convictions,” the three-judge panel said.

Mike Arias, the lawyer who filed the suit, said the appeals court incorrectly assumed that an opt-out letter would have to state the individuals were contacted because they had a marijuana conviction. Arias said yesterday he may take the case to the California Supreme Court.

“We are pleased with the court’s ruling setting aside further discovery in this matter and paving the way for dismissal of the lawsuit,” Lily Gluzberg, a spokeswoman for Starbucks, said in an e-mailed statement.

The appellate panel said the law forbidding employers from inquiring about marijuana convictions was enacted in the mid- 1970s during the first administration of Governor Jerry Brown, a Democrat who was again elected governor last year.

The case is Starbucks v. Orange County Superior Court, G04350, California Court of Appeals, Fourth Appellate District, Division Three (Santa Ana.)

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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