Diverging Concepts of Freedom – Scrutiny of Employee Political Activity and the Right to Free Speech

By Isabel Cagala

When one of the most prominent Wall Street law firms, Sullivan & Cromwell, opted to scrutinize job applicants’ political activities in response to pro-Palestinian protests on U.S. campuses, the firm’s recruitment strategy raised some eyebrows – even across the industry.¹ Sullivan & Cromwell’s newly adopted hiring policy could disqualify applicants who participated in pro-Palestinian protests, where slogans like “From the river to the sea” were chanted.

The firm’s approach is quite unique in that it holds applicants accountable for the actions of others, potentially disqualifying someone who didn’t personally express controversial views.²

While this policy is bold and contentious, Sullivan & Cromwell is not alone in this approach.³ Recently, employees across the United States have faced job losses and rescinded offers due to their statements about the conflict in Gaza.⁴

Critics argue that such scrutiny serves to silence speech on the war, while others view it as a necessary extension of existing workplace prohibitions against hate speech.⁵

This article examines the legal protections surrounding employee political activity both within and outside the workplace. Additionally, the article evaluates the legal implications of the Sullivan & Cromwell policy.

Navigating the thin Line Between Employee Rights and Employer Control over Political Activity

In the United States, the landscape for regulating political activity in the workplace is notably permissive, with employers generally having broad discretion to take action against employees and job applicants who express opinions they find objectionable, whether during working hours or off duty. However, certain federal and state laws provide limited protections, aiming to balance employee rights with employer interests.

Federal Law

At the federal level, employee speech and related activities are primarily governed by Title VII of the Civil Rights Act and the First Amendment.

Title VII of the Civil Rights Act

Title VII of the Civil Rights Act, as amended, safeguards employees and job applicants from discrimination based on race, color, religion, sex, and national origin.⁶ These protections extend to all aspects of employment decisions, including recruitment, selections, terminations, and other decisions concerning terms and conditions of employment.⁷ Notably, political activity is not a protected characteristic under Title VII.

However, the Supreme Court’s 1971 decision in Griggs v. Duke Power Company marked a significant interpretation of Title VII, allowing for claims of disparate impact. The Court asserted that Title VII prohibits practices that are ostensibly neutral but discriminatory in effect. This means that if an employment practice disproportionately affects members of a protected group, e.g. racial minorities, it can be deemed unlawful, even if there is no intent to discriminate. Further, the Griggs Court introduced the concept of “business necessity” as a defense for employers. Thus, for an employer to justify a practice that causes a disparate impact, it must demonstrate that the practice is directly related to job performance and necessary for the operation of the business.⁸ Importantly, once a plaintiff demonstrates that an employment practice has a disparate impact on a protected group under Title VII, the burden shifts to the employer to prove that the practice is “job-related” and consistent with business necessity.⁹

For instance, consider an employer who rejects an Afro-American applicant based on his criminal record while hiring a White applicant with a similar criminal record. If both candidates have equivalent qualifications, the African-American applicant may bring a Title VII discrimination lawsuit. The applicant would need to show that the employer’s neutral policy or practice disproportionately excludes African-American applicants or that he was treated differently than a similarly situated individual. Additionally, the employer would have to fail in demonstrating that the policy or practice is job-related and consistent with business necessity.

Thus, whereas Sullivan & Cromwell’s policy of scrutinizing applicants’ political behavior does not inherently violate Title VII, the firm must ensure that the policy does not disproportionately impact any group protected under Title VII or serve as a pretext for discrimination based on race, color, religion, sex, or national origin. For example, if the firm disproportionately enforces its policy against applicants of a particular race or religion, or if the policy indirectly targets political activities that are closely tied to a protected characteristic, this could raise a Title VII disparate impact or disparate treatment claim. The firm would then have to demonstrate that the policy or practice is job-related and consistent with business necessity. In summary, Sullivan & Cromwell’s policy must be applied consistently and in a non-discriminatory manner to avoid potential Title VII claims.

First Amendment to the United States Constitution – Freedom of Speech

Contrary to common belief, the First Amendment’s protection of free speech does not extend to employees of private businesses.¹² While the First Amendment safeguards citizens from government interference with free expression, this protection does not apply to the workplace in most cases. For public sector employees, however, the situation is different. The First Amendment does extend some protections, but even these are not absolute. The U.S. Supreme Court has made it clear that the “First Amendment simply protects a public employee’s right, in certain circumstances, to speak as a citizen addressing matters of public concern.”¹³ If a government worker, for instance, raises concerns about broader issues like taxpayer waste during their private time, they might be protected from employer retaliation. However, complaints about personal employment issues, such as disciplinary actions or performance evaluations, typically do not fall under the amendment’s protection. In essence, while the First Amendment robustly guards against government censorship, it provides little refuge for employees within private companies.

In summary, as the First Amendment’s protections do not extend to private employers, Sullivan & Cromwell is within its legal rights to impose conditions on political activities without violating the First Amendment.

State Law

While federal regulations provide a baseline for managing pre-employment background checks and employee speech, the bulk of restrictions on employers and the protections afforded to job applicants and employees are governed by state and local laws.

Several states and cities, including California, New York, and the District of Columbia, have enacted laws that safeguard employees’ rights to free speech and political activity under certain conditions. These regulations are especially pertinent in the context of recent pro-Palestinian protests that began at Columbia University and later spread to the West Coast.

CALIFORNIA

California’s laws are among the most robust, prohibiting employers from discriminating against employees and applicants based on their political activities or affiliations.

Labor Code Section 1101

Under Labor Code Section 1101 an employer must not “make, adopt, or enforce any rule, regulation, or policy…controlling or directing, or tending to control and direct the political activities or affiliations of employees.”¹⁴

Labor Code Section 1102

Under Labor Code Section 1102, an employer cannot “coerce or influence or attempt to coerce or influence [its] employees through or by means of threat of discharge or loss of employment to adopt or follow or refrain from adopting or following any particular course of line of political action or political activity.”¹⁵

Protection of Job Applicants

California Labor Code Sections 1101 and 1102 are designed to protect employees from employer interference in their political activities and affiliations. While the text of these sections explicitly refers to “employees”, California courts have interpreted these protections broadly in some cases, extending their application to job applicants under certain circumstances.

The reasoning behind this extension is that the principles underlying Sections 1101 and 1102 – preventing employers from controlling or influencing political activities – apply equally to those seeking employment. If an employer were allowed to discriminate against job applicants based on their political beliefs or activities, it would effectively undermine the protections afforded to current employees, creating a loophole that contradicts the intent of the law.

One notable case that supports this interpretation is Gay Law Students Assn. v. Pacific Tel. & Tel. Co., where the California Supreme Court indicated in a footnote that Labor Code Sections 1101 and 1102 could extend to job applicants. The Court’s broad interpretation of these sections suggests that the protections against political discrimination are not confined solely to those already employed but can also shield job seekers from discriminatory hiring practices based on their political activities.¹⁶

Thus, while the statutory language specifically mentions “employees”, judicial interpretation in California has extended these protections to job applicants in situations where political activities or affiliations are at issue. Since the Sullivan & Cromwell policy addresses the political activities of job applicants, California Labor Code Sections 1101 and 1102 could be applicable.

Interpretation of “Political Activity”

In its landmark 1979 decision, Gay Law Students Ass’n v. Pac. Tel. & Telc. Co., the California Supreme Court offered a broad interpretation of the term “political activity”, defining it as encompassing both advocacy and efforts to promote a cause. The Court stated that political activity “connotes espousal of a…cause, and some degree of action to promote the acceptance thereof by other persons.”

Further broadening this interpretation, the 1991 case Gordon v. University of California extended the protection of political activities to include advocacy for controversial issues, noting that even when such activities are unconventional or unpopular, they are still protected if they involve significant political or social concerns.¹⁸

In summary, given the broad interpretation of political activity in California, involvement in pro-Palestinian protests could be regarded as protected under Labor Code Sections 1101 and 1102, especially if the participation in such protests is linked to the employee’s political views and activities outside of work, even if the protests and some slogans are controversial.¹⁹

Motives behind the Employer’s Policy

When assessing potential claims under these statutes, a crucial factor is whether the employer’s actions were driven by a “political motive.” A policy that applies equally to all political affiliations is less likely to face legal challenges, while one that appears to target a specific viewpoint may be deemed politically motivated, which is demonstrated by the following cases.

In Napear v. Bonneville International, a talk show host was terminated after posting his views on the Black Lives Matter movement on his personal Twitter account. Amid the ongoing protests over George Floyd’s death, the host tweeted, “ALL LIVES MATTER…EVERY SINGLE ONE.” Following this, his employer dismissed him and publicly stated that his comments did not align with the company’s values, emphasizing that the tweet’s timing—just a day after Floyd’s death—intensified the issue. The court found that allegations suggesting the employer’s political disagreement with the employee’s viewpoint led to the termination could constitute a violation of Labor Code sections 1101 and 1102.²⁰

In a similar vein, the court rejected an employer’s notion for summary judgment in Surdak v. DXC Technology. In this case an employee faced termination after posting a controversial quote attributed to Lyndon Baines Johnson on his personal Twitter account, which included a racial slur. Following a complaint from another employee, the company launched an investigation. During the probe, the plaintiff argued that the company was attempting to censor his personal political views expressed outside of work. Rejecting the employer’s notion, the court ruled that a jury might determine that the employer’s actions were driven by political motives, such as punishing views that contradicted the company’s stance.²¹

By evaluating applicants based on their political involvement and potentially using this as a disqualifying factor, Sullivan & Cromwell could be viewed as acting on a political motive, especially as the policy seems to disproportionately impact individuals with particular – pro-Palestinian – political views. This perception could lead to claims that the firm’s policy violates California Labor Code Sections 1101 and 1102.

Protection of Legitimate Business Interests

In California, the balance between protecting employee political activities and allowing employer restrictions due to business interests is a nuanced area of law, particularly under Labor Code Sections 1101 and 1102. These sections broadly protect employees’ rights to engage in political activities, and any restrictions imposed by employers can face significant legal scrutiny. However, there are instances where the courts have acknowledged that an employer’s business interests may justify certain restrictions.

While not directly under Sections 1101 and 1102, the case Miller v. Department of Corrections illustrates how California courts weigh employer business interests against employee rights. The California Supreme Court held that while the state’s sexual harassment policies (not directly related to political activity) were legitimate, they must be balanced against employees’ free speech rights. The ruling suggests that when an employer’s business interest is compelling – such as maintaining a harassment-free workplace – it may justify certain restrictions, provided these are narrowly tailored and serve a legitimate business purpose.²²

In Ralphs Grocery Co. v. United Food and Commercial Workers Union Local 8, the California Supreme Court upheld the employer’s right to restrict union-related activities on its private property, citing the business’s property rights and interests. Although this case dealt with union activities, it indicates that employer interests, such as protecting property rights or ensuring the smooth operation of business, can justify some restrictions on activities typically protected under broader interpretations of free speech or political activity.²³

While there is no clear-cut case law under Sections 1101 and 1102 explicitly allowing an employer to restrict political activities based solely on business interests, California courts have recognized in other contexts that significant business interests – such as maintaining a harassment-free environment or protecting property right – can justify restrictions on certain employee activities. Thus, employers like Sullivan & Cromwell must ensure that any such restrictions are narrowly tailored, directly related to legitimate business interests, and are not overly broad to avoid running afoul of California’s robust protections for political activities. Notwithstanding, the legal foundation for a business interest defense remains relatively thin.

NEW YORK

New York’s legal safeguards for employees’ political activities are generally considered less expansive than those in California. In New York Labor Law, § 201-d (NYLL § 201-d) prohibits employers from taking adverse action against employees because of their ‘recreational activities’ or “political activities” that are legal, occur outside of working hours, off the employer’s premises and without use of the employer’s equipment or other property.²⁴ This protection explicitly extends to the hiring process, meaning that employers cannot refuse to hire someone based on their engagement in such activities. Thus, employees as well as job applicants are protected under the statute.

Protection of “Recreational Activities”

NYLL § 201-d is widely recognized for its prohibition against employment discrimination based on off-duty “recreational activities”, such as smoking and skiing. Initially, the statute was primarily designed to shield smokers from discrimination amid a surge of anti-smoking sentiment in the early 1990s. The law was a product of the tobacco lobby’s efforts to protect employees who smoked from employer retaliation. However, New York legislators expanded the scope of the law beyond its original intent. Today, NYLL § 201-d defines “recreational activities” as including “any lawful, leisure-time activity, for which the employee receives no compensation and which is generally engaged in for recreational purposes, including but not limited to sports, games, hobbies, exercise, reading and the viewing of television, movies and similar material.”²⁵

Protection of “Political Activities”

Amid escalating political tensions, the protection against discrimination for off-duty political activities under NYLL § 201-d is increasingly coming into the spotlight. However, ambiguity remains regarding whether activities such as off-duty social media comments or participation in political protests are covered under the statute. The law’s definition of “political activities” is notably narrow, specifying only three protected actions: (i) running for public office, (ii) campaigning for a public office candidate, or (iii) participating in fundraising for a candidate, political party, or advocacy group.²⁶

Evaluating the Scope of “Political Activity”

While NYLL § 201-d explicitly defines “political activities” as running for public office, campaigning for a candidate, or participating in fundraising for political entities, courts have sometimes recognized broader forms of political engagement. For instance, in Bilal El-Amine v. Avon Products, a New York City employee challenged his termination after being arrested at a rally for a hate crime victim. The Appellate Court ruled that his involvement in the rally fell within the ambit of “political activities” under NYLL § 201-d, given its significance in advancing hate crime legislation.²⁷ This case, among others,²⁸ demonstrates New York courts’ openness to interpreting protected political activities more expansively when there is a clear link to adverse employment actions.

Moreover, legislative history suggests that the intent behind NYLL § 201-d was to broadly safeguard employees’ rights to engage in political and recreational activities without employer interference.²⁹ This broader interpretation indicates that activities related to controversial political issues, such as protests or political speech, may be considered protected under NYLL § 201-d. Thus, employees and job applicants who participate in pro-Palestinian protests might argue that their actions, aimed at influencing U.S. policy toward the Middle East, fall within the statute’s protections.³⁰

Is Political Activism Considered a “Recreational Activity”?

The question of whether political activism could be classified as a “recreational activity” under employment laws remains unresolved. Political protests are unpaid activities typically conducted during personal time, much like running a marathon or attending a concert. However, past rulings suggest that such activities might not fit within the definition of “recreational.”

In State v. Wal-Mart Stores, Inc., the Third Department notably dismissed the notion that “dating” qualifies as a recreational activity.³¹ This precedent has influenced subsequent decisions, with courts ruling that organizing after-work gatherings,³² and participating in picketing do not meet the criteria for recreational activities, which traditionally include “sports, games, hobbies, exercise, reading, and watching television or movies.”³³

Despite these restrictive interpretations, the original Third Department opinion on dating has faced criticism, including from dissenting judges and Second Circuit judges who anticipate a potential shift towards a broader definition of “recreational activity” by higher courts.³⁴

However, given the case law on NYLL § 201-d, it is rather unlikely the involvement in a pro-Palestinian protest could be deemed a protected “recreational activity”.

Safe-Harbor Provision for Employers

Under NYLL § 201-d, even if an employee’s or applicant’s activities meet the criteria for protection, there is a significant caveat. Section 201-d (3) includes a safe-harbor provision allowing employers to take action against employees if their protected activities create “a material conflict of interest related to the employer’s trade secrets, proprietary information, or other business interests.”³⁵ This provision means that employers may still be justified in taking adverse action if the employee’s activities pose a significant risk to the business.

The safe-harbor clause was introduced following Governor Cuomo’s veto of an earlier version of the bill. In his veto message, Cuomo expressed concerns that the original bill could leave employers vulnerable if employees engaged in conflicting activities, such as working with competitors or endorsing rival products.³⁶ Despite this, judicial guidance on the “material conflict” provision is sparse. The only notable case, Berg v. German National Tourist Office, involved the dismissal of an employee who translated Holocaust revisionist content. The court found that the conflict of interest was clear, given the organization’s role in promoting German culture.³⁷

Thus, under NYLL § 201-d, attending an antiwar protest could be considered a protected political activity, as the statute broadly safeguards employees and applicants from discrimination based on their participation in legal recreational and political activities outside of work. However, if an applicant’s participation in an antiwar protest could be seen as conflicting with the firm’s interest – such as if the protest stance opposes a key client’s position or damages the firm’s reputation – the firm might argue that its policy is justified under the safe-harbor provision. The firm’s policy could therefore comply with New York law, provided it is narrowly tailored to address specific conflicts of interest and is applied uniformly.

Key Takeaways

Navigating the landscape of workplace political activity policies, such as that of Sullivan & Cromwell, requires careful adherence to federal and state laws. Federal law, including Title VII of the Civil Rights Act and the First Amendment, does not explicitly shield political activities from employer scrutiny, provided policies do not discriminate based on protected characteristics or unduly suppress speech.

At the state level, New York’s Labor Law § 201-d offers a broader shield for employees and job applicants, protecting them from discrimination based on off-duty political activities. However, the safe-harbor provision allows employers to act if such activities create a “material conflict of interest.” Sullivan & Cromwell’s policy, which restricts political activities conflicting with the firm’s interests, appears to align with this provision if the firm can demonstrate legitimate business justifications for its restrictions.

In California, Labor Code Sections 1101 and 1102 protect employees and job applicants from policies that infringe upon their political activities and affiliations. Given California’s broad interpretation of political activity and the relatively thin legal foundation for a business interest defense, Sullivan & Cromwell’s policy faces heightened scrutiny. Therefore, the firm must carefully balance its business interests with respect for employees’ rights to engage in political activities, such as attending antiwar protests. Ultimately, private employers like Sullivan & Cromwell are well-advised to ensure its policy is clear, consistently applied, and backed by well-documented business reasons.

Outlook

As political tensions continue to rise in the United States, the legal landscape surrounding employee political activity in the workplace is poised for significant evolution. The increasing polarization of society, coupled with the growing presence of social media, has blurred the lines between personal and professional lives, making it more likely that employees’ expressions will intersect with their employment.

In states like California, where the courts have historically been more protective of individual rights, we might see a trend toward expanding legal protections for employees. Employers may face stricter scrutiny, particularly when their policies affect off-duty conduct. This could lead to a tightening of the standards that employers must meet to justify any restrictions on political activity, requiring them to demonstrate a direct and substantial conflict with business interests.

At the same time, as social movements gain momentum and the polarization of everyday issues intensifies, courts will likely grapple with defining what constitutes “political activity” in an era where almost every aspect of public life has a political dimension. The legal framework may evolve to include more nuanced considerations, especially as political discourse increasingly unfolds online.

For employers, this evolving legal environment means that policies governing political activity must be carefully crafted to withstand legal challenges. Thus, companies are well advised to articulate clear, specific business justifications for any restrictions, ensuring they strike a balance between protecting their interests and respecting employees’ growing demands for autonomy in expressing their political beliefs. As the case law develops, it will be crucial for employers to stay ahead of the curve, adapting their policies not only to comply with existing laws but also to anticipate the broader societal trends that will shape the future of workplace regulation.

The Author:

Isabel Cagala is a co-founder of Truveo Compliance, where she focuses on all compliance related matters, including corporate law, labor law, and antitrust law. She also serves as the co-editor-in-chief of the Transatlantic Law Blog (TLB).