Executives Behaving Badly: Can CEO Be Fired For Kathy Griffin Hate Speech?

by Lewitt Hackman

Lewitt Hackman

Neighbors don’t always get along – not even affluent neighbors living in exclusive gated communities in Bel-Air.

This was proven most recently, when the Huffington Post released security camera audio of Jeffrey Mezger yelling profanities at his neighbor Kathy Griffin and her partner Randy Bick. Warning: the audio is definitely NSFW – keep the speakers on low so as not to offend colleagues.

Mezger is the Chief Executive Officer of KB Home which is one of the largest home builders in the nation, and a publicly traded company.

Griffin, of course, is a well-known and somewhat controversial comedienne. In July she shaved her head to show support for her sister who was dying of cancer. In August she was fired by CNN for posting a photo in which she held a mask of President Donald Trump covered in fake blood. In mid-September, Griffin’s sister passed away, and more recently, she was the target of Mezger’s rant.

Mezger called Griffin, among other things, a “bald f-ing dyke” – not just obscene, but truly insensitive to Griffin’s recent loss.

The reason for Mezger’s rant?  He was upset that Griffin and Bick called the police with a noise complaint between 8 and 9 p.m. on a Saturday night. The alleged noisemakers were Mezger’s young grandchildren who were playing in the pool – supervised by the children’s mother and grandmother.

Mezger’s anger may or may not be justified, but how he expressed his anger was not. His employer acted quickly to minimize damage.

An Employer’s Right to Terminate

Some may believe what an employee does outside of the workplace is strictly the employee’s business. That’s mostly true, but only to a certain extent. And what about free speech rights?

These concerns were addressed recently, just after the Charlottesville “Alt-Right” march last August. 

Photos from Charlottesville featured individuals who were later identified by the public in social media, and tagged by Twitter user @YesYoureRacist. There was a very public call to action via social media for employers to fire the Alt-Right participants, particularly those brandishing swastikas.

Here are some legal clarifications:

First, the Bill of Rights protects citizens from our government’s attempts to quash speech – the Bill doesn’t protect employee speech from employers. There are other laws for that, as seen below.

Second, most California employees are “at will”, and can be terminated for any reason or no reason at all, provided the decision is not based on race, age, religion, gender, gender identification, marital status, or other protected categories defined by state and federal laws.

California’s Labor Code section 1101-1106  prohibits employers from discriminating against employees for expressing political views. Discriminatory or adverse acts could include firing, or refusing to consider the employee for promotions, bonuses, professional training, or other opportunities. However, there are exceptions. 

For instance, if an employee’s political activity creates a conflict of interest, or if the activities interfere with work duties.  In Mezger’s case, there is some evidence KB Home’s stock prices dropped about three percent following release of the meltdown audio. As CEO, Mezger has a fiduciary duty to protect the company.

How Can Employers Reduce Risk of Wrongful Termination Claims?

Mezger’s expletive-ridden rant created a public perception problem for KB Home. But the employer in this case reacted quickly and we think, effectively.

Here’s what employers in this position should consider: 

  1. The home builder chose to slash Mezger’s year-end bonus by 25 percent. There is some question as to whether or not the CEO will even earn a bonus this year, but Mezger is on notice that his behavior affects his income.
  2. KB Home created a written record expressing that the CEO’s “personal dealings with a neighbor is unacceptable….” The record is a public filing with the securities exchange, but most other employers can just send a troublesome employee an email or memo. Either way, the employee should be informed in writing, and a copy added to the personnel file.
  3. The employer protected its interests. Though KB Home states it has full confidence in Mezger’s abilities (this may cause a problem if Mezger ever files a wrongful termination suit against KB Home in the future), the builder also states outright that Mezger will be terminated should similar incidents occur later. 

The lessons for employers?

First and foremost, make expectations clear. If those expectations are not met, consider a separation agreement as a means to offer the employee a bit of transition assistance in return for a waiver of future claims.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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