chapter 33 employment and labor law business law: text & cases — legal, ethical,...

Chapter 33 Chapter 33 Employment andEmployment and

Labor Law Labor Law

BUSINESS LAW: Text & Cases — BUSINESS LAW: Text & Cases — Legal, Ethical, International, and Legal, Ethical, International, and

E-Commerce Environment 11E-Commerce Environment 11thth Ed.Ed.

Copyright © 2009 South-Western Legal Studies in Business,

a part of South-Western Cengage Learning.



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IntroductionIntroduction

Historically, employment law was Historically, employment law was governed by the common law doctrine of governed by the common law doctrine of “employment at will” where either “employment at will” where either employer or employee could terminate the employer or employee could terminate the relationship at any time, for any reason.relationship at any time, for any reason.

Today employment law is heavily Today employment law is heavily regulated by state and federal statutes. regulated by state and federal statutes.



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§ 1: Employment at Will§ 1: Employment at Will

Traditionally, employment relationships Traditionally, employment relationships have been by common law doctrine of have been by common law doctrine of “employment at will.”“employment at will.”

Either party may terminate at any time for Either party may terminate at any time for any reason.any reason.

Exceptions Exceptions to the Employment At Will to the Employment At Will Doctrine: Contract, Tort, Public Policy. Doctrine: Contract, Tort, Public Policy.



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WhistleblowingWhistleblowing

WhistleblowingWhistleblowing occurs when an employee occurs when an employee tells a supervisor or the press that the tells a supervisor or the press that the employer is engaged in some unsafe or employer is engaged in some unsafe or illegal activity.illegal activity.

Protection under federal and state law.Protection under federal and state law.– CASE 33.1 CASE 33.1 Wendeln v. The Beatrice Wendeln v. The Beatrice

Manor, Inc.Manor, Inc. (2006). (2006). Whistleblower Protection Act.Whistleblower Protection Act. Wrongful Discharge. Wrongful Discharge.



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Hours and Wages.Hours and Wages.– Davis-Bacon Act -- the prevailing wage act.Davis-Bacon Act -- the prevailing wage act.– Walsh-Healey Act -- the beginning of minimum Walsh-Healey Act -- the beginning of minimum

wages.wages.– Fair Labor Standards Act (FLSA) -- an Fair Labor Standards Act (FLSA) -- an

extension of wage and hour regulation to extension of wage and hour regulation to workers in interstate commerce.workers in interstate commerce.

Child Labor.Child Labor.– FLSA prohibits oppressive child labor practices.FLSA prohibits oppressive child labor practices.

§2: §2: Wage-Hour LawsWage-Hour Laws



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Overtime ExemptionsOvertime Exemptions Certain employees, e.g., executive or Certain employees, e.g., executive or

professional, are exempt from overtime professional, are exempt from overtime (white collar workers).(white collar workers).

New Over Time rules (August 2004):New Over Time rules (August 2004):– Workers earning less than $23,660 working Workers earning less than $23,660 working

40 hours/week are entitled to OT.40 hours/week are entitled to OT.– Does not apply to manual laborers or ‘blue Does not apply to manual laborers or ‘blue

collar’ workers.collar’ workers.– Does not apply to firefighters, police.Does not apply to firefighters, police.– CASE 33.2 CASE 33.2 Mims v. Starbucks, Inc.Mims v. Starbucks, Inc. (2007). (2007).



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§3: §3: Labor UnionsLabor Unions

Norris-LaGuardia Act.Norris-LaGuardia Act.– Protects peaceful strikes by limiting the Protects peaceful strikes by limiting the

injunction powers of federal courts.injunction powers of federal courts.

National Labor Relations Act.National Labor Relations Act.– Establishes the right of workers to strike Establishes the right of workers to strike

and engage in collective bargaining.and engage in collective bargaining.



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Federal Labor LawsFederal Labor Laws

Labor Management Relations Act.Labor Management Relations Act.– Prohibits certain unfair union practices Prohibits certain unfair union practices

such as closed shops.such as closed shops.

Labor-Management Reporting and Labor-Management Reporting and Disclosure Act.Disclosure Act.– Regulates the internal operations of Regulates the internal operations of

unions and outlaws hot-cargo unions and outlaws hot-cargo agreements.agreements.



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Union OrganizationUnion Organization Elections.Elections.

– An election can be held only if it can be shown that An election can be held only if it can be shown that at least 30% of the workers will be represented.at least 30% of the workers will be represented.

Election Campaigns.Election Campaigns.– The National Labor Relations Board regulates the The National Labor Relations Board regulates the

rights and obligations of employers and workers in rights and obligations of employers and workers in the election process.the election process.

– Each side can pursue their objectives, but cannot Each side can pursue their objectives, but cannot interfere, beyond certain limits, in the other’s interfere, beyond certain limits, in the other’s activities.activities.



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Collective BargainingCollective Bargaining

Collective bargaining is the process by Collective bargaining is the process by which management and labor negotiate which management and labor negotiate the terms and conditions of employment.the terms and conditions of employment.– The NLRB will certify an exclusive bargaining The NLRB will certify an exclusive bargaining

agent for labor.agent for labor.– Both labor and management must bargain in Both labor and management must bargain in

good faith, but the law does not require that good faith, but the law does not require that they reach an agreement.they reach an agreement.



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StrikesStrikes

There are two basic forms of strikes:There are two basic forms of strikes:– Economic Strikes.Economic Strikes.

• These are strikes over wages.These are strikes over wages.• Workers can be replaced by permanent Workers can be replaced by permanent

replacements.replacements.

– Unfair Labor Practice Strikes.Unfair Labor Practice Strikes.• These are strikes alleging that the employer has These are strikes alleging that the employer has

committed an unfair labor practice.committed an unfair labor practice.



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§4: §4: Worker Health and Worker Health and SafetySafety

The Occupational Safety and Health Act. The Occupational Safety and Health Act. (OSHA).(OSHA).– The fundamental federal law aimed toward The fundamental federal law aimed toward

safety in the workplace.safety in the workplace.– Enforcement is by OSHA, NIOSH, and the Enforcement is by OSHA, NIOSH, and the

OSHRC.OSHRC.



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State Workers’ State Workers’ Compensation LawsCompensation Laws

Reduce employer liability to employees for Reduce employer liability to employees for workplace injuries, and provide a measure of workplace injuries, and provide a measure of assurance that workplace injuries will be assurance that workplace injuries will be compensated, regardless of the solvency of compensated, regardless of the solvency of the employer, by:the employer, by:– Requiring that injured employees make a claim Requiring that injured employees make a claim

against the employer’s workers’ compensation against the employer’s workers’ compensation insurance policy, instead of suing the employer.insurance policy, instead of suing the employer.

– Requiring most employers to carry workers’ Requiring most employers to carry workers’ compensation insurance.compensation insurance.



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§5: §5: Income Security, Income Security, Pension, and Health PlansPension, and Health Plans

The primary income security laws are:The primary income security laws are:– Social Security and Welfare.Social Security and Welfare.– Private Pension Plans.Private Pension Plans.

• Employee Retirement Income Security Act (ERISA) Employee Retirement Income Security Act (ERISA) gives employee a vested right to receive pension gives employee a vested right to receive pension benefits at a future date when she stops working.benefits at a future date when she stops working.

– Unemployment Compensation.Unemployment Compensation.



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COBRACOBRA

COBRA prohibits the discontinuance of COBRA prohibits the discontinuance of insurance benefits of workers who have insurance benefits of workers who have voluntarily or involuntarily been separated voluntarily or involuntarily been separated from work, unless the involuntary from work, unless the involuntary separation was on the basis of gross separation was on the basis of gross misconduct.misconduct.

Employers must comply if they have more Employers must comply if they have more than 20 employees.than 20 employees.

Employer-sponsored Group Health Plans.Employer-sponsored Group Health Plans.



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§6: §6: Family and Medical Family and Medical LeaveLeave

The The FMLAFMLA requires employers with over 50 requires employers with over 50 employees to provide unpaid leave to employees employees to provide unpaid leave to employees who need to care for a spouse, child, or parent who need to care for a spouse, child, or parent suffering with a serious medical condition.suffering with a serious medical condition.

The employee cannot be terminated for taking The employee cannot be terminated for taking leave under the policy, and has the right to leave under the policy, and has the right to restoration to the same or a similar position upon restoration to the same or a similar position upon return to work.return to work.

CASE 33.3 CASE 33.3 Nevada Dept. of Human Nevada Dept. of Human Resources v. HibbsResources v. Hibbs (2003). (2003).



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§7: §7: Employee Privacy RightsEmployee Privacy Rights

More than 2/3 employers use some sort of More than 2/3 employers use some sort of electronic monitoring of employees.electronic monitoring of employees.

Laws Protecting Employee Privacy Rights.Laws Protecting Employee Privacy Rights.– Constitutional and Tort law.Constitutional and Tort law.– ECPAECPA

Privacy and Email Systems.Privacy and Email Systems.



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Lie Detector Tests.Lie Detector Tests.– Prohibited, except under the ongoing Prohibited, except under the ongoing

investigation exception.investigation exception. Drug Testing.Drug Testing.

– Most government employees are subject to Most government employees are subject to testing and the rights of private employees testing and the rights of private employees vary from state to state.vary from state to state.

AIDS Testing.AIDS Testing.– Some state statutes restrict AIDS testing.Some state statutes restrict AIDS testing.

Other Types of MonitoringOther Types of Monitoring



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Other Types of MonitoringOther Types of Monitoring

Electronic Performance Surveillance.Electronic Performance Surveillance.– Most limitations can be avoided if the Most limitations can be avoided if the

employer informs employees that surveillance employer informs employees that surveillance will occur.will occur.

Screening Procedures.Screening Procedures.– Application question must have some Application question must have some

reasonable connection to the job sought.reasonable connection to the job sought.



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§8: §8: Employment-Related Employment-Related Immigration LawsImmigration Laws

The Immigration Reform and Control Act The Immigration Reform and Control Act prohibits the hiring of illegal aliens.prohibits the hiring of illegal aliens.

The Immigration Act of 1990 limits the The Immigration Act of 1990 limits the number of legal immigrants into the U.S.number of legal immigrants into the U.S.

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