I. TABLE OF CONTENTS

II. Legal Boundaries of the Employment Relationship.............................................................................5

The Idea of Employee Status....................................................................................................................5

Employees v. Independent Contractors...................................................................................5

NLRB v. Hearst, 322 U.S. 111 (1944)....................................................................................5

Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 319 (1992)......................................5

Clackamas Gastroenterology Associates v. Wells, 538 U.S. 440 (2003)...............................5

Vizcaino v. Microsoft Corp., 120 F.3d 1006 (9th Cir. 1997)..................................................6

Statutory Exemptions, Small Employers, and Joint Employees................................................6

Zheng v. Liberty Apparel Co., 355 F.3d 61 (2d Cir. 2003).....................................................6

The Hiring Process....................................................................................................................................7

Legal Restrictions on Job Access..............................................................................................7

Wardwell v. Board of Education, 529 F.2d 625 (6th Cir. 1976)(School Teacher Case).........7

Collins Food Intern., Inc. v. INS, 948 F.2d 549 (9th Cir. 1991)(Sizzler Case).........................7

Employer Information-Gathering.............................................................................................8

(a) Interviews................................................................................................................................8

Lysak v. Seiler Corp, 614 N.E.2d 991 (Mass. 1993)...............................................................8

(b) Employment References..........................................................................................................8

Singer v. Beach Trading Co., 876 A.2d 885 (N.J. Super Ct. App. Div. 2005)..........................8

Lewis v. Equitable Life Assurance Soc’y, 389 N.W. 2d 876 (Minn. 1986).............................8

(c) Invasion of Privacy...................................................................................................................9

Eddy v. Brown, 715 P.2d 74 (Okla. 1986).............................................................................9

Bratt v. IBM Corp., 785 F.2d 352 (1st Cir. 1986)...................................................................9

Negligent Hiring/Retention....................................................................................................10

Malroney v. B&L Motor Freight, Inc., 496 N.E.2d 1086 (Ill. App. 1986).............................10

Keller v. Koca, 111 P.3d 445 (Colo. 2005)...........................................................................10

Kadlec v. Medical Center v. Lakeview Anesthesia Associates, 527 F.3d 412 (5th Cir. 2008)10

Testing of Applicants and Employees.....................................................................................................11

Polygraph and Personality Tests............................................................................................11

Soroka v. Dayton Hudson Corp., 1 Cal. Rptr 2d 77 (Cal.Ct. App. 1991)..............................11

Drug Testing and the Constitution.........................................................................................11

National Treasury Employees Union v. Von Raab, 489 U.S. 656 (1989).............................11

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Chandler v. Miller, 520 U.S. 305 (1997)(contrast with Von Raab)......................................11

Drug Testing (conclusion)......................................................................................................12

19 Solid Waste Dept. Mechanics v. Albuquerque; 156 F.3d 1068 (10th Cir. 1998).............12

Luedtke v. Nabors Alaska Drilling Inc., 768 P.2d 1123 (Alaska 1989).................................12

Work Environment.................................................................................................................................12

Grooming and Dress..............................................................................................................12

Kelley v. Johnson, 425 U.S. 238 (1976)...............................................................................12

Jespersen v. Harrah’s Operating Co, Inc., 444 F.3d 1104 (9th Cir. 2006).............................13

Protecting Privacy on the Job.................................................................................................................13

Constitutional and Statutory Responses................................................................................13

Bodewig v. K-Mart, Inc, 635 P.2d 657 (Or. App. 1981).......................................................13

Vega-Rogriguez v. Puerto Rico Tel. Co., 110 F.3d 174 (1st Cir. 1997)..................................13

Common Law Responses.......................................................................................................13

Smyth v. Pyllsbury Co., 914 F. Supp. 97 (E.D. Pa. 1996).....................................................13

Catalano v. GWD Management Corp., 2005 WL 5519861 (S.D. Ga. March 30, 2005)........14

Off-Work Activity...................................................................................................................14

Rulon-Miller v. IBM Corp., 162 Cal. App. 3d 241 (1984).....................................................14

McCavitt v. Swiss Reinsurance America Co., 237 F.3d 166 (2d Cir. 2001)..........................14

Freedom of Expression on and Away From the Job...............................................................................14

Rankin v. McPherson, 483 U.S. 378 (1987)........................................................................14

Curay-Cramer v. Ursuline Academy, 450 F.3d 130 (3d Cir. 2006)......................................14

Novosel v. Nationwide Insurance Co., 721 F.2d 894 (3d Cir. 1983)....................................15

Jordan v. Ector County, 516 F.3d 290 (5th Cir. 2008).........................................................15

III. Discharge and Termination of Employment...................................................................................16

A. The Employment At-Will Rule.....................................................................................................16

Buian v. Jacobs and Co., 428 F.2d 531 (2d Cir. 1970).........................................................16

B. Erosion of Employment at Will....................................................................................................16

The Public Policy Exception....................................................................................................16

Gantt v. Sentry Insurance, 4 Cal. Rptr. 2d 874 (Cal. 1992)..................................................16

Arres v. IMI Cornelius Remcor, Inc., 333 F.3d 812 (7th Cir. 2003).......................................16

Serrano v. Christ Hosp., 2007 WL 4462723 (N.J. Super Ct. App. Div. 2007).......................17

Breach of Contract Terms......................................................................................................17

Gordon v. Matthew Bender & Co., 562 F.Supp. 1286 (N.D. Ill. 1983).................................17

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Scribner v. Worldcom, Inc., 249 F.3d 902 (9th Cir. 2001)...................................................17

Pugh v. See’s Candies, Inc., 171 Cal. Rptr 917 (Cal. Ct. App. 1981)....................................17

Employee Handbooks............................................................................................................17

Woolley v. Hoffman-LaRoche, Inc., 99 N.J. 284 (1985).......................................................17

Bankey v. Storer Broadcasting Co., 432 Mich. 438 (1989).................................................17

Nicosia v. Wakefern Food Corp., 136 N.J. 401 (1994)........................................................18

Promissory Estoppel..............................................................................................................18

Pepsi-Cola General Bottlers, Inc. v. Woods, 440 N.E.2d 696 (Ind. App. 1982)...................18

Covenant of Good Faith and Fair Dealing..............................................................................18

Murphy v. American Home Products Corp., 448 N.E.2d 86 (N.Y. 1983).............................18

Fortune v. National Cash Register, 364 N.E. 2d 1251 (Mass. 1977)...................................18

C. Other Protections for Employment Security...............................................................................19

Intentional Infliction of Emotional Distress; Whistleblower Statutes....................................19

Dudewicz v. Norris-Schmid Inc., 443 Mich. 68 (1993)........................................................19

Wilson v. Monarch Paper, 939 F.2d 1138 (5th Cir. 1991)...................................................19

Wrongful Discharge Statutes.................................................................................................19

Buck v. Billings Montana Chevrolet, 248 Mont. 276 (1991)...............................................19

Property and Liberty Interests...............................................................................................19

Goetz v. Windsor School District, 698 F.2d 606 (2d Cir. 1983)...........................................19

Mosrie v. Barry, 718 F. 2d 1151 (D.C. Cir. 1983)................................................................19

Plant Closings.........................................................................................................................................20

Common Law and Statutory Responses.................................................................................20

Local 1330, United Steel Workers v. U.S. Steel Corp., 631 F.2d 1264 (6th Cir. 1980)..........20

WARN ACT Litigation..............................................................................................................20

Carpenter Dist. Council of New Orleans v. Dillard Dept. Stores, Inc., 15 F.3d 1275 (5th Cir. 1994)20

Pena v. American Meat Packing Corp., 362 F.3d 418 (7th Cir. 2004)...................................20

Leaving a Job..........................................................................................................................................21

Breach of Express Terms........................................................................................................21

Handicapped Children’s Educ. Bd. v. Lukaszewski, 332 N.W. 2d 774 (Wis. 1983)..............21

Breach of Implied Terms........................................................................................................21

Mercer Mgmt. Consulting, Inc. v. Wilde, 920 F. Supp. 219 (D.D.C. 1996)..........................21

IV. Alternative Dispute Resolution.......................................................................................................21

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A. Arbitration of Employment Disputes: Chap 3 of casebook..........................................................21

The Federal Arbitration Act....................................................................................................21

Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974).......................................................21

Mitsubishi Motors Corp. v. Soler-Chrysler-Plymouth, Inc, 473 U.S. 614 (1985).................21

Gilmer v. Interstate Johnson Lance Corp., 500 U.S. 20 (1991)...........................................22

Circuit City v. Adams, 532 U.S. 105 (2001).........................................................................22

B. Arbitration after Circuit City........................................................................................................22

Hooters of America, Inc. v. Phillips, 173 F.3d 933 (4th Cir. 1999)........................................22

EEOC v. Waffle House, Inc., 534 U.S. 279 (2002)................................................................22

C. Rights of Employees and Arbitration...........................................................................................22

Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1378 (11th Cir. 2005).....................23

Gentry v. Superior Court, 42 Cal. 4th 443 (2007)...............................................................23

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II. LEGAL BOUNDARIES OF THE EMPLOYMENT RELATIONSHIP

THE IDEA OF EMPLOYEE STATUS

EMPLOYEES V. INDEPENDENT CONTRACTORS

NLRB v. Hearst, 322 U.S. 111 (1944) o Facts: News publishers refuse to collectively bargain with union representing paperboys because they didn’t consider them “employees” under the NLRA.o Holding: Union should be allowed to collectively bargain because the paperboys are employees under NLRB.o Rule: In determining whether person is IC or Employee look at “economic realities” of the situation (i.e. newsies rely on the wages paid by publishers, publishers set the minimum price on papers, give them equipment, etc).

Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 319 (1992) o Facts: Nationwide allowed P to enroll in company retirement plan so long as he sold their insurance. Contract provided that P would forfeit this retirement plan if he sold other insurance within a year of termination. P is terminated and begins selling other insurance. Nationwide rescinds his retirement plan and P sues under ERISA. o Holding: Remanded to determine whether P is “employee” under Agency Testo Rule: Where the statute is unclear as to how to determine whether P is an “employee,” the Court should employ a common-law “agency theory including factors such as:o hiring party's right to control manner and means by which product is accomplished, o skill required, o source of instrumentalities and tools, o location of work, o duration of relationship, o right to assign additional projects, o extent of hiring party's discretion over when and how long to work,o method of payment, o hiring party's role in hiring and paying assistants, o regular business of hiring party, o employee benefits, o tax treatment of hired party

Clackamas Gastroenterology Associates v. Wells, 538 U.S. 440 (2003) o Facts: P files suit alleging that she was fired in violation of the ADA. D argues that ADA does not apply because they do not meet the 15-employee threshold necessary for ADA to apply. P argues that the 4 physicians that own the practice should be counted as employees.o Issue: Whether a “shareholder-director” is an “employee” under the ADA.

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o Holding: “Shareholder-directors” or a Professional Corporation can be employees if sufficient control is exerted over them as in a typical master-servant relationship. Reversed and remandedo Rule: Control Test:o (1) whether organization can hire or fire individual or set rules and regulations of individual's work; o (2) whether and, if so, to what extent organization supervises individual's work; o (3) whether individual reports to someone higher in organization; o (4) whether and, if so, to what extent individual is able to influence organization; o (5) whether parties intended that individual be employee, as expressed in written agreements or contracts; and o (6) whether individual shares in profits, losses, and liabilities of organization.

Vizcaino v. Microsoft Corp., 120 F.3d 1006 (9th Cir. 1997) o Facts: Microsoft employs two workforces—one of “core” employees and one of “freelancers”—that essentially do the same work under the same supervision. The difference is the freelancers signed a contract that states they were ICs ineligible for health and retirement plans but received more pay. P sues under ERISAo Holding: Freelancers were entitled to retroactive benefits because they were employees.o Rule: An employer may not contract a way around a statutory or common-law definition of an employee. Labeling someone an “independent contractor” in an agreement doesn’t necessarily make them one.

STATUTORY EXEMPTIONS, SMALL EMPLOYERS, AND JOINT EMPLOYEES

Zheng v. Liberty Apparel Co., 355 F.3d 61 (2d Cir. 2003) o Facts: Ps are non-English-speaking workers that finished clothing for several contracting corporations through Liberty. They brought suit against Liberty alleging overtime and minimum wage violations under the FLSA. o Issue: Whether garment manufacturers who hired contractors to stitch and finish pieces of clothing were “joint employers” within the meaning of the FLSA.o Holding: Vacated and remanded with new testo Rule: Economic Realities test:o Whether [employer]’s premises and equipment are used for P’s worko Whetehr Contractor Corp. had a business that could shift as a unit from one putative joint employer to another.o The extent to which Ps performed a discrete line-job that was integral to Liberty’s process of productiono Whether responsibility under the contracts could pass from one subcontractor to another without material changeso The degree to which the [employer] or their agents supervised P’s work; ando Whether Ps worked exclusively or predominantly for the [employer]

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THE HIRING PROCESS

LEGAL RESTRICTIONS ON JOB ACCESS

Wardwell v. Board of Education, 529 F.2d 625 (6th Cir. 1976)(School Teacher Case) o Facts: A schoolteacher brought an action under federal civil rights statutes questioning the constitutionality of a rule adopted by the Board of Education of the City of Cincinnati requiring all teachers in the Cincinnati schools hired after a given date to establish residence within the city's school district within 90 days of employment.o Holding: The right to INTRAstate travel is not protected by the Federal Constitution and that there was rational basis for the school board's residency requirement.o Rule: Government employer can restrict job access where it has rational bases for basis for restrictive measures such as:o (1) hiring teachers who are highly motivated and deeply committed to an urban educational system, o (2) teachers who live in the district are more likely to vote for district taxes, less likely to engage in illegal strikes, and more likely to help obtain passage of school tax levies, o (3) teachers living in the district are more likely to be involved in school and community activities bringing them in contact with parents and community leaders and are more likely to be committed to the future of the district and its schools, o (4) teachers who live in the district are more likely to gain sympathy and understanding for the racial, social, economic, and urban problems of the children they teach and are thus less likely to be considered isolated from the communities in which they teach, o (5) the requirement is in keeping with the goal of encouraging integration in society and in the schools.

Collins Food Intern., Inc. v. INS, 948 F.2d 549 (9th Cir. 1991)(Sizzler Case) o Facts: Collins, through a store manager, hires an employee from Sizzler’s in California to work at a Sizzler’s in Phoenix. When employee shows up to work he doesn’t have his working documents so he is not allowed to work. The next day he returns and presents driver’s license and fake SSI card. INS fines Collins for hiring an alien to work.o Holding: offering alien a job prior to verification of documents could not support finding of constructive knowledge, and employer complied with verification requirement.o Rule: Employers need not verify documents prior to extending an offer to work but must before commencing employment.

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EMPLOYER INFORMATION-GATHERING

(A) INTERVIEWS

Lysak v. Seiler Corp, 614 N.E.2d 991 (Mass. 1993) o Facts: In interview woman tells employer without solicitation that she is done having children. She is terminated after she discloses that she is pregnant. It comes out that she was pregnant—and knew of it—during the interview. P brings sex discrimination suit against employer.o Holding: employer was entitled to discharge employee on basis of her unsolicited and false statement at time of interview when she knew she was pregnanto Rule: Employer can terminate employee for giving knowingly false information on an interview.

(B) EMPLOYMENT REFERENCES

Singer v. Beach Trading Co., 876 A.2d 885 (N.J. Super Ct. App. Div. 2005) o Facts: Employee is terminated from new job when her old job tells the employer that she was not a VP but a customer service representative. She sues for negligent misrepresentation. o Holding: Reverse and remand to use new negligent misrepresentation test.o Rule: Employer can be held liable for the negligent misrepresentation of a former employee's work history if: o (1) the inquiring party clearly identifies the nature of the inquiry; o (2) the employer voluntarily decides to respond to the inquiry, and thereafter unreasonably provides false or inaccurate information; o (3) the person providing the inaccurate information is acting within the scope of his/her employment; o (4) the recipient of the incorrect information relies on its accuracy to support an adverse employment action against the plaintiff; and o (5) plaintiff suffers quantifiable damages proximately caused by the negligent misrepresentation.

Lewis v. Equitable Life Assurance Soc’y, 389 N.W. 2d 876 (Minn. 1986) o Facts:

o Holding:

o Rule:

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(C) INVASION OF PRIVACY

Eddy v. Brown, 715 P.2d 74 (Okla. 1986) o Facts: A couple of Eddy’s co-workers make fun of him after they out—through his medical record—that he is undergoing psychological evaluation. P sues for IIED and invasion of privacy.o Holding: Because psychiatric visits legitimate concerns of his supervisor, they were not actionable as unreasonable intrusion upon employee’s seclusion. Furthermore, since only a few people knew about the psych visits, it did not amount to “publicity.”o Rule: Invasion of privacy:o Publicity “Publicity” means that the matter is made public, by communicating it to the public at large, or to so many persons that the matter must be regarded as substantially certain to become one of public knowledge ... The difference is not one of the means of communication ... [but] one of a communication that reaches, or is sure to reach the public. Rest. 2d Torts § 652Do Unreasonableo Given as a private fact

Bratt v. IBM Corp., 785 F.2d 352 (1st Cir. 1986) o Facts: P sues IMB for right of privacy for: o (1) disclosing P’s use of a company wide open-door policy; o (2) circulating memos that said he was paranoid and had mental problems; and o (3) allowed IBM’s physician to discuss P’s medical problems without P’s permission.o Holding: o (1) discussion of open-door policy is permitted because it’s not intimate or highly personalo (2) circulating memos about P’s mental health was not invasion of privacy because it was not widely disseminated and limited to managers that would work with P.o (3) REVERSED and REMANDED because a reasonable fact-finder could have found that IBM gave P a reasonable expectation of privacy in providing an “in-house” doctors—even though the doctor that disclosed this was not “in-house” but a “local examining physician.”o Rule: Invasion of Privacy balancing test:o Balance the degree of intrusion on privacy created by this disclosure

Against the legitimate business interest in that information held by the employees to whom the disclosure was made.

NEGLIGENT HIRING/RETENTION

9

Malroney v. B&L Motor Freight, Inc., 496 N.E.2d 1086 (Ill. App. 1986) o Facts: D trucking company hires truck driver. On the application it asks if he has committed any vehicular or criminal offenses. He says no. The answer is not verified by D. While on duty, the trucker picks up hitch-hiker (P) and sexually assaults her. P sues D under respondeat superior. o Holding: Employer has duty to entrust truck to competent employee fit to drive a truck with a sleeping compartment. REMANDED to determine whether hiring was negligent. o Rule: Negligent Hiring Elements:o Duty – trucking company employer has duty to public to entrust truck to competent employee. o Breacho Causationo Damages

Keller v. Koca, 111 P.3d 445 (Colo. 2005) o Facts: D owned drycleaners where Uzan was GM and had keys to the store but was not allowed to let 3rd parties in during non business hours. Uzan lets in a 12-year-old (P) during non-business hours and sexually assaults her. P sues.o Holding: Employer did not owe duty to victim, since harm to her was not foreseeable risk.o Rule: Duty element requires foreseeability.

Kadlec v. Medical Center v. Lakeview Anesthesia Associates, 527 F.3d 412 (5th Cir. 2008) o Facts: Anesthesiologist lets patient lapse into vegetative state at current job. Admits to on-duty narcotic use. Current employer sues old employer for negligent misrepresentation on old referrals and omissions of the employee’s drug use.o Holding:o (1) defendants had duty not to make affirmative misrepresentations to clinic in their referral letters concerning anesthesiologist;o (2) statements in PC shareholders' referral letters were materially misleading; buto (3) hospital's referral letter that did not recommend anesthesiologist to clinic was not affirmatively misleading;o (4) defendants did not have duty to disclose in their referral letters, absent misleading statements;o Rule: Employer does not have a duty to disclose, but if they choose to disclose, they have a duty to not make affirmative misrepresentations concerning previous employees.

TESTING OF APPLICANTS AND EMPLOYEES

10

POLYGRAPH AND PERSONALITY TESTS Soroka v. Dayton Hudson Corp., 1 Cal. Rptr 2d 77 (Cal.Ct. App. 1991).

o Facts: Target security applicants brought class action suit against the company for requiring them to submit to a psychological screening. The test involved questions of religious beliefs and sexual orientation.o Holding: Target's preemployment requirement of psychological screening violates both the constitutional right to privacy and statutory prohibitions against improper preemployment inquires and discriminatory conduct by inquiring into its applicants' religious beliefs and sexual orientationo Rule: Under California Constitution, any violation of the right to privacy of job applicants must be justified by a compelling interest. o There is no compelling interest to ask a store security officer about sexual orientation or religion.

DRUG TESTING AND THE CONSTITUTION

National Treasury Employees Union v. Von Raab, 489 U.S. 656 (1989) o Facts: Customs agents are notified and subjected to drug testing prior to promotion/transfero Issue: Whether federal customs agents could be subjected to drug urinalysis testing as a condition of promotion or transfer even where there’s no history of a drug problem.o Holding: Urinalysis does not violate 4th Amendment because Government has a reasonable interest in drug testing customs officers—immediacy of the government concern outweighs the minimal intrusion. diminished expectation of privacy.o Rule: DRUG TESTING Balancing:o public need for the program

against o the individual's privacy concerns implicated by the tests to determine whether a warrant, probable cause, or some level of individualized suspicion is required in this particular context.o dissent: no evidence that drug use caused these agents to take bribes or if they carry guns, cause poor aim and shoot a person and if you test people that carry firearms, then you’d have to test people like bus drivers, crossing guards, and others who are likely to cause harm to the public safety

Chandler v. Miller, 520 U.S. 305 (1997)(contrast with Von Raab) o Facts: State statute in Georgia requires those running for public office to submit to a drug test.o Holding: Georgia's requirement that candidates for state office pass a drug test does not fit within the closely guarded category of constitutionally permissible suspicionless searcheso Rule: Where public safety is not genuinely in jeopardy, Fourth Amendment precludes suspicionless search, no matter how conveniently arranged.o challenged by (Libertarian) candidate

DRUG TESTING (CONCLUSION)

11

19 Solid Waste Dept. Mechanics v. Albuquerque; 156 F.3d 1068 (10 th Cir. 1998) o Facts: City employees challenge city’s alcohol- and drug-policies on the grounds that they are violations of 4th and 14th Amendments.o Holding: City's program requiring drug testing of trash truck mechanics not authorized to drive city vehicles on streets and highways was not warranted by a special need, and thus constituted unreasonable search and seizureo Rule: o Balancing Test Explained: In balancing intrusion on individuals' privacy interests against promotion of legitimate governmental interests, for purposes of determining whether program for drug testing of government employees constitutes unreasonable search and seizure, court examines on one side the nature of the privacy interest upon which the search at issue intrudes and the character of the intrusion that is complained of, and, on the other side, considers the nature and immediacy of the governmental concern at issue and the efficacy of the challenged test for meeting it.

Luedtke v. Nabors Alaska Drilling Inc., 768 P.2d 1123 (Alaska 1989) o Facts: Brothers working on Alasking drilling rigs are fired by private employer after refusing to submit to a drug test.o Holding: (1) drug testing program did not violate state constitutional right to privacy; (2) employer's actions did not give rise to cause of action for invasion of privacy; and (3) discharge of employees did not violate implied covenant of good faith and fair dealing.o Rule: With private employer (at-will doctrine!), the state constitution must afford a right to privacy to invalidate drug test program.

WORK ENVIRONMENT

GROOMING AND DRESS Kelley v. Johnson, 425 U.S. 238 (1976)

o Facts: Policeman brought suit under the Civil Rights Act of 1871 challenging validity of county's hair grooming regulation for the male members of its police force. The regulation required short hair, no sideburns, moustaches, beards or goatees except for medical reasons. o Holding: Police force regulations were not arbitrary enough to deprive an officer of his liberty because they were rationally related in fostering an “esprit de corps” and making officers readily identifiable to the public.o Rule: Choice of organization, dress and equipment for law enforcement personnel is a decision entitled to the same sort of presumption of legislative validity as are state choices designed to promote other aims within the cognizance of the state's police power.

Jespersen v. Harrah’s Operating Co, Inc., 444 F.3d 1104 (9 th Cir. 2006) o Facts: Female bartender at a casino is told to wear make-up. She refuses and is terminated. She brings a suit against the casino under Title VII sex discrimination.

12

o Holdings: o requirement that only female employees wear makeup was insufficient to establish prima facie Title VII sex discrimination based on disparate impact;o Court of Appeals would not take judicial notice of asserted fact that it cost more money and took more time for a female employee than a male employee to comply with employer's grooming policy; ando grooming policy did not constitute impermissible sex stereotyping, as would establish that gender played a motivating role in employer's policy.o Rule: Private employees may reasonably regulate the grooming and dress of their employees.

PROTECTING PRIVACY ON THE JOB

CONSTITUTIONAL AND STATUTORY RESPONSES

Bodewig v. K-Mart, Inc, 635 P.2d 657 (Or. App. 1981) o Facts: K-Mart employee is accused by customer of shorting her change. The employee is searched and subsequently strip-searched. She sues K-Mart and customer under theory of outrageous conduct.o Holding:o Rule:

Vega-Rogriguez v. Puerto Rico Tel. Co., 110 F.3d 174 (1 st Cir. 1997) o Facts: o Holding:o Rule: (1) employees lacked objectively reasonable expectation of privacy against disclosed, soundless video surveillance while toiling in open and undifferentiated work area; o (2) employees lacked fundamental right to be free from surveillance; and o (3) surveillance did not violate employees' substantive due process rights

COMMON LAW RESPONSES

Smyth v. Pyllsbury Co., 914 F. Supp. 97 (E.D. Pa. 1996) o Facts: Employee is discharged for what he send over company e-mailo Holding:o Rule: Termination of at-will employee for sending inappropriate e-mail did not violate public policy.o Reasonable expectation of privacy was lost when he sent out the e-mail over the company server.

Catalano v. GWD Management Corp., 2005 WL 5519861 (S.D. Ga. March 30, 2005) o Facts: McDonalds strip search caseo Holding:

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o Rule:

OFF-WORK ACTIVITY

Rulon-Miller v. IBM Corp., 162 Cal. App. 3d 241 (1984) o Facts: IMB terminated low-level employee after accusation that she was in a relationship with a manager of a rival company. IMB knew about the relationship before she was promoted. Gave her an ultimatum to stop dating. She is terminated for a conflict of interest.o Holding: o Rule:

McCavitt v. Swiss Reinsurance America Co., 237 F.3d 166 (2d Cir. 2001) o Facts: o Holding:o Rule:

FREEDOM OF EXPRESSION ON AND AWAY FROM THE JOB

Rankin v. McPherson, 483 U.S. 378 (1987) o Facts: Data-entry employee in county constable office is terminated because she says, “if they go after him again, I hope they get him,” in reference to an assassination attempt on the president.o Holding: (1) statement by employee, made in course of conversation with coemployee addressing policies of President's administration, that, “if they go for him again, I hope they get him” dealt with matter of public concern, and o (2) constable's interest in discharging clerical employee in constable's office for making statement did not outweigh employee's rights under First Amendment.o Rule: Protected Work Speech Balancing Test: o to determine whether public employer properly discharged employee for engaging in speech is whether speech may be fairly characterized as constituting speech on matter of public concern

Curay-Cramer v. Ursuline Academy, 450 F.3d 130 (3d Cir. 2006) o Facts: Former teacher at private Catholic school sued school, individual school officials, and others, alleging that her termination after signing pro-choice advertisement in local newspaper constituted retaliation for protected speech and sex discrimination in violation of Title VII and Pregnancy Discrimination Acto Holding: (1) teacher did not engage in protected activity when she signed newspaper advertisement, precluding retaliation claim, ando (2) sex discrimination claim was not cognizable, since it would necessitate court's assessment of relative severity of violations of church doctrine, in violation of First Amendment.

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o Rule:

Novosel v. Nationwide Insurance Co., 721 F.2d 894 (3d Cir. 1983) o Facts: o Holding: (1) former employee's allegations of discharge for refusal to participate in former employer's lobbying effort and his privately stated opposition to company's political stand stated claim for wrongful discharge under Pennsylvania law;o Rule: Factors to be considered in discharge for refusal to participate in lobbying:o whether, because of speech, employer was prevented from efficiently carrying out its responsibilities, o whether speech impaired employee's ability to carry his own responsibilities, o whether speech interfered with essential and close working relationships, and o whether manner, time and place in which speech occurred interfered with business operations.

Jordan v. Ector County, 516 F.3d 290 (5th Cir. 2008) o Facts: Two County Clerk employees run for County Clerk. When one wins (Morgan), the other (Jordan) stays on but is demoted. After an incident where Jordan goes into a locked judge’s office, Morgan fires her. It comes out that Morgan fires her because they were about to run against each other again.o Holding: employee engaged in protected activity involving hybrid of speech and political affiliationo Rule: For a public employee to prevail on a First Amendment retaliation claim, she must prove that: (1) she suffered an adverse employment decision; (2) she was engaged in protected activity; and (3) the requisite causal relationship between the two exists

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III. DISCHARGE AND TERMINATION OF EMPLOYMENT

A. THE EMPLOYMENT AT-WILL RULE

Buian v. Jacobs and Co., 428 F.2d 531 (2d Cir. 1970) o Facts: P is offered a contract to work in Saudia Arabia offering a MONTHLY salary for an 18-month contract. He is terminated after arriving in Saudia Arabiao Holding: provision of employment contract that ‘it is scheduled that your assignment in Saudi Arabia will continue for a period of 18 months' was merely one of expectation and was not sufficient to convert employment relationship terminable at will to contract of specific duration, particularly where contract specifically permitted employee to work as long as he desired.o Rule: An employment contract not specifically intended by the parties to be any certain duration creates employment relationship which is terminable at will by either party without cause and without liability.

B. EROSION OF EMPLOYMENT AT WILL

THE PUBLIC POLICY EXCEPTION Gantt v. Sentry Insurance, 4 Cal. Rptr. 2d 874 (Cal. 1992)

o Facts: Employee is demoted and ultimately terminated for supporting a co-worker who has claimed sexual harassment against their employers.o Holding: employee who was terminated in retaliation for supporting co-worker's claim of sexual harassment stated cause of action for tortious discharge against public policyo Rule: At-will employee possesses tort action when:o he or she is discharged for performing act that public policy would encourage, o or for refusing to do something that public policy would condemn

Arres v. IMI Cornelius Remcor, Inc., 333 F.3d 812 (7 th Cir. 2003) o Facts: Employee suggested to employers that they terminate people who may have fraudulent SSI cards. Employer tells her to notify the employees to correct the error. She refuses to do this because she believes it to be unlawful.o Holding: fact that employee may have had federal remedy against employer under Immigration Reform and Control Act did not automatically preclude employee's state law tort claim of retaliatory dischargeo Rule: Public Policy exception is allowed even if the employee asserting it is incorrect about the law which he or she is trying to uphold. o A theory of retaliatory discharge under Illinois law requires an employee to show: o (1) that she had been discharged; o (2) that her discharge was in retaliation for her activities; and o (3) that her discharge violated a clearly mandated public policy of the state of Illinois.

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Serrano v. Christ Hosp., 2007 WL 4462723 (N.J. Super Ct. App. Div. 2007) o Facts: Meningitis caseo Holding:o Rule:

BREACH OF CONTRACT TERMS Gordon v. Matthew Bender & Co., 562 F.Supp. 1286 (N.D. Ill. 1983)

o Facts: Employee is terminated right before the 8-year mark of employment where his pension would have kicked in.o Holding: Employer could not terminate (in bad faith) prior to the vesting of pension to avoid paying the pension. o Rule: Employee at will may not be deprived of commissions, in large part “earned” prior to separating from employer, by discharge made in bad faith and intended to deprive employee of the commissions.

Scribner v. Worldcom, Inc., 249 F.3d 902 (9th Cir. 2001) o Facts: Employee is terminated by his employer when they are trying to sell a division of the corporation. The corporation frames the termination as “for cause” to avoid having to honor stock options to employee.o Holding: committee breached duty of good faith and fair dealing it owed under Washington law when it found employee's termination to be with cause for purposes of option contractso Rule: Once again, you cannot deprive an employee of bargain-for terms (pensions, stock options) by operating in bad faith.

Pugh v. See’s Candies, Inc., 171 Cal. Rptr 917 (Cal. Ct. App. 1981) o Facts: o Holding:o Rule:

EMPLOYEE HANDBOOKS Woolley v. Hoffman-LaRoche, Inc., 99 N.J. 284 (1985)

o Facts: P works as an engineer for D. There is no written employment contract. After writing a report about piping problems that his superiors did not like, he is asked to resign or be fired. P declines. P is fired. o Holding: absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause was enforceable against employer even when employment was for an indefinite term and would otherwise be terminable at will.o Rule: An employment manual can contractually obligate the employer to the terms within it (unilateral contract!)

Bankey v. Storer Broadcasting Co., 432 Mich. 438 (1989) o Facts:

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o Holding: In Michigan, employer may unilaterally change written discharge-for-cause policy to employment-at-will policy, even though right to make such change was not expressly reserved from onseto Rule: For revocation of discharge-for-cause policy to become legally effective, reasonable notice of change must be uniformally given to affected employees.

Nicosia v. Wakefern Food Corp., 136 N.J. 401 (1994) o Facts: Low-level employee (P) is fired for mishandling merchandise. P files wrongful termination suit for not following the manual’s procedures. The manual contains a disclaimer on the first paragraph of the first page of a 160-page manual but was only distributed to 300 of the 3,000 of the employees.o Holding: employee handbook created implied contract of employment.o Rule: Disclaimer location: In determining whether handbook is enforceable contract of employment, courts look to reasonable expectation of employment.o Distribution : the handbook must be widely distributed

November 2, 2009 PROMISSORY ESTOPPEL

Pepsi-Cola General Bottlers, Inc. v. Woods, 440 N.E.2d 696 (Ind. App. 1982) o Facts: P is orally promised a job with Pepsi provided that she quit her other jobs. She discloses that her boyfriend works for Coca Cola. She is terminated before she reports to work. She subsequently finds a job at the Ramada. P sues on promissory estoppel theory. o Holding: P had right of action under promissory estoppel, but since defendant could discharge plaintiff after a single day's work without incurring liability and since there was insufficient proof of out-of-pocket expenses incurred in reliance on defendant's promise, plaintiff was not entitled to recovery.o Rule: Executory indefinite employment contract is not enforceable, and is terminable at will of either party.o If tenure of service cannot be determined from terms of contract, such contract is one at will, and may be terminated at any time

COVENANT OF GOOD FAITH AND FAIR DEALING Murphy v. American Home Products Corp., 448 N.E.2d 86 (N.Y. 1983)

o Facts: P who has no written contract is allegedly fired for uncovering millions in illegal financial manipulations and for his age. P argues that D was bound not to dismiss employees for reasons contrary to public policy.o Holding: there is no implied obligation of good faith in at-will contract of employmento Rule: Good Faith: (NY) an obligation of good faith and fair dealing on the part of a party to a contract may be implied and, if implied will be enforced. The covenant of good faith will not, however, fetter an employer’s right to terminate an employee.

PROCEDURAL POSTURE: Plaintiff former employee appealed a decision of the Appellate Division of the Supreme Court in the First Judicial Department (New York), which granted defendant former

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employer's motion to dismiss the former employee's causes of action for wrongful discharge, intentional infliction of emotional distress, prima facie tort, and breach of contract.

OVERVIEW: The former employee filed an action against his former employer for wrongful discharge, intentional infliction of emotional distress, prima facie tort, and breach of contract. On appeal, the court held that recognition in New York State of tort liability for wrongful discharge should await legislative action. Further, the court held that facts alleged by the former employee fell far short of the strict standard for a claim of intentional infliction of emotional distress. The court held that the former employee's employment was at will, a relationship in which the law had accorded the former employer an unfettered right to terminate at any time. Under New York law, absent a constitutionally impermissible purpose, a statutory proscription, or an express limitation in individual contract of employment, an employer's right at any time to terminate employment at will was unimpaired. Finally, the court held that the former employee's cause of action for age discrimination was not barred by the one-year statute of limitations in N.Y. Exec. Law ß 297(5) because ß 297(5) applied only to the filing of complaints with the Division of Human Rights.50 million in illegal accounting practices

OUTCOME: The court modified the lower court's order to reinstate the former employee's cause of action for age discrimination. The dismissal of all other causes of action was upheld.

Fortune v. National Cash Register, 364 N.E. 2d 1251 (Mass. 1977) o Facts: P is employed by written contract as a salesman who receives commission for his sales. Prior to completing a big sale, the company terminates him.o Holding: (1) even though salesman's contract was terminable at will, there was an implied covenant of good faith in the contract, and (2) evidence sustained determination that employer had discharged the salesman in order to avoid paying certain bonuses to the salesman.o Rule: (MA) Under covenant of good faith and fair dealing, employer cannot terminate employee to avoid contract terms.

C. OTHER PROTECTIONS FOR EMPLOYMENT SECURITY

INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; WHISTLEBLOWER STATUTES Dudewicz v. Norris-Schmid Inc., 443 Mich. 68 (1993)

o Facts: o Holding:o Rule:

Wilson v. Monarch Paper, 939 F.2d 1138 (5th Cir. 1991) o Facts: o Holding:o Rule:

WRONGFUL DISCHARGE STATUTES Buck v. Billings Montana Chevrolet, 248 Mont. 276 (1991)

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o Facts: Guy goes around buying failing dealerships. He offers the previous owners a contract to buy the dealership on the condition that they resign. Buck’s contract doesn’t have this condition. He is subsequently terminated. Buck sues for: wrongful discharge, violation of public policy o Holding: o Rule: Montana law requires a legitimate business reason for termination (cannot be arbitrary, capricious or whimsical). NO AT WILL DOCTRINE.

PROPERTY AND LIBERTY INTERESTS Goetz v. Windsor School District, 698 F.2d 606 (2d Cir. 1983)

o Facts: The school believes that Goetz played a role in break-ins occurring at the school. He asks for an extension to write reasons why he was not involved and it is granted. He doesn’t turn it in and it terminated. o Holding: Goetz has no property interest in his job because he was not implied for 5 years as required by law.o Rule: Civil service employment positions can be legitimate property interests.

Mosrie v. Barry, 718 F. 2d 1151 (D.C. Cir. 1983) o Facts: Police officer criticizes his superiors and is transferred laterally (to a worse assignment). Asserts that he is being deprived of Due Process liberty.o Holding: police officer was not deprived of any liberty interest when he was publicly criticized prior to his being transferred, and thus he was not entitled to due process protections before transfer.o Rule: Deprivation of liberty must involve a removal, extinguishment, or significant alteration of an interest recognized and protected by state law.

PLANT CLOSINGS

COMMON LAW AND STATUTORY RESPONSES Local 1330, United Steel Workers v. U.S. Steel Corp., 631 F.2d 1264 (6 th Cir. 1980)

o Facts:

o Holding:

o Rule:

WARN ACT LITIGATION Carpenter Dist. Council of New Orleans v. Dillard Dept. Stores, Inc., 15 F.3d 1275 (5 th Cir. 1994)

o Facts:

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o Holding:

o Rule:

Pena v. American Meat Packing Corp., 362 F.3d 418 (7 th Cir. 2004) o Facts:

o Holding:

o Rule:

LEAVING A JOB

BREACH OF EXPRESS TERMS Handicapped Children’s Educ. Bd. v. Lukaszewski, 332 N.W. 2d 774 (Wis. 1983)

o Facts: Speech therapist leaves school district for

o Holding:

o Rule:

BREACH OF IMPLIED TERMS Mercer Mgmt. Consulting, Inc. v. Wilde, 920 F. Supp. 219 (D.D.C. 1996)

o Facts:

o Holding:

o Rule:

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IV. ALTERNATIVE DISPUTE RESOLUTION

A. ARBITRATION OF EMPLOYMENT DISPUTES: CHAP 3 OF CASEBOOK

THE FEDERAL ARBITRATION ACT Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974)

o Facts:

o Holding:

o Rule:

Mitsubishi Motors Corp. v. Soler-Chrysler-Plymouth, Inc, 473 U.S. 614 (1985) o Facts:

o Holding:

o Rule:

Gilmer v. Interstate Johnson Lance Corp., 500 U.S. 20 (1991) o Facts:

o Holding:

o Rule:

Circuit City v. Adams, 532 U.S. 105 (2001) o Facts:

o Holding:

o Rule:

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B. ARBITRATION AFTER CIRCUIT CITY

Hooters of America, Inc. v. Phillips, 173 F.3d 933 (4 th Cir. 1999) o Facts:

o Holding:

o Rule:

EEOC v. Waffle House, Inc., 534 U.S. 279 (2002) o Facts:

o Holding:

o Rule:

C. RIGHTS OF EMPLOYEES AND ARBITRATION

Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1378 (11th Cir. 2005) o Facts:

o Holding:

o Rule:

Gentry v. Superior Court, 42 Cal. 4th 443 (2007) o Facts:

o Holding:

o Rule:

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