Chapter 51 – Employment Law

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Employment Law

PA ET RHC 51

Take care of those who work for you and you’ll float to greatness on their achievements.

H.S.M. Burns, quoted inMen at the Top (Elliott, 1959)

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Learning Objectives

• Identify and describe legislation protecting worker safety, health, and well-being; regulating wages and hours, pensions and benefits, and income security; and that governs unionized workforces

• Explain employment-at-will doctrine and its major exceptions

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• Historic rule of law: employment at will– Employer may fire an employee for any

(or no) reason

Overview

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• Modern employment law: employment at will unless the employee is protected by a statute in several categories:– Employee Health, Safety, and Well-Being – Employment Security – Financial Protection – Employment Discrimination– Employee Privacy

Overview

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Employee Health, Safety, and Well-Being

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• Workers’ compensation protects only employees (not independent contractors)– Some state laws exempt certain

categories of employees or employers

• When applicable, worker’s compensation laws allow injured employees to recover under strict liability– Removes need to prove employer

negligence and eliminates employer defenses

Workers’ Compensation

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• Workers’ compensation is an employee’s exclusive remedy against an employer for covered injuries– Unless employer acted intentionally

• Types of recovery: hospital and medical expenses, (2) disability benefits, (3) specified recoveries for loss of certain body parts, and (4) death benefits to survivors and/or dependents

Exclusive Remedy

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• Employees recover only for work-related injuries – those injuries that:1. Arise out of the employment

• Close relationship between nature of employment and injury

2. Happen in the course of employment• Injury occurred within time, place, and

circumstances of employment

• See Darco Transportation v. Dulen

Work-Related Injuries

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• In general, a state agency administers workers’ compensation systems to handle and adjudicate workers’ claims

• States fund workers’ compensation by requiring covered employers to purchase private insurance, make payments into a state fund, or self-insure with a contingency fund

Agency Administration

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• The federal Occupational Safety and Health Act imposes a duty on employers to provide their employees with a workplace and jobs free from recognized hazards that may cause death or serious physical harm

• The Occupational Safety and Health Administration (OSHA) issues and enforces supporting regulations

OSHA

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• OSHA requires employers to inform, train and protect employees, especially with regard to hazardous materials and equipment

• OSHA is authorized to inspect a workplace and issue citations for violations of the act and regulations

OSHA Rules & Enforcement

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• Family and Medical Leave Act (FMLA) covers those employed for > 12 months (>1,250 hours) by an employer employing 50 or more employees

• Employers who deny FMLA rights bear civil liability to the affected employee

Family & Medical Leave Act

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• Covered employees may take a total of 12 workweeks of leave during any 12-month period for one of several reasons: – Birth of a child– Adoption of a child– Need to care for a spouse, child, or parent with a

serious health condition– Employee’s own serious health condition

• Beaver v. RGIS Inventory Specialists, Inc.: not every illness qualifies for FMLA leave

Family & Medical Leave Act

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Financial Protection

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• Federal social security system is funded by the Federal Insurance Contributions Act (FICA), which imposes a flat percentage tax on employee income below a base figure and requires matching amounts by employers to support programs:– Social security– Disability– Medicare

Social Security

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• Covering discharged workers, each state administers a system of unemployment compensation under federal guidelines– Funded by federal and state unemployment

compensation taxes paid by employers– Workers who voluntarily leave without good

cause, are fired for misconduct, fail to actively seek new work, or refuse other work generally are ineligible for benefits

Unemployment Compensation

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• Employers often contribute voluntarily to employee retirement income through pension plans

• Employee Retirement Income Security Act of 1974 (ERISA) imposes:– Guaranteed employee participation– Record-keeping, reporting, and disclosure

requirements– Pension fund managers have fiduciary duties

ERISA

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• Remedies for ERISA violations include civil suits by plan participants and beneficiaries, equitable relief, and criminal penalties

ERISA

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• FLSA regulates wages and hours by entitling covered employees to 1. Specified minimum wage whose

amount changes over time, and 2. Time-and-a-half rate for work

exceeding 40 hours per week

• Exemptions: executive, administrative, and professional personnel

Fair Labor Standards Act

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• FLSA prohibits oppressive child labor by any employer engaged in interstate commerce or producing goods for such commerce

• See U.S. Dept. of Labor Int’l Child Labor Program website

Fair Labor Standards Act

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• Until the National Labor Relations Act of 1935 (NLRA or Wagner Act), U.S. workers attempting to organize and obtain better working conditions and pay often were treated like criminals

Collective Bargaining

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• NLRA gave employees the right to organize by enabling them to form, join, and assist labor organizations and to bargain collectively through their own representatives

• The Act also prohibited employers from engaging in certain unfair labor practices and established the National Labor Relations Board (NLRB)

Union Activity

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• NLRA amended in 1947 and 1959 to restrict union activity, but organized labor may still engage in collective bargaining to achieve a collective bargaining agreement and may protest unfair labor practices by employers

Restrictions on Union Activity

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Information for Discussion

• 4,547 fatal work injuries were recorded in the United States in 2010.

• 3,063,400 non-fatal injuries and illness were reported in 2010.

• Cost of most disabling workplace injuries and illnesses in 2008: $53.42 billion in direct U.S. workers compensation costs, averaging more than one billion dollars per week

• See OSHA’s Making the Business Case for Safety and Health

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Thought Questions

• Do you think that people take advantage of government employment laws? Do you believe that Workers’ Compensation programs are effective methods to handle the substantial cost of workplace injuries?

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Equal Opportunity Legislation

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• The Equal Employment Opportunity Commission is an independent federal agency authorized to enforce employment discrimination laws, investigate allegations of discrimination, and interpret statutes by issuing rules, regulations, and guidelines– See the EEOC website

The EEOC

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• As an amendment to the FLSA, the Act forbids pay discrimination based on gender: employee may not be paid a lesser rate than employees of opposite sex for equal work– Equal work defined as substantially equal

in terms of effort, skill, responsibility, and working conditions

– Unlike FLSA, EPA covers executive, administrative, and professional employees

Equal Pay Act of 1963 (EPA)

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• Employer may raise one four defenses in a lawsuit filed under the EPA by showing the pay disparity is based on (1) seniority, (2) merit, (3) quality or quantity of production (e.g., a piecework system), or (4) any factor other than gender

Equal Pay Act of 1963 (EPA)

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Title VII of 1964 Civil Rights Act

• Prohibits employers from discriminating on basis of race, color, religion, gender, or national origin

• Prohibits sexual harassment and discrimination because of pregnancy

• Covers all employers employing 15 or more employees and engaging in an industry affecting interstate commerce

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Title VII Procedure

• If an employer’s act violates Title VII, the aggrieved person must file a charge or complaint with EEOC for investigation and allow agency to either file a lawsuit or obtain resolution– See EEOC website regarding procedure

• If, after six months, EEOC fails to file suit or resolve the claim, plaintiff may obtain a right to sue letter and file a civil lawsuit

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Title VII Remedies

• If private plaintiff or EEOC wins a Title VII suit, several remedies exist: compensatory damages, reasonable attorney’s fees, and equitable relief

• If discrimination was intentional, an employee may obtain back pay for lost wages and compensatory damages for emotional distress, sickness, loss of reputation, or denial of credit

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• Punitive damages are available if defendant discriminated against current or prospective employee with malice or reckless indifference to plaintiff’s rights

Title VII Remedies

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Definition of Discrimination

• Discrimination is refusing to hire, failing to promote, firing, or otherwise reducing a person’s employment opportunities for a person in a protected class

• Two methods to prove discrimination:– Disparate treatment– Disparate impact

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• Plaintiff must show s/he was treated differently due to race, gender, color, religion, or ethnicity (prima facie case)

– Example: Gaskell v. University of Kentucky

• Once plaintiff proves prima facie case, the burden shifts to employer to show a legitimate and non-discriminatory reason for discrimination

– Plaintiff must then prove that employer’s reason is mere pretext to win the case

Proving Disparate Treatment

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• Disparate impact occurs if an employer has a rule or practice that, on its face, seems non-discriminatory or neutral, but the impact excludes too many people in a protected class– Example: height or weight limits, taking

a written test

• If plaintiff proves disparate impact, burden is on employer to show job-related reason

Proving Disparate Impact

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• An employer may prevail in a Title VII claim if it can prove a legitimate reason for the discriminatory act or practice based on:– Bona fide occupational qualification

(BFOQ)– Seniority– Merit

Title VII Employer Defenses

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Henry v. Milwaukee County

• Facts: – Plaintiffs (both women) filed Title VII suit

alleging gender discrimination and retaliation by defendant-employer for its policy of assigning some correction officers' shifts in single-sex juvenile detention facilities on the basis of sex

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• Ruling: – Judgment for defendant affirmed in part

and reversed in part• Gender-based assignments not reasonably

necessary to achieve facility's goals of privacy, security, and rehabilitation, and therefore an officer's gender could not be considered a bona fide occupational qualification

• But, plaintiffs did not prove their harassment or retaliation claims

Henry v. Milwaukee County

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Title VII and Religion

• Employers must make reasonable accommodation for a worker’s religious beliefs unless the request would cause undue hardship for the business– The term religion is broadly defined– Undue hardship exists if

accommodation imposes more than a minimal burden on an employer

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Title VII and Sexual Harassment

• Two major categories of sexual harassment are prohibited by Title VII:– Quid pro quo (this for that): when an

aspect of a job is made contingent on an employee’s sexual activity

– Hostile work environment: when sexual talk and innuendo are so pervasive that a hostile work environment is created for the employee

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• Harassers and victims may be either gender

• Keeton v. Flying J, Inc. confirms that Title VII allows recovery when the harasser is a female and harassee is male

• Harasser(s), individual manager(s), and the company are potential defendants

Title VII and Sexual Harassment

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Ashmore v. J. P. Thayer Co.

• Facts and Background:– Plaintiff sued under Title VII for same-sex

sexual harassment and retaliation, and state law claims for negligent retention

– Plaintiff alleged that Fye, a male employee of defendant and plaintiffs' supervisor, sexually harassed plaintiffs and took adverse employment actions against plaintiffs when they complained about it

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Ashmore v. J. P. Thayer Co.

• Appellate Court Ruling:– Jury found for plaintiffs, but appellate

court ruled for defendant because plaintiffs failed to notify defendant of harassment in a timely manner and “failed as a matter of law to take reasonable advantage of opportunities provided by Defendant to prevent and/or correct the sexual harassment”

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Age Discrimination in Employment Act

• Prohibits age-based discrimination against employees or job applicants at least 40 years old

• Covers organizations that engage in an industry affecting interstate commerce, and employ at least 20 persons

• Remedial procedures, defenses, and remedies are similar to Title VII claims

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Americans with Disabilities Act

• Prohibits employers from disqualifying a job applicant or employee if employee can, with reasonable accommodation, perform the essential functions of the job

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Definition of Disability

• Disability under the ADA is:– A physical or mental impairment that

substantially limits one or more of an individual’s major life activities

– A record of such an impairment, or – One’s being regarded as having such

an impairment

• Employer may not ask about disabilities before making a job offer

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• Act covers employers who have 15 or more employees and are engaged in an industry affecting interstate commerce

• Accommodation is not reasonable if it would create undue hardship for employer

• Remedial procedures, defenses, and remedies are similar to Title VII claims

Americans with Disabilities Act

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• During 1990s and early 2000s, the Supreme Court narrowed the concept of “disability”

• In response, Congress enacted the ADA Amendments Act of 2008, which clarified standards for determining disability and expressed intent that the ADA be “construed in favor of broad coverage”

• Fleck v. WILMAC Corp.: case allowed to proceed to trial to determine whether reasonable accommodation was provided

Americans with Disabilities Act

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Employee Privacy

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Overview

• Employer interests in surveillance of the workplace may conflict with employee privacy interests

• Unless otherwise specified by statute, U.S. Constitution does not apply to private employment– Federal privacy laws typically apply

only to federal employees and state law covers private sector employees

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Employee Polygraph Protection Act of 1988

• Applies to private employers and current or prospective employees

• Enforced by Department of Labor (DOL), an employer may not:– Require or request employees to take a

polygraph (lie detector) test– Use or inquire about polygraph results– Discriminate based on polygraph results

or an employee’s failure or refusal to take test

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• Certain employers exempted: government, private firms with security-related interests, private firms investigating economic loss

• For violations, DOL may file suits or issue civil penalties and private parties may sue for damages and equitable relief

Employee Polygraph Protection Act of 1988

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Drug & Alcohol Testing

• Testing by public employers is legal under search and seizure provisions of Fourth Amendment if:– Reasonable basis for

suspecting employee drug or alcohol use on the job exists

– If such use could threaten public interest or public safety

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Employer Searches

• A public employee has a reasonable expectation of privacy in areas such as his or her office, desk, or files, but a search of those areas is constitutional if the search is reasonable under circumstances– Requires balancing employee’s legitimate

privacy expectations against government’s need for control of the workplace

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• A public or private employer who conducts an allegedly unreasonable search may be sued by an employee under common law claim of invasion of privacy

Employer Searches

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Records & References

• Most states allow employees access to their personnel files maintained by employers and limit access by third parties

• Employers who transmit such data to third parties, such as information in a reference letter, may be liable for civil claims of defamation or invasion of privacy

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Employer Monitoring

• Employers may monitor the workplace by closed-circuit television, video monitoring, telephone monitoring, computer workstation monitoring (keystroke counting), and using metal detectors

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• Many firms warn employees that e-mail, voicemail, Internet usage, and other communications and transactions are subject to monitoring

• Sporer v. UAL, Inc. illustrates the legal impact of these policies on a wrongful termination claim

Employer Monitoring

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Employment Security

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Employment at Will Rule

• Traditional employment-at-will rule first appeared around 1870: either party can terminate an employment contract of indefinite duration for good cause or no cause

• Doctrine limited today by statutes and three common law exceptions:– Public policy– Implied covenant of good faith & fair dealing– Employment promises

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Wrongful Discharge

• In states recognizing exceptions to traditional rule, a terminated employee may sue the former employer for wrongful discharge or unjust dismissal– May also include tort

or contract claims

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Public Policy Exception

• Terminated employee may claim discharge was unlawful because it violated state public policy in one of three ways:– Employee refused to commit unlawful act– Employee performed public obligation

such as military duty or whistle-blowing• A whistle-blower is an employee who

publicly discloses dangerous, illegal, or improper behavior by the employer

– Employee exercised legal right or privilege

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Breach of Good Faith

• In a wrongful discharge suit based on breach of the implied covenant of good faith and fair dealing, employee argues discharge was unlawful because it was not made in good faith or did not amount to fair dealing

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Breach of Promise Exception

• Increasingly, courts have made employers liable for breaking promises to employees made prior to or during employment

• If employer breaks promises when it fires employee, it is liable for breach of contract

• Sporer v. UAL, Inc : employee should have known that e-mail privacy did not exist

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Test Your Knowledge

• True=A, False = B– Employment at will is the rule of law in

all fifty states.– An employer (100 employees) may not

fire a man for taking a two month leave of absence to care for his seriously-ill wife.

– Workers’ compensation is an employee’s exclusive remedy against an employer for covered injuries

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• True=A, False = B– The Fair Labor Standards Act prohibits any

form of child work or labor by any employer engaged in interstate commerce.

– OSHA may not inspect a workplace or issue citations for violations of the act without a warrant issued by a judge.

– An employer may terminate a whistle-blower immediately because whistle-blowers make defamatory comments to the public.

Test Your Knowledge

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• Multiple Choice– Under Workers’ Compensation,

employees recover only for: a) Injuries that affect an employee’s

ability to do his or her jobb) Work-related injuries that arise out of

or happen in the course of employmentc) Injuries that occur during any period of

employment, whether on or off the jobd) both A and B

Test Your Knowledge

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Test Your Knowledge

• True=A, False = B– The Civil Rights Act prohibits employers

from discriminating on basis of race, color, religion, gender, or national origin.

– Two methods to prove discrimination are disparate treatment and disparate impact.

– Discrimination based on a BFOQ is legal.– Every employer has the right to request a

prospective employee to take a pre-employment polygraph.

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• True=A, False = B– Unless otherwise specified by statute,

protections of the U.S. Constitution do not apply to government employees.

– The Americans With Disabilities Act prohibits employers from disqualifying a job applicant or employee with a disability for any reason.

– The two types of sexual harassment claims are quid pro quo and undue hardship.

Test Your Knowledge

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• Multiple Choice– If an employer’s act violates Title VII, the

aggrieved person must: a) File a charge or complaint with the EEOCb) Allow the EEOC to investigate the charge c) Allow the EEOC to file a lawsuit or obtain

resolutiond) All of the abovee) File a lawsuit within 6 months in federal

district court

Test Your Knowledge

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Thought Questions

• Employers may be able to monitor your work by video, audio, computer keystroke, or other methods of surveillance. Are you comfortable with this fact? Are broad allowances for employer surveillance good public policy?