BUSINESS LAW TODAY Essentials 9th Ed BUSINESS LAW TODAY Essentials 9th Ed. Roger LeRoy Miller - Institute for University Studies, Arlington, Texas Gaylord A. Jentz - University of Texas at Austin, Emeritus Chapter 18 Employment Law

Learning Objectives What is the employment-at-will doctrine? When and why are exceptions to this doctrine made? What federal statute governs working hours and wages? Under the Family and Medical Leave Act of 1993, under what circumstances may an employee take family or medical leave?

Learning Objectives What are the two most important federal statutes governing immigration and employment today? Generally, what kind of conduct is prohibited by the Title VII Civil Rights Act, as amended?

Employment-at-Will Historically, employment law was governed by the common law doctrine of “employment at will” where either employer or employee could terminate the relationship at any time, for any reason. Today employment law is heavily regulated by state and federal statutes.

Employment-at-Will The doctrine of employment-at-will allows the employer and the employee to terminate employment at any time, for any reason, without liability. Some states recognize one or more judicial exceptions to this rule, while some states recognize none. 

Exceptions to At-Will Contract Exceptions: An implied contract exists between employer and employee. Oral agreements may become part of the implied contract. Tort Exceptions: Wrongful discharge, defamation may be actionable. Public Policy Exceptions (Whistleblowing). Wrongful Discharge.

Wage and Hour Laws Child Labor. Fair Labor Standards Act (1938) prohibits oppressive child labor practices. Provides regulations for work, depending on the age of child.

Wage and Hour Laws Wages and Hours. Overtime Exemptions. Davis-Bacon Act -- the prevailing wage act. Walsh-Healey Act -- the beginning of minimum wages. Fair Labor Standards Act (FLSA) -- an extension of wage and hour regulation to workers in interstate commerce. Overtime Exemptions. Certain employees (usually executive, administrative, and professional) are exempt from overtime.

Layoffs Worker Adjustment and Retraining Notification Act. Intended to give employees advance notice in the event of a “mass layoff.” Mass layoff: during 30 day period, loss of at least 33% full-time and 50 employees, OR Loss of 500 hundred employees. Remedies for Violations: $500/day, plus back pay, medical benefits.

Family Medical Leave Act The FMLA requires employers with over 50 employees to provide unpaid leave to employees who need to care for a spouse, child, or parent suffering with a serious medical condition. The employee cannot be terminated for taking leave under the policy, and has the right to restoration to the same or a similar position upon return to work.

The Occupational Safety and Health Act (OSHA) The fundamental federal law aimed toward safety in the workplace. Enforcement is by OSHA, NIOSH, and the OSHRC. Procedures and Violations: Employers with 11 or more employees required to keep records.

State Worker’s Compensation Laws These laws reduce employer liability to employees for workplace injuries, and provide a measure of assurance that workplace injuries will be compensated, regardless of the solvency of the employer, by: Requiring that injured employees make a claim against the employer’s workers’ compensation insurance policy, instead of suing the employer. Requiring most employers to carry workers’ compensation insurance.

Income Security Social Security and Welfare. Medicare. Federally funded health insurance for people aged 65 or older. Private Pension Plans. Employee Retirement Income Security Act (ERISA) gives employee a vested right to receive pension benefits at a future date when she stops working. Unemployment Insurance.

COBRA COBRA prohibits the discontinuance of insurance benefits of workers who have voluntarily or involuntarily been separated from work, unless the involuntary separation was on the basis of gross misconduct. Employers must comply if they have more than 20 employees.

Employer-Sponsored Group Health Plans Health Insurance Portability and Accountability Act (HIPAA) Does not require health coverage but does establish requirements for those that do.

Employee Privacy Rights Electronic Monitoring in the Workplace. Employee Privacy Under Constitutional and Tort Law. Personal right to privacy may not apply to work computers, especially if there is a policy manual. Electronic Communications Privacy Act. Stored Communications (part of ECPA).

Employee Privacy Rights Other Types of Monitoring. Lie Detectors. Drug and Genetic Testing. What about preemployment screening procedures?

Immigration Law Immigration Reform and Control Act of 1986. Amnesty to certain groups of illegal aliens living in the United States. Sanctions for employers. Criminal and Civil Penalties. Antidiscrimination Provisions.

Immigration Law Immigration Act of 1990. I-9 Employment Verification by Employers. I-551 Alien Registration Receipts. H-1 B Visa Program. Labor Certification. H-2, O, L, and E Visas. CASE 18.1 Castellanos-Contreras v. Decatur Hotels, LLC. (2009). Guest workers are liable for their own recruitment, transportation, and visa expenses if incurred without employer’s knowledge.

Title VII of the Civil Rights Act of 1964 Title VII prohibits discrimination in employment on the basis of race, sex, color, religion, and national origin. “Sex” now includes pregnancy. In addition to prohibiting religious discrimination, employers must reasonably accommodate an employee’s religious practices. Enforcement of Title VII by EEOC.

Intentional vs. Unintentional Discrimination Intentional (“Disparate-Treatment”) Discrimination. For prima facie case, applicant must prove: She is member of a protected class; Applied, qualified and rejected for job; and Employer continued to seek applicants. Unintentional (“Disparate Impact”) Discrimination. No-protected applicant sues Employer who tries to integrate members of protected classes into workplace.

Discrimination Based on Race, Color, and National Origin Title VII prohibits employment policies or intentional/ negligent discrimination on basis of race, color or national origin. Company policies that discriminate are illegal, unless (except for race) they have a substantial demonstrable relationship to realistic qualifications for job. Reverse Discrimination: discrimination against “majority” such as white males. See Richi v. Destefano (2009) involving white New Haven firefighters who were discriminated against by fire department be throwing out a promotion test.

Discrimination Based on Religion Accommodation: Employers must “reasonably accommodate” the “sincerely held’ religious practices of its employees, unless to do so would cause undue hardship to employer’s business.

Discrimination Based on Gender Title VII prohibits employers from classifying jobs as male or female or from advertising such, unless employer can prove gender is essential to the job. Plaintiff must show gender was determining factor in hiring, firing or lack of promotion. 2009 “Lilly Ledbetter Fair Pay Act” Equal Pay Legislation: removed time limits to file suit. Constructive Discharge. Voluntarily leaves because conditions “intolerable.” Applies to all Title VII discrimination.

Sexual Harassment U.S. Supreme Court has interpreted Title VII’s prohibition against sex discrimination to include a prohibition against sexual harassment. There are currently two forms of recognized sexual harassment: Hostile Work Environment.  Quid Pro Quo.

Hostile Work Environment Hostile environment occurs when workplace is “permeated” with discriminatory intimidation, ridicule, insult so severe to alter the conditions of the victim’s employment. The conduct in the workplace must be offensive to a reasonable person as well as to the victim, and it must be severe and pervasive.

Quid Pro Quo : Harassment by Supervisors Involves demands for sexual favors by a supervisor from a subordinate, in exchange for some workplace benefit. Must have “tangible employment action” for employer liability. Ellerth/Faragher Affirmative Defense.  Retaliation by Employers: 2006: employer’s retaliatory actions may be evidence of harassment. 2009: protection for speaking out about another’s complaint.

The Ellerth/Faragher Affirmative Defense The Ellerth/Faragher cases (1998) gave employers a defense against sexual harassment claims that absolves them from liability IF the employer can prove: The employer has taken reasonable care to prevent and promptly correct any sexually harassing behavior (by establishing effective antiharassment policies and complaint procedures, for example), AND The plaintiff-employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer to avoid harm.

Sexual Harassment Issues Co-Workers: employer generally liable only if it knew, or should have known, about harassment and failed to take immediate action. Employee notice to supervisor is notice to employer under agency law. Non-Employees: employers may also be liable for harassment. Same-Gender harassment also violates Title VII.

Remedies under Title VII Liability may be extensive. Plaintiff may receive: Reinstatement. Back Pay. Retroactive Promotions; and Damages.

Discrimination Based on Age The Age Discrimination in Employment Act (ADEA) protects individuals over the age of 40 from workplace discrimination that favors younger workers. Plaintiff must show: He was member of protected age group, Was qualified for the position from which he was discharged, and Was discharged under circumstances that inferred discrimination.

Discrimination Based on Age Replacing Older Workers with Younger Workers. CASE 18.2 Sprint/United Management Co. v. Mendelsohn (2008). Testimony of company’s attitude towards age was not per se admissible and inadmissible. State Employees Not Covered by ADEA. U.S. Supreme Court cases: Kimel v. Florida Board of Regents (2000). Tennessee v. Lane (2004). Federal Employees Explicitly Covered by the ADEA. Gomez-Perez v. Potter (2008).

Discrimination Based On Disability The Americans with Disability Act (ADA) requires employers to offer reasonable accommodation to employees or applicants with a “disability” who are otherwise qualified for the job they hold or seek. The duty of reasonable accommodation ends at the point at where it becomes an undue hardship.

Procedures under the ADA To prevail on a claim under ADA, plaintiff must show she: Has a “disability.” Is otherwise qualified for the employment in question; and Was excluded from employment solely because of the disability. Workforce must be more than 15 employees Plaintiff must first exhaust administrative relief with EEOC.

ADA: What is a “Disability”? ADA defines disability as: Physical or mental impairment that “substantially limits” one or more of major life activities; or A record of such impairment; or Being regarded as having such an impairment. Determination is decided on a case-by-case basis.

2008 Amendments 2008 Congressional Amendments reverse prior Supreme Court cases: Reverse Supreme Court’s restrictive interpretations of disability, and Prohibit employers from considering mitigating measures or medications when determining if an individual has a disability. In other words, disability is now determined on a case-by-case basis. CASE 18.3 Rohr v. Salt River Project Agricultural Improvement and Power District. (2009). Diabetes is a disability if it significantly restricts an individual’s eating (a major life activity).

ADA: ‘Reasonable Accommodation’ If an employee with a disability can perform the job with reasonable accommodation, without undue hardship on the employer, the accommodation must be made. Examples: wheelchair ramps, flexible working hours, improved training materials. (Does not include carpel tunnel syndrome.)

ADA Issues Reasonable Accommodation: Association Discrimination. Job Applications and Pre-Employment Physical Exams. Substance Abusers (ADA only protects former users). Association Discrimination. Adverse actions based on stereotypes. Does ADA allow ‘Hostile Environment’ claims?

Defenses to Employment Discrimination There are four basic types of defenses to employment discrimination claims. Business necessity.  Bona fide occupational qualification. Seniority Systems. After-acquired evidence of employee misconduct. 

Business Necessity Defense The business necessity defense requires the employer to demonstrate that the imposition of a job qualification is reasonably necessary to the legitimate conduct of the employer’s business. Business necessity is a defense to disparate impact discrimination.

B.F.O.Q. Defense The bona fide occupational qualification defense requires an employer to show that an particular skill is necessary for the performance of a particular job. The BFOQ defense is used in cases of disparate treatment discrimination.

Seniority System Defense A seniority system is one that conditions the distribution of job benefits on the length of time one has worked for an employer. A seniority system can be a defense only if it is a bona fide system, not designed to evade the effects of the anti-discrimination laws.

After-Acquired Evidence of Employee Misconduct After-acquired evidence refers to evidence of misconduct, committed by an employee who is suing an employer for employment discrimination, that is uncovered during the process of discovery conducted in preparation for a defense against the suit. While it may serve to limit employee recovery, it does not act as an absolute defense for the employer.