Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning Chapter 39 Regulation of Employment Twomey Jennings Anderson’s Business Law and the Legal Environment, Comprehensive 20e Anderson’s Business Law and the Legal Environment, Standard 20e Business Law: Principles for Today’s Commercial Environment 2e

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 2 The Employment Relationship The relationship of employer and employee is created by the agreement of the parties and is subject to contract principles. –If the contract states a specific duration, the employer cannot terminate the contract at an earlier date unless just cause exists. Collective Bargaining Contracts.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 3 Employment Relationship If no definite time period is set forth, the individual is an at-will employee, and the employer can terminate the contract at any time. –Some courts limit this if the discharge violates public policy or is contrary to good faith and fair dealing in the employment relationship.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 4 Employment Relationship Justifiable Discharge. Whistle-Blower Protection under the Sarbanes-Oxley Act (2002). –Contains reforms for corporate accountability, disclosure, and liability for corporate records. –Title VII contains protections for corporate whistle-blowers.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 5 Employment Relationship EmployerEmployee Consent (Individual or Collective Bargaining Agreement) Pays Compensation Performs services/works under employer’s direction and control Independent Contractor Perform duties free from control by other party Agent Negotiates contracts on behalf of an under control of principal Differs from:

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 6 Labor Relations Laws The Fair Labor Standards Act regulates minimum wages, overtime hours, and child labor. Under the National Labor Relations Act, employees have the right to form a union to obtain a collective bargaining contract or to refrain from organizational activities.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 7 Labor Relations Laws National Labor Relations Act. National Labor Relations Board. –NLRB promotes union election conduct. –Union activity on private property. –Firing employees for union activities. Once a union certified, employers have a duty to bargain collectively. NRLA allows right to work laws.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 8 Labor Relations Laws Strike and picketing activities. –Rights of strikers. Economic strikers may not be entitled to return to work at the end of the strike. –Picketing: Primary picketing, mass picketing, or secondary picketing. Regulation of internal affairs.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 9 Pension Plans The Employees Retirement Income Security Act (ERISA) protects employees’ pensions by requiring: –(1) high standards of those administering the funds, –(2) reasonable vesting of benefits, –(3) adequate funding, and –(4) an insurance program to guarantee payments of earned benefits.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 10 Unemployment Benefits Unemployment compensation benefits are paid to persons for a limited period of time if they are out of work through no fault of their own. Persons receiving unemployment compensation must be available for placement in a job similar in duties and comparable in rate of pay to the job they lost.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 11 Benefits Provided by Law Twelve-week maternity, paternity, and adoption leaves are available under the Family and Medical Leave Act. Leaves for Military Service under USERRA. Employers and employees pay Social Security taxes to provide retirement benefits, disability benefits, life insurance benefits, and Medicare.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 12 Employees’ Health & Safety The Occupational Safety and Health Act provides for: –(1) the establishment of safety and health standards and –(2) the effective enforcement of these standards. Many states have enacted “right-to-know” laws, which require employers to inform their employees of any hazardous substances present in the workplace.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 13 Regulation of Working Conditions Working ConditionsPrivacy Drug Testing Monitoring Safety OSHA Wages and Hours Fair Labor Standards Act Sweat Shop Code Contract Terms National Labor Relations Act

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 14 Compensation for Employees’ Injuries Workers’ compensation laws provide for the prompt payment of compensation and medical benefits to persons injured in the course of employment without regard to fault. –An injured employee’s remedy is generally limited to the remedy provided by the workers’ compensation statute. –Most states also provide compensation to workers for occupational diseases.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 15 Employee Privacy The Bill of Rights is the source of public sector employees’ privacy rights. Private sector employees may obtain limited privacy rights from statutes, case law, and collective bargaining agreements. Employers may monitor employee telephone calls, although once it is determined that the call is personal, the employer must stop listening or be in violation of the federal wiretap statute.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 16 Employee Privacy The ordinary-course-of-business and consent exceptions to the Electronic Communications Privacy Act of 1986 (ECPA) give private employers a great deal of latitude to monitor employee . Notification to employees of employers’ policies on searching lockers, desks, and offices reduces employees’ expectations of privacy, and a search conducted in conformity with a known policy is generally not an invasion of privacy.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 17 Employee Privacy Drug and alcohol testing is generally permissible if it is based on reasonable suspicion; random drug and alcohol testing may also be permissible in safety- sensitive positions.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 18 Employer-Related Immigration Laws Immigration laws prohibit the employment of aliens who have illegally entered the United States. Employer liability. Employer verification and special hiring programs.