1. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law 6 th Edition Chapter 23 Employment Law

2. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 2 Introduction 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. 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.

3. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 3 Wage-Hour Laws Davis-Bacon Act -- the prevailing wage act. Walsh-Healey Act -- beginning of minimum wages. Fair Labor Standards Act (FLSA): –Extension of wage and hour regulation to workers in interstate commerce. –Child Labor: FLSA prohibits oppressive child labor practices. Davis-Bacon Act -- the prevailing wage act. Walsh-Healey Act -- beginning of minimum wages. Fair Labor Standards Act (FLSA): –Extension of wage and hour regulation to workers in interstate commerce. –Child Labor: FLSA prohibits oppressive child labor practices.

4. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 4 Labor Unions Norris-LaGuardia Act. –Protects peaceful strikes by limiting the injunction powers of federal courts. National Labor Relations Act. –Establishes the right of workers to strike and engage in collective bargaining. Norris-LaGuardia Act. –Protects peaceful strikes by limiting the injunction powers of federal courts. National Labor Relations Act. –Establishes the right of workers to strike and engage in collective bargaining.

5. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 5 Labor Unions Labor Management Relations Act. –Prohibits certain unfair union practices such as closed shops. Labor-Management Reporting and Disclosure Act. –Regulates the internal operations of unions and outlaws hot-cargo agreements. –Case 23.1 National Steel Corp. v. NLRB (2003). Labor Management Relations Act. –Prohibits certain unfair union practices such as closed shops. Labor-Management Reporting and Disclosure Act. –Regulates the internal operations of unions and outlaws hot-cargo agreements. –Case 23.1 National Steel Corp. v. NLRB (2003).

6. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 6 Worker Health and Safety 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. 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.

7. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 7 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. 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. Workers’ Compensation

8. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 8 Income Security The primary income security laws are –Social Security and Welfare. –Case 23.2 U.S. v. Cleveland Indians Baseball, Co. (2001). –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 Compensation. The primary income security laws are –Social Security and Welfare. –Case 23.2 U.S. v. Cleveland Indians Baseball, Co. (2001). –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 Compensation.

9. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 9 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. 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.

10. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 10 FMLA 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. Case 23.3 Nevada Dept. of Human Resources v. Hibbs (2003). 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. Case 23.3 Nevada Dept. of Human Resources v. Hibbs (2003).

11. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 11 Wrongful Discharge 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 however recognize one or more judicial exceptions to this rule, while some states recognize none.  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 however recognize one or more judicial exceptions to this rule, while some states recognize none. 

12. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 12 –There are three such exceptions to the doctrine of employment at will: Contract (implied covenant of Good Faith and Fair Dealing). Torts: fraud, emotional distress. Public Policy. –There are three such exceptions to the doctrine of employment at will: Contract (implied covenant of Good Faith and Fair Dealing). Torts: fraud, emotional distress. Public Policy. Wrongful Discharge

13. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 13 Whistleblower Statutes A whistleblower is one who reports illegal employer activities to the proper authorities. Whistleblowers are frequently subjected to retaliation for such activities. There are a number of state and federal (Whistleblower Protection Act) whistle-blower protection statutes, offering a wide variation in protections.Whistleblower Protection Act A whistleblower is one who reports illegal employer activities to the proper authorities. Whistleblowers are frequently subjected to retaliation for such activities. There are a number of state and federal (Whistleblower Protection Act) whistle-blower protection statutes, offering a wide variation in protections.Whistleblower Protection Act

14. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 14 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.EEOC 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.EEOC

15. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 15 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. 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.

16. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 16 Religious Discrimination Employers must “reasonably accommodate” the “sincerely held’ religious practices of its employees, unless to do so would cause undue hardship to employer’s business.

17. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 17 Gender Discrimination Title VII prohibits sex discrimination in the work place. Employers are prohibited 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. Title VII prohibits sex discrimination in the work place. Employers are prohibited 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.

18. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 18 Gender Discrimination Two types of sex discrimination: –Differential treatment. –Sexual harassment, which itself, exists in two varieties: Hostile Work Environment. Quid Pro Quo. Two types of sex discrimination: –Differential treatment. –Sexual harassment, which itself, exists in two varieties: Hostile Work Environment. Quid Pro Quo.

19. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 19 Sexual Harassment Title VII does not specifically mention sexual harassment as a form of sex discrimination, but the 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. Title VII does not specifically mention sexual harassment as a form of sex discrimination, but the 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.

20. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 20 “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. 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.

21. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 21 Harassment by Supervisors: Quid Pro Quo Quid Pro Quo harassment involves the demands for sexual favors by a superior from a subordinate, in exchange for some workplace benefit. –See Faragher v. City of Boca Raton (1998) and Burlington Industries v. Ellerth (1998).Faragher v. City of Boca Raton Burlington Industries v. Ellerth Under certain conditions, an employer may be liable for the quid pro quo harassment committed by its supervisory employees. Quid Pro Quo harassment involves the demands for sexual favors by a superior from a subordinate, in exchange for some workplace benefit. –See Faragher v. City of Boca Raton (1998) and Burlington Industries v. Ellerth (1998).Faragher v. City of Boca Raton Burlington Industries v. Ellerth Under certain conditions, an employer may be liable for the quid pro quo harassment committed by its supervisory employees.

22. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 22 Harassment by Co- Workers Employer generally liable only if employer knew or should have known and failed to take action. –Employee notice to supervisor is notice to Employer under agency law. Employers may also be liable for harassment by non-employees. Same-sex harassment violates Title VII. Employer generally liable only if employer knew or should have known and failed to take action. –Employee notice to supervisor is notice to Employer under agency law. Employers may also be liable for harassment by non-employees. Same-sex harassment violates Title VII.

23. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 23 Remedies under Title VII Liability may be extensive. Plaintiff may receive: –Reinstatement. –Back Pay. –Retroactive Promotions; and –Damages. Liability may be extensive. Plaintiff may receive: –Reinstatement. –Back Pay. –Retroactive Promotions; and –Damages.

24. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 24 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. Under Kimmel v. Florida Board of Regents (2000), states are immune from private lawsuits brought in federal court under 11 th Amendment.Kimmel v. Florida Board of Regents The Age Discrimination in Employment Act (ADEA) protects individuals over the age of 40 from workplace discrimination that favors younger workers. Under Kimmel v. Florida Board of Regents (2000), states are immune from private lawsuits brought in federal court under 11 th Amendment.Kimmel v. Florida Board of Regents

25. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 25 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. Case 23.4 Clackamas Gastroenterology Assoc., P.C. v. Wells (2003). 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. Case 23.4 Clackamas Gastroenterology Assoc., P.C. v. Wells (2003).

26. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 26 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. Plaintiff must first exhaust administrative relief with EEOC. 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. Plaintiff must first exhaust administrative relief with EEOC.

27. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 27 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. Case 23.5 Sutton v. United Airlines, Inc. (1999). 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. Case 23.5 Sutton v. United Airlines, Inc. (1999).

28. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 28 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. Job Applications and Pre-Employment Physical Exams. 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. Job Applications and Pre-Employment Physical Exams.

29. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 29 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. 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.

30. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 30 Business Necessity 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. 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.

31. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 31 BFOQ The bona fide occupational qualification (BFOQ) 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. The bona fide occupational qualification (BFOQ) 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.

32. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 32 Seniority Systems 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. 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.

33. ©2005 by West Legal Studies in Business A Division of Thomson Learning Fundamentals of Business Law Miller Jentz 6 th Ed. 33 Affirmative Action Affirmative action programs go one step beyond non-discrimination: they are designed to “make up” for past patterns of discrimination by giving preferential treatment to protected classes. AA has led to “reverse discrimination” cases such as Adarand and the recent U.S. Supreme Court cases: –Gratz v. Bollinger (2003). –Grutter v. Bollinger (2003). Affirmative action programs go one step beyond non-discrimination: they are designed to “make up” for past patterns of discrimination by giving preferential treatment to protected classes. AA has led to “reverse discrimination” cases such as Adarand and the recent U.S. Supreme Court cases: –Gratz v. Bollinger (2003). –Grutter v. Bollinger (2003).