Chapter 20 Employment

Employment relationships have been changing: Changes in- employment laws, evaluation of labor, agreements that restrict employees

Employment relationship Can be- oral or written, contract talks between unions and management Governed by- federal and state statutes Wages, hours, discrimination, working conditions, disability, and retirement

Labor-Management Agreements Collective bargaining agreement- a contract negotiated by the employer and representatives of the labor union, covering all issues related to employment Members- select representatives Just cause- legitimate, employment related reason to fire a union worker

Grievance procedure- a series of steps employees must take to appeal an employer’s action Example 1: Edward worked on the assembly line for Stewart Motors. He was also a member of the Organization of American Automotive Employees (OAAE). Ed was fired because the reported late for work on one occasion. The collective bargaining agreement between Stewart Motors and the OAAE forbids the firing of a worker for a single incident of lateness. All such violations were to be reported in writing, and employees were to be given a second chance. After going through the grievance procedure, Ed was restored to his position. Example 2: Because of a downturn in the economy, Stewart Motors was forced to lay off several workers. Ed was one of the employees who was laid off because he had been employed a shorter time than other union workers at the plant. He received a percentage of his wages while he was out of work. Moreover, he was guaranteed to be the first to be considered for a job when the economy picked up and Stewart Motors needed more workers. All this was part of the collective bargaining agreement.

Professional Employment Contracts Power to negotiate their own contracts Professions in demand and can be selective in choosing employers Example 3: Ellen is a famous science fiction writer who has won several major literary awards. American Studios purchased the screen rights to Ellen’s best-selling novel, The Thirteenth of February. The studio also wanted Ellen to write the screenplay. Ellen did not want to bother with it. American Studios wanted her work so badly that they offered her $5 million to participate in the project. They also offered to pay for an Internet connection so that she could write without leaving her cabin in the mountain. Ellen agreed. She could negotiate such a lucrative contract because of her unique talents.

Rights and Duties State and federal statutes Rights of Employers 1. skills they claim 2. reasonable amount of work 3. what tasks to perform 4. loyal, honest, and dependable

Rights of Employees 1. regular pay 2. safe workplace and tools 3. taught how to do the job 4. opportunity to get raises and promotions

Terminating the Relationship Employment at will- employment relationship may be terminated at any time by either the employee or the employer Example 4: Ernest was a janitor for the Richland Fruit and Vegetable Company. Although he was a faithful and capable employee, he was dismissed. Under the doctrine of employment-at-will, Ernest would have no legal recourse. Richland can discharge him at any time, with or without notice, with or without reason.

Exceptions to employment-at-will: Unjust dismissal- grounds for legal action against employers who have treated them unfairly public policy- if an employee can prove that his or her firing violated public policy, they may recover damages in tort. Example 5: Edward was ordered to appear for jury duty on March 17. The law in his stat said that anyone who disobeys such an order can be fined and imprisoned for contempt of court. The same law also expressly forbids an employer to discharge an employee who was ordered to appear for jury duty. The employer could face up to $500 for discharging an employee under such circumstances. Nevertheless, Ed’s employer discharged him when he did not show up for work on March 17. Ed sued his former employer for unjust dismissal and recovered damages because his employment termination violated public policy.

implied contract- oral agreement that would ordinarily be covered by employment-at-will, had the employer not said or done something that implies otherwise Example 6: Eliot, who worked for Lafayette Security, was arrested for a felony. His supervisor, Frank, told Eliot, “We’ll have to lay you off, but when the case is resolved you can have your job back with full seniority.” Eliot believed Frank and did not look for another job. When he was acquitted, Eliot found that Lafayette would not honor Frank’s promise. It took Eliot three months for find a job. He successfully sued Lafayette for unjust dismissal based on the implied contract created by Frank’s promise. Lafayette could not deny that Eliot had reasonably relied on the promise to his detriment.

Disclaimer- a statement that, regardless of provisions or policies in the employee handbook and regardless of any oral promises to the contrary, an employment-at-will still exists between the employer and the employees. Example 7: George applied for a job as a sales clerk with the Kosar Brothers Department Store. The employee manual contained a disclaimer that preserved employment-at-will. The disclaimer specifically said that employees could be discharged with or without notice at any time for any reason and even without a reason. Only the president of the store could alter this provision. George, who had other job prospects lined up, told Jack Gower, the assistant manager, that he would not work under such a provision. Gower told him to ignore the disclaimer and promised George a job for life. Gower’s oral representation will have no legal effect whatsoever, given the ironclad nature of the disclaimer. George realized this and sought employment elsewhere.

implied covenant- in any employment relationship, there is an implied promise that the employer and the employee will be fair and honest in their dealing with one another Example 8: Ella was to receive a 25% commission on all computer sales she made for her employer. Ella made a $10 million commission. She was fired despite her excellent sales record and refused to pay the commission. Ella sued her employer for unjust dismissal based on the existence of an implied covenant. The court held that her employer had violated an implied covenant of fair dealing and honesty in its relationship with Ella. Ella was entitled to her commission.

Restrictive Employment Covenants- employees enter into agreements not to compete Employers were suffering because competing businesses were getting inside information Trade secret- inside information on products, processes, or inventions Law allows businesses to protect themselves with patents and copyrights Employers can restrict the activities after leaving a company

Employees: Promise not to work for a competitor for a period of time and a geographic area Reasonable: type of work length of time geographic area covered Example 9: Esther began working as a bookkeeper for the Tiro Telegraph after signing a restrictive employment covenant. It stated that if she left the newspaper, she could not work anywhere in the state of Kansas for 10 years. Esther worked for the paper for 6 months and then left to become a teller at Sebastian County Bank in Kansas City. Tiro Telegrpah sued Esther to prevent her from working for Sebastian. Esther won when the court held that the restrictive employment covenant was unreasonable as to time, geographic area, and type of work.

Laws Affecting Employment Collective bargaining is regulated by the government Past: collective bargaining was an illegal conspiracy Present: government encourages bargaining with regulations Wagner Act- (National Labor Relations Act- 1935)- encourage collective bargaining, discourage unfair labor practices and provide federal assistance in obtaining fair bargaining

Employers must negotiate on: wages hours conditions of employment Example 10: Wilma, chief executive officer of Collier Laboratories, Inc. decides to discontinue a line of over-the-counter capsule medications that had been the object of tampering. Unfortunately, the discontinuation caused the shutdown of one of Collier’s manufacturing plants. The union claimed that the decision to close the plant should have been submitted to collective bargaining. The union was incorrect. The decision to discontinue that line of medication was clearly within the business discretion of corporate management.

Taft-Hartley Act- (labor management relations act)- too much power to labor unions, Wagner Act amended in 1947 Tried to equalize the power. 60 day cooling off period- president of the US could postpone a strike for 60 days if the strike would endanger the nations health or safety Closed shop is illegal Closed shop- a business in which a person must be a union member before hiring

Union shop is allowed Union shop- must join the union within 30 days after being hired States may pass Right-to-work laws- prohibits union shops Featherbedding- a practice of assigning more employees to a job than are actually needed Must give advance notice of intent to strike

Landrum-Griffin Act goal was to stop corruption in the unions and to report to the government financial matters of the union Employment of Minors A source of cheap labor Used in mines because they were small Paid very low wages

Three groups opposed child labor: unions church schools Massachusetts first law- age 12 could only work 10 hrs a day: way ahead of the times conference on the labor legislation

Federal Child Labor Law Fair Labor Standards Act prohibits the interstate or foreign trade shipment of any goods produced in factories in which “oppressive child labor” had been used within 30 days of the removal of the goods Oppressive child labor- any employment of minors under the age of 16 in jobs covered by the act, and employment of minors under 18 in jobs declared dangerous by the secretary of labor may work

Exceptions to FFLAS: agriculture after school child actors children working for their parents in non- manufacturing jobs delivering newspapers Example 11: John threatens to complain to the secretary of labor because his parents have him put to work after school on the family farm. He argues that such work violates child labor laws. However, after school work in agriculture in one of the exceptions to the minimum wage and maximum hours rules set up under the Fair Labor Standards Act.

Industry Education Many industries have their own regulations Bad: interferes with education Work permits are obtained at school

Assignment Page 441 #1-4 and CT Page 447 #1-5