1 Employment Law in Ohio Bus Orgs II LAP 202 Mike Brigner, J.D.

2 Types of Employment At-will employment –Can be fired for any reason (incompetence) –Or no reason at all –As long as it is not an illegal reason –Most US employees are at-will

3 Exceptions to Employment at Will Labor union employment –Collective bargaining contracts protect employee rights Civil Service –Rights set by statute Employment agreements –Usually only key executives, or special skills employees

4 Other Exceptions to At-Will Other Exceptions to At-Will Federal statutes State statutes Court decisions Public policy (Examples: discrimination / retaliation) –44 states recognize Violations = “wrongful discharge” All to insure that employees are not terminated for exercising certain rights & privileges: –Free speech –Union activities –Unsafe workplace complaints

5 Employee Handbook/Manual Another exception to at-will Include “Termination only for good cause” words But courts often find an implied contract and allow firing only for good cause Examples of breach: –Probationary period not followed –Disciplinary procedures ignored –Good evaluations disregarded –Some disciplined & others not

6 Alphabet soup of state/federal exceptions to at-will

7 Wrongful Discharge Suits Employees can sue if termination is for an improper reason –Age –Race –Religion –Disability –Gender –Retaliation against complaints, whistleblowers, exercise of lawful rights

8 Who is an Employee? And who is an Independent Contractor? How employer classifies both have impact on liability and taxes IRS & FLSA favor employee status (more withholding, more individ rights) Employer owes fewer rights to IC IC has no protection from discrimination IC gets no employee benefits IC must pay own taxes

9 How to Distinguish? Right to Control test: Does company have the right to control: –Details of the work (hours, tools, location) –Manner in which individual works (judgment) –Progress of work (schedule, deadlines) –Permanency of relationship --Profits –If company controls only RESULT, it is IC –Employment contract does not control –IRS has test with 20 factors

10 Employment Contracts Employer gets employee’s skills for certain time period Employee gets job security Employee can usually terminate agreement before end of contract –Courts reluctant to force labor against will But courts will force employer who ends contract early to pay out balance due

11 Typical Terms Duties of parties to each other Specific duties of employee Compensation Benefits Duration of agreement Termination of agreement Working conditions Nondisclosure provision Noncompete provision Agreement as to who owns inventions

12 Nondisclosure Provision Purpose to protect trade secrets Employee agrees not to disclose anything learned on the job to any other source, including competitors

13 Noncompete Provisions Employee agrees not to start or join a business to compete with employer Courts have ruled such provisions must serve a valid purpose & must be reasonable & fair –Reasonable duration of time –Reasonable restriction on geography –Only covering employees with special skills

14 Employment Law in Ohio Concluded Thank you