Chapter 39 THIRD PERSONS IN AGENCY

2 The relationship of employer and employee is created by the agreement of the parties and is subject to contract principles. 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 Agreements. Collective Bargaining Agreements. The Employment Relationship

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. 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.

4 Duties and Rights of Employee The duties of an employee include: The duties of an employee include:  Performing the service of the contract.  Refraining from disclosing trade secrets.  Allowing the employer to freely use any inventions created on work time with employer’s materials (called shop right). The rights of an employee include: The rights of an employee include:  To be paid according to the contract (at least the federal minimum wage).

5 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: Employment Relationship

6 The Fair Labor Standards Act regulates minimum wages, overtime hours, and child labor. 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. 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. Labor Relations Laws

7 Pension Plans The Employees Retirement Income Security Act (ERISA) protects employees’ pensions by requiring: 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.

8 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. 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. 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.

9 Benefits Provided by Law Twelve-week maternity, paternity, and adoption leaves are available under the Family and Medical Leave Act. Twelve-week maternity, paternity, and adoption leaves are available under the Family and Medical Leave Act. Employers and employees pay Social Security taxes to provide retirement benefits, disability benefits, life insurance benefits, and Medicare. Employers and employees pay Social Security taxes to provide retirement benefits, disability benefits, life insurance benefits, and Medicare.

10 Employees’ Health & Safety The Occupational Safety and Health Act provides for: 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. Many states have enacted “right-to-know” laws, which require employers to inform their employees of any hazardous substances present in the workplace.

11 Working ConditionsPrivacy Drug Testing Monitoring Safety OSHA Wages and Hours Fair Labor Standards Act Sweat Shop Code Contract Terms National Labor Relations Act Regulations of Working Conditions

12 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. 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.

13 Compensation and Benefits Regulation of Compensation Fair Labor Standards Act Pensions ERISA UnemploymentSocial Security Family and Medical Leave Act

14 Employee Privacy The Bill of Rights is the source of public sector employees’ privacy rights. 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. 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. 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.

15 Employee Privacy Monitoring. 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 . Monitoring. 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 . Searches. 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. Searches. 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.

16 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. 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.

17 Employer-Related Immigration Laws Immigration laws prohibit the employment of aliens who have illegally entered the United States. Immigration laws prohibit the employment of aliens who have illegally entered the United States. Immigration and Naturalization Act. Immigration and Naturalization Act. Immigration Reform and Control Act of Immigration Reform and Control Act of Immigration Act of Immigration Act of Employer Verification (Form I-9). Employer Verification (Form I-9).