1. © 2007 West Legal Studies in Business, A Division of Thomson Learning Chapter 23 Employment Law

2. © 2007 West Legal Studies in Business, A Division of Thomson Learning 2 What is the employment-at-will doctrine? When and why are exceptions to this doctrine made? What federal statute governs working hours and wages? What federal statutes govern labor unions and collective bargaining? What federal law was enacted to protect the health and safety of employees? What are workers’ compensation laws? Generally, what kind of conduct is prohibited by Title VII of the Civil Rights Act of 1964, as amended? What remedies are available under Title VII of the 1964 Civil Rights Act, as amended? Learning Objectives

3. © 2007 West Legal Studies in Business, A Division of Thomson Learning 3 Employment-at-Will 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.

4. © 2007 West Legal Studies in Business, A Division of Thomson Learning 4 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.  Wrongful Discharge

5. © 2007 West Legal Studies in Business, A Division of Thomson Learning 5 Exceptions to Employment-at-Will Exceptions to the Employment at Will Doctrine: –Contract Exceptions: An implied contract exists between employer and employee. Oral agreements may become part of the implied contract. –Tort Exceptions: Wrongful discharge, defamation may be actionable. –Public Policy Exceptions. –Whistleblowing.

6. © 2007 West Legal Studies in Business, A Division of Thomson Learning 6 Child Labor. –FLSA prohibits oppressive child labor practices. Provides regulations for work, depending on the age of child. Wages and Hours. –Davis-Bacon Act -- the prevailing wage act. –Walsh-Healey Act -- the beginning of minimum wages. –Fair Labor Standards Act (FLSA) -- an extension of wage and hour regulation to workers in interstate commerce. Overtime Exemptions. Wage and Hour Laws

7. © 2007 West Legal Studies in Business, A Division of Thomson Learning 7 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. –Established the NLRB. –CASE 23.1 National Steel Corp. v. NLRB (2003). Labor Unions

8. © 2007 West Legal Studies in Business, A Division of Thomson Learning 8 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.

9. © 2007 West Legal Studies in Business, A Division of Thomson Learning 9 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. –Procedures and Violations: Employers with 11 or more employees required to keep records.

10. © 2007 West Legal Studies in Business, A Division of Thomson Learning 10 Worker Health and Safety State Workers’ Compensation Laws. –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.

11. © 2007 West Legal Studies in Business, A Division of Thomson Learning 11 Income Security Social Security and Welfare. 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 Insurance. –CASE 23.2 Lewis v. Director, Employment Security Director (2004).

12. © 2007 West Legal Studies in Business, A Division of Thomson Learning 12 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.

13. © 2007 West Legal Studies in Business, A Division of Thomson Learning 13 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 Department of Human Resources v. Hibbs (2003).

14. © 2007 West Legal Studies in Business, A Division of Thomson Learning 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

15. © 2007 West Legal Studies in Business, A Division of Thomson Learning 15 Intentional vs. Unintentional Discrimination Intentional (“Disparate-Treatment”) Discrimination. For prima facie case, applicant must prove: –She is member of a protected class; –Applied, qualified and rejected for job; and –Employer continued to seek applicants. Unintentional (“Disparate Impact”) Discrimination. –No-protected applicant sues Employer who tries to integrate members of protected classes into workplace.

16. © 2007 West Legal Studies in Business, A Division of Thomson Learning 16 Discrimination Based on 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.

17. © 2007 West Legal Studies in Business, A Division of Thomson Learning 17 Discrimination Based on Religion Employers must “reasonably accommodate” the “sincerely held’ religious practices of its employees, unless to do so would cause undue hardship to employer’s business.

18. © 2007 West Legal Studies in Business, A Division of Thomson Learning 18 Discrimination Based on Gender 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. Constructive Discharge. CASE 23.4 Conway-Jepsen v. SBA (2004).

19. © 2007 West Legal Studies in Business, A Division of Thomson Learning 19 Gender Discrimination Two types of sex discrimination: –Differential treatment. –Sexual harassment, which itself, exists in two varieties: Hostile Work Environment. Quid Pro Quo.

20. © 2007 West Legal Studies in Business, A Division of Thomson Learning 20 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: –Quid Pro Quo. –Hostile Work Environment. Sexual Harassment

21. © 2007 West Legal Studies in Business, A Division of Thomson Learning 21 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 Work Environment

22. © 2007 West Legal Studies in Business, A Division of Thomson Learning 22 Harassment by Supervisors Quid Pro Quo harassment involves the demands for sexual favors by a supervisor from a subordinate, in exchange for some workplace benefit. –See Faragher v. City of Boca Raton (1998) and Burlington Industries v. Ellerth (1998). Under certain conditions, an employer may be liable for the quid pro quo harassment committed by its supervisory employees.

23. © 2007 West Legal Studies in Business, A Division of Thomson Learning 23 Harassment by Co-Workers and Nonemployees 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 also violates Title VII.

24. © 2007 West Legal Studies in Business, A Division of Thomson Learning 24 Online Harassment Company email systems. Company chat rooms. Posting sexually explicit images on company computer systems, screen savers, etc. Employees will generally not be liable if prompt action taken.

25. © 2007 West Legal Studies in Business, A Division of Thomson Learning 25 Remedies under Title VII Liability may be extensive. Plaintiff may receive: –Reinstatement. –Back Pay. –Retroactive Promotions; and –Damages.

26. © 2007 West Legal Studies in Business, A Division of Thomson Learning 26 Discrimination Based on Age (ADEA) The Age Discrimination in Employment Act (ADEA) protects individuals over the age of 40 from workplace discrimination that favors younger workers. Plaintiff must show: –He was member of protected age group, –Was qualified for the position from which he was discharged, and –Was discharged under circumstances that inferred discrimination.

27. © 2007 West Legal Studies in Business, A Division of Thomson Learning 27 Discrimination based on Disability (ADA) 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.

28. © 2007 West Legal Studies in Business, A Division of Thomson Learning 28 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. –Workforce must be more than 15 employees Plaintiff must first exhaust administrative relief with EEOC.

29. © 2007 West Legal Studies in Business, A Division of Thomson Learning 29 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.

30. © 2007 West Legal Studies in Business, A Division of Thomson Learning 30 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. Hostile-Environment Claims. ADA: “Reasonable Accommodation”

31. © 2007 West Legal Studies in Business, A Division of Thomson Learning 31 Defenses to Employment of 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.

32. © 2007 West Legal Studies in Business, A Division of Thomson Learning 32 Business Necessity Defense 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.

33. © 2007 West Legal Studies in Business, A Division of Thomson Learning 33 BFOQ Defense The bona fide occupational qualification 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.

34. © 2007 West Legal Studies in Business, A Division of Thomson Learning 34 Seniority System Defense 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.

35. © 2007 West Legal Studies in Business, A Division of Thomson Learning 35 After-Acquired Evidence After-acquired evidence refers to evidence of misconduct, committed by an employee who is suing an employer for employment discrimination, that is uncovered during the process of discovery conducted in preparation for a defense against the suit. While it may serve to limit employee recovery, it does not act as an absolute defense for the employer.

36. © 2007 West Legal Studies in Business, A Division of Thomson Learning 36 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 which violate equal protection. –University of California v. Bakke (1978). –Adarand Constructors v. Pena (1995). –Hopwood v. State of Texas (1996). –Recent Supreme Court decisions 

37. © 2007 West Legal Studies in Business, A Division of Thomson Learning 37 Latest Supreme Court Decisions Gratz v. Bollinger (2003). Awarding 20 points to underrepresented minorities violated equal protection clause. Grutter v. Bollinger (2003). Considering race as a flexibile ‘plus’, however, is constitutional. Distinction: Grutter was flexible, not mechanical.