BUSINESS LAW: Text & Cases — Legal, Ethical, International, and E-Commerce Environment 11 th Ed.

Chapter 33 Employment and Labor Law

Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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. 2 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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1: Employment at Will

 Traditionally, employment relationships have been by common law doctrine of “employment at will.”  Either party may terminate at any time for any reason.

 Exceptions to the Employment At Will Doctrine: Contract, Tort, Public Policy.  3 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Whistleblowing

   Whistleblowing occurs when an employee tells a supervisor or the press that the employer is engaged in some unsafe or illegal activity.

 Protection under federal and state law.

–

CASE 33.1

Wendeln v. The Beatrice Manor, Inc.

(2006).

Whistleblower Protection Act.

Wrongful Discharge. 4 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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2: Wage-Hour Laws

 Hours and Wages.

– – 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.

 Child Labor.

– FLSA prohibits oppressive child labor practices.

Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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Overtime Exemptions

 Certain employees, e.g., executive or professional, are exempt from overtime (white collar workers).

 New Over Time rules (August 2004): – – Workers earning less than $23,660 working 40 hours/week are entitled to OT.

Does not apply to manual laborers or ‘blue collar’ workers.

– – Does not apply to firefighters, police.

CASE 33.2

Mims v. Starbucks, Inc.

(2007).

6 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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3: 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.

7 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Federal Labor Laws



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.

Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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Union Organization

 Elections.

– An election can be held only if it can be shown that at least 30% of the workers will be represented.

 Election Campaigns.

– – The National Labor Relations Board regulates the rights and obligations of employers and workers in the election process.

Each side can pursue their objectives, but cannot interfere, beyond certain limits, in the other’s activities.

9 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Collective Bargaining

 Collective bargaining is the process by which management and labor negotiate the terms and conditions of employment.

– The NLRB will certify an exclusive bargaining agent for labor.

– Both labor and management must bargain in good faith, but the law does not require that they reach an agreement.

10 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Strikes

 There are two basic forms of strikes: – Economic Strikes.

• These are strikes over wages.

• Workers can be replaced by permanent replacements.

– Unfair Labor Practice Strikes.

• These are strikes alleging that the employer has committed an unfair labor practice.

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4: 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.

12 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

State Workers’ Compensation 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.

13 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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5: Income Security, Pension, and Health Plans

 The primary income security laws are: – 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 Compensation.

14 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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.

 Employer-sponsored Group Health Plans.

15 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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6: Family and Medical Leave

 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 33.3

a part of South-Western Cengage Learning.

Nevada Dept. of Human Resources v. Hibbs

Copyright © 2009 South-Western Legal Studies in Business,

(2003).

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7: Employee Privacy Rights

 More than 2/3 employers use some sort of electronic monitoring of employees.

 Laws Protecting Employee Privacy Rights.

– Constitutional and Tort law.

– ECPA  Privacy and Email Systems.

17 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Other Types of Monitoring

 Lie Detector Tests.

– Prohibited, except under the ongoing investigation exception.

 Drug Testing.

– Most government employees are subject to testing and the rights of private employees vary from state to state.

 AIDS Testing.

– Some state statutes restrict AIDS testing.

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Other Types of Monitoring

 Electronic Performance Surveillance.

– Most limitations can be avoided if the employer informs employees that surveillance will occur.

 Screening Procedures.

– Application question must have some reasonable connection to the job sought.

19 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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8: Employment-Related Immigration Laws

 The Immigration Reform and Control Act prohibits the hiring of illegal aliens.

 The Immigration Act of 1990 limits the number of legal immigrants into the U.S.

Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

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