CHAPTER THIRTEEN
True-False
Any element of falsity renders the statement false.
1. Labor of persons under age 18 is not regulated under federal law.
2. Right-to-know laws require that employers disclose, to workers who request the information, the
average rate of pay for all workers in the business.
3. If an agent exceeds his or her authority, the principal is ordinarily not liable.
4. The historic federal statute UNIONS (Union Negotiated Interest Organizing National Statute)
requires employers to bargain collectively with recognized unions.
5. A fiduciary relationship exists when the law requires that a person act on behalf of another with
scrupulous good faith and honesty.
6. Right-to-work laws have been enacted in 48 states and by Congress.
7. An agent may legally accept fees or gratuities from third parties with whom he or she is dealing on
behalf of the principal without the principal’s knowledge as long as the agent does not use any
money gained for recreational purposes.
8. Employees who cheerfully hum or whistle while they work are called “whistle blowers,” and
although such practices are annoying to some, the employees are protected from dismissal by
“whistle blower,” statutes.
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9. Law guarantees the right of workers to organize into unions of their own choice and to bargain
collectively with their employers. Nevertheless, the majority of American workers do not belong to
unions.
10. Despite equal pay statutes, on average, women earn substantially less than men earn.
11. An employee has the power to quit at any time, but may be sued for resulting damages if in so
doing he or she breaches a valid contract to work for a specified period.
12. Federal statutes mandate both “affirmative action” and “quotas” for employees (by gender and/or
race).
13. Most complaints filed with the Equal Employment Opportunity Commission (EEOC) by workers
for alleged violations of the Civil Rights Act of 1964, are found to be valid by the Commission and
settled promptly within 30 days of filing.
14. River City Building Supply contracts with Mango Janitorial for their services, but has little control
over how the janitorial services are performed. Mango Janitorial is most likely an independent
contractor.
15. Employers may not legally require that persons who apply for a given job have a high school
diploma or pass an intelligence test unless such criteria are directly related to proper performance of
the job.
16. In the strikes that endanger the national health and welfare, the president can impose an 80-day
cooling-off period.
17. Under the federal Employee Polygraph Protection Act, so-called “lie-detector tests” are forbidden
except for persons who apply for admission to West Point, Annapolis, or the Air Force Academy.
Test Bank 3
18. Improvements in computers and related technology have greatly enhanced the privacy enjoyed by
all people who live in the United States.
19. Social security is a government-mandated fringe benefit financed by taxes paid by both employers
and employees.
20. A person can work for another and be both an agent and employee.
21. A group of persons defined by one or more of these criteria (race, color, gender, nation origin, or
religion) is referred to as the Rainbow Coalition.
22. Vicarious liability occurs even though the employer has not been careless.
23. The employer is liable to third parties for injuries caused by the negligence of employees while they
are acting within the scope of their employment under a common law doctrine called “The
Economic Yo Yo.”
24. Bona Fide Occupational Qualification (BFOQ) is a valid defense to a claim of racial discrimination.
25. Although an independent contractor has some independence from the direct control of his
employer, his or her duties may still require he or she act as an agent.
26. The Price Waterhouse v. Hopkins case held that an employer cannot fire an employee for taking
time off to care for a sick relative.
27. Arbitration is often used as a dispute resolution method for employment disputes in
Union/Management contracts.
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28. The Taft-Harley Act provides for limited right to seek injunctions in labor disputes.
29. In an agency shop the worker although not required to join a union is required to support the union
by paying a representative fee.
30. As a matter of law an employee handbook cannot serve as part of an implied employment contract
for purposes of unlawful dismissal of an employee.
Fill-ins
Complete each sentence or statement.
1. Discrimination is prohibited whether it is intentional, called disparate __________________, or
unintentional, called disparate __________________.
2. A(n) __________________ shop requires union membership as a condition of initial employment,
and it is illegal.
3. A type of Individual Retirement where the initial contribution is not tax deductible, but all earnings
remain tax-free, even upon withdrawal. This is called the __________________ IRA.
4. A company pension plan keeps fund or money ownership with the employer until an employee
reaches retirement age. This practice changed for most employees with the __________________.
5. __________________ is a form of no-fault insurance protecting workers from lost wages
occurring due to work-place injuries.
6. The __________________ – __________________ relationship permits the owner of a business to
expand by employing any number of persons to make contracts with third parties that bind the firm.
Test Bank 5
7. The __________________ has the power to institute civil actions in court to eliminate violations of
the Civil Rights Act of 1964.
8. An IRA is a(n) __________________. A SEP is a(n) __________________. Self-employed
persons can enjoy similar benefits by establishing __________________ retirement plans. All three
types of plans are meant to supplement __________________ retirement benefits.
9. Sexual harassment that has the purpose or effect of unreasonably interfering with an individual’s
work performance or creating an intimidating, hostile, or offensive working environment is called
__________________ sexual harassment.
10. So-called __________________ laws do not provide, or reflect, a constitutional right to be
employed. Instead they restrict the ability of unions to require mandatory membership.
11. Coupled with subsequent amendments, the __________________ Act of 1964 is probably the most
important federal law against unfair __________________ in employment practices.
12. Unless hired for a specific period of time or for a specific project or task, an employee is generally
hired __________________ and can be terminated for any reason except those prohibited by law.
13. One discrimination act only protects women against discrimination. It is the
__________________.
14. A(n) __________________ is a job requirement that does draw distinctions. It is a valid defense to
many discrimination cases, however. It describes a job requirement that is essential to the job in
question.
15 Protection against age discrimination was provided for by the __________________ and the
protection begins when a person reaches the age of __________________.
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16. A qualified employee or applicant with a disability is one who, with __________________, can
perform the essential functions of the job.
17. John hires Max and retains not only the right to the services of Max but the ability to tell Max how
to perform the tasks. Max is a(n) __________________.
18. A legal doctrine where an employer is held liable for the acts of an employee even if the employer
is not negligent. The doctrine is called __________________.
19. A classification of persons defined by one or more of these criteria: race, color, gender, national
origin, age, or religion is called a ____________________..
20. The federal agency tasked with administering the National Labor Relations Act is the
__________________
Multiple Choice
Select the one best answer.
1. A significant improvement in the legal status of some employees was made by the Equal
Employment Opportunity Act of 1972. The act
a. assures all workers equal access to all jobs where payment is in hourly wages rather than
monthly salaries.
b. abolishes time consuming informal conferences and conciliation over disputes, which
employers could ignore.
c. provides that all labor-management disputes must be settled within a reasonable time, not to
exceed 90 days.
d. gives the federal Equal Employment Opportunity Commission (EEOC) the power to institute
civil lawsuits to eliminate violations of the Civil Rights Act.
2. Discrimination in pay among employees is permitted under both the Equal Pay Act of 1963 and the
Civil Rights Act of 1964, if it is in conformance with a bona fide
a. system geared to quantity or quality of production by the worker.
b. seniority system, which pays more to workers who have been with the firm longer.
c. system that pays more or less depending on the location of the work.
d. all of the above
Test Bank 7
3. The Civil Rights Act of 1964 and subsequent federal law made it illegal to discriminate in
employment practices on the basis of all of the following except
a. productivity and longevity.
b. race and national origin.
c. color and gender.
d. religion and age.
4. Carlos Kraushar was an enterprising junior at River City College. He entered into a contract with
several farmers, whereby he would take delivery of truckloads of tomatoes, without purchasing
them, and attempt to sell the tomatoes in bulk to roadside produce merchants for the benefit of the
farmers. If he made a sale, it was on credit and payments were made to the individual farmers. If
any roadside vendor failed to make a payment, Carlos made good on the loss and paid the farmer.
He would return unsold tomatoes to the farmers and they would in turn sell them for hog feed. The
farmers paid Carlos 25% of all the payments they received from the produce merchants. What
terms best describe Carlos?
a. principle/employee
b. employee/agent
c. servant/agent
d. agent/independent contractor
5. Fernando Kraushar a student at Consumé Community College, often drove trucks for his brother
Carlos, helping with pickup and delivery operations. Carlos would pay him $12 per hour and give
him explicit instructions about the pickup and delivery times and even the driving routes. Fernando
resented his big brother’s dominance, but Carlos was explicit, “I love you bro, but don’t ever
negotiate with either the buyers or sellers.” What term or terms best describes Fernando?
a. agent/independent contractor
b. employee
c. agent
d. durable power of attorney
6. Title VII of the Civil Rights Act of 1964, as amended, prohibits job discrimination against
a. only union members
b. only applicants for employment
c. only employees
d. employees, applicants, and union members
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7. The Pregnancy Discrimination Act of 1978 requires that employers
a. provide paid leave to pregnant women.
b. provide paid leave to pregnant women and paternity leave to the fathers.
c. consider pregnancy as a temporary disability, treating pregnant women as they would any other
temporarily disabled employee.
d. provide health insurance for the mother and child for the first five years of life.
8. Disparate treatment is (are)
a. intentional discrimination against a protected group of persons, such as blacks or women.
b. practices that have an unintentional, discriminatory effect on a class of people, protected under
Title VII.
c. programs that attempt to “make up” for past patterns of discrimination.
d. workers giving up the right to sue in court for on-the-job injuries.
9. Disparate impact is (are)
a. intentional discrimination against a protected group of persons, such as blacks or women.
b. practices, which have unintentional discriminatory effect on a class of people, protected under
Title VII.
c. programs that attempt to “make up” for past patterns of discrimination.
d. workers giving up the right to sue in court for on-the-job injuries.
10. A 54-year-old manager of a plant who earned $20.75 an hour was temporarily laid off when the
company plant was closed for the winter. When spring came, a 23-year-old worker who earned
$14.05 per hour replaced the manager. The older manager, who had worked for the company for 27
years, was not offered a position paying a lower wage rate. Which of the following is true?
a. Since the manager was not offered another position with the company, no rights exist under the
ADEA.
b. The fact the manager is 54 is irrelevant is this situation.
c. In order to claim an ADEA violation the manager must prove specific intent to violate the act.
d. The manager’s termination in these circumstances appears to violate the ADEA.
Test Bank 9
11. Carla is an honors graduate from a prestigious college with a degree in computer sciences. She also
is African-American. Carla applies for an entry-level management position with a medium sized
computer software company. She passes a written test prepared by the company. At an oral
interview, one of the interviewing parties tells her “the company enjoys a harmonious work force
and she probably would not fit in.” The company has no black management employees. After the
interview, the company does not hire Carla for the position, but advertises again for new applicants.
a. Unless the company can show a legitimate reason for not hiring Carla, they have violated Title
VII of the Civil Rights Act.
b. If the company is a partnership, it has no duty to comply with federal civil rights law.
c. Upon rejection, Carla can immediately file a lawsuit claiming discriminatory practices under
the Civil Rights Act.
d. Carla has no rights under Title VII of the Civil Rights Act, as she is merely a job applicant, not
a hired employee.
12. In the United States, legislation and case law affect or control
a. who may work and what work may be done.
b. when and where work may be done.
c. how it may be done and what minimum wage must be paid.
d. All of the above are affected or controlled.
13. Employers may discriminate in employment practices without violating federal law with reference
to which one of the following sets of attributes?
a. gender, race, or disability-free condition
b. relevant education, experience, or productivity
c. religion or advanced age
d. color or national origin
14. The Civil Rights Act of 1964, as amended, does not apply to which of the following?
a. employers who have less than 15 employees
b. employers who are engaged in foreign, as well as interstate. commerce
c. employers with less than 10 percent of their sales made across their own state borders
d. employers who are losing money and must cut costs to avoid bankruptcy
15. Economic fringe benefits can include all of the following except
a. medical, dental, and legal insurance.
b. assignment of a choice corner office with a scenic view and cross-ventilation.
c. private pension plan to supplement Social Security.
d. maternity and paternity leave with pay.
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16. Which of the following statements about agency relationships is not true?
a. Agency is a legal relationship between a principal and an agent.
b. The agency relationship must necessarily be evidenced by a written contract.
c. The agent represents and acts on behalf of the principal in making contracts with third parties,
which normally are binding on the principal, but not on the agent.
d. An agent who acts beyond the scope or her of his authority is personally liable to the third
party.
17. Although the point is disputed, which of the following federal laws is generally regarded as
unfavorable to unions?
a. Anti-Injunction Act of 1932 (Norris-La Guardia)
b. National-Labor Relations Act of 1935 (Wagner Act)
c. Labor-Management Relations Act of 1947 (Taft-Hartley)
d. Labor-Management Reporting and Disclosure Act of 1959 (Landrum-Griffin)
18. The Age Discrimination in Employment Act of 1967 requires continued employment, if requested
by the employee, of
a. persons up to the normal retirement age of 65.
b. persons of any age as long as they are physically and mentally willing and able to do the work
required by their employer.
c. persons over the age of 40.
d. none of the above
19. Legislation and court decisions affect or control, to some greater or lesser extent,
a. who may work, doing what, when, and where.
b. how the work may be done, within what continuous span of time, and for what compensation.
c. Both of the above are correct.
d. None of the above is correct, because in our society the parties are free to contract on any terms
of their unique and specialized choice.
20. Mr. Sagacious was fired from his job after a wrestling fight with another employee. What would his
best argument for reinstatement be?
a. No one in the fight was seriously injured.
b. The company had neglected to provide a written rule clearly prohibiting wrestling or fighting.
c. Five other altercations had occurred under similar circumstances, but all participants were
females and none of them were fired.
d. He was employed for a specific three-year term and the term had two and a half years
remaining.
Test Bank 11
21. An employer/principal is liable for the torts of an employee/agent committed while the
employee/agent is
a. within the scope of employment.
b. paid an hourly wage.
c. a deep pocket employee.
d. on his or her way to work.
22. Cheryl Alessandro was driving down Hornet Street on her way to deliver a mattress for Comfort
Zone Mattress Company. Unfortunately, Cheryl was distracted momentarily and rear ended Ricki
Nesaam’s new automobile. Luckily, Ricki was not hurt, but the car suffered $12,000 in damages.
Who is legally responsible for the harm to Ricki’s car?
a. Cheryl only
b. Cheryl and Comfort Zone Mattress
c. Comfort Zone Mattress only
d. Ricki only
23. In determining whether someone is an independent contractor or an employee all but which of the
following questions are important?
a. What control does the employer have over the details of the work?
b. Was the task contracted for performed?
c. Did the worker provide his or her own tools?
d. How is the worker compensated?
24. The concept of wrongful termination of an employee
a. includes tort theory limiting the right of employers to discharge for certain reasons or under
certain circumstances.
b. is a modern developing common law concept.
c. provides some protection for at will employees.
d. all of the above
25. River City Corporation sells medical testing equipment to the physicians. The manager hires only
women as salespersons because he believes that most physicians are males and they are more willing to
listen to a sales pitch from a woman than a man. Which of the following is true?
a. The manager has violated the law but the company if free from liability unless his was
specifically instructed to hire in this fashion.
b. This is a violation of Title VII of the Civil Rights Act.
c. The is a violation of the Family Leave Act.
d. This is an example of a bona fide occupational qualification.
12 Chapter Thirteen
26. Hazel Andrus believes her company has a systematic preference for males in executive positions,
and that she has been denied a promotion because of this bias. Her employment contract contained
an arbitration clause. Assuming the arbitration clause is fair and enforceable, can the EEOC still
bring an action against the company on Hazel’s behalf or is arbitration her sole way to enforce the
law?
a. The arbitration clause provides her sole remedy and the EEOC is bared from bringing a claim.
b. The arbitration clause bars the EEOC, but it cannot stop Hazel from filing a lawsuit to enforce
her claims.
c. The EEOC can pursue a claim, but they must also arbitrate the claim.
d. Even if Hazel must arbitrate her claims, the EEOC has an independent right to bring an action
against the company on Hazel’s behalf.
27. River City Corporation arranged to have Han Vongphakham negotiate energy contracts on the
company’s behalf. In return for his services, Han was paid $25,000 plus royalties. Han purchased
several contracts for River City. He told River City that he paid more for the contracts than he actually
did. Through various tricks, Han kept much of the money River City gave him to pay for the contracts,
and used it for personal gain.
a. Because Han breached his duty of loyalty to River City, they owe him no royalty.
b. From the facts it is clear Han was an independent contractor with no duty of loyalty to River
City.
c. The doctrine of respondeat inferior applies to this situation and thus Han can keep his $25,000
and one-half the royalty.
d. If River City is engaged in interstate commerce, EEOC regulations will provide the rules to
determine the relative rights in this situation.
28. The Family and Medical Leave Act:
a. applies to all employers no matter the size of the company
b. requires paid leave for mothers for six weeks after the birth of any infant.
c. allows unpaid leave for family purposes as well as child care.
d. is funded by sales taxes and employers are reimbursed for 2 weeks vacation
29. In an “agency shop” an employee
a. must be a union member before being hired
b. cannot be hired if he is union member
c. cannot agitate for union representation.
d. need not be a union member to work but must pay the union an amount approximately equal to
union member’s normal dues.
Test Bank 13
30. Which of the following is correct about employment relationships?
a. In the absence of a contract and guarantee, most employment arrangements are “at will.”
b. It is illegal to fire a person if the employer lacks a legitimate reason.
c. The Taft-Hartley Act protects the employee from unfair practice by the employer.
d. Sexual harassment is not covered by Title VII.
Short Answer Essays
1. Under the Civil Rights Act, discrimination is prohibited except for four exceptions. Name and
explain any two of the four.
2. In the world of work, basically a person may serve as an
a. ordinary employee
b. agent
c. independent contractor
d. self-employed person
Briefly explain the nature of each, and give one example where each type of service is utilized.
3. Briefly explain why “equal pay” and “minimum wage” legislation has not ended the subordinate
status of women in the labor market, both in terms of compensation and of duties or
responsibilities.
14 Chapter Thirteen
4. What types of inequality or differences among individuals are not addressed by civil rights
legislation (e.g., laws barring discrimination in employment because of gender, religion, color, race,
national origin, or advanced age) and probably never will be subject to legislation?
5. High on the agenda of changes sought by unions in federal labor-management law is the demand
that there should be no distinction in the right of striking workers to return to their job whether the
strike was an unfair labor practice strike or an economic strike.
a. What is the difference between these two types?
b. Should the rule be changed as demanded?
Test Bank 15
6. Explain the nature of the relationship between agent and principal (the law of agency).
7. Ameg, a Nigerian-born, Muslim, black man was employed in the room-service department at
Consumer’s Resort Hotel. He made several unsuccessful attempts to transfer to the marketing
department. Ameg had completed high school in Nigeria and received an undergraduate business
degree in marketing at Roosevelt State University in Rhode Island. Last week he interviewed for a
transfer again, and he did not get the new job. He found out later that another applicant had gotten
the job, and that the other applicant had less experience and had not completed his college degree in
business at American Baptist University. What legal arguments might Ameg raise with Consumer’s
Resort Hotel?
8. a. What is at will employment?
b. What are some limitations on the ability of an employer to terminate a “at will” employee?
c. Why is it said that although an employer may lack the right to fire an employee, the employer
may still have the power?
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9. What is the difference between Quid Pro Quo Sexual Harassment and Hostile Environment Sexual
Harassment?
Test Bank 17
10. What is a Yellow Dog contract? What is its legal status?
11. Could employees who are professionals, such as attorneys at law, doctors of medicine, dentists, and
college professor’s form and join labor unions? If so, what would be some pros and cons of
unionization by such professionals?
12. The technicians at television station KTVE went out on strike in a dispute over the terms of a
proposed contract. The strike dragged on for weeks. Ordinary picketing seemed to be ineffective, so
some of the strikers prepared and distributed 5,000 handbills, which in sharp language disparaged
the quality of KTVE programs. The employer fired those responsible for the printing and
distribution. As an employer, we KTVE guilty of an unfair labor practice?