1. Around half the states originally followed the employment-at-will rule.
a.
True
b.
False
2. A private-sector employee can avoid at-will status by negotiating a contract that provides for a specific term of
employment and defines how the contract can be terminated.
a.
True
b.
False
True
1
Moderate
12–1a Employees Not Subject to the At–Will Rule
3. Even if an individual is an at-will employee, in most states the employer is prohibited from discharging the employee
for a reason that violates public policy.
a.
True
b.
False
True
1
Moderate
12–2a Public Policy Exception
4. In CASE 12.1 Perez v. Progenics Pharmaceuticals, Inc. (2013) plaintiff Perez was a chemist who was fired after
issuing a memo disputing the company’s public representations to shareholders, calling it “fraud” and “illegal.”
Perez sued claiming his termination was in retaliation against him, in violation of Sarbanes-Oxley.
a.
True
b.
False
True
1
Challenging
12–3b Federal Statutory Protection
False
1
Easy
12-1 At–Will Employment
5. In United States v. Windsor case referenced in the text, the U.S. Supreme Court struck down the Defense of Marriage
Act, holding that DOMA was an unconstitutional deprivation of liberty protected by the Fifth Amendment.
a.
True
b.
False
1
Challenging
12–11e Defense of Marriage Act
6. Because federal law preempts the area, states have not enacted legislation regarding drug testing of private employees.
a.
True
b.
False
False
1
Moderate
12–8a Drug Testing
7. Regarding drug testing, the Fifth Amendment’s ban on unreasonable searches and seizures applies only to governmental
activity.
a.
True
b.
False
False
1
Moderate
12–8a Drug Testing
8. The WARN act requires employers to give employees at least 120 days advance notice of a plant closure affecting at
least 50 employees.
a.
True
b.
False
False
1
Challenging
9. Because of sufficient federal protection, states have not enacted laws addressing illegal immigration.
a.
True
b.
False
False
1
Easy
12–13 Immigration Law
10. The federal Sarbanes-Oxley Act removed several federal whistleblower provisions applicable to nongovernment
employees.
a.
True
b.
False
False
1
Moderate
12–3b Federal Statutory Protection
11. Rights under the Employee Polygraph Protection Act can be waived in advance by the employee.
a.
True
b.
False
False
1
Moderate
12–8c Polygraph Testing of Employees
12. The Patient Protection and Affordable Care Act prohibits insurers from denying health-care coverage or charging
higher premiums due to preexisting conditions.
a.
True
b.
False
True
Moderate
12–12 Worker Readjustment and Retraining Notification Act (WARN)
13. States vary in their willingness to enforce noncompete agreements.
a.
True
b.
False
True
1
Moderate
12-5 Noncompete and Other Agreements
14. The Employee Polygraph Protection Act completely bans the use of polygraph exams.
a.
True
b.
False
False
1
Moderate
12–8c Polygraph Testing of Employees
15. Section 7 of the NRLA gives union employees the right to engage in “concerted activities” for collective bargaining or
other mutual aid or protection.
a.
True
b.
False
True
1
Moderate
12-14d Unfair Labor Practices by Employers
16. The National Labor Relations Act prohibits employers from discriminating against any employee to encourage or
discourage membership in any labor organization.
a.
True
b.
False
True
Moderate
12-11d Patient Protection and Affordable Care Act of 2010
17. Payment of workers’ compensation is based on fault.
a.
True
b.
False
False
1
Moderate
12-09d Workers’ Compensation
18. The Fair Labor Standards act does not limit the number of hours that an employee may work in a workweek or
workday, as long as the employee is paid appropriate overtime.
a.
True
b.
False
True
1
Moderate
12–10 Minimum Wage, Overtime, and Child Labor
19. State and local governments are prohibited from complying with the overtime provisions of the Fair Labor Standards
Act by giving employees compensatory time in lieu of overtime pay.
a.
True
b.
False
False
1
Moderate
12–10 Minimum Wage, Overtime, and Child Labor
20. The Occupational Safety and Health Administration (OSHA) has safety requirements but no requirements regarding
recordkeeping.
a.
True
b.
False
False
1
Moderate
12–14 Labor-Management Relations
21. The U.S. Supreme Court struck down Arizona’s “Legal Arizona Worker’s Act of 2007″ because it went beyond the
Immigration Reform and Control Act’s savings clause which preempts states from imposing civil or criminal sanctions on
employers hiring aliens other than through licensing or similar laws.
a.
True
b.
False
False
1
Challenging
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
12-13b Legislative Reform: States Rush in Where Congress Fears to Tread
Blooms: Application
22. Pursuant to federal law, states have the same rules in place in regard to implied contracts of employment.
a.
True
b.
False
False
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–2b Implied Contracts
Blooms: Comprehension
23. The National Labor Relations Act prohibits employers from interrogating employees about union sentiment or
activity.
a.
True
b.
False
True
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12-14d Unfair Labor Practices by Employers
Blooms: Comprehension
24. What type of statutes protect employees who report illegal activities going on within their company?
a.
Reporting statutes
b.
Revealing statutes
c.
Discovery statutes
d.
Whistleblower statutes
d
DISC: – AICPA: BB-Legal
12-9 Occupational Safety and Health Act
Blooms: Comprehension
25. Which of the following are generally NOT subject to the employment-at-will rule?
a.
Public employees
b.
Employees who have express employment contracts for a fixed term and public employees
c.
Public employees and union employees
d.
Public employees, employees who have express employment contracts for a fixed term, and union employees
b
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–1a Employees Not Subject to the At–Will Rule
Blooms: Comprehension
26. Which of the following provides whistleblower protection for employees who provide information of illegality to the
SEC?
a.
The Employee Retirement and Protection Income Security Act
b.
The Dodd-Frank Wall Street Reform and Consumer Protection Act
c.
The Wagner Act
d.
The SEC Accountability and Reform Act to Protect Consumer Investors
b
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–3c Dodd-Frank Wall Street Reform and Consumer Protection Act
Blooms: Comprehension
27. The Nat’l Treasury Emps. Union v. Von Raab case referenced in the text, involved the testing of U.S. Customs Service
employees in line for transfer or promotion to certain sensitive positions involving drug interdiction or the handling of
firearms. How did the U.S. Supreme Court rule?
a.
That drug testing would be allowed only if the government could establish evidence of a drug problem among
that group of customs employees.
b.
That the drug testing was illegal and unconstitutional.
c.
That the drug testing was justified by the need for national security and by the extraordinary safety hazards
attendant to the positions involved.
d.
That the drug testing would be allowed because the customs employees, as public employees, had no greater
rights than private employees.
1
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12-3 Statutory and Constitutional Protection for Whistleblowers
Blooms: COmprehension
28. Assuming a jurisdiction permits noncompete agreements, which of the following is considered in determining whether
restrictions are reasonable?
a.
The duration of limitations
b.
Geographic limitations
c.
The scope of the activities prohibited and the duration of any limitations
d.
The duration of limitations, geographic limitations, and the scope of the activities prohibited
d
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12-5 Noncompete and Other Agreements
Blooms: Comprehension
29. __________ purport to give an employer the right to recoup some or all of an employee’s stock option gain if he or she
goes to work for a competitor within a certain period of time following exercise of the option.
a.
Climb back provisions
b.
Incline clauses
c.
Let loose clauses
d.
Clawback provisions
d
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–5b ClawBack Provisions
Blooms: Application
30. The federal agency responsible for enforcing the provisions of the Occupational Safety and Health Act is the:
a.
Occupational Safety and Health Administration.
b.
Safe Workplace Administration.
c.
Health in the Workplace Administration.
d.
Federal Employment Oversight Administration.
1
United States – BUSBROG: – Analytic
12-9 Responsibility for Worker Safety
Blooms: Knowledge
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12-8 Drug Testing
Blooms: Analysis
31. Which of the following is true regarding genetic testing by employers?
a.
There is a federal law prohibiting all employers from firing employees based on genetic information.
b.
There is no federal law prohibiting employers from firing employees based on genetic information, but many
states have laws prohibiting the firing of employees based on genetic information.
c.
There is a federal law prohibiting employers of health care workers from firing employees based on genetic
information, but other than that, employers are not subject to any limitations.
d.
There is a federal law prohibiting employers of over a certain number of employees from firing employees
based on genetic information.
32. Which of the following is true regarding private employer monitoring of employee e-mail on company-owned
equipment?
a.
There is a federal law prohibiting private employers from monitoring employee e-mail on company-owned
equipment.
b.
Most states have state laws prohibiting private employers from monitoring employee e-mail on company-
owned equipment.
c.
Most states allow private employers to monitor employee e-mail on company-owned equipment, but
employees must first be warned that the e-mail will be monitored.
d.
Most courts have upheld a private employer’s right to monitor employee e-mail on company-owned
equipment.
d
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–8d Employee Surveillance in an Electronic Age
Blooms: Comprehension
33. Which of the following are included within OSHA requirements regarding posting of information?
a.
OSHA requires that notices of any potentially dangerous conditions be posted.
b.
OSHA requires that any citations for violations be posted.
c.
OSHA requires that notices of any potentially dangerous conditions be posted and also that citations for
penalties be posted.
d.
OSHA does not have any posting requirements.
c
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–9a Occupational Safety and Health Act
Blooms: Comprehension
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–8b Genetic Testing and Health Monitoring
Blooms: Comprehension
34. Which of the following is NOT typically true of a state workers’ compensation statute?
a.
The system is no-fault.
b.
The system is based on the principle that the risks of injury in the workplace should be borne by the state.
c.
An employee is entitled to benefits regardless of the level of safety in the work environment.
d.
An employee is entitled to benefits regardless of the degree to which the employee’s carelessness contributed
to the incident.
35. A(n) __________ plan is a defined contribution pension plan funded with contributions by the participants or a
combination of participant and employer contributions.
a.
630(b)
b.
401(k)
c.
employee stock ownership
d.
defined benefit pension
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–11a Employee Retirement Income Security Act of 1974 (ERISA)
Blooms: Comprehension
36. Which of the following is true regarding compensation for hours worked under the Fair Labor Standards Act when an
employee is asked to be on standby—that is, available to return to work while off duty?
a.
If an employee is asked to be on standby, the hours spent on standby will not be counted as hours worked if
the employee is generally free to use the time for his or her own purposes.
b.
If an employee is asked to be on standby, the hours spent on standby will be counted as hours worked for
which the employee is entitled to compensation even if the employee is generally free to use the time for his or
her own purposes.
c.
If an employee is asked to be on standby, the hours spent on standby will be counted as hours worked; but the
employee is only entitled to one-half of the employee’s regular pay for those hours.
d.
If an employee is asked to be on standby, the hours spent on standby will be counted as hours worked; but the
employee is only entitled to three-fourths of the employee’s regular pay for those hours.
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–10 Minimum Wage, Overtime, and Child Labor
Blooms: Comprehension
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–9d Workers’ Compensation
Blooms: Comprehension
37. The Fair Labor Standards Act requires that, with some exceptions, every employee be paid __________ for hours
worked in excess of __________ hours in a workweek.
a.
one and one-half the regular rate of pay; 40
b.
two times the regular rate of pay; 40
c.
one and one-half the regular rate of pay; 45
d.
two times the regular rate of pay; 45
38. In 1938, the FLSA set the first minimum wage at:
a.
$1.00 per hour.
b.
$2.50 per hour.
c.
fifty cents per hour.
d.
twenty-five cents per hour.
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Blooms: Knowledge
39. Congress has introduced the Fair Minimum Wage Act of 2013, which would increase the minimum wage to
__________ by 2016.
a.
$10.10 per hour
b.
$8.88 per hour
c.
$6.75 per hour
d.
$15.00 per hour
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–10e Minimum Wage
Blooms: Comprehension
40. Under federal law, it is illegal to employ anyone under the age of __________, except in specified agricultural
occupations.
a.
fourteen
b.
fifteen
c.
sixteen
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–10 Minimum Wage, Overtime, and Child Labor
Blooms: Comprehension
d.
seventeen
41. Employees who must be paid both minimum wage and overtime as required by the Fair Labor Standards Act are
referred to as __________ employees.
a.
exempt
b.
nonexempt
c.
covered
d.
accommodated
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–10f Exempt and Nonexempt Employees
Blooms: Comprehension
42. Generally, employees who earn less than _____ per week are automatically considered eligible for minimum wage
and overtime as required by the Fair Labor Standards Act.
a.
$240
b.
$300
c.
$455
d.
$550
c
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–10f Exempt and Nonexempt Employees
Blooms: Comprehension
43. Which of the following federal laws governs most employer-sponsored retirement plans as well as many other types of
employer-sponsored employee benefit plans?
a.
The Consolidated Omnibus Budget Reconciliation Act
b.
The Employee Retirement Security Act
c.
The National Labor Relations Act
d.
The Fair Labor Standards Act
b
1
Moderate
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12-10g Child Labor
Blooms: Comprehension
44. In the Harris v. Quinn case discussed in the text, the State of Illinois attempted to compel __________ chosen by
Medicaid to pay their __________ fees to the bargaining representative representing their union.
a.
public sector employees, union
b.
union workers, fair share
c.
home-care personal assistants, fair share
d.
employers, employees’ fair share
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
12-14g Fair Share Fees
Blooms: Analysis
45. In a(n) __________, the employer guarantees that the participant will receive an annual benefit for life following
retirement, or the actuarial equivalent of such a benefit, based on a formula in the plan regardless of contributions made or
the plan’s investment performance.
a.
defined contribution pension plan
b.
401(k) plan
c.
employee stock ownership plan
d.
defined benefit pension plan
d
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–11a Employee Retirement Income Security Act of 1974 (ERISA)
46. The “Inside Story” focuses on Employers’ Policies Regarding Employees’ Use of Social Media. The NLRB issued
guidelines to protect employees’ use of social media, especially concerning:
a.
concerted activity under Section 7 of the NLRA, including communication to each other about wages, hours,
and working conditions.
b.
concerted activity under Section 12 of the NRLA, including communication to each other about wages, hours,
and working conditions.
c.
unfair labor practices under Section 1 of the NRLA, including retaliation emails.
d.
a public sector employee’s right to freedom of speech and collective bargaining information.
1
DISC: – AICPA: BB-Legal
Inside Story: Employers’ Policies Regarding Use of Social Media
Blooms: Analysis
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–11a Employee Retirement Income Security Act of 1974 (ERISA)
Blooms: Comprehension
47. Which of the following is true regarding drug testing of public and private employees by employers?
a.
There are greater limits on drug testing in relation to public employees as compared to private employees
because public employees have rights under the U.S. Constitution.
b.
There are greater limits on drug testing in relation to public employees as compared to private employees
because private employees have rights under the U.S. Constitution.
c.
The limits on drug testing are the same in relation to public and private employees because both categories of
employees have rights under the U.S. Constitution.
d.
There are no U.S. Constitutional limits on drug testing in relation to either public or private employees
because neither category has rights under the U.S. Constitution.
48. In the Garcetti v. Ceballos case discussed in the text, Ceballos a deputy district attorney with the Garcetti’s Los
Angeles District Attorney’s office, wrote a memo to his supervisors recommending they dismiss a case based on factual
inaccuracies in the affidavit that secured a search warrant. Thereafter, Ceballos claimed he suffered retaliation and denial
of promotion, and filed suit against the DA’s office claiming violations of his First, Fourth and Fifth Amendment rights.
The U.S. Supreme Court held:
a.
against Ceballos, finding that his First Amendment right was not violated because he breached the attorney
client confidentiality agreement.
b.
against Garcetti, finding that the DA’s office had violated the federal whistleblower statute.
c.
against Ceballos, finding that his First Amendment right was not violated because Ceballos spoke as an
employee of the DA’s office, not as a citizen.
d.
against Garcetti, finding that Ceballos’ First Amendment rights were violated because Ceballos spoke as an
employee of the DA’s office, protecting the public.
c
1
Challenging
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
12–3d Claims of Constitutional Protection by Public Whistleblowers
Blooms: Analysis
49. Employers must complete a(n) _____ form showing verification of the identity and employment eligibility of all
persons hired.
a.
A-12
b.
I-9
c.
Imm.1
d.
A1
b
1
Moderate
United States – BUSBROG: – Analytic
a
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–8a Drug Testing
Blooms: Application
50. Courts in a minority of states have recognized a bad-faith exception to the at-will employment relationship called the:
a.
implied covenant of good faith and fair dealing.
b.
imposed contract of fair treatment.
c.
imposed contract of fair treatment and ethical conduct.
d.
implied obligation of fairness and ethics.
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–2c Implied Covenant of Good Faith and Fair Dealing
Blooms: Application
51. The __________ prohibits employers from using genetic information to make decisions about hiring, firing, or
compensation.
a.
Family Medical History Act
b.
Genetic Prohibition and Protection Act
c.
Privacy in Testing Act
d.
Genetic Information Nondiscrimination Act
d
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
12–8b Genetic Testing and Health Monitoring
Blooms: Comprehension
52. Programs in effect in some states requiring employers to pay employees wages approximating the real cost of living in
the locality are called __________ ordinances.
a.
real cost
b.
estimated expense
c.
living wage
d.
accurate wage
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Blooms: Application
53. In CASE 12.2 Edwards v. Arthur Anderssn LLP. (2008), plaintiff Edwards was a tax manager at an Arthur Anderson
DISC: – AICPA: BB-Legal
12–13 Immigration Law
Blooms: Application
office in Los Angeles. Arthur Anderson was later indicted for its role in the Enron debacle, but an AA subsidiary HSBC
offered to hire Edwards conditioned on signing a “termination of non-compete” agreement (TONC). Edwards signed the
employment offer but not the TONC. The offer was rescinded and Edwards was terminated. Edwards sued. The main
issue dealt with California’s statutory ban on most:
a.
employee surveillance tactics.
b.
‘clawback’ agreements.
c.
confidentiality agreements.
d.
noncompete agreements.
Fact Pattern 12-1
Ricardo, an Italian citizen, who is trained in a specialized form of computer programming that is highly in demand, is
interested in coming to work in the U.S. A friend of his told him that he could come to the U.S., but that he would not be
protected by U.S. employment laws and regulations. Ricardo also understands that a strictly enforced rule is that he could
only work in the U.S. for three years. Ricardo is inclined to come to the U.S. but would like additional information
regarding his rights and the process.
54. Refer to Fact Pattern 12–1. Which of the following would enable Ricardo to work in the U.S.?
a.
A passport
b.
An H-1B visa
c.
A recognized visa
d.
A work permit
b
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
12–13a Immigration Reform and Control Act of 1986
Blooms: Application
55. Refer to Fact Pattern 12–1. If Ricardo comes to the U.S. to work with appropriate documentation, for how long will he
generally be authorized to work?
a.
For up to two years
b.
For up to three years
c.
For up to six years
d.
For up to ten years
1
d
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
12–5a Noncompete Agreements
Blooms: Analysis
56. Roxanne has a serious heart condition. She has worked as an administrator with employer-sponsored health insurance
at Big Company for ten years. She has been offered a great job at Up and Coming Company that she would like to take. It
pays slightly less but has great opportunities for advancement. Up and Coming has health insurance, but there is a
preexisting condition with the insurance excluding coverage for any preexisting health condition for six months. Roxanne
says that if she takes the job at Up and Coming she will not be able to afford to continue her health insurance from Big
Company. Up and Coming wants her to start immediately. She is in a quandary about what to do. What would you advise
her to consider?
a.
She should consider relying on the Health Insurance Portability and Accountability Act which would likely
prohibit enforcement of the preexisting condition exclusion.
b.
She should consider relying on the Consolidated Omnibus Budget Reconciliation Act which would require
that Big Company pay for the continuation of her insurance through Big Company for six months.
c.
She should file for assistance with the insurance payments under the Worker Adjustment and Retraining
Notification Act.
d.
She should not take the job with Up and Coming because she cannot afford to take a risk with the preexisting
condition exclusion.
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
12–5c Confidentiality Agreements
Blooms: Application
Fact Pattern 12-2
Paige is 64 years old and would like to retire from her job at a large accounting firm. She, however, is concerned about
health insurance. She would not be eligible for Medicare benefits until age 65, and due to some serious health conditions,
she would not be able to obtain insurance in the private market. She has good health insurance at the accounting firm and
is considering putting off her retirement so that she can keep it.
57. Refer to Fact Pattern 12–2. Which of the following would likely enable Paige to keep her insurance with the
accounting firm until she is eligible for Medicare?
a.
The Health Insurance Portability and Accountability Act
b.
The Consolidated Omnibus Budget Reconciliation Act
c.
The Employee Security Act
d.
The Insurance Protection Act
b
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
12-11b Consolidated Omnibus Budget Reconciliation Act (COBRA)
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
12–13a Immigration Reform and Control Act of 1986
Blooms: Application
58. Refer to Fact Pattern 12–2. Assuming Paige exercises her rights under federal law to maintain her insurance with the
accounting firm upon her resignation, which of the following is true regarding the premiums?
a.
The employer would be required to pay all of the premium.
b.
The employer would be required to pay for one-half of the premium, and Paige would be required to pay for
one-half.
c.
Paige and the employer would pay the premium based upon whatever arrangement was in effect during her
period of employment.
d.
Paige would have to pay all the premium.
d
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
12-11b Consolidated Omnibus Budget Reconciliation Act (COBRA)
Blooms: Comprehension
59. Which of the following is true regarding employment laws within the European Union?
a.
The European Union has attempted to bring uniformity to the laws related to termination of employment.
b.
No member states of the European Union recognize the U.S. concept of employment at will.
c.
The European Union has attempted to bring uniformity to the laws related to termination of employment, but
laws of the United Kingdom provide significantly more benefits and legal protection to employees than do the
employment laws of France.
d.
In order to facilitate trade, the European Union has mandated that all member states apply the same laws
regarding employment.
d
1
United States – AACSB: Diversity
DISC: – AICPA: BB-Legal
Global View: Right to Continued Employment
Blooms: Comprehension
60. List the factors set forth in the text that may give rise to an implied obligation to discharge the employee only for good
cause in jurisdictions recognizing the contract-based implied contract judicial exception to the employment-at-will rule.
personnel policies of the employer and the practices of the industry in which the
employee is engaged.
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Blooms: Comprehension
61. List exceptions, if any, to the Employee Polygraph Protection Act’s ban on polygraph testing.
The Employee Polygraph Protection Act does not completely ban the use of polygraph
security services or the handling of drugs. In addition, the act does not restrict federal,
1
12–8c Polygraph Testing of Employee
62. Bertha works for Bad Taste, Inc. She has been employed for over 12 years by the company without a written
employment contract. Last year Bertha was promoted to the position of executive secretary. The company policy manual
issued 6 years ago promises that no employee may be terminated without 2 prior written warnings regarding poor job
performance. Bertha has always received excellent job reviews. Recently the president resigned and was replaced by Fred,
who promised to improve productivity by 20%. Bertha has just learned from Fred that she is being replaced by Sheila,
who was Fred’s former executive secretary. What claims may Bertha make against Bad Taste, Inc. for wrongful
discharge? Does the company have any defenses? Discuss fully.
ANSWER:
Bertha should sue for breach of contract based upon the policy manual. The company
would claim that the manual did not create any legal obligation and that employment
remained at will. States interpret the effect of such manuals in different ways. Bertha
should also claim that an implied contract is present based upon the parties’ conduct. A
factor in her favor is that she has been an exemplary, long-term employee. Not all
jurisdictions recognize that theory, however. A minority of states also recognize a cause
of action based upon a breach of the implied covenant of good faith and fair dealing.
1
12-2 Wrongful Discharge
63. What standards are applied in regard to judicial review of ERISA decisions by plan administrators?
decisions. If a benefit plan gives discretion to an administrator who is operating under a
conflict of interest, however, then the court will weigh the conflict as a factor in
12–2b Implied Contracts
64. Joe is the owner of a manufacturing company called ProfitMax. Joe finds out that a union is attempting to organize the
employees at ProfitMax. Joe tells you that he will never deal with a union and that he has no plans to pay a higher wage if
the union is elected. Joe has plans to tell his supervisors that they may not encourage union activity. Joe has plans to do
surveillance regarding which employees attend union meetings so that he can fire them. He is also going to announce to
all employees that they will get a raise if they vote against the union. He asks you what his obligations are if the union
gets elected and if his other plans are legal. He also wants to know what he can expect from his supervisors, some of
whom he is suspicious of supporting the union. What would you tell him?
65. Melody just got out of law school and went to work at Big Law Firm. One of her first assignments is to help a partner
who just got reassigned to the employment law section of the firm. The partner asks her to provide information regarding
the legality of drug testing. What four factors should Melody tell the partner are considered in determining whether drug
testing will be deemed permissible in a particular situation?