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Chapter 51 - Employment Law
CHAPTER 51
EMPLOYMENT LAW
I. OBJECTIVES
This chapter discusses the most important legal topics that deserve to be considered part of
employment law. Although the chapter's scope is broad, its emphasis is selective. That is, the
chapter concentrates its efforts on the employment-related topics that hopefully are of the greatest
current interest: employment discrimination, employee privacy, and common-law suits for
wrongful discharge. Such selectivity is required by the general nature of this text. Even so, this
is a very long chapter. Thus, instructors may want to use its materials selectively. The material
on employment discrimination can be taught as a self-contained unit, as can the material on the
recent erosion of employment at will.
Depending of the portions of the chapter upon which the instructor focuses, after reading the
chapter and attending class, a student should be able to:
A. Explain the structure and operation of a workers’ compensation regime, including the
elements of a work-related injury.
B. Identify and describe legislation that protects workers’ safety, health, and well-being; that
regulates employees’ wages and hours, pensions and benefits, and income security; and
that governs unionized workforces.
C. Analyze and apply the appropriate legislation for a workplace scenario for potential
unlawful discrimination and assess the possibility for liability, including an employer’s
potential defenses.
D. Distinguish the relative privacy rights of private-sector and public-sector employees.
E. Describe the employment-at-will doctrine and its major exceptions.
II. ANSWER TO INTRODUCTORY PROBLEM
The introductory problem was inspired by, though changes and expands significantly upon, the
facts of Chaney v. Plainfield Healthcare Ctr., 612 F.3d 908 (7th Cir. 2010). Instructors may find it
helpful to read the case for a more in-depth discussion of one court’s resolution of the first two
questions.
A. Possibly. Jackson was subject to a racially hostile work environment. The comments from
her coworkers were hostile and abusive; the notation on the shift assignment sheet was
humiliating. Pages 1367-1369 describe the circumstances under which an employer can be
held liable for the harassing behavior of its employees. Though the chapter’s discussion
focuses on sexual harassment, the same theory applies to harassment on the other protected
characteristics under Title VII, such as race. Jackson would have to prove that the noted
behaviors are severe or pervasive enough to change the terms and conditions of employment
and that there is a basis upon which to hold Wheatfield liable. Because there were both
coworkers and supervisors involved in the action, this example provides an opportunity to
discuss the standards for vicarious or direct liability.
B. If Wheatfield attempted to justify its actions based on the residents’ preferences, such an
argument might be couched in terms of a bona fide occupational qualification (BFOQ)
defense. This defense is described on pages 1364-1366. The BFOQ defense does not apply
to race. Though courts have recognized a privacy interest in same-sex health providers that is
sometimes sufficient to support a BFOQ based on sex, there is no such defense under Title
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Chapter 51 - Employment Law
VII for same-race health providers. Moreover, in general, the BFOQ defense is usually
unavailable where the discrimination is based on the preferences of customers, rather than a
privacy interest.
C. Yes. Lucas could claim that he was subject to retaliation for protesting discriminatory actions
that are unlawful under Title VII. Retaliation is discussed on pages 1377-1378.
D. As described on pages 1350-1354, Jackson is entitled to workers’ compensation benefits for
work-related injury.
E. Jackson was substantially limited in her ability to lift and the restrictions were permanent.
According to the ADA Amendments Act of 2008, lifting is a major life activity. Thus,
Jackson is disabled. Because of that, Wheatfield must provide Jackson a reasonable
accommodation if it allows her to perform the essential functions of her job, unless to do so
would cause Wheatfield an undue hardship on the operation of its business. The Americans
with Disabilities Act and the ADA Amendments Act of 2008 is discussed on pages 1372-
1376.
F. Mandatory drug testing by a private, nongovernmental employer is generally permissible.
State constitutional protections may limit Wheatfield’s ability to do this testing. Also, tort
suits for invasion of privacy or infliction of emotional distress are possible, if the employer is
not careful about how the testing is done. Page 1379 addresses the privacy interests involved
in drug and alcohol testing.
G. Yes. As explained in page 1356, unemployment compensation protects employees after their
employment ends. Though employees who voluntarily quit or who are fired for bad conduct
are not entitled to unemployment compensation, Jackson was terminated without good cause
and would be entitled, so long as Wheatfield is a covered employer and Jackson worked for
the minimum time specified by her state’s unemployment insurance plan.
H. Yes, as long as the state in which these events occurred has adopted the public policy
exception to employment at will. Page 1381 describes this exception.
III. SUGGESTIONS FOR LECTURE PREPARATION
A. Discuss how the field of employment law has grown and expanded in a relatively short time.
B. Legislation Protecting Employee Health, Safety, and Well-being
1. Workers' Compensation. The main things to stress here are:
a. That workers' compensation is an employee's sole recovery for covered injuries
against covered employers; that this recovery is based on strict liability; and that
workers’ compensation eliminates the three traditional defenses of assumption of
risk, contributory negligence, and the fellow-servant rule.
b. That workers' compensation represents a kind of social compromise, greatly
increasing the probability of recovery but generally reducing its amount as compared
with a successful negligence suit. It can be argued that the two hang together, since
without lower dollar recoveries the overall increase in liability produced by strict
liability might result in costs that are politically unsustainable.
c. The work-related injury requirement and the problems it poses. The Dulen case is
the text's main vehicle for developing the different tests used to determine whether
the injury arose out of the employment. In addition to the increased risk and
positional risk tests discussed in that case, some states have used a test intermediate
between the two: the actual risk test. Under this test, the injury is compensable if the
risk causing it was actually a risk associated with the employment, regardless of
whether it was also a risk shared by the general public. For example, this test would
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manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 51 - Employment Law
allow recovery for frostbite if the nature of the employment actually exposed the
employee to frostbite, even though this risk is common to all those exposed to wind
and low temperatures.
d. Darco Transportation v. Dulen (p. 1408) discusses and applies the two major tests for
workers' compensation liability in the context of alleged employee horseplay.
Points for Discussion: What arising-out-of-the-employment test does Oklahoma
appear to have adopted? (Positional-risk). What result in this case under the
increased-risk test? (Unclear. Did Dulen 's job expose him to any greater risk of this
injury than anyone else on the road? Or should the comparison include people who
drive much less than Dulen does?) Is the court's invocation of the malfunctioning
crossing gate relevant to the arising-out-of-the-employment issue? (Probably not.
Would the result be different if, say, Dulen simply hadn't seen the oncoming train?
Although most of the relevant language was excised, this judge seems obsessed with:
(1) viewing this case as in essence a contributory fault case, and (2) expunging any
hint of contributory fault from Oklahoma workers' compensation law.)
Additional Example: Problem Case #1.
2. Discuss the general provisions of OSHA, comparing its purpose with that of workers’
compensation (to prevent injuries rather than to compensate injuries that have already
occurred).
3. Discuss the provisions of the Family and Medical Leave Act.
a. Note that in a number of countries, mothers (and sometimes fathers) are given paid
leave for the birth or adoption of a child. Should that be the policy in the U.S.?
b. If you want to go into detail, you might discuss the recent rules interpreting the
military family amendment to FMLA.
c. You may wish to draw distinctions here between the FMLA and USERRA, discussed
on page 1433. Note, for instance, that the FMLA does not have a requirement similar
to USERRA’s “escalator principle” when an employee returns from an FMLA-
covered leave.
C. Legislation Protecting Wages, Pensions, and Benefits
1. Provide an overview of social security and unemployment compensation. You may want
to discuss some of the current problems with funding social security.
2. With regards to ERISA:
a. Stress that ERISA does not require employers to establish pension plans and does not
set benefit levels.
b. You might mention that ERISA is a very complicated statute in which individual
attorneys often specialize, and that the text's treatment of it is very general.
c. Among the other duties it imposes, ERISA also prohibits plan managers from dealing
with plan assets on their own interest or for their own account, and from acting in any
capacity on behalf of a party whose interests are adverse to the interest of the plan.
3. Discuss the Fair Labor Standards Act and identify some very familiar features of our
labor environment that come from FLSA regulations, e.g., minimum wage and ban on
child labor. The major things to emphasize are the Act's wages and hours provisions, its
ban on certain child labor, and its exemptions.
D. Collective Bargaining and Union Activity
1. Note that this brief text coverage of collective bargaining and union activity is primarily
an historical overview of the topic.
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Chapter 51 - Employment Law
E. Equal Opportunity Legislation
1. The Equal Pay Act
a. Emphasize how limited a provision the EPA is: it applies only to sex discrimination
regarding pay.
b. In explaining the act's operation, consider the following model: female in Job A sues
employer because male in Job B receives higher pay. The plaintiff obviously has to
show that Job A and Job B are equal. She does so by showing that the jobs involve
equal effort, skill, and responsibility, and similar working conditions. In comparing
the jobs with respect to these variables, job descriptions are probably important, but
what the employees actually do is also quite significant. Remember that the skill in
question is the skill the jobs require. Thus, a pay differential is difficult to justify just
because, for instance, a male assembly line employee has a Ph.D. in philosophy.
Finally, note that many EPA cases do not discuss these elements one-by-one, but
rather just compares the two jobs with reference to them.
c. In the interest of not providing too much detail, the text does not address the issues
raised in the 2007 Supreme Court case of Ledbetter v. Goodyear Tire & Rubber Co.
or the subsequent Congressional override of that decision by the Lilly Ledbetter Fair
Pay Act in 2009. If you have time, you may find this to provide a useful discussion
of the ongoing evolution of equal opportunity legislation, particularly because it
illustrates the “conversation” between the Supreme Court and Congress related to
statutory interpretation, which is especially active in this area of the law.
2. Title VII
a. By way of introduction, note that Title VII is the employment discrimination
provision, due to its various prohibited bases of discrimination and the wide range of
employment decisions it covers. Compare Title VII with the Equal Pay Act, which
only covers sex discrimination regarding pay.
b. When discussing Title VII's coverage, it is easy to set up hypotheticals regarding
employment agencies. Suppose for example that an agency with 10 employees
discriminates on the basis of race both in its own hiring, and in its referrals to General
Motors. Finally, note the two situations in which unions might be covered by Title
VII (regarding their employees and their members). Stress that state fair employment
practices laws can apply to employers as well, even in some cases in which an
employer’s workforce is too small for Title VII to apply.
c. Overview the complicated procedure and short statute of limitations of Title VII.
d. Regarding the methods of proving a Title VII case:
1) Stress the importance of the subject. If Title VII only covered situations where
an employer uses express classifications or where direct evidence of
discrimination is present, it would be a much less potent provision. Nonetheless,
expressly discriminatory policies, like the one described in Problem Case #4, and
cases involving direct evidence, like the Gaskell case in the text (discussed
below), are not unheard of. These proof methods are complex and are constantly
being refined by the courts.
2) Following amendment to Title VII in the 1991 Civil Rights Act and, particularly,
the Supreme Court’s 2009 decision in Gross v. FBL Financial Svcs., Inc., the
causal proof standards that govern Title VII and the other equal opportunity
statutes (e.g., the ADEA, ADA, USERRA, etc.) are no longer uniform. So,
addressing them carefully in the Title VII context is particularly appropriate. The
chapter’s discussion of disparate treatment proof structures, in particular, notes
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Chapter 51 - Employment Law
the motivating factor standard for mixed-motives claims in addition to the more
dominant (though not necessarily more important) McDonnell Douglas
paradigm.
3) Two other Title VII proof methods probably deserve some attention, especially
on the heels of the 2011 Supreme Court opinion in Wal-Mart Stores, Inc. v.
Dukes and the 2009 decision in AT&T Corp. v. Hulteen. Relevant to the former,
systemic discrimination claims can come in the form of pattern or practice
theory; however, Dukes significantly reduced the likelihood of class certification
under such a theory. As a result, suits by the government, particularly the EEOC,
which is empowered by Title VII to bring pattern or practice case on its own,
have increased in importance. Proof of a pattern or practice of discrimination
usually takes place by statistics to show that discrimination in the defendant’s
standard operating procedure, rather than isolated instances. The statistics may
be supplemented by specific evidence of discrimination. If such proof is
provided, then each individual who claims discrimination need not provide
individualized proof. Rather, the burden shifts to the employer to prove that
particular individuals are not entitled to the presumption of discrimination and
the corresponding remedy. Also, employers may violate Title VII by adopting a
facially neutral rule that perpetuates the effects of past discrimination. For
example, suppose that a labor union which has racially discriminated in the past
abandons explicit discrimination but adopts a rule saying that new members must
be related to, or recommended by, existing members. Hulteen, however,
restricted the operation of this theory by holding that an employer was not liable
for the ongoing disadvantage that was created by a service credit rule that was
unfavorable to women who opted for pregnancy leave at a time before the
Pregnancy Discrimination Act clarified that pregnancy was a protected
classification. Though such a rule would violate the current law, it was not a
violation at the time it was implemented. That the disadvantage currently affects
employees’ pension benefits did not make its application unlawful.
e. Gaskell v. University of Kentucky (p. 1415) provides an example of a claim of
disparate treatment based on religion. Gaskell was clearly the most experienced
applicant to direct UK’s new astronomical observatory. But some members of the
search committee were worried about his scientific beliefs and his ability to interface
with important constituencies, such as other departments. These concerns were
rooted in Gaskell’s religious beliefs about the origin of human life; Gaskell was a
“creationist.” Ultimately, the search committee did not select him, despite objections
by the chair of that committee that he was passed over on the basis of his religious
beliefs. The case provides a discussion of the various proof structures that may be
used to prove an individual disparate treatment claim.
Points for discussion: Do you agree with the court that Gaskell has provided direct
evidence of discrimination (i.e., is religious discrimination the only possible
interpretation of the statements and e-mails the court quotes)? How is it that the
court finds direct evidence of discrimination, but does not grant Gaskell’s motion for
summary judgment? Here is a good opportunity to remind students of the procedural
posture of the case. If this is a possible “mixed-motives” claim, what are the
competing motives? Assuming that Gaskell convinces a jury that the evidence he
provided is true and that his religion was “a motivating factor” for UK’s refusal to
hire him, would UK be liable under Title VII? What remedy would he be entitled to?
How might UK limit its exposure to damages in that case? (These questions provide
a natural transition to the discussion of Title VII’s defenses.) You may also use this
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Chapter 51 - Employment Law
case to launch a discussion of Title VII’s prohibition on religious discrimination, as
discussed on page 1367. In particular, it illustrates the sometimes messy interplay
between religious beliefs and nonreligious scientific, cultural, or political viewpoints.
f. Discuss Title VII's defenses, especially the same-decision defense and the BFOQ
defense. You might want to introduce students to the BFOQ by discussing the
infamous “Hooters Case,” which many students have heard about. Some details
about the case are available at the following websites:
http://blogs.findlaw.com/free_enterprise/2009/04/can-men-be-hooters-girls-when-
can-businesses-hire-only-women.html (providing an overview of the issues);
http://www.originalhooters.com/saga/the-90s/ (providing Hooters’ own description of
the case).
Henry v. Milwaukee County (p. 1418): Henry and Lewis, female juvenile corrections
officers (“JCOs), sued Milwaukee County when their overtime hours were cut and
their shift assignments were restricted due to a policy that required night shift JCOs
to be of the same sex as the juveniles in the “pods” they were assigned to monitor at
the Juvenile Detention Center. Because there were far more male juveniles in the
Center than females, opportunities for working the night shift were limited for the
women. Milwaukee County defended the policy by arguing it was a BFOQ.
Points for Discussion: This case is a strong illustration of how courts are skeptical of
BFOQ claims and have been careful to interpret the defense quite narrowly. Though
courts tend to give wide latitude in personnel matters to administrators of correctional
facilities and other quasi-military organizations, that does not mean that courts
uncritically accept arguments made by them. The employer has the burden to prove
that the discriminatory practice for which it is claiming a BFOQ is a necessity, not
simply that it makes sense or that it is helpful to the legitimate goals of the employer.
This case provides a nice discussion of a couple of bases upon which employers
argue sex-based BFOQs: safety and privacy. Because Milwaukee County did not
provide sufficient evidence to support its claimed BFOQ for the sex-restrictive
assignment policy, you could generate discussion with students by posing the
following question: “What evidence could a correctional facility present that might
be sufficient to justify as a BFOQ a discriminatory policy like Milwaukee County’s?”
g. Regarding the prohibited bases of discrimination:
1) Note just what the ban on race or color discrimination covers. It's probably best
to treat race and color together. Can an employer voluntarily prefer minorities
simply to attain racial diversity? The standards adopted by the Supreme Court in
United Steelworkers v. Weber (listed on p. 1421) suggest not.
2) Note what's included in Title VII's ban on national origin discrimination. Also,
note the various situations in which national origin discrimination can be based
on an adverse impact argument. The EEOC has guidelines on these situations.
3) Note the wide sweep of Title VII's ban on religious discrimination. Emphasize
that the ban extends to religious observances or practices, and note that the
employer has an "undue hardship" defense. It may be worthwhile to remind
students here that the same defense under the ADA has been interpreted to be
much more exacting on employers. For an example of a striking example of the
potential breadth of the definition of religion and the likely concomitant ease of
providing undue hardship, see Problem Case #10. The Supreme Court has held
that an employer is obliged only to offer a reasonable accommodation to a
religious employee. It does not have an obligation to provide the employee’s
preferred accommodation.
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Chapter 51 - Employment Law
h. Regarding sex discrimination:
1) Note that voluntary reverse discrimination in favor of women is treated under
tests like those used in similar situations involving minority preferences. Such
tests were used in Johnson v. Santa Clara County Transportation Agency (1987),
which upheld a public employer plan with a point system giving women a
practical edge in obtaining promotions.
2) The section on sexual harassment has been revised in this edition to focus
students’ attention on the bases for employer liability for harassment by its
employees or others under its control, rather than on the descriptive names often
used to describe harassing behavior. Because only supervisors can make a quid
pro quo demand, but both supervisors and coworkers can create hostile
environments, this section focuses on the employer’s responsibility and exposure
to liability for harassing behavior. The goal is to focus students on what they
should be doing to avoid, prevent, and correct harassment in their current or
future roles as managers. Students can be guided through a decision-tree analysis
when confronted with a harassment scenario or claim:
4) Ashmore v. J.P. Thayer Co. (pp. 1369-1371): This case involves claims of same-
sex harassment, which the Supreme Court clarified in Oncale v. Sundowner
Offshore Svcs., Inc., is actionable under Title VII. Ashmore and Green were
subjected to repeated sexually aggressive behaviors by their supervisor Fye over
the course of several months. When they complained, eventually some action
was taken, but Fye’s behavior did not cease. Only when Ashmore and Green
retained an attorney and the attorney threatened legal action did the employer fire
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Chapter 51 - Employment Law
Fye. The case illustrates a case of supervisory harassment without a tangible job
action (i.e., a supervisory hostile environment theory). It also illustrates the
application of the Ellerth/Faragher affirmative defense.
Points for discussion:
a) It is worthwhile to draw out the point that sexual harassment cases do not
require that the perpetrator is, in fact, sexually attracted to the victim. In this
case, it did not matter whether Fye was gay or bisexual, but rather only
mattered that he targeted Ashmore and Green because they were men.
Discussion of this point should direct students to recall that harassment is a
form of discrimination under Title VII, so the plaintiff must demonstrate that
the harassment is because of his or her protected characteristic (in this case,
sex).
b) The case also provides a vivid example of the fact that Title VII is not a
“general civility code” for the workplace. Note that the court had to take
seriously arguments about whether Fye’s clearly inappropriate conduct was
sufficiently severe or pervasive to create a hostile and abusive environment.
Students should be guided to appreciate that Title VII doesn’t impose a risk
of liability on employers for every sexist (or racist) joke, comment, or
behavior to which employees are subjected. In fact, as the reference to the
Gupta case illustrates, there are multitude examples of cases in which clearly
“inappropriate and disgusting” behavior has not been sufficiently severe or
pervasive to alter an employee’s terms or conditions of employment.
c) The court’s holdings regarding the vicarious liability standard and the
Ellerth/Faragher affirmative defense should provide excellent fodder for
class discussion, particularly if you ask students to put themselves in the
shoes of Ashmore and Green. Note that Ashmore and Green endured more
than two months of repeated, aggressive, and inappropriate behavior from
Fye. They complained at least twice to management, but saw no change in
Fye’s behavior, and only got resolution when their attorney sent a threatening
letter to the employer. Yet, the court held as a matter of law that the
employer had fulfilled its responsibility to correct the harassment. Ask
students, “Are you comfortable with an outcome that tells Ashmore and
Green, ‘We recognize that you endured terrible behavior, but your employer
did everything we can expect of it to protect you,’ even though it did nothing
effective for more than a month?” The court also finds that Ashmore and
Green unreasonably delayed in notifying their employer about the
harassment. Again, you can stimulate conversation by asking students to put
themselves in the employees’ shoes and to consider what may have been the
reason for that delay? Finally, the discussion should note the effect of the
employer’s antiharassment policy on its affirmative defense.
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