978-0078023194 Chapter 32 Lecture Notes

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Essentials of Business Law, 9th edition

INSTRUCTOR’S MANUAL

Chapter 32 Employment Law

LESSON OVERVIEW

While the previous chapter dealt with the employer–employee relationship, Chapter 32 deals with the

employment law at length. This chapter discusses federal and state laws that protect employees,

including workers’ compensation and the Occupational Safety and Health Act. It identifies the major

federal statutes concerning discrimination in employment, and the several forms of conduct that can

constitute sexual harassment. Additionally, this chapter also discusses labor unions and the rights of

employees, unions, and employers under federal law. It discusses the rights o employees to medical

leave and unemployment benefits. Finally, students’ understanding of the topics is evaluated through

objective-type questions, discussion questions, and case scenarios. Students are encouraged to conduct

their own research through the use of the Internet and other sources.

CHAPTER OUTLINE

A. WORKER SAFETY AND HEALTH (pp. 536-538)

1. Workers’ Compensation (pp. 536-537)

2. Occupational Safety and Health Act (pp. 537-538)

B. DISCRIMINATION IN EMPLOYMENT (pp. 538-542)

1. The Civil Rights Act of 1964 (p. 538-539)

2. The Equal Pay Act of 1963 (p. 539)

2. The Age Discrimination in Employment Act (p. 539)

3. The Pregnancy Discrimination Act (pp. 539-540)

4. The Americans with Disabilities Act (pp. 540-541)

5. The Civil Rights Act of 1991 (p. 541)

6. Sexual Harassment (pp. 541-542)

C. LABOR UNIONS (p. 542)

1. Rights of Employees (p. 542)

2. Rights of the Union (p. 542)

3. Rights of the Employer (p. 542)

D. Additional Employee Rights (pp. 542-543)

1. Family Medical Leave Act (p. 543)

2. Unemployment Benefits (p. 543)

E. CHAPTER SUMMARY (pp. 543-544)

F. CHAPTER ASSESSMENT (pp. 544-549)

1. Matching Key Terms (p. 544)

2. True/False Quiz (pp. 544-545)

3. Discussion Questions (pp. 545-546)

4. Thinking Critically About the Law (pp. 546-547)

5. Case Questions (pp. 547-548)

6. Case Analysis (pp. 548-549)

7. Legal Research (p. 549)

KEY TERMS

Key terms are listed at the beginning of the chapter, posted in the student textbook margins, and placed

in bold in the copy. They are listed here for your quick reference.

§ workers’ compensation (p. 536)

§ exclusive remedy (p. 536)

§ Occupational Safety and Health Act of 1970 (p. 537)

§ Occupational Safety and Health Administration (OSHA) (p. 537)

§ ergonomics (p. 538)

§ affirmative action plans (p. 538)

§ Civil Rights Act of 1964 (p. 538)

§ Title VII (p. 538)

§ Equal Employment Opportunity Commission (EEOC) (p. 538)

§ Equal Pay Act of 1963 (p. 539)

§ Age Discrimination in Employment Act of 1967 (p. 539)

§ Pregnancy Discrimination Act of 1978 (p. 539)

§ Americans with Disabilities Act of 1990 (ADA) (p. 540)

§ Civil Rights Act of 1991 (p. 541)

§ sexual harassment (p. 541)

§ National Labor Relations Board (NLRB) (p. 542)

§ collective bargaining agreement (p. 542)

§ wildcat strike (p. 542)

§ slowdown (p. 542)

§ lockout (p. 542)

§ Family Medical Leave Act of 1993 (p. 543)

§ Unemployment Benefits (p. 543)

LEARNING OUTCOMES

The chapter Learning Outcomes will help you and the students discover the concepts and information

that should be understood upon completion of the chapter. You may want to access the PowerPoint

(PPT) slides for Chapter 32 when you begin the study of the chapter and discuss each Learning

Outcome. Each Learning Outcome will be covered separately in the Instructor Notes, but they are

shown here in total as an overview of the sections being presented in Chapter 32. The corresponding

text page numbers and PPT slides are listed next to each outcome. These slides should be used to

reinforce the main points of the lecture.

After completing this chapter, the students will be able to:

1. Discuss federal and state laws that protect employees, including workers’ compensation and the

Occupational Safety and Health Act. (pp. 536-538, PPT slides 2-6)

2. Identify the major federal statutes concerning discrimination in employment, and identify several

forms of conduct that can constitute sexual harassment. (pp. 538-542, PPT slides 7-17)

3. Discuss labor unions and the rights of employees, unions, and employers under federal law. (p.

542, PPT slides 18-21)

4. Discuss an employee rights to medical leave and unemployment benefits (pp. 542-543, PPT slides

22-24)

LECTURE OUTLINE

A. WORKER SAFETY AND HEALTH

There are numerous federal and state laws that serve to protect employees from accidents and

sicknesses that are job-related.

1. Workers’ Compensation

Workers’ compensation provides that employees may recover damages for

work-related injuries. Because workers’ compensation is mandatory in most industries,

and because it provides employees with nearly automatic recovery, it is considered to be

the exclusive remedy, that is, an employee who sustains a work-related injury or illness

can only recover damages through workers’ compensation and may not file a lawsuit

against his or her employer. The number of workers’ compensation claims that have

been filed has increased dramatically; many employees have filed claims for

stress-related illnesses, which are compensable if the stress was not the result of the

employee’s ordinary duties on the job. Many employers have employee assistance

programs in place, a company benefit that provides opportunities for counseling and

stress reduction.

2. Occupational Safety and Health Act

The Occupational Safety and Health Act of 1970 was passed to promote safety and

health in the workplace. The law created a federal agency, the Occupational Safety and

Health Administration (OSHA), to administer to its many provisions. OSHA inspects

workplaces to be certain worksites comply with safety and health standards. As a

response to OSHA standards, companies are paying greater attention to the developing

science of ergonomics, which deals with designing workplaces so as to promote safety

and health.

B. DISCRIMINATION IN EMPLOYMENT

There are numerous federal, state, and local statutes that prohibit employers from discriminating in

employment. At times, under federal and state law, companies must maintain and report detailed

records to demonstrate that their employment practices are nondiscriminatory. These reports are

referred to as affirmative action plans.

1. The Civil Rights Act of 1964

The Civil Rights Act of 1964 is a federal statute designed to protect individuals from

illegal discrimination. This law is divided into parts, referred to as Titles, that prohibit

discrimination in various situations. Discrimination in employment is covered in Title

VII of the law. The Civil Rights Act of 1964 created the Equal Employment

Opportunity Commission (EEOC), a federal agency responsible for administering to

laws prohibiting discrimination in employment.

2. The Equal Pay Act of 1963

The Equal Pay Act of 1963, enacted prior to Title VII, was the first federal statute to

address discrimination against women in the workplace. The act prohibits any employer

from engaging in wage discrimination based on sex. Under this law, all employees

performing substantially similar jobs must be compensated equally. However, there are

some situations in which wage disparity between sexes is permissible, such as when

wages are based on seniority or tenure within an organization.

3. The Age Discrimination in Employment Act

The Age Discrimination in Employment Act of 1967 is a federal statute designed to

protect individuals from illegal discrimination in employment on the basis of age.

4. The Pregnancy Discrimination Act

The Pregnancy Discrimination Act of 1978 is a federal statute designed to protect

individuals from illegal discrimination in employment on the basis of pregnancy.

5. The Americans with Disabilities Act

The Americans with Disabilities Act of 1990 (ADA) is a federal statute designed to

protect individuals from illegal discrimination in employment on the basis of disability.

Persons considered disabled under the ADA would include individuals who are sight

impaired, are hearing impaired, or use a wheelchair. Persons who have diseases such as

cancer, diabetes, alcoholism, AIDS, epilepsy, manic depression, or schizophrenia are

protected under this law as well. The ADA also protects persons who are not currently

disabled but who have a record of a covered disability. The ADA requires that employers

make reasonable accommodation for an otherwise qualified employee with a disability,

unless to do so would cause undue hardship.

6. The Civil Rights Act of 1991

The Civil Rights Act of 1991 is a federal statute that provides two important additional

remedies to an employee who can prove that he or she was a victim of discrimination:

i. An employee may collect punitive damages.

ii. An employee may recover for emotional distress associated with

being the victim of discrimination.

7. Sexual Harassment

Sexual harassment is unwelcome sexual attention, whether verbal or physical, that

affects an employee’s job condition or creates a hostile working environment. Sexual

harassment is a form of discrimination on the basis of sex and is illegal under federal

and state law. Same-sex harassment is also illegal.

There are numerous forms of sexual harassment. Examples may include

• Unwelcome sexual advances, such as repeated propositions for

dates by a supervisor, coworker, or even a third party whether these occur

on or off company premises.

• Coercion, such as asking for a date while implying either a

promise of benefit or threat of reprisal.

• Favoritism, such as granting a promotion as a result of a

relationship

• Indirect harassment, such as an employee who continually

witnesses other employees being sexually harassed.

• Physical conduct, such as unseemly gestures or touching.

• Visual harassment, such as graffiti or inappropriate photographs

and pictures.

• Verbal harassment, such as improper teasing, joking, and so

forth.

If a case of sexual harassment winds up in court, the employer will attempt to defend

against this lawsuit by demonstrating that there was an effective sexual harassment

program in force. An effective sexual harassment program is one that:

i. is in writing and communicated to the employees;

ii. defines sexual harassment and declares a “no tolerance” policy;

iii. establishes a complaint procedure;

iv. trains, educates, and sensitizes employees;

v. provides for prompt and thorough investigation of complaints;

and

vi. includes corrective action, including discipline.

C. LABOR UNIONS

Since the 1930s, labor unions have played a vital role in both the U.S. economy and its politics. While

the number of employees in the private sector who are members of labor unions has declined in recent

years, it is important to understand the rights under the law that pertains to employees, unions, and

employers. All of these rights are protected by the National Labor Relations Board (NLRB), a

federal agency responsible for administering to laws relating to labor unions. A select sample of these

rights follows.

1. Rights of Employees

Under federal law, employees have the right to form, join, and assist a labor union and

the right to bargain collectively through representatives of their own choosing.

Employees have the right to vote for union leadership in democratically held elections.

If the employee has a dispute with his or her union, he or she may retain an attorney and

file a lawsuit.

2. Rights of the Union

The union has the right to represent all employees of a company who are a part of the

bargaining unit. The union then has the right to negotiate a contract with the employer,

called a collective bargaining agreement, that covers all terms and conditions of

employment. During the negotiation process, the union has the right to ensure that the

employer bargains in good faith, making an honest effort to reach an agreement. In the

event an agreement is not reached, the union has the right to call a strike. At times,

employees engage in a wildcat strike, that is, a strike without the union’s consent, or a

slowdown, wherein employees report to work but intentionally decrease their

productivity.

3. Rights of the Employer

The employer has the right to be free from featherbedding and secondary boycotts.

During the negotiation process, the employer has the right to ensure that the union

bargains in good faith. In the event an agreement is not reached, the employer has the

right to engage in a lockout, that is, not allow employees to return to work.

D. ADDITIONAL EMPLOYEE RIGHTS

1. Family Medical Leave Act

The Family and Medical Leave Act of 1993 (FMLA) is a federal statute that provides

eligible employees with the right to take up to 12 weeks of unpaid leave for personal

medical reasons or to care for a child, spouse, or parent. The FMLA applies to all

employers with 50 or more employees. To be eligible, an employee must have worked

for his or her current employer for at least 1,250 hours in the previous year.

2. Unemployment Benefits

Unemployment insurance provides financial stability, in the form of unemployment

compensation, to eligible employees who lose their jobs. In the United States,

unemployment insurance is established by state and federal statutes that create a system

whereby employers are required to pay federal and state unemployment insurance taxes.

Laws pertaining to unemployment compensation vary from state to state; however,

generally, in order for employees to be eligible to receive unemployment compensation,

they must have lost a job through no fault of their own, and they must meet the minimum

state requirements for wages or time worked during an established period.

INSTRUCTOR NOTES

A resulting answer or explanation is provided below for each Learning Outcome in Chapter 32. Every

outcome is also mapped to corresponding text page numbers, PPT slides, and relevant chapter

assessment exercises and activities for ease of reference and use.

LO1. Discuss federal and state laws that protect employees, including workers’ compensation and

the Occupational Safety and Health Act.

Workers’ compensation is a type of insurance that provides that employees may recover damages for

work-related injuries and illnesses without having to prove negligence on the part of the employer. It is

considered to be the exclusive remedy, that is, an employee who sustains a work-related injury or

illness can only recover damages through workers’ compensation and may not file a lawsuit against his

or her employer. The Occupational Safety and Health Administration administers to the many

provisions of the Occupational Safety and Health Act. OSHA requires that companies maintain records

of employee work-related accidents and sicknesses, inspects workplaces to be certain that these

worksites comply with safety and health standards, and, in the event violations are found to exist, can

impose penalties ranging from fines to closing the facility.

Text Pages: 536-538

PowerPoint: Slides 2-6

Discussion Questions: 21-22

Thinking Critically About the Law: 27-28

Case Questions: 35

Case Analysis: 36

LO2. Identify the major federal statutes concerning discrimination in employment, and identify

several forms of conduct that can constitute sexual harassment.

The major federal statutes designed to protect individuals from discrimination in employment

are the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Pregnancy

Discrimination Act of 1978, the Americans with Disabilities Act of 1990, and the Civil Rights Act of

1991. Forms of conduct that can constitute sexual harassment include unwelcome sexual advances,

coercion, favoritism, indirect harassment, physical conduct, visual harassment, and verbal harassment.

Text Pages: 538-542

PowerPoint: Slides 7-17

Discussion Questions: 23-25

Thinking Critically About the Law: 29-30

Case Questions: 33

Case Analysis: 37

LO3. Discuss labor unions and the rights of employees, unions, and employers under federal law.

Under federal law, employees have the right to form, join, and assist a labor union (or not to do so), the

right to bargain collectively, the right not to be discriminated against because of their union activities,

the right to vote for union leadership in democratically held elections, and the right to retain an attorney

and file a lawsuit. The union has the right to represent all employees who are a part of the bargaining

unit, the right to negotiate a collective bargaining agreement, the right to ensure that the employer

bargains in good faith, and the right to call a strike. The employer has the right to be free from

featherbedding and secondary boycotts, the right to ensure that the union bargains in good faith, and the

right to engage in a lockout.

Text Pages: 542

PowerPoint: Slides 18-21

Discussion Questions: 26

Thinking Critically About the Law: 31-32

Case Questions: 34

Case Analysis: 38

LO4. Discuss an employee rights to medical leave and unemployment benefits.

The Family and Medical Leave Act of 1993 (FMLA) is a federal statute that provides eligible

employees with the right to take up to 12 weeks of unpaid leave for personal medical reasons or to care

for a child, spouse, or parent. The FMLA applies to all employers with 50 or more employees. To be

eligible, an employee must have worked for his or her current employer for at least 1,250 hours in the

previous year.

Unemployment insurance provides financial stability, in the form of unemployment compensation, to

eligible employees who lose their jobs. In the United States, unemployment insurance is established by

state and federal statutes that create a system whereby employers are required to pay federal and state

unemployment insurance taxes. Laws pertaining to unemployment compensation vary from state to

state; however, generally, in order for employees to be eligible to receive unemployment compensation,

they must have lost a job through no fault of their own, and they must meet the minimum state

requirements for wages or time worked during an established period.

Text Pages: 542-543

PowerPoint: Slides 22-24