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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
