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Chapter 21 - Employment Laws
21-1
Chapter 21
Employment Laws
Learning Objectives
The purpose of this chapter is to introduce the students to basic employment issues. The
employment at will doctrine is explained as well as issues related to workplace privacy and
workers’ compensation laws. Finally, the responsibilities that an employer must undertake to
document employee performance and the anticipation of potential employee litigation is
addressed.
References
Azari-Rad, H., P. Philips, and M. Prus, The Economics of Prevailing Wage Laws. Ashgate
(2005).
Decker, K., Family and Medical Leave in a Nutshell. West Publishing (2000).
Guerin, L. and A. Delpo, Essential Guide to Federal Employment Laws, NOLO (2006).
Hynes, J.D. and Lowenstein, Agency, Partnership, and the LLC in a Nutshell, 3rd ed. West
Publishing Co. (2005).
Teaching Outline
I. Employment Laws (LO 21-1)
A. Minimum Wages and Maximum Hours
Emphasize:
The importance of the Fair Labor Standards Act (FLSA).
The current minimum wage required by the FLSA.
The establishment of the maximum length for a standard work week.
The workings of overtime pay or, as an alternative, compensatory time.
Sidebar 21.1—“Fair Labor Standards Act: To Pay or Not to Pay Overtime”
Chapter 21 - Employment Laws
21-2
B. The WARN Act
Alternative scenarios where the WARN act should be applied.
Additional Matters for Discussion:
The penalty for failing to comply with WARN Act requirements.
When the WARN Act notice is not required: replacing striking workers, when business
is failing, and impact of natural disasters
Sidebar 21.4—“FMLA: Facts and Statistics”
Sidebar 21.5—“EEOC: Best Practices Recommendations on Work/Family Balance”
FMLA and Military Families
Describe:
The main function of the National Defense Authorization Act (FY 2010 NDAA).
occurs due to family or medical leave.
The legal rights of employees to enforce FMLA in federal district court.
Sidebar 21.6—“States Are Immune from FMLA Self-Care Claims?”
D. Uniformed Services Employment and Reemployment Rights Act
Chapter 21 - Employment Laws
21-3
Emphasize:
The scope of reemployment rights.
The health insurance provisions.
Sidebar 21.7—“Rand Study: Invisible Wounds of War”
Case 21.3—“Staub v. Proctor Hospital”
E. Occupational Safety and Health Administration
Emphasize:
OSHA’s jurisdiction.
The scope of OSHA.
That there is no private cause of action.
Sidebar 21.8—“New OSHA Crowd Management Safety Guidelines”
Recent developments in corporations changing their retirement plans, usually from
defined benefits to private individual accounts, such as 401(k) plans.
G. Health Care
Explain:
The goals of the Affordable Care Act of 2010.
That these limitations are both statutory and common law imposed.
How personnel handbooks can contain statements that courts imply to be contractually
binding on employers.
The three major employer behaviors that have been central to many contract and tort
Chapter 21 - Employment Laws
21-4
exceptions.
Table 21.2—“Federal Statutes Limiting Employment-at-Will Doctrine”
That the Dodd-Frank Wall Street Reform and Consumer Protection Act provides for
incentives to whistleblowers for a broad range of violations.
Sidebar 21.11—“IRS Whistleblowers Rewards Program”
Additional Matter for Discussion:
That many nations have much stricter laws promoting an employee’s right to job
security than does the United States.
I. Workers’ Privacy (LO 21-3)
Emphasize:
The protection offered to employees by the Electronic Communications Privacy Act of
1986 and the Employee Polygraph Protection Act of 1988.
Penalties imposed by the labor department on violators of the act.
The protection offered by the Fourth Amendment to public employees.
1988. It allows testing when there is a “reasonable suspicion” that the employee is
involved in activity resulting in economic loss or injury to the employer. Also when the
employer is a security-related firm or is involved with controlled substances.
J. Workers’ Compensation Acts
Discuss:
The replacement of torts with compensatory laws.
The clear purpose of compensatory statutes.
History
Emphasize:
Workers’ compensation laws are state statues designed to protect employees and their
families from the risks of accidently industry, death, or disease resulting from their
employment.
Chapter 21 - Employment Laws
21-5
How historically three defenses insulated employees from negligence liability in most
instances.
The System
Discuss:
How the state workers’ compensation statutes provide a system to pay workers or
their families in case of injuries or death of the employee.
That workers’ compensation is an insurance program administered exclusively by an
administrative agency called a board.
Tests for Determining Compensation
Explain:
The tests for determining eligibility for compensation.
The problems confronting the workers’ compensation system.
Why slowly developing occupational diseases is a growing concern.
A possible solution to the problems confronting the workers’ compensation system.
Additional Matters for Discussion:
An interesting handout-type article on New Zealand’s no-fault compensation
Appeals Board increased 63 percent, and the litigation rate climbed from 25 percent
of all claims to nearly 36 percent.
According to a study by a Duke University economist—when workers’ comp benefits
are higher, wage levels on the average are lower. This indicates that employers are
cutting costs in other areas when comp benefits rise; the rate at which comp claims
21-6
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according to their claim histories provide incentives for employer-provided safety.
Cases for Discussion:
1. A toxic level of polychlorinated biphenyls was spilled in the employer’s mill. The
employer ordered two employees to clean up the spill without protective clothing.
2. Female employers sued their employer for battery, intentional infliction of mental
distress, and negligent hiring based on sexual harassment by co-workers. The trial
court dismissed due to the Florida exclusive remedy rule. Held by the Florida
Supreme Court: The exclusive remedy rule does not bar the suit. Byrd v. Richardson-
Greenshields Securities, Inc., 10/26/89.
K. Employment Eligibility Verification
Emphasize:
That the IRCA requires the completion of a Form I-9 Employment Eligibility
Verification form for each individual hired in the United States.
That the citizens and noncitizens must complete the form.
Sidebar 21.14—“Arizona Law on Hiring Foreign Workers is Upheld.”
II. Agency Law in Contracts and Other Contexts (LO 21-4)
Emphasize:
Why business organizations cannot accomplish anything without the assistance of
individuals.
The terms “agent” and “agency law.”
A. Terminology
