978-1285427003 Chapter 26 Lecture Note Part 1

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Suggested Additional Assignments

Research: Airline Unions

Students should find as much information as possible about an airline that recently filed for bankruptcy,

or is on the verge of filing for bankruptcy. What role do unions play in the financial position of the

airline? Are there on-going talks between the union and management? If so, which union is involved?

What are the talks about? What are management’s goals? The union’s goals?

Research: Current Strike

Students should find as much information as possible about a current strike, anywhere in the United

States. In addition to news articles, students should try to locate position statements by the two sides. In

cases of longstanding, or long-threatened, strikes, both management and labor may use Web sites to

advocate their views on the conflict. If those sites are not available, students should try to find interviews

or broadcast transcripts that provide detail about the respective positions. One useful resource is

http://www.ilr.cornell.edu/depts/ICB/briefing/.

Drafting Exercise: Advising Management

Students are to assume that they are employee relations supervisors at Parton Parcel, a nationwide parcel

delivery company. Presently none of Parton Parcel’s employees belong to a union. However, a national

union is attempting to organize the drivers, package sorters, and desk clerks. Parton Parcel’s bosses are

adamantly opposed to all unions. They want to do everything possible to defeat this union drive,

including, if necessary:

Speaking to individual workers, to let them know what management regards as the

dangers of unionization, including economic harm to the company, and possible layoffs.

Assembling all workers, in large groups, to speak against unionization, and asking all

workers to declare publicly whether they intend to vote for or against the union.

Making pay changes, both up and down, to certain workers to prove that employees are

better off without a union, and may suffer if they play “too active” a role in organizing.

Immediately laying off all desk clerks and subcontracting the work to a part-time labor

force.

Students should prepare a memorandum that summarizes management’s rights during an organizing drive

and responds specifically to each of the possible actions listed above.

Ethics: Creating a Part-Time Labor Force

Divide the class into an even number of groups, half of which will represent management and the other

half, labor. Using the Parton Parcel example above, debate the ethics of the last proposal, to lay off all

desk clerks and subcontract the work to a part-time labor force. Assume that doing this would save the

company large sums of money. Parton Parcel currently pays desk clerks from $8 to $12 per hour for a

40-hour week, pays time-and-a-half for overtime, and gives full health and retirement benefits to all. By

using part-time workers, the company can reduce the hourly rate to $7 to $9 per hour (including the fees

to the “temp” company), eliminate all overtime, eliminate all health and retirement benefits, and build

greater flexibility into the week’s work schedule. For example, while a few workers might still work 40

hours, many others would work only 15 to 20 hours; the company could hire extra workers during the

busy holiday season and then quickly reduce staff as necessary; and it could hire extra workers for the

busiest hours of deskwork, typically 4 P.M. to 8 P.M. However, there are corresponding losses to all

employees and their families.

Students should debate the ethics of this proposal, and see if they can reach some kind of

compromise.

Research: Working Conditions

Students should research and prepare a brief report on a dispute describing unsafe working conditions at

some workplace in the United States. Likely places include poultry processing plants, textile factories,

mines, or any job site using undocumented workers. Students can find vivid examples at

http://www.uniteunion.org/sweatshops/sweatshop.html.

Chapter Overview

Chapter Theme

Employment law is an important—and difficult—area of law to study. It is important because it affects

almost everyone, directly or indirectly. It is difficult because it is changing rapidly. Even now,

employment law can vary dramatically from state to state.

Many decades after Congress guaranteed important labor rights, management and workers in many

industries still clash over the old issues of union organizing, collective bargaining, and concerted action.

Traditional Common Law Rule –

Employment-At-Will

In the absence of a specific legal exception, the rule in the United States is still that an employee at-will

can be fired for any reason or no reason at all.

Employment Security

Family and Medical Leave Act

The Family and Medical Leave Act (FMLA) guarantees both men and women up to 12 weeks of unpaid

leave each year for childbirth, adoption, or a serious health condition of their own or in their immediate

family. A family member is a spouse, child, or parent — but not a sibling, grandchild or in-law.

Case: Peterson v. Exide Technologies.1

Facts: Exide Technologies issued repeated warnings to Robert Peterson for driving forklifts too fast and

violating other safety rules. After he was injured in a forklift crash, Exide granted him FMLA leave for 10

days while he recovered.

Peterson’s manager fired him during the leave period for “flagrant violations of safety rules.” Peterson

sued, claiming that he was terminated in retaliation for exercising his right to take FMLA leave. The

lower court granted summary judgment to Exide, and Peterson appealed.

Issue: Was Peterson fired in retaliation for claiming FMLA leave?

Excerpts from Judge Baldock’s Decision: The FMLA makes it unlawful for any employer to interfere

with, restrain, or deny the exercise of the rights provided by the FMLA, or to discriminate against any

individual for opposing any practice prohibited by the FMLA.

[I]f Plaintiff makes out a prima facie retaliation case, the burden shifts to Defendant to demonstrate a

legitimate, nonretaliatory reason for its termination decision. If Defendant meets this burden, the burden

shifts back to Plaintiff to show that there is a genuine dispute of material fact as to whether Defendant’s

explanations are pretextual.

1 2012 U.S. App. LEXIS 7139 Tenth Circuit Court of Appeals, 2012.

Defendant asserts it dismissed Plaintiff for the legitimate reason that he violated company safety policies.

According to Defendant’s Plant Manager:

Based on my own review of the photographs and the damage they depicted,

Plaintiff was driving too fast at the time of the crash and was not operating his

forklift in a safe manner. Such conduct on Plaintiff’s part was a flagrant violation of

company health and safety policy and posed a threat to the safety of Plaintiff and

other Exide employees.

The Plant Manager also based his decision to fire Plaintiff on the “history of careless and unsafe conduct”

reflected in Plaintiff’s personnel file. Defendant has adequately demonstrated a nonretaliatory reason for

Plaintiff’s termination: his repeated safety violations. Thus, the burden shifts back to Plaintiff to show

pretext.

Plaintiff argues Defendant’s asserted justification is pretextual because the forklift accident was a “minor

incident.” Whether the accident was “minor” is questionable. But even if it was, we see nothing that

prevents Defendant from firing employees for minor safety violations. Particularly where, as here, the

employee has a record of unsafe work performance, even a minor infraction could be the last straw.

Plaintiff has produced no evidence to undermine Defendant’s nonretaliatory explanation for the

termination. Aside from the fact Plaintiff was on FMLA leave when he was fired, no evidence suggests a

causal connection between Plaintiff’s firing and his exercise of FMLA rights. Therefore, the district court

properly granted summary judgment.

AFFIRMED.

Question: Based on the evidence presented, what is the most likely reason Peterson was fired?

Question: Is that a violation of FMLA?

Health Insurance

Companies are not required to provide their employees with health insurance. However, current

legislation specifies that, starting in 2014, employers who have more than 50 full-time employees must

pay a penalty if they do not provide basic health insurance. In addition, company insurance policies must

cover employees’ children up to the age of 26. The Supreme Court in 2012 upheld the statute as

constitutional.

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), former employees must be

allowed to continue their health insurance at their own expense for 18 months after being terminated from

their job.

Common Law Protections

The employment-at-will doctrine was created by the courts. Because that rule has sometimes led to

grossly unfair results, the courts have now created a major exception to the rule—wrongful discharge.

Wrongful Discharge: Violating Public Policy

As a general rule, an employer may not fire an employee for a reason that violates basic social rights,

duties, or responsibilities. In essence, the public policy rule prohibits an employer from firing a

worker for a reason that violates basic social rights, duties, or responsibilities. Students may firmly

believe that the employer has virtually unchallengeable authority to define the conditions of employment.

Generally, an employee may not be fired for refusing to violate the law, performing a legal duty,

exercising a legal right, or supporting basic societal values.

This case, the additional example that follows, and the public policy moot court assignment at the start of

this chapter should provide ample material to explore the limits on the employer’s ability to terminate

employment.

Case: Kozloski v. American Tissue Services Foundation.2

Facts: American Tissue Services Foundation (ATSF) supplies human tissue for use in both research and

transplantation into live patients. Kevin Noyes was the director of procurement of tissue. Paul Kozloski

was president and COO, and Robert Turner was Chairman of the Board and also Executive Director of

Lifeshare, which was a major supplier of tissue to ATSF.

Mike Slack, an employee of ATSF revealed to Noyes that he has ordered a subordinate to falsify a

donor medical record and change the donor’s blood type on the form. This falsification was not only

dangerous to recipients of the tissue, but also it was a violation of U.S. Food and Drug Administration

(FDA) regulations. Noyes reported the violation to Kozloski who fired Slack.

Slack was Turner’s foster child, and Turner was furious at Kozloski. Turner hired Slack at Lifeshare

as a quality assurance specialist. Kozloski reported the problem with Slack to Duke Kasprisin, the director

of quality assurance at Lifeshare.

Kozloski and Kasprisin then held a conference call with ATSF managers. Kasprisin said he thought

the company was required under federal law to report the infraction to the FDA, and that if the company

did so voluntarily, the punishment would be less severe then if the FDA found out on its won. When

Kozloski and Kasprisin sent a letter to the FDA, Turner fired Kozloski, Kasprisin and Noyes. Kozloski

and Noyes filed suit for wrongful discharge under the public policy doctrine. ATSK filed a motion to

dismiss on the grounds that Minnesota law on wrongful discharge only protected employees who were

fired for refusing to break the law.

Issue: Does the public policy doctrine in Minnesota apply?

Holding: Yes, ATSF’s motion to dismiss was denied. According to the court, the Plaintiffs claim their

terminations occurred as a direct result of, and in retaliation for their reporting to their employer and the

FDA concerns about public safety, violations of federal regulations and federal law, and related concerns

regarding quality control issues that may directly affect public safety. The court rejected ATSF’s claim

that the only wrongful discharge claim was one based on termination in retaliation for refusing to break

the law. Instead, according to the court, Minnesota law recognizes wrongful discharge when a discharge is

for a reason that clearly violates public policy.

The FDA regulations regarding the safe transfer of tissues from cadavers for use in live patients

emphasize the public safety and protection of citizens, and thus encompass a clear public policy regarding

public safety. Noyes and Kozloski’s arguments that they were required by law to report the violations to

the FDA only bolster this finding.

Question: Why did Turner fire Noyes and Kozloski?

Answer: Turner fired Kozloski because he reported to the FDA that Slack had ordered a subordinate

Question: Under a traditional employment-at-will doctrine, did Turner have the right to fire Noyes

and Kozloski?

Question: Did the court permit Turner to fire Noyes and Kozloski?

Question: How did the court define the public policy doctrine?

2 2006 U.S. Dist. LEXIS 95435, United States District Court for the District of Minnesota, 2006.

Question: Is this holding a narrow or broad interpretation of the public policy doctrine?

Answer: It seems to be a more narrow interpretation of the public policy doctrine. The court stated

Additional Example: Public Policy

Mark Lewis was a master mechanic who managed a Firestone store in Tucson. He claimed that Firestone

fired him because he refused to tell customers that certain parts and maintenance procedures were

recommended by the manufacturer when, in fact, they were not. His regional manager told him to give up

his “ridiculous ideals” and become part of the “real world.” Firestone also expected Lewis to tell

customers that a “certified” technician had examined their cars even though, in most cases, the technician

was neither certified nor competent.3

Question: Mark Lewis says he was fired for refusing to sell customers parts and service that they did not

need. What is the difference between being an aggressive salesperson and committing fraud? How many

of us need everything we buy?

Question: What did it want Mark Lewis to say?

Answer: It wanted Lewis to misrepresent to customers that the manufacturers recommended certain

Question: Did Firestone violate public policy by firing Lewis?

Question: Did Firestone expect Lewis to break the law?

Question: What if Firestone had simply ordered him to tell customers that their cars needed maintenance

when he did not believe that to be the case, and then had fired him when he refused?

Question: Does an employer ever have the right to require workers to participate in an illegal scheme?

Suppose that compliance with state pollution control regulations would force a company out of business.

When the life of the company is at stake, does the boss have a right to expect a worker to cooperate by

fudging records?

Answer: No, but students don’t always see it that way. What happens in society if everyone decides

individually whether a particular law applies to him or not? If an employee is willing to violate

Contract Law

Traditionally, many employers (and employees) thought that only a formal, signed document qualified as

an employment contract. Increasingly, however, courts have been willing to enforce an employer’s more

3 Sam Negri, “Car-Repair Firm Accused of Lying,” Arizona Republic, June 8, 1991, vol. 102, no. 21, §E,

p. 6.

casual promises, whether written or oral. Sometimes courts have also been willing to imply contract terms

in the absence of an express agreement.

A few contract terms that courts have upheld:

Oral promises made during the hiring process can be enforceable, even if not approved by the

company’s top executives.

An employee handbook creates a contract.

In almost all states, courts will imply a covenant of good faith and fair dealing in an at-will

employment relationship.

Tort Law

Workers have successfully sued their employers under the following tort theories:

Defamation

Employers may be liable for defamation when they give false and unfavorable references about a former

employee.

More than half of the states, however, recognize a qualified privilege for employers who give references

about former employees. A qualified privilege means that employers are liable only for false statements

that they know to be false or that are primarily motivated by ill will.

On the flip side, do employers have any obligation to warn about risky workers? Generally, courts have

held that employers do not have a legal obligation to disclose information about former employees.

In some recent cases, however, courts have held that, when a former worker is potentially dangerous,

employers do have an obligation to disclose this information

Intentional In0iction of Emotional Distress

Employers who condone cruel treatment of their workers face liability under the tort of intentional

infliction of emotional distress.

Whistleblowing

Whistleblowers are employees who disclose illegal behavior on the part of their employer. Sometimes,

rather than fixing the reported problems, employers retaliate against the informer. As a general rule,

whistleblowers are protected in the following situations:

The False Claims Act. This act prohibits employers from firing workers who file suit under the statute.

The recovery is shared by the government (who receives 75 percent to 85 percent) and the whistleblower

(who gets the rest).

The Dodd-Frank Act. Anyone who provides information to the government about violations of securities

or commodities laws is entitled to a payout of from 10 to 30 percent of whatever award the government

receives, provided that the award tops $1 million. If a company retaliates against tipsters, they are entitled

to reinstatement, double back pay and attorney’s fees.

Sarbanes-Oxley Act of 2002. This act protects employees of publicly traded companies who provide

evidence of fraud to investigators (whether in or outside the company). A successful plaintiff is entitled to

reinstatement, back pay, and attorney’s fees.

Constitutional protection for government employees. Employees of federal, state, and local

governments have a right to free speech under the United States Constitution. Therefore, the government

cannot retaliate against public employees who blow the whistle if the employee is speaking out on a

matter of public concern.

Statutory protection for federal employees. The Civil Service Reform Act and the Whistleblower

Protection Act prevent retaliation against federal employees who report wrongdoing. They also permit the

award of back pay and attorney’s fees to the whistleblower.

State laws. All 50 states have laws that protect whistleblowers from retaliation by their employers. The

bad news is that the scope of this protection varies greatly from state to state.

Privacy in the Workplace

Employees are entitled under the common law to a reasonable expectation of privacy. However, in the

absence of a specific law to the contrary, employers do have the right to fire workers for off-duty conduct.

A few states, such as California, have passed so-called “lifestyle laws” that protect the right of employees

to engage in any lawful activity or use any lawful product when off-duty.

About half the states and the federal government have passed laws that protect particular off-duty

conduct, such as smoking or use of legal drugs.

You Be the Judge: Rodrigues v. Scotts Lawnservice 4

Facts: Scotts Lawnservice refused to hire tobacco users. It also tested all employees for both illegal

drugs and nicotine. Scotts offered Rodrigues a job “contingent upon successful completion of a

pre-hire screening which includes a nicotine test.” Rodrigues voluntarily submitted a urine sample

and started work.

Shortly thereafter, a Scotts’ supervisor saw a pack of cigarettes on Rodrigues’ dashboard and issued

a warning. Two weeks later, when Rodrigues’ test came back positive for nicotine, he was told not to

return to work. He sued, claiming a violation of his privacy rights. Massachusetts Law states: “A

person shall have a right against unreasonable, substantial or serious interference with his privacy.”

You Be The Judge: Did Scotts’ enforcement of its anti-tobacco policy violate Rodrigues’ privacy

rights?

Argument for Rodrigues: Under Massachusetts law, a person has a right to be free from

unreasonable interference with his privacy. As a result, employers are not allowed to exercise total

control over their employees’ personal lives. For Scotts to require a test that reveals what Rodrigues

has been doing at home or in his car, is a clear violation of his privacy rights.

Smoking outside of work has nothing to do with Mr. Rodrigues’s job performance.

We would have no argument with Scotts if the company prohibited employees from smoking while

on duty. But, a policy that disallows tobacco use at any time goes too far and is an unreasonable

invasion of workers’ right to privacy. Tobacco is a legal substance, and it is absurd for a private

business to ban what the government does not.

Argument for Scotts: There is nothing private about smoking. Smokers typically light up in their

cars and in public places. They purchase cigarettes openly. A person does not have a right to privacy

when he does not attempt to keep information private. Rodrigues had a pack of cigarettes in his

truck while at work. He made no effort to keep his tobacco use secret.

Scotts has a legitimate interest in hiring workers who do not use tobacco. No law, including the

Massachusetts privacy statute, prohibits the company’s anti-tobacco policy.

Holding: The court held that Rodrigues did not have a protected privacy interest, because he never

attempted to keep the fact that he was a smoker private.

Question: What if Rodrigues had been an “embarrassed smoker” who smoked only while alone

and inside his own home with the blinds drawn?

4 639 F. Supp. 2d 131 United States District Court for the District of Massachusetts, 2009.

Alcohol and Drug Use

Under federal law, private employers are permitted to test for alcohol and illegal drugs. However, the

Equal Employment Opportunity Commission (EEOC), which is the federal agency charged with

enforcing federal employment laws, prohibits testing for prescription drugs unless a worker seems

impaired.

Governments are sometimes allowed to conduct drug and alcohol tests of their employees. Public safety

workers, such as police and firefighters, can be randomly tested for illegal drugs and they may also be

required to report legal drug use that could compromise their ability to perform their jobs.

Polygraph Tests

Under the Employee Polygraph Protection Act of 1988, employers may not require, or even suggest, that

an employee or job candidate submit to a lie detector test, except (1) as part of an “on-going

investigation” into crimes that have occurred or (2) for jobs in pharmaceutical firms that deal with

controlled substances. Before the test is administered, employees are entitled to written notice of their

rights.

Electronic Monitoring of the Workplace

The Electronic Communications Privacy Act of 1986 (ECPA) permits employers to monitor workers’

telephone calls and email messages if (1) the employee consents, (2) the monitoring occurs in the

ordinary course of business, or (3) in the case of email, the employer provides the email system.

Social Media

Social media are the newest challenge facing employers and workers alike. The law is uncertain and

varies by state, so employees-at-will should err on the side of caution and remember that the law does not

currently protect their electronic lives from employer prying. They should consider anything they publish

on the Internet to be public.

Immigration

Because of discrimination laws, employers should not ask about an applicant’s country of origin, but they

are permitted to inquire if the person is authorized to work in the United States. If the applicant says,

“Yes,” the interviewer cannot ask for evidence until the person is hired. At that point, the employer must

complete an I-9 form – Employment Eligibility Verification – within three days.

Workplace Safety

In 1970, Congress passed the Occupational Safety and Health Act (OSHA) to ensure safe working

conditions.

Financial Protection

Congress and the states have enacted laws that provide employees with a measure of financial security.

All of the laws in this section were created by statute, not by the courts.

Fair Labor Standards Act: Minimum Wage,

Overtime and Child Labor

Passed in 1938, the Fair Labor Standards Act (FLSA) regulates wages and limits child labor nationally. It

provides that hourly workers must be paid a minimum wage of $7.25 per hour, plus time and a half for

any hours over 40 in one week. These wage provisions do not apply to salaried workers, such as

managerial, administrative, or professional staff.

The FLSA also prohibits “oppressive child labor,” which means that children under 14 may work only in

agriculture and entertainment. Fourteen- and fifteen-year-olds are permitted to work limited hours after

school in nonhazardous jobs. Sixteen- and seventeen-year-olds may work unlimited hours in

nonhazardous jobs.

Workers’ Compensation

Workers’ compensation statutes ensure that employees receive payment for injuries incurred at work.

Social Security

The federal Social Security system began in 1935, during the depths of the Great Depression, to provide a

basic safety net for the elderly, ill, and unemployed. Currently, the Social Security system pays benefits to

workers who are retired, disabled, or temporarily unemployed and to the spouses and children of disabled

or deceased workers. It also provides medical insurance to the retired and disabled. The Social Security

program is financed through a tax on wages that is paid by employers, employees, and the self-employed.

Pension benefit

In 1974, Congress passed the Employee Retirement Income Security Act (ERISA) to protect workers

covered by private pension plans. Under ERISA, employers are not required to establish pension plans,

but if they do, they must follow federal rules.

Labor Law and Collective Bargaining

Without unions to represent employee interests, employers could simply fire any troublemaking workers

who complained about conditions in factories or mines. By joining together, workers could bargain with

their employers on more equal terms.

Key Pro-Union Statutes

In 1932 Congress passed the Norris-LaGuardia Act, which prohibited federal court injunctions in

nonviolent labor disputes. By taking away the injunction remedy, Congress was declaring that workers

should be permitted to organize unions and to use their collective power to achieve legitimate economic

ends.

In 1935 Congress passed the Wagner Act, generally known as the National Labor Relations Act

(NLRA). This is the most important of all labor laws. A fundamental aim of the NLRA is the

establishment and maintenance of industrial peace, to preserve the flow of commerce. The NLRA ensures

the right of workers to form unions and encourages management and unions to bargain collectively and

productively.

Known as the NLRA or the Wagner Act, this statute:

Created the National Labor Relations Board to enforce labor laws;

Prohibits employers from penalizing workers who engage in union activity (for example, joining

a preexisting union or forming a new one); and

Requires employers to “bargain in good faith” with unions.

Section 7 guarantees employees the right to organize and join unions, bargain collectively through

representatives of their own choosing, and engage in other concerted activities.

Section 8 prohibits employers from engaging in the following unfair labor practices (ULPs):

• Interfering with union organizing efforts

• Dominating or interfering with any union

• Discriminating against a union member, or

• Refusing to bargain collectively with a union.

Section 8(b) makes it an unfair labor practice for a union to:

• interfere with employees who are exercising

their labor rights under section 7

• encourage an employer to discriminate

against a particular employee because of a union dispute

• refuse to bargain collectively, or

• engage in an illegal strike or boycott,

particularly secondary boycotts.

Organizing a Union

Exclusivity

Under section 9 of the NLRA, a validly recognized union is the exclusive representative of the

employees. A collective bargaining unit is the precisely defined group of employees who will be

represented by a particular union.

Organizing Stages

A union organizing effort generally involves the following pattern.

Campaign. Union organizers talk with employees—or attempt to talk—and interest them in forming a

union.

Authorization Cards. Union organizers ask workers to sign authorization cards, which state that the

particular worker requests the specified union to act as her sole bargaining representative. If a union

obtains authorization cards from a sizable percentage of workers, it seeks recognition as the exclusive

representative for the bargaining unit. The union may ask the employer to recognize it as the bargaining

representative, but most of the time employers refuse to recognize the union voluntarily.

Petition. Assuming that the employer does not voluntarily recognize a union, the union generally

petitions the National Labor Relations Board (NLRB) for an election. It must submit to the NLRB

regional office authorization cards signed by at least 30 percent of the workers.

Election. All members of the proposed bargaining unit vote on whether they want the union to represent

them. If more than 50 percent of the workers vote for the union, the NLRB designates that union as the

exclusive representative of all members of the bargaining unit.

It is an unfair labor practice for an employer to interfere with a union organizing effort. If the Board upholds a

union’s claim of interference, it will order the employer to permit a fair election. In some cases, though,

management’s interference has been so pervasive that few workers would dare to vote for union

representation. In those cases, the Board skips the election altogether and issues an “order to bargain,”

that is, a mandate establishing the union and requiring management to negotiate.

The “Card-Check” Debate. Before becoming president, then-Senator Obama co-introduced a bill called

the Employee Free Choice Act. This bill provides that, once more than 50% of workers sign an

authorization card, the NLRB must immediately designate that union as the exclusive representative of all

members in the bargaining unit without an election.

Organizing: Actions

What Workers May Do –The NLRA guarantees employees the right to talk among themselves about

forming a union, to hand out literature, and ultimately to join a union.

What Employers May Do—Management is entitled to communicate to the employees why it

believes a union will be harmful to the company. But the employer’s efforts must be limited to

explanation and advocacy. The employer may vigorously present anti-union views to its employees, but

may not use either threats or promises of benefits to defeat a union drive.