20 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
whole or in part.
On the defendants’ appeal, the U.S. Court of Appeals for the Ninth Circuit affirmed the judgment of the
lower court. “The judgment of liability was properly entered when a correctly instructed jury, on a sufficient
factual record, found the defendants in breach of their fiduciary duties under Section 501” of the Labor
Management Reporting and Disclosure Act.
B. UNION ORGANIZATION
The first step in union organizing is to have the workers sign authorization cards.
1. Union Elections
2. Union Election Campaigns
During an election campaign, the employer can limit campaign activities on company property
during working hours, for a legitimate business reason, and can campaign against the union. If, in
the election, the union receives majority support, the NLRB certifies the union as the employees’
bargaining representative. If the employer issued threats or engaged in other unfair labor practices,
Wages, hours of work, and other conditions of employment may be discussed during collective
bargaining sessions. The subjects for negotiation include—
• Workplace safety.
• Employee discounts.
Some demands are illegal in collective bargaining. Management need not bargain over—
• A provision that would be illegal if it were included in a contract.
• A decision to shut down facilities, but management must bargain over the economic
consequences (such as severance pay).
2. Good Faith
Both sides must bargain in good faith. Refusing to bargain in good faith without justification is an
unfair labor practice. Actions constituting bad faith include—
CHAPTER 10: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 21
whole or in part.
• Excessive delaying tactics.
• Insistence on obviously unreasonable contract terms.
• Rejection of a proposal without offering a counterproposal.
• Engaging in a campaign among workers to undermine the union.
• Unilaterally changing wages or terms and conditions of employment during the bargaining pro-
cess.
• Constantly shifting positions on disputed contract terms.
• Sending bargainers who lacked authority to commit the company to a contract.
D. STRIKES
2. Illegal Strikes
These include—
• Violent or threatened-violence strikes.
3. Striker Rights after a Strike Ends
In an economic strike, strikers have no right, however, to return to their jobs (although employers
must give former strikers preferential rights to any new vacancies and also retain their seniority
rights). After an unfair labor practice strike, an employer must give the strikers back their jobs.
TEACHING SUGGESTIONS
1. Students may have a difficult time understanding that the development of effective labor law is fairly
modern and is still going through a growing process. For example, some states have right-to-work laws and
some do not. Students might be asked to discuss the advantages and disadvantages of right–to-work laws.
Students may also be asked to discuss recent developments concerning unions, which seem to be declining
in popularity. What has contributed to this decline? Is management today more responsive to the
needs of employees than was management of the nineteenth and earlier twentieth centuries?
whole or in part.
2. Ask students to discuss with the class whether they or any of their immediate family members have ever
belonged to a union and their experiences with the union. What were their attitudes towards elections,
strikes, collective bargaining, and other union topics discussed in this chapter?
3. Ask students to discuss with the class their own families’ experiences with immigration and employment.
Who arrived when? What difference did different arrival times make in terms of employment?
4. To discuss the material in this chapter, you might start from the students’ personal perspective.
Undoubtedly, they, or at least many of them, have had jobs. What was their chief concern? The money,
the accomplishment, the respect or friendliness of co–workers, the employer’s praise? If the chief
concern was the money, they may also have been concerned that the money keep coming, that there be
some security in the job. Ask then why there isn’t more protection against termination of employment at will.
5. Society does not stand still, and neither can the law that governs it. The Family and Medical Leave Act of
1993 (FMLA) provides an excellent illustration of how the law can recognize and effect change. The FMLA re-
flects the realities of today’s world. Nearly two-thirds of women with children now work, by choice or
necessity. Also, about a fourth of all adults now provide care for elderly relatives or anticipate the need to
provide such care within the next five years. With so many women now working, there is often no caretaker
available to attend to medical emergencies or other family needs in the home. By allowing employees to take
a leave from work for family or medical reasons, the FMLA recognizes the changing face of America. From an
ethical perspective, the act may be viewed as a choice on the part of society to shift to the employer family
burdens caused by changing economic and social needs. In effect, Congress, by passing the act, addressed
the pressing needs of the so-called baby-boomer (or “sandwich”) generation—caught between the pressures
of providing child care on the one hand and care for their parents on the other.
6. Students may be surprised to learn that their e-mail may not be private, technologically or legally, when it
is sent or received through their workplace. Students might be asked to discuss the advantages and
disadvantages of this circumstance. Would they rather work for an employer who monitors their
communications or one who does not? Why?
Cyberlaw Link
How might the existence of the Internet affect employees’ attempts to unionize and employers’ at–
tempts to prevent employees from unionizing? What are the legal questions and complications of
monitoring employees’ use of the Internet during working hours? What are some of the key points of
a good policy regarding the use, and monitoring of the use, of the Internet in the workplace?
DISCUSSION QUESTIONS
1. What are some important provisions of the Fair Labor Standards Act? The Fair Labor Standards Act
(FLSA) of 1938, which covers employers engaged in interstate commerce, regulates child labor, maximum hours, and
minimum wages. Children under sixteen years of age cannot work full-time except for a parent under certain
circumstances. Children between sixteen and eighteen cannot work in hazardous jobs or in jobs detrimental to their
whole or in part.
CHAPTER 10: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 25
whole or in part.
26 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
whole or in part.
which in many markets can be hard to obtain. There may be political, economic, social, or cultural reasons in support
country.
Footnote 7: In Starbucks Corp.’s stores, baristas wait on customers and managers oversee customer
service, process paperwork, and develop revenue-enhancing strategies. Kevin Keevican began as a barista, in less
than two years became a manager, and quit three years later. Keevican and other former managers, including
relevant non–exempt work.” The barista chores “quite obviously were of minor importance to Defendant when
compared to the significant management responsibilities * * * that directly influenced the ultimate commercial and
financial success or failure of the store.” Also, each plaintiff was “the single highest-ranking employee in his particular
store and was responsible on site for that store’s day-to–day overall operations.” He or she was “vested with enough
discretionary power and freedom from supervision to qualify for the executive exemption.” Finally, the “marked
were responsibilities of Starbucks’ managers. In the Mims case, the plaintiffs “performed many management tasks,
including: interviewing applicants and deciding whom to hire and promote for certain positions within their authority,
training and supervising staff, evaluating staff performance, disciplining some infractions, creating weekly work
schedules, assigning staff’ s day-to-day tasks, deciding the amount of products to order, overseeing their stores‘
financial performance, controlling costs, and ensuring compliance with Defendant’s policies.” What might the court
requirements was at issue? According to the court in the Mims case, “with managers of retail establishments—who
often perform managerial and non-managerial tasks concurrently and perform non-exempt tasks to ‘teach by
example’—the case law is replete with decisions holding them to be exempt, notwithstanding the fact that they spent
the majority of their time performing non-exempt tasks or their need to obey corporate policies and/or follow the orders
of their corporate superiors.” In issuing the new overtime regulations, the U.S. Department of Labor (DOL) noted that
spent 75 to 80 percent of her time performing basic line–worker tasks held exempt because she
“could simultaneously perform many of her management tasks”).
CHAPTER 10: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 27
• Murray v. Stuckey’s, Inc., 939 F.2d 614 (8th Cir. 1991) (store managers who spent 65 to 90 percent of
customers and stocking shelves” were exempt executives).
• Kastor v. Sam’s Wholesale Club, 131 F.Supp.2d 862 (N.D.Tex. 2001) (summary judgment for
employer where retail bakery manager spent 90 percent of time on non-exempt tasks).
28 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
 DEBATE THIS 
The U.S. labor market is highly competitive, so state and federal laws that require overtime pay
are unnecessary and should be abolished. In a competitive market, arrangements for overtime pay would
be dictated by the forces of supply and demand for labor. There is no need for the government to step in to
regulate this market.
Most employees have little bargaining power in the labor market. Consequently, without government
regulations with respect to overtime pay, employers would exploit the weakest employees, the ones that
cannot seek alternative employment.

EXAMPREP—
 ISSUE SPOTTERS 
1. Erin, an employee of Fine Print Shop, is injured on the job. For Erin to obtain workers’
compensation, does her injury have to have been caused by Fine Print’s negligence? Does it matter
whether the action causing the injury was intentional? Explain. Workers’ compensation laws establish a
procedure for compensating workers who are injured on the job. Instead of suing to collect benefits, an injured
worker notifies the employer of the injury and files a claim with the appropriate state agency. The right to re-
cover is normally determined without regard to negligence or fault, but intentionally inflicted injuries are not
covered. Unlike the potential for recovery in a lawsuit based on negligence or fault, recovery under a workers’
compensation statute is limited to the specific amount designated in the statute for the employee’s injury.
2. Onyx applies for work with Precision Design Company, which tells her that it requires union
membership as a condition of employment. She applies for work with Quality Engineering, Inc., which
does not require union membership as a condition of employment but requires employees to join a
union after six months on the job. Are these conditions legal? Why or why not? No. A closed shop (a
company that requires union membership as a condition of employment) is illegal. A union shop (a company
that does not require union membership as a condition of employment but requires workers to join the union
after a certain time on the job) is illegal in a state with a right-to-work law, which makes it illegal to require
union membership for continued employment.

CHAPTER 10: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 21
whole or in part.
• Excessive delaying tactics.
• Insistence on obviously unreasonable contract terms.
• Rejection of a proposal without offering a counterproposal.
• Engaging in a campaign among workers to undermine the union.
• Unilaterally changing wages or terms and conditions of employment during the bargaining pro-
cess.
• Constantly shifting positions on disputed contract terms.
• Sending bargainers who lacked authority to commit the company to a contract.
D. STRIKES
2. Illegal Strikes
These include—
• Violent or threatened-violence strikes.
3. Striker Rights after a Strike Ends
In an economic strike, strikers have no right, however, to return to their jobs (although employers
must give former strikers preferential rights to any new vacancies and also retain their seniority
rights). After an unfair labor practice strike, an employer must give the strikers back their jobs.
TEACHING SUGGESTIONS
1. Students may have a difficult time understanding that the development of effective labor law is fairly
modern and is still going through a growing process. For example, some states have right-to-work laws and
some do not. Students might be asked to discuss the advantages and disadvantages of right–to-work laws.
Students may also be asked to discuss recent developments concerning unions, which seem to be declining
in popularity. What has contributed to this decline? Is management today more responsive to the
needs of employees than was management of the nineteenth and earlier twentieth centuries?
whole or in part.
2. Ask students to discuss with the class whether they or any of their immediate family members have ever
belonged to a union and their experiences with the union. What were their attitudes towards elections,
strikes, collective bargaining, and other union topics discussed in this chapter?
3. Ask students to discuss with the class their own families’ experiences with immigration and employment.
Who arrived when? What difference did different arrival times make in terms of employment?
4. To discuss the material in this chapter, you might start from the students’ personal perspective.
Undoubtedly, they, or at least many of them, have had jobs. What was their chief concern? The money,
the accomplishment, the respect or friendliness of co–workers, the employer’s praise? If the chief
concern was the money, they may also have been concerned that the money keep coming, that there be
some security in the job. Ask then why there isn’t more protection against termination of employment at will.
5. Society does not stand still, and neither can the law that governs it. The Family and Medical Leave Act of
1993 (FMLA) provides an excellent illustration of how the law can recognize and effect change. The FMLA re-
flects the realities of today’s world. Nearly two-thirds of women with children now work, by choice or
necessity. Also, about a fourth of all adults now provide care for elderly relatives or anticipate the need to
provide such care within the next five years. With so many women now working, there is often no caretaker
available to attend to medical emergencies or other family needs in the home. By allowing employees to take
a leave from work for family or medical reasons, the FMLA recognizes the changing face of America. From an
ethical perspective, the act may be viewed as a choice on the part of society to shift to the employer family
burdens caused by changing economic and social needs. In effect, Congress, by passing the act, addressed
the pressing needs of the so-called baby-boomer (or “sandwich”) generation—caught between the pressures
of providing child care on the one hand and care for their parents on the other.
6. Students may be surprised to learn that their e-mail may not be private, technologically or legally, when it
is sent or received through their workplace. Students might be asked to discuss the advantages and
disadvantages of this circumstance. Would they rather work for an employer who monitors their
communications or one who does not? Why?
Cyberlaw Link
How might the existence of the Internet affect employees’ attempts to unionize and employers’ at–
tempts to prevent employees from unionizing? What are the legal questions and complications of
monitoring employees’ use of the Internet during working hours? What are some of the key points of
a good policy regarding the use, and monitoring of the use, of the Internet in the workplace?
DISCUSSION QUESTIONS
1. What are some important provisions of the Fair Labor Standards Act? The Fair Labor Standards Act
(FLSA) of 1938, which covers employers engaged in interstate commerce, regulates child labor, maximum hours, and
minimum wages. Children under sixteen years of age cannot work full-time except for a parent under certain
circumstances. Children between sixteen and eighteen cannot work in hazardous jobs or in jobs detrimental to their
whole or in part.
CHAPTER 10: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 25
whole or in part.
26 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
whole or in part.
which in many markets can be hard to obtain. There may be political, economic, social, or cultural reasons in support
country.
Footnote 7: In Starbucks Corp.’s stores, baristas wait on customers and managers oversee customer
service, process paperwork, and develop revenue-enhancing strategies. Kevin Keevican began as a barista, in less
than two years became a manager, and quit three years later. Keevican and other former managers, including
relevant non–exempt work.” The barista chores “quite obviously were of minor importance to Defendant when
compared to the significant management responsibilities * * * that directly influenced the ultimate commercial and
financial success or failure of the store.” Also, each plaintiff was “the single highest-ranking employee in his particular
store and was responsible on site for that store’s day-to–day overall operations.” He or she was “vested with enough
discretionary power and freedom from supervision to qualify for the executive exemption.” Finally, the “marked
were responsibilities of Starbucks’ managers. In the Mims case, the plaintiffs “performed many management tasks,
including: interviewing applicants and deciding whom to hire and promote for certain positions within their authority,
training and supervising staff, evaluating staff performance, disciplining some infractions, creating weekly work
schedules, assigning staff’ s day-to-day tasks, deciding the amount of products to order, overseeing their stores‘
financial performance, controlling costs, and ensuring compliance with Defendant’s policies.” What might the court
requirements was at issue? According to the court in the Mims case, “with managers of retail establishments—who
often perform managerial and non-managerial tasks concurrently and perform non-exempt tasks to ‘teach by
example’—the case law is replete with decisions holding them to be exempt, notwithstanding the fact that they spent
the majority of their time performing non-exempt tasks or their need to obey corporate policies and/or follow the orders
of their corporate superiors.” In issuing the new overtime regulations, the U.S. Department of Labor (DOL) noted that
spent 75 to 80 percent of her time performing basic line–worker tasks held exempt because she
“could simultaneously perform many of her management tasks”).
CHAPTER 10: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 27
• Murray v. Stuckey’s, Inc., 939 F.2d 614 (8th Cir. 1991) (store managers who spent 65 to 90 percent of
customers and stocking shelves” were exempt executives).
• Kastor v. Sam’s Wholesale Club, 131 F.Supp.2d 862 (N.D.Tex. 2001) (summary judgment for
employer where retail bakery manager spent 90 percent of time on non-exempt tasks).
28 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
 DEBATE THIS 
The U.S. labor market is highly competitive, so state and federal laws that require overtime pay
are unnecessary and should be abolished. In a competitive market, arrangements for overtime pay would
be dictated by the forces of supply and demand for labor. There is no need for the government to step in to
regulate this market.
Most employees have little bargaining power in the labor market. Consequently, without government
regulations with respect to overtime pay, employers would exploit the weakest employees, the ones that
cannot seek alternative employment.

EXAMPREP—
 ISSUE SPOTTERS 
1. Erin, an employee of Fine Print Shop, is injured on the job. For Erin to obtain workers’
compensation, does her injury have to have been caused by Fine Print’s negligence? Does it matter
whether the action causing the injury was intentional? Explain. Workers’ compensation laws establish a
procedure for compensating workers who are injured on the job. Instead of suing to collect benefits, an injured
worker notifies the employer of the injury and files a claim with the appropriate state agency. The right to re-
cover is normally determined without regard to negligence or fault, but intentionally inflicted injuries are not
covered. Unlike the potential for recovery in a lawsuit based on negligence or fault, recovery under a workers’
compensation statute is limited to the specific amount designated in the statute for the employee’s injury.
2. Onyx applies for work with Precision Design Company, which tells her that it requires union
membership as a condition of employment. She applies for work with Quality Engineering, Inc., which
does not require union membership as a condition of employment but requires employees to join a
union after six months on the job. Are these conditions legal? Why or why not? No. A closed shop (a
company that requires union membership as a condition of employment) is illegal. A union shop (a company
that does not require union membership as a condition of employment but requires workers to join the union
after a certain time on the job) is illegal in a state with a right-to-work law, which makes it illegal to require
union membership for continued employment.
