Suggested Additional Assignments
Research: Sexual Harassment Policies
Ask students who are employed to find their company’s sexual harassment policy. What type of behavior
does it prohibit? What are the procedures for complaining about harassment? Do they think it is
comprehensive? What, if any, changes would they make to the policy?
Presentation: Employment Issues
Ask students to choose an issue of employment law that they or a colleague has experienced at work.
They should present the facts, an analysis of the legal issues and the ruling that they would issue if they
were the judge in the case. This assignment can be either written or oral, prepared either individually or
in teams.
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. So stay tuned . . .
Quote of the Day
“I wouldn’t want to live unless I could work for a living.” –Erle Stanley Gardner (1889-1970), mystery
writer, creator of Perry Mason, in The Case of the Stuttering Bishop.
Employment Security
National Labor Relations Act
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. Naturally, the owners fought against the unions, firing organizers
and even hiring goons to beat them up. Distressed by anti-union violence, Congress passed the National
Labor Relations Act in 1935. 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.
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 an in-law.
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 twenty-six.
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.
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. 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: Peterson v. Exide Technologies1
United States Court of Appeals for the Tenth Circut
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 violation 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 Plantiff to show that there is a genuine dispute of material fact as to whether Dependant’s
explanations are pretextual.
Defendant asserts it dismissed Plantiff for the legitimate reason that he violated company safety policies.
According to Defendant’s Plant Manager: Based on my own review of the photgraphs and the damage
they depicted, Plantiff was driving too fast at the time of the crash and was not operating his forklift in a
safe manner. Such conduct on Plantiff’s part was a flagrant violation of the 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 the Plaintiff on the “history of careless and unsafe
conduct” reflected in Plaintiff’s personnel file. Defendant has adequately deomonstrated 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
casual connection between Plaintiff’s firing and his exercise of FMLA rights. Therefore, the district court
properly granted summary judgment.
Question: What does the Court mean when it states “the burden shifts?”
Answer: In the vast majority of civil litigation cases, the burden of proof rests upon the Plaintiff who
1 477 Fed. Appx. 474 United States Court of Appeals for the Tenth Circuit, 2012.
Question: Can you recall an instance, covered in tort law, where the burden shifts from Plaintiff to
Defendant?
Question: What is the nonretaliatory reason stated by the Court for Plaintiff’s termination?
You Be the Judge: Roe v. TeleTech Customer Care Mgmt. (Colo.) LLC2
Facts: The voters of Washington State passed the Medical Use of Marijuana Act (MUMA) which stated
that:
Humanitarian compassion necessitates that the decision to authorize the medical use of marijuana by
patients with terminal or debilitating illnesses is a personal, individual decision, based upon their
physician’s professional medical judgment and discretion.
Qualifying patients and medical practitioners shall not be found guilty of a crime under state law for their
possession and limited use of marijuana. This act is intended to provide clarification to law enforcement
and to all participants in the judicial system.
Any person meeting the requirements appropriate to his or her status under this chapter shall not be
penalized in any manner, or denied any right or privilege, for such actions. Nothing in this chapter
requires any accommodation of any on-site medical use of marijuana in any place of employment.
Jane Roe suffered from debilitating migraine headaches that caused chronic pain, nausea, blurred vision,
and sensitivity to light. On a medical questionnaire, she described her average pain as an 8 on a scale of 1
to 10 where 10 represented “pain as bad as you can imagine.” Because other medications were not
effective, she obtained a prescription for medical marijuana. It alleviated her symptoms without side
effects and allowed Roe to work and care for her children. She ingested marijuana only in her home.
TeleTech Customer Care Mgmt. offered Roe a position as a customer service representative but required
that she first pass a drug test. She told the company about her medical marijuana use. On the day she
started work, TeleTech received notice that Roe had failed the drug test. A week later, it fired her.
Roe sued TeleTech for wrongful discharge, alleging that her termination had violated public policy. (She
filed suit under a pseudonym because medical marijuana use is illegal under federal law.) The trial court
granted TeleTech’s motion for summary judgment. The appeals court confirmed. The Washington
Supreme Court agreed to hear the case.
You Be the Judge: Did TeleTech violate public policy when it fired Roe? Was this discharge wrongful?
Arguments for Roe: Roe is exactly the sort of person this statute is intended to protect. Medical
marijuana changed her life—now she can hold a job and care for her family. But, of course, she cannot
hold a job if employees terminate her for using this legal medication. TeleTech is undermining the whole
point of the statute and jeopardizing its clear policies. A ruling in favor of TeleTech would inhibit other
people from using medication that citizens voted to make available.
Furthermore, the statute specifically states that, “No person…shall be penalized in any manner, or deny
any right or privilege, for such actions.” Being fired is a substantial penalty.
No one is asking TeleTech to tolerate drug-impaired workers. Marijuana should be treated like any other
medication—it cannot be used if it hurts job performance. But there is no evidence that it did so.
Arguments for TeleTech: Just because medical marijuana is legal in Washington does not mean it is an
important social right. Indeed, employers can fire workers for many legal behaviors, such as smoking, or
being disagreeable.
The purpose of MUMA is to protect doctors and patients from criminal liability, not to create an unlimited
right to use medical marijuana. The statute does not explicitly prevent employers from banning its use.
And how can marijuana use be an important public policy when it is still illegal under federal law?
2 71 Wn.2d 736 Washington Supreme Court, 2011.
Ruling: Judgment for TeleTech. Summary Judgment was properly granted.
Question: Why did the Plaintiff file suit under a pseudonym?
Question: What does the public policy rule prohibit employers from doing?
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
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 In/iction of Emotional Distress
Employers who condone cruel treatment of their workers face liability under the tort of intentional
infliction of emotional distress.
Whistleblowing
No one likes to be accused of wrongdoing even if (or, perhaps, especially if) the accusations are true. This
is exactly what whistleblowers do: they are employees who disclose illegal behavior on the part of their
employer.
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.
Workplace Freedom
In 1970, Congress passed the Occupational Safety and Health Act (OSHA) to ensure safe working
conditions.
Employee Privacy
Employees are entitled under the common law to a reasonable expectation of privacy.
Alcohol and Drug Testing
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.
Lie Detector 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 “ongoing 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.
Case: Hispanics United of Bu$alo, Inc. and Carlos Ortiz before the
NLRB3
Facts: Lydia Cruz-Moore and Marianna Cole-Rivera worked at Hispanics United of Buffalo (the
Agency), an organization that assisted victims of domestic violence. At work and at home, by phone and
by text, Cruz-Moore routinely complained to Cole-Riviera that other employees provided poor service to
their clients. At home one Saturday night, Cruz-Moore texted Cole-Riviera that she intended to tell the
executive director, Lourdes Iglesias, that these other employees had been performing poorly. Cole-Rivera
then posted the following message on her Facebook page: Lydia Cruz, a coworker feels that we don’t help
our clients enough at [the Agency]. I about had it! My fellow coworkers how do u feel?
Four off-duty employees posted comments saying that they were upset with Cruz-Moore. She responded
with a comment demanding that Cole-Rivera “stop with ur lies about me.
3 359 NLRB No. 37 National Labor Relations Board, 2012.
Cruz-Moore then complained to Iglesias that she felt defamed by the Facebook postings. After looking at
them, Iglesias fired Cole-Rivera and the four coworkers on the grounds that their remarks violated the
Agency’s zero tolerance policy on bullying and harassment.
Issue: Were these Facebook postings protected speech under the NLRA?
Excerpts from the Decision of the NLRB:4
[Two issues are] in dispute here: whether the employees’ Facebook comments constituted concerted
activity and, if so, whether that activity was protected by the Act.
The Board defined concerted activity as that which is engaged in with or on the authority of other
employees, and not solely by and on behalf of the employee himself. Applying these principles, there
should be no question that the activity engaged in by the five employees was concerted. As set forth in her
initial Facebook post, Cole-Rivera alerted fellow employees of another employee’s complaint that they
“don’t help our clients enough, stated that she about had it with the complaints, and solicited her
coworkers’ views about this criticism. By responding to this solicitation with comments of protest,
Cole-Rivera’s four coworkers made common cause with her, and, together, their actions were concerted
because they were undertaken with other employees.
As to the [other] element of the violation, whether the employees’ concerted activity was protected, we
find that the Facebook comments here fall well within the Act’s protection. The Board has long held that
[the NLRA] protects employee discussions about their job performance, and the Facebook comments
plainly centered on that subject. As discussed, the employees were directly responding to allegations they
were providing substandard service to the Agency’s clients. Given the negative impact such criticisms
could have on their employment, the five employees were clearly engaged in protected activity in mutual
aid of each other’s defense to those criticisms.
According to the Agency, it was privileged to discharge the five employees because their comments
constituted unprotected harassment and bullying of Cruz-Moore, in violation of its “zero tolerance
policy. [We] reject this argument. First, the Facebook comments cannot reasonably be construed as a form
of harassment or bullying within the meaning of the Agency’s policy. Second, legitimate managerial
concerns to prevent harassment do not justify policies that discourage the free exercise of [NLRA] rights
by subjecting employees to discipline on the basis of the subjective reactions of others to their protected
activity. Here, the Agency applied its harassment policy to the discharged employees based solely on
Cruz-Moore’s subjective claim that she felt offended by the Facebook comments.
Question: What are the two issues the Board said were in dispute?
Question: How did the Board define “concerted activity?”
Question: What were the two reasons the Board gave for rejecting the argument that Agency was
permitted to fire the five employees because their comments violated its “zero tolerance” policy.
Answer: First, the Facebook comments cannot reasonably be construed as a form of harassment or
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
4
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.
Employment Discrimination
In the last five decades, Congress has enacted important legislation to prevent discrimination in the
workplace.
Equal Pay Act of 1963
Under the Equal Pay Act, an employee may not be paid at a lesser rate than employees of the opposite sex
for equal work.
Title VII
Under Title VII of the Civil Rights Act of 1964, it is illegal for employers to discriminate on the basis of
race, color, religion, sex, or national origin. Other issues, such as being transgender, are being tested in the
courts. Specifically, Title VII prohibits (1) discrimination in the workplace, (2) sexual harassment, and
(3) discrimination because of pregnancy. It also permits employers to develop affirmative action plans.
Title VII not only prohibits discrimination, it also penalizes employers who retaliate against workers for
complaining about discrimination.
Employers must make reasonable accommodation for a worker’s religious beliefs unless the request
would cause undue hardship for the business.
Proof of Discrimination
Plaintiffs in Title VII cases can prove discrimination two different ways: disparate treatment and disparate
impact.
Disparate Treatment: to prove a disparate treatment case, the plaintiff must show that she was treated
differently because of her set, race, color, religion, or nationality.
Case: NLRB v. Truitt Manufacturing5
Facts: A union representing workers at Truitt Manufacturing Company requested a raise of 10 cents per
hour for all members. The company countered with an offer of 2.5 cents, arguing that a larger increase
would bankrupt the company. The union demanded to examine Truitt’s books, and when the company
refused, the union complained to the NLRB.
The NLRB determined that the company had committed an ULP by failing to bargain in good faith and
ordered it to allow union representatives to examine its finances. A court of appeals found no ULP and
refused to enforce the Board’s order. The Supreme Court granted certiorari.
Issue: Did the company refuse to bargain in good faith?
Excerpts from Justice Black’s Decision: While Congress did not compel agreement between employers
and bargaining representatives, it did require collective bargaining in the hope that agreements would
result. [T]he Act admonishes both employers and employees to exert every reasonable effort to make and
maintain agreements.
In their effort to reach an agreement here, both the union and the company treated the company’s ability
to pay increased wages as highly relevant. Claims for increased wages have sometimes been abandoned
because of an employer’s unsatisfactory business condition; employees have even voted to accept wage
decreases because of such conditions.
Good-faith bargaining necessarily requires that claims made by either bargainer should be honest claims.
This is true about an asserted inability to pay an increase in wages. If such an argument is important
enough to present in the give and take of bargaining, it is important enough to require some sort of proof
of its accuracy.
The Board concluded that under the facts and circumstances of this case, the respondent was guilty of an
unfair labor practice in failing to bargain in good faith. We see no reason to disturb the findings of the
Board.
Reversed
Question: According to the Court, what does good-faith bargaining necessarily require?
Question: In their efforts to reach an agreement, what did both the union and the company treat as highly
relevant?
Question: According to the Court, what does the Act admonish both employers and employees to do?
KLandmark Case: Griggs v. Duke Power6
Facts: Before Title VII, Duke Power hired black employees only in the Labor Department, where the
highest pay was less than the lowest earnings in the other departments. After Title VII, the company
required all new hires for jobs in the desirable departments to have a high school education or satisfactory
scores on two tests that measured intelligence and mechanical ability. Neither test gauged the ability to
perform a particular job. The pass rate for whites was much higher than for blacks and blacks were also
5 co. 351 U.S. 149 United States Supreme Court, 1956.
6 401 U.S. 424, 91 S. Ct. 849, 1971 U.S. LEXIS 134, United States Supreme Court, 1971
less likely than whites to have a high school diploma. The new policy did not apply to the (exclusively
white) employees who were already working in the preferred departments. These “unqualified” whites all
performed their jobs satisfactorily.
Black employees sued Duke Power, alleging that this hiring policy violated Title VII. The trial
court dismissed the case. The Court of Appeals ruled that the policy was not in violation of Title VII
because Duke Power did not have a discriminatory purpose. The Supreme Court granted certiorari.
Issue: Does a policy violate Title VII if it has a discriminatory impact but no discriminatory purpose?
Excerpts from Chief Justice Burger’s Decision: Congress did not intend by Title VII to guarantee a job
to every person regardless of qualifications. What is required by Congress is the removal of artificial,
arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate
on the basis of racial or other impermissible classification.
The Act proscribes not only overt discrimination but also practices that are fair in form, but
discriminatory in operation. The touchstone is business necessity. If an employment practice which
operates to exclude Negroes cannot be shown to be related to job performance, the practice is prohibited.
On the record before us, neither the high school completion requirement nor the general
intelligence test is shown to bear a demonstrable relationship to successful performance of the jobs for
which it was used. Both were adopted without meaningful study of their relationship to job-performance
ability. Rather, the requirements were instituted on the Company’s judgment that they generally would
improve the overall quality of the work force. The evidence, however, shows that employees who have
not completed high school or taken the tests have continued to perform satisfactorily and make progress
in departments for which the high school and test criteria are now used.
[G]ood intent or absence of discriminatory intent does not redeem employment procedures or
testing mechanisms that operate as “built-in headwinds” for minority groups and are unrelated to
measuring job capability. Congress directed the thrust of the Act to the consequences of employment
practices, not simply the motivation. More than that, Congress has placed on the employer the burden of
showing that any given requirement must have a manifest relationship to the employment in question.
History is filled with examples of men and women who rendered highly effective performance
without the conventional badges of accomplishment in terms of certificates, diplomas, or degrees.
Diplomas and tests are useful servants, but Congress has mandated the commonsense proposition that
they are not to become masters of reality.
Nothing in the Act precludes the use of testing or measuring procedures; obviously they are
useful. What Congress has commanded is that any tests used must measure the person for the job and not
the person in the abstract.
The judgment of the Court of Appeals is reversed.
Question: What is a factor that the court looked at to determine if Duke Power had a discriminatory
purpose?
Question: What does disparate impact mean?
Answer: The employer or management may enact a policy or regulation that is, on its face,
Defenses to Charges of Discrimination
Under Title VII, the defendant has three possible defenses.
Merit A defendant is not liable if he shows that the person he favored was the most qualified.
Seniority A legitimate seniority system is legal, even if it perpetuates past discrimination.
Bona Fide Occupational Qualification An employer is permitted to establish discriminatory job
requirements if they are essential to the position in question.
Example: Bona Fide Occupational Quali3cation
Increasingly, women prefer female gynecologists and obstetricians (OB-GYNs). Since 72 percent of the
doctors in the field are men, women OB GYNS are in high demand. Women OB GYN residents receive
more job offers than their male colleagues, at higher starting salaries. Some women are opening all
female practices and refusing to hire men.
Question: If a hospital or clinic refused to hire male OB GYNs, would it be in violation of Title VII?
Answer: To win a disparate treatment case under Title VII of the Civil Rights Act, the plaintiff must
Question: Would the hospital have a defense?
Question: Is this a legitimate defense?
Answer: It is difficult to predict how a court would rule. There are two countervailing arguments:
On the other hand, the major exception to this customer preference rule is sexual privacy. An
Sexual Harassment
Everyone has heard of sexual harassment, but few people know exactly what it is. So what is sexual
harassment anyway? Sexual harassment involves unwelcome sexual advances, requests for sexual favors,
and other verbal or physical conduct of a sexual nature. There are two major categories of sexual
harassment: (1) quid pro quo and (2) hostile work environment.
Text messages have become a new frontier in sexual harassment – so-called textual harassment. In
behavior that can only make you ask, “What were they thinking?” bosses have sent wildly inappropriate
text messages to their subordinates – offering promotions for sex or providing evidence of a sexual
relationship. News flash: text messages can be recovered and juries can read. She said, he said cases are a
lot harder to win than she said, he texted.