Homework Help

Business Law Chapter 34 Homework Case Synopsis Case 342 Ballard Chicago Park

Page Count
9 pages
Word Count
4993 words
Book Title
Business Law: Text and Cases 14th Edition
Authors
Frank B. Cross, Kenneth W. Clarkson, Roger LeRoy Miller
1
Chapter 34
Employment, Immigration, and Labor Law
INTRODUCTION
Every business student should have a basic familiarity with general laws in the area of employment. This
chapter looks at some of the significant laws that regulate employment and the workplace. Unions and collective bar-
gaining, the employment-at-will doctrine, employees’ privacy rights, workers’ compensation, workplace safety,
whistleblowing, and retirement and security income are among the topics discussed.
CHAPTER OUTLINE
I. Employment at Will
Under the at-will employment doctrine, employers can fire workers for good, bad, or no reasons.
A. COMMON LAW EXCEPTIONS TO THE EMPLOYMENT-AT-WILL DOCTRINE
1. Exceptions Based on Contract Theory
Some courts have held, based on employees’ reasonable expectations, that an implied con-
tract exists between employer and employee under an employer’s handbook, personnel bul-
2 UNIT SEVEN: AGENCY AND EMPLOYMENT
letin, or the like that workers will be dismissed only for good cause. An employer who fires a
worker contrary to this promise may be liable for breach of contract.
In a few states, all employment contracts are considered to contain an implied covenant of
good faith. If an employer fires an employee arbitrarily or unjustifiably, the employee can claim
breach of this covenant.
ADDITIONAL BACKGROUND
Employment at Will
In the early years of this nation’s history, most Americans were self-employed. For these individuals,
problems arising from employment relationships did not exist. For those who were employed, employers
usually determined the terms of employment.
Generally, contract, tort, and agency law governed employment relationships before the twentieth
century. Most employment contracts were considered to be “at will,” which meant either party could termi-
nate the contract at any time for any reason, unless a particular period was specified. Generally, employers
could fire workers for good, bad, or no cause in response to changing economic conditions. If an employee
was injured on the job, it was difficult for him or her to recover from the employer, because an employee was
considered to have assumed the risks of employment when he or she accepted the job.
The nature of employment changed with the Industrial Revolution, beginning about 1760 in Europe and
1800 in the United States. Fewer Americans were self-employed, and employment relationships lost some of
their paternalistic character. Terms of employment came to be determined by bargaining between employees
and employers, but because an employer usually bargained from a superior position, the terms tended to
favor the employer. Also, because most industrial enterprises were in their infancy, to encourage their
development, they were given considerable freedom under the law to respond to changing conditions
freedom to hire and fire and freedom from potentially crippling liability.
With increasing industrialization, the size of corporate employers and the number of workplace hazards
increased. Employers discouraged employees’ collective activities to improve conditions, but as labor gained
political influence, legislators responded with minimum wage, maximum hour, child labor, and other laws. At
the end of the nineteenth century, the courts generally sided with business and struck many of these laws as
unconstitutional.
2. Exceptions Based on Tort Theory
3. Exceptions Based on Public Policy
Under this exception (the most widespread common law exception to the at-will doctrine), an
employer may not fire a worker in violation of a fundamental public policy. The policy must be
clearly expressed in statutory law. Firing workers who refuse to perform illegal acts violates
public policy.
CHAPTER 34: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 3
Whistleblowers may be protected for public policy reasons. Federal and state statutes may
also offer protection
B. WRONGFUL DISCHARGE
Federal statutes and state court rulings provide exceptions to the at-will doctrine in actions based on a
wrongful-discharge theory. Punitive damages have been awarded against employers.
II. Wages, Hours, and Layoffs
The Davis-Bacon Act requires federal contractors to pay “prevailing wages” to their employees.
The Walsh-Healey Act requires manufacturers and suppliers to federal agencies to pay a minimum
wage, as well as overtime at 1.5 times regular pay, to their employees.
A. CHILD LABOR
Children under fourteen can work in only limited occupations, children under sixteen cannot work full-
time except for a parent under certain circumstances, and children under eighteen cannot work in
hazardous jobs or in jobs detrimental to their health and well being.
B. MINIMUM WAGES
The current federal minimum wage is stated in the text. Tips received by employees can reduce the
direct wages that an employer pays, or the employer can pay the minimum wage and distribute the tips
in other ways.
C. OVERTIME PROVISIONS ABD EXEMPTIONS
Employees who agree to work more than forty hours per week must be paid no less than one and a half
times their regular pay for all hours over forty. Excepted from federal overtime regulations are employees
who earn more than a specified amount per week and devote their efforts to certain duties.
To qualify for this exemption, an employee’s primary duty must be management.
CASE SYNOPSIS
Case 34.1: Bailey v. TitleMax of Georgia, Inc.
Santonias Bailey was an employee of TitleMax of Georgia, Inc. Bailey’s supervisor told him that TitleMax
did not pay overtime, so he regularly worked off the clock. His supervisor also edited Bailey’s time records to
report fewer hours than he actually worked. Bailey quit TitleMax and filed a suit in a federal district court
against the employer to recover for the unpaid overtime under the Fair Labor Standards Act (FLSA). TitleMax
argued that Bailey was responsible for the unpaid timehe never complained about his supervisor and he
violated company policy with respect to accurate time records. The court issued a judgment in the defendant’s
favor. Bailey appealed.
4 UNIT SEVEN: AGENCY AND EMPLOYMENT
..................................................................................................................................................
Notes and Questions
Should Congress increase the minimum wage? To what level? The answer to this question involves
policy considerations across the entire political spectrumto what degree should government regulate
ADDITIONAL CASES ADDRESSING THIS ISSUE
Overtime Exemptions
Cases in which overtime exemptions were at issue include the following.
Jones v. Virginia Oil Co., 69 Fed. Appx. 633 (4th Cir.2003) (unpublished) (per curiam) (manager who
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”).
ENHANCING YOUR LECTURE
  EMPLOYMENT ISSUES IN THE VIRTUAL WORKPLACE
 
CHAPTER 34: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 5
Over thirty million workers in the United States telecommunicate, up from fewer than twenty million at the
end of the last decade. Between eight and ten million U.S. workers now telecommunicate full-timenever
laying eyes on, or feet in, a physical office building. As often happens, though, a spurt in technologymainly
due to the growth in Internet usehas caused real-world conditions to leap ahead of the law. After all,
virtually all state and federal statutes governing employment were drafted when the only workplace was the
traditional workplace.
DO OVERTIME AND MINIMUM-WAGE LAWS APPLY TO THE VIRTUAL WORK FORCE?
Not until the early 1990s did the U.S. Department of Labor issue regulations defining exemptions to the
overtime-pay requirements for employees in computer-related occupations. Under the regulations, these
employees can qualify as “professionals” and thus be exempt from the overtime-pay requirements. When an
employee falls within this (or any other) exemption to the overtime-pay requirements of the Fair Labor
Standards Act, the employee is not entitled to be paid time and a half for overtime hours.
NONEXEMPT EMPLOYEES IN COMPUTER-RELATED OCCUPATIONS
The professional exemption does not apply to trainees or to entry-level employees in computer
specialties, such as programming and analysis. Individuals operating computers or manufacturing, repairing,
or maintaining computer hardware are also not included in the professional exemption for overtime pay.
Moreover, just because an employee relies heavily on computers or computer software in his or her work
does not qualify that person for a professional exemption.
REGULATING THE SAFETY OF AT-HOME WORK SITES
The Occupational Safety and Health Administration (OSHA) did not issue a formal directive on home-
office safety until 2000. At that time, OSHA stated that it would not conduct home-office inspections and
would not hold employers liable for their employees’ home offices. It also stated that it did not expect
employers to inspect the home offices of their telecommuting employees.
6 UNIT SEVEN: AGENCY AND EMPLOYMENT
airports, for example. At some point in the future, however, OSHA may audit remote work-sites and increase
record-keeping requirements.
IMPLICATIONS FOR THE BUSINESSPERSON
1. Simply designating an employee as a telecommuting employee whose work site is no longer a physical
office environment does not change the employer’s status with respect to the overtime-pay requirements of
FOR CRITICAL ANALYSIS
Why might telecommuting employees sometimes accept being wrongly classified (and not being
paid overtime)? Under what scenario might a home-based employee sue his or her employer for
injuries in the home office?
D. LAYOFFS
Restructuring an operation or downsizing a workforce means a layoff. Under the Worker Adjustment and
Retraining Notification (WARN) Act of 1988
Employers with at least one hundred full-time workers must provide sixty-days’ notice before
implementing a mass layoff or closing a plant that employs more than fifty full-time workers.
III. Family and Medical Leave
The Family and Medical Leave Act (FMLA) of 1993 protects employees who need time off work for family or
medical reasons. Most states have similar laws.
A. COVERAGE AND APPLICATION
The FMLA covers employers (public and private) with fifty or more employees who have worked for their
employers for at least a year. An eligible employee may take up to twelve weeks of leave within a
twelve-month period
To care for new children.
To care for an adopted or foster child within one year of the child’s placement.
CHAPTER 34: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 7
An eligible employee may take up to twenty-six weeks of leave within a twelve-month period to care for a
family member with a serious injury or illness incurred as a result of military duty.
CASE SYNOPSIS
Case 34.2: Ballard v. Chicago Park District
Beverly Ballard worked for the Chicago Park District in Chicago, Illinois. She lived with her mother Sarah,
who suffered from congestive heart failure. Beverly served as Sarah’s primary caregiver with support from
Horizon Hospice & Palliative Care. The hospice helped Sarah plan and secure funds for a “family trip” to Las
Vegas, Nevada, as an end-of-life goal. To accompany Sarah as her caretaker, Beverly asked the Park District
..................................................................................................................................................
Notes and Questions
Suppose that Beverly had been one of the Park District’s “key employees.” Would the result in
this case have been different? Yes, it is likely that if Beverly had been one of her employer’s key
employees, the result would have been different. When an employee takes FMLA leave, the employer must
continue the employee’s healthcare coverage on the same terms as if the employee had continued to work.
B. BENEFITS AND PROTECTIONS
During the leave, an employer must continue the absent employee’s health-care coverage as if the
employee were working. After the leave, the employee must be restored to his or her original, or a
comparable, position. Key employeesthose whose pay falls within the top 10 percent of the
workforceare excepted.
C. VIOLATIONS
Remedies for violations include damages, job reinstatement, promotion, costs, and fees.
IV. Health, Safety, and Income Security
A. THE OCCUPATIONAL SAFETY AND HEALTH ACT
8 UNIT SEVEN: AGENCY AND EMPLOYMENT
The Occupational Safety and Health Act of 1970 provides for workplace safety standards with oversight
by the Occupational Safety and Health Administration (OSHA). Employers have a general duty to keep
the workplace safe. OSHA establishes specific safety standards.
1. Notice, Records, and Reports
Employers must comply with notice, recordkeeping, and reporting requirements.
Employers with eleven or more employees must keep occupational injury and illness records
for each employee and make them available to OSHA compliance officers.
2. Inspections
Generally, an employer cannot discharge an employee who files a complaint with OSHA or who, in
good faith, refuses to work in a high-risk area.
B. STATE WORKERS COMPENSATION LAWS
These laws establish state procedures for compensating most workers, including minors, injured on the
job. A state agency or board administers workers’ compensation claims.
1. Requirements for Receiving Workers’ Compensation
2. Workers’ Compensation versus Litigation
In return, workers cannot sue for the injuries, even if caused by an employer’s negligence (and
employers cannot argue standard negligence defenses).
C. INCOME SECURITY
Government programs are designed to protect employees and their families by covering the financial
impact of retirement, disability, death, hospitalization, and unemployment.
1. Social Security
2. Medicare
Medicare is administered by the Social Security Administration for people sixty-five years of
3. Tax Contributions
CHAPTER 34: EMPLOYMENT, IMMIGRATION, AND LABOR LAW 9
4. Private Retirement Plans
The Employee Retirement Income Security Act (ERISA) of 1974 regulates private pension
funds. The Pension Benefit Guaranty Corporation provides timely, uninterrupted payments of
5. Unemployment Insurance
Under the Federal Unemployment Tax Act of 1939, employers pay into a fund that pays proceeds
to unemployed individuals subject to certain requirements and limits.
6. COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 prohibits the elimina-
tion of a worker’s medical, optical, or dental insurance coverage on the employee’s termination
7. Employer-Sponsored Group Health Plans
8. Affordable Care Act
Under the Affordable Care Act (ACA), most employers with fifty or more full-time employees are
required to offer health-insurance benefits and may receive tax credits to offset the cost. The cost to
an employee must not exceed 9.5 percent of their income. Violations of these provisions are
subject to fines and penalties.
V. Employee Privacy Rights
A. ELECTRONIC MONITORING
10 UNIT SEVEN: AGENCY AND EMPLOYMENT
1. Employee Privacy Protection
Privacy rights are protected at common law (invasion of privacy) and under the U.S.
Constitution (First, Third, Fourth, Fifth, and Ninth Amendments) and state constitutions.
Electronic monitoring may violate the Electronic Communications Privacy Act (ECPA) of 1986,
which prohibits employers from intercepting electronic communications that are personal when
made on devices and systems not furnished by the employer.
Private employers can use filtering software to block their employees’ access to certain Web
sites—the First Amendment’s protection of free speech prevents only government employers
from restraining speech by blocking Web sites.
2. Reasonable Expectation of Privacy
Generally, an employer’s interests are weighed against employees’ reasonable expectations of
privacy (if employees are informed of monitoring, they cannot reasonably expect privacy).
ENHANCING YOUR LECTURE
  HOW TO DEVELOP AN INTERNET POLICY
 
Employers that make electronic communications systems (such as access to the Internet and e-mail)
available to their employees face some obvious risks. One risk is that e-mail could be used to harass other
employees. Another risk is that employees could subject the employer to liability by reproducing, without
authorization, copyright-protected materials on the Internet. Still another risk is that confidential information
contained in e-mail messages transmitted via the Internet could be intercepted by an outside party. Finally, an
employer that monitors employees’ Internet use in an attempt to avoid these risks faces yet another risk: the
risk of being held liable for violating the employees’ privacy rights. If you are an employer and find it prudent
to monitor employees’ Internet use, you should take certain precautions.
Remember, a small company can be bankrupted by just one successful lawsuit against it. Even if your
company wins the suit, the legal fees incurred to defend against the claim could be devastating for your
profits.
INFORM YOUR EMPLOYEES OF THE MONITORING AND OBTAIN THEIR CONSENT
First of all, you should notify your employees that you will be monitoring their Internet communications,
including their e-mail. Second, you should ask your employees to consent, in writing, to such actions.
Generally, as discussed earlier in this chapter, if employees consent to employer monitoring, they cannot
claim that their privacy rights have been invaded by such practices. You will find it easier to obtain
employees’ consent to monitoring if you explain why it is necessary or desirable and let them know what
methods will be used to monitor Internet communications. As a rule, when employees are told the reasons
for monitoring and clearly understand their rights and duties with respect to the company’s communications
system, they are less offended by the surveillance.
SPELL OUT PERMISSIBLE AND IMPERMISSIBLE INTERNET USES
12 UNIT SEVEN: AGENCY AND EMPLOYMENT
Employees should be told which uses of the firm’s communications system are permissible and which
uses are prohibited. To clarify Internet policy standards, develop a comprehensive policy setting forth your
standards of Internet use and illustrate through specific examples what kinds of communications activities will
constitute impermissible uses. It is also important to let employees know what will happen if they violate the
policy. The policy might state, for example, that any employee who violates the policy will be subject to
disciplinary actions, including termination.
CHECKLIST FOR THE EMPLOYER
2. Obtain employees’ written consent to having their electronic communications monitored.
3. Develop a comprehensive policy statement explaining how Internet communications should and should
not be used and indicating the consequences of misusing the firm’s communications system.
B. OTHER TYPES OF MONITORING
1. Lie-Detector Tests
The Employee Polygraph Protection Act (1988) prohibits the use of lie detectors by most employers
2. Drug Testing
a. Public Employers
Drug tests have been held constitutional when there was a reasonable basis for suspecting a
government employee’s use of drugs or when drug use in a government job could threaten
public safety.
b. Private Employers
Some state constitutions or statutes may inhibit private employers’ testing. A collective
bargaining agreement may provide protection against testing. Random drug tests and “zero-
tolerance” policies have been upheld, however.
VI. Immigration Law
The two most important employment-related immigration laws are the Immigration Act of 1990 and the
Immigration Reform and Control Act (IRCA) of 1986. The IRCA provided amnesty to some illegal immigrants
and sanctioned employers who hired immigrants without work authorization.
A. THE IMMIGRATION REFORM AND CONTROL ACT
The IRCA provided amnesty to some illegal immigrants and sanctioned employers who hired
immigrants without work authorization
1. I-9 Employment Verification
The U.S. Citizenship and Immigration Services (CIS)part of the U.S. Department of Homeland
Securitysupplies Form I-9, Employment Eligibility Verification, which an employer must complete
within three days of each employee’s hiring.
2. Documentation Requirements
The employer must declare, under penalty of perjury, that an employee produced documents
3. Enforcement
U.S. Immigration and Customs Enforcement (ICE) officers conduct random audits and act on
4. Penalties
These include civil fines of up to $11,000 for each unauthorized employee and criminal penalties of
increased fines and imprisonment. An employer may be barred from future government contracts.
The penalties are affected by the size of an employer’s business, his or her cooperation with
authorities, the seriousness of the violations, and previous transgressions.
B. THE IMMIGRATION ACT
Persons who immigrate to the United States to work include those with special skills, or “extraordinary
ability.” To hire such individuals, an employer must petition the CIS. An immigrant employee’s ability to
stay in the United States and to switch jobs here is limited.
1. I-551 Alien Registration Receipts
An employer may hire a “self-authorized” noncitizen who (a) is a lawful permanent resident (as
2. The H-1B Visa Program
3. Labor Certification

Trusted by Thousands of
Students

Here are what students say about us.

Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.