Chapter 41Labor and Employment Law

Chapter 41Labor and Employment Law

IntroductionIntroduction

Historically, employment law was governed by the common law doctrine of “employment at will” where either employer or employee could terminate the relationship at any time, for any reason.

Today employment law is heavily regulated by state and federal statutes.

§1: Wage-Hour Laws§1: Wage-Hour Laws

Hours and Wages.Davis-Bacon Act -- the prevailing wage act.Walsh-Healey Act -- the beginning of minimum

wages.Fair Labor Standards Act (FLSA) -- an extension

of wage and hour regulation to workers in interstate commerce.

Child Labor.FLSA prohibits oppressive child labor practices.

Labor Union LawsLabor Union Laws

Norris-LaGuardia Act.Protects peaceful strikes by limiting the

injunction powers of federal courts.

National Labor Relations Act.Establishes the right of workers to strike

and engage in collective bargaining.

Labor Union Laws [2]Labor Union Laws [2]

Labor Management Relations Act.Prohibits certain unfair union practices

such as closed shops.

Labor-Management Reporting and Disclosure Act.Regulates the internal operations of

unions and outlaws hot-cargo agreements.

Union OrganizationUnion OrganizationUnion organization involves:Elections.

• An election can be held only if it can be shown that at least 30% of the workers will be represented.

Election Campaigns.• The National Labor Relations Board regulates the

rights and obligations of employers and workers in the election process.

• Each side can pursue their objectives, but cannot interfere, beyond certain limits, in the other’s activities.

Collective BargainingCollective Bargaining

Collective bargaining is the process by which management and labor negotiate the terms and conditions of employment.The NLRB will certify an exclusive bargaining

agent for labor.Both labor and management must bargain in

good faith, but the law does not require that they reach an agreement.

Strikes

There are two basic forms of strikes:Economic Strikes.

• These are strikes over wages.

• Workers can be replaced by permanent replacements.

Unfair Labor Practice Strikes.• These are strikes alleging that the employer has

committed an unfair labor practice.

§3: Worker Health and Safety§3: Worker Health and Safety

The Occupational Safety and Health Act. (OSHA).The fundamental federal law aimed toward

safety in the workplace.Enforcement is by OSHA, NIOSH, and the

OSHRC.

Worker Health and Safety [2]

State Workers’ Compensation Laws.These laws reduce employer liability to

employees for workplace injuries, and provide a measure of assurance that workplace injuries will be compensated, regardless of the solvency of the employer, by:

Requiring that injured employees make a claim against the employer’s workers’ compensation insurance policy, instead of suing the employer.

Requiring most employers to carry workers’ compensation insurance.

§4: Income Security

The primary income security laws areSocial Security and Welfare.Private Pension Plans.

• Employee Retirement Income Security Act (ERISA) gives employee a vested right to receive pension benefits at a future date when she stops working.

Unemployment Compensation.

§5: COBRA

COBRA prohibits the discontinuance of insurance benefits of workers who have voluntarily or involuntarily been separated from work, unless the involuntary separation was on the basis of gross misconduct.

Employers must comply if they have more than 20 employees.

§6: Family and Medical Leave Act

The FMLA requires employers with over 50 employees to provide unpaid leave to employees who need to care for a spouse, child, or parent suffering with a serious medical condition.The employee cannot be terminated for taking leave under the policy, and has the right to restoration to the same or a similar position upon return to work.

§7: Employee Privacy RightsLie Detector Tests.Prohibited, except under the ongoing

investigation exception.

Drug Testing.Most government employees are subject to

testing and the rights of private employees vary from state to state.

AIDS Testing.Some state statutes restrict AIDS testing.

Employee Privacy [2]Employee Privacy [2]

Electronic Performance Surveillance.Most limitations can be avoided if the

employer informs employees that surveillance will occur.

Screening Procedures.Application question must have some

reasonable connection to the job sought.

§8: Employment-Related Immigation Laws

The Immigration Reform and Control Act prohibits the hiring of illegal aliens.

The Immigration Act of 1990 limits the number of legal immigrants into the U.S.

§9: Wrongful Discharge§9: Wrongful Discharge

The doctrine of employment-at-will allows the employer and the employee to terminate employment at any time, for any reason, without liability.

Some states however recognize one or more judicial exceptions to this rule, while some states recognize none.

Wrongful DischargeWrongful Discharge

There are three such exceptions to the doctrine of employment at will:Contract (implied covenant of Good

Faith and Fair Dealing).Torts: fraud, emotional distress.Public Policy.

§10: Whistleblower Protections

A whistleblower is one who reports illegal employer activities to the proper authorities.

Whistleblowers are frequently subjected to retaliation for such activities.

There are a number of state and federal (Whistleblower Protection Act) whistle-blower protection statutes, offering a wide variation in protections.

Case 41.1: Rogers v. Pacesetter(Workers’ Compensation)

Case 41.1: Rogers v. Pacesetter(Workers’ Compensation)

FACTS:Rogers was a full-time manager for Pacesetter

Corporation, but occassionally worked at home. At the invitation of his supervisor, he and the

supervisor met at the River Port Club, a bar, to discuss a promotion.

While driving home, he was injured in an auto accident. He filed a workers’ compensation claim. with the Missouri Division of Workers’ Compensation.

The administrative law judge awarded him temporary compensation for a permanent partial disability.

HELD: FOR ROGERS.Compensation for an injury that occurs while

an employee is traveling home are appropriate “when it can genuinely *  *  * be said that the home has become part of the employment premises.”

Rogers regularly worked at home because he did not have sufficient time to do the work at his employer’s office and he typically conducted performance reviews on Monday nights at home.

Case 41.1: Rogers v. Pacesetter(Workers’ Compensation)

Case 41.1: Rogers v. Pacesetter(Workers’ Compensation)

Case 41.2: U.S. v. Cleveland Indians(Social Security & Medicare)

Case 41.2: U.S. v. Cleveland Indians(Social Security & Medicare)

FACTS:In 1994, the Major League Baseball Players

Association settled a grievance with twenty-six major league baseball teams for conspiring to stop the steep escalation of salaries for free agent players.

Under the agreement, the Cleveland Indians Baseball Company owed eight players a total of $610,000 in salary for 1986, and fourteen players a total of $1,457,848 for 1987 but computed taxes, FICA and FUTA according to 1986 and 1987 rates and ceilings.

The IRS sued and the court ordered a refund of the FICA and FUTA taxes.

HELD: FOR IRS.U.S. Supreme Court held that taxes on wages

should be computed using the rates and ceilings that apply in the year in which the wages are actually paid, not those in effect in the year in which the wages should have been paid.

IRS regulations specify that the applicable employer tax is determined at the time that the wages are paid by the employer, not when they were earned. In other words, the tax “is computed by applying to the wages paid by the employer the rate in effect at the time such wages are paid.”

Case 41.2: U.S. v. Cleveland Indians(Social Security & Medicare)

Case 41.2: U.S. v. Cleveland Indians(Social Security & Medicare)

Case 41.3: Lins v. Children’s Discovery Centers

(Wrongful Discharge)

Case 41.3: Lins v. Children’s Discovery Centers

(Wrongful Discharge)

FACTS:CDC operates child care centers and hired Lins as a

CDC supervisor. French was Lins’s superior. Lins and five of her subordinates who were injured

in an auto accident filed workers’ compensation claims.

French ordered Lins to fire the other five employees because she “didn’t trust *  *  * them not to sue the company.”

Lins realized she could not lawfully fire the employees, and refused. French fired Lins. Lins filed a suit in a Washington state court against CDC, alleging wrongful discharge.

HELD: FOR LINS.It was against public policy and law for Lins to

fire the employees. Therefore, Lins was wrongfully discharged.

“Public policy *  *  * prohibits an employer from considering certain activities when deciding whether to discharge an employee.”

In particular, “employers do not have any overriding justification for wanting to consider an employee’s refusal to perform an unlawful order when deciding whether to fire the employee.”

Case 41.3: Lins v. Children’s Discovery Centers

(Wrongful Discharge)

Case 41.3: Lins v. Children’s Discovery Centers

(Wrongful Discharge)