Employment Law OutlineProfessor Avery, Before Fall 2007 

Preliminary Questions:1. 1.      Source of Law2. 2.      Who is covered?3. 3.      Procedural rights?4. 4.      Substantive Rights?5. 5.      What forum?6. 6.      Who pays?7. 7.      Employer’s defenses?8. 8.      Employee’s remedies?9. 9.      When did injury/ breach occur?10. 10.  Is Plaintiff an employee?11. 11.  Is Defendant an employer?

   

I. Work and LawA. A.     Work & SocietyB. B.     Legal InterventionWagenseller v. Scottsdale Memorial Hospital: (Ariz.1985) p.10Facts: Group of ee’s go on rafting trip and engage in lewd activities (drinking,

mooning, public urination). P refuses to participate. Ee is subsequently promoted and then discharged.

Issue: What can an er require as a condition of employment?Holding: Not clearly stated, but the case examines what an er can ask an ee to do

as a condition of employment. If er can discharge ee for refusing to participate, it seems like a condition of employment.

 Always look at how long ee was employed by er before action in question occurs.

The longer the employment, the greater the “interest” the ee has in the job. II. Development of Employment Law

A. Foundations of Employment Law 1. 1.      Master-Servant2. 2.      Employer-EmployeeLemmerman v. A.T. Williams Oil: (N.C. 1986) p. 19Facts: Mom brings child to work, child does odd jobs while mom works, child

slips and falls and is injured on the job. Child wants to bring tort action, so he argues that he is not an ee so that he could bring the claim as a tort action.

Issue: Was child an ee for purposes of workers compensation recovery?Holding: Child is an ee for purposes of workers compensation.

Although child did not fill out tax forms, was not on payroll, the court looked to objective facts of the situation (he had tasks and was paid) and determined that by allowing child to work, he was deemed an ee. 

Components of a Contract for Employment:(1) (1)     duration(2) (2)     provisions for termination/ notice of termination if no duration is specified, then K is treated as employment at will er can terminate ee at any time for good reason, bad reason, or no reason employment-at-will is a k, but with no duration reinstatement is not a remedy under a pure breach of contract action, limited to compensatory damages (reinstatement would be a remedy under Title VII, ADA, ADEA, NLRA) 3. Employment-at-WillClarke v. Atlantic Stevedoring (EDNY 1908) p. 28Facts: After going to work for Atlantic (D) in response to a letter he received from Atlantic’s superintendent, which appeared to guarantee continuous work, Clarke(P) and 96 black longshoreman were later discharged and their places filled by white longshoreman.Issue: Does promise of continuous work without a definite term enough to provide ee’s with Just Cause protection?Holding: A contract of hiring, indefinite with respect to the term for which the contract shall run, is at most a contract terminable at will. Court prefers to find at-will employment, unless a term is proven by P “permanent employment” does not imply just cause protection—at will only Civil Service --begins to change the at will rule, civil service bribed ee’s to work for a lower wage in exchange for job security substantive and procedural protections are provided to civil service workers identify the fact that ee is not an independent contractor and bill of rights issues need to be identified ASAP there is no term, but you are protected from arbitrary discharge 

discharge decisions are review by gov’t commissions—must exhaust these channels before going to court tenure implies a property interest—Constitutional issues 4th and 1st Amendment issues, due process and equal protection elected officials and policy makers are not a part of civil service 

B. Sources of Modern Employment Law 1. 1.      Civil Service/Public Employment:McAuliffe v. Mayor & City of New Bedford (Mass. 1892) p. 31Facts: When he was removed from Police force for allegedly violating city regulations forbidding solicitation of money for political purposes, P sought to be reinstated in his job.Issue: Shall a member of the police dept. be allowed to solicit money or aid for any political purpose whatsoever?Holding: No. Ee has a constitutional right to free speech, but no constitutional right to be a policeman. Implied in his employment contract with the city is an agreement by P to suspend his freedom of speech . Nothing in Constitution or statute that forbids city from making compliance with statute a condition of employment. Rutan v. Republican Party (S.Ct. 1990) p. 37Facts: P protested employment decisions made by governor based solely on a state ee’s affiliation or non-affiliation with the Republican Party, the party in power.Issue: Does the 1st Amendment forbid gov’t officials from promoting, transferring, recalling or hiring public ee’s solely on the basis of their support of the political party in power, unless party affiliation is an appropriate requirement for the position?Holding: Yes. Assertion that at-will ee’s have no entitlement to continued employment was rejected by S.Ct; to hold otherwise would place an undue burden on ee to support all activities of er (political or otherwise) and this impinges upon first amendment rights 2. 2.      Collective Bargaining: Wright v. Universal Maritime (1998) Supp. p. 2Facts: Longshoreman brought worker’s comp. claim and received settlement for $250,000 for permanent disability (medical bills and future lost wages). A few years later, he goes back to work as a longshoreman. Someone realizes it’s the same person who received disability. Er claims they have a contract right not to hire Wright under the CBA. If he works and gets paid, he would be getting paid double. Wright then claims protection under the ADA and takes er to district

court. D claims P failed to exhaust all remedies under the CBA, so the forum/jurisdiction is at stake. Issue: Did Wright, through his membership in the Union, waive his right to go to court for redress?Holding: No. CBA does not contain a clear and unmistakeable waiver of covered ee’s rights to a judicial forum for federal claims of employment discrimination. Any such requirement to arbitrate must be particularly clear.Not resolved: Whether such a waiver would be enforceable.

 Union cannot waive substantive rights or federal forum rights on behalf of an employee under federal law P prefers to go to court b/c of juries and the likelihood that they would be sympathetic to his claim and evidentiary protections Gilmer (p. 4 of supp.) (1991) holds that an ee who signed an agreement to arbitrate all claims did waive his right to a federal forum

 Distinction: In Gilmer, the ee signed the form himself, in Wright the issue was whether or not the union could waive this right on behalf of its ee’s. There is a presumption of “arbitrability” in that arbitrators are in a better position to interpret the agreements than the courts. If the claim, therefore, involves a federal statue rather than simply the CBA, federal courts are more likely to hear it. 3. Government Regulation of Employment4. Nondiscrimination5. Judicial Modification of the At Will Rule6. Other Sources

C. The Changing Economic and Social Setting 1. 1.      DemographicsWorkforce is aging and becoming more diverse—illegal immigration2. 2.      New Work Arrangements:Donovan v. DialAmerica (S.Ct. 1985) p. 81Facts: D was paying less than minimum wage to two groups of workers which it considered independent contractors. P filed suit alleging violation of the FLSA minimum wage requirements for ee’s.Issue: Were these workers ee’s for purposes of the FLSA?Holding: Researchers were ee’s

Researchers who also distributed were not ee’sSureway Cleaners test for an ee:(1) (1)    the degree of the alleged employer’s right to control the manner in which

the work is to be performed; (2) the alleged ee’s opportunity for profit or loss depending upon his managerial skill; (3) the alleged ee’s investment in equipment or materials required for his task or his employment of helpers; (4) whether the service rendered requires a special skill; (5) the degree of

permanence of the working relationship; and (6) whether the service rendered is an integral part of the alleged employer’s business

 Neither the presence or absence of any particular factor is dispositive, courts should examine the “totality of the circumstances” If the employer in question was removed, would the alleged ee still be in business? Vizcaino v. Microsoft (S.Ct.1998) p. 93Facts: Freelance workers employed by Microsoft brought a class action suit seeking the receipt of pension and welfare benefits on the basis that they satisfied the statutory definition of common law employees. Freelancers signed an agreement stating that they are IC’s.ICs were fully integrated into the workforce, but they were not on the payroll, no taxes withheld, not allowed to participate in the welfare and pension benefit plans.Issue: May a company properly exclude Independent contractors (who were common law employees) from the receipt of welfare and pension benefits provided to its other employees?Holding: No. IRS recognized the IC’s as ee’s and held that they must be considered ee’s for all purposes, including benefits and profit-sharing plans. Court treated the IC agreement as mutual mistake.

 III. III.             The Hiring Process

A. A.     IntroductionKotch v. Bd. of River Port Pilot Commissioners (S.Ct. 1947) p.104Facts: Disparate impact/rational relation case. Nepotism practices used in appointing new river pilots. After he was denied appointment as a sate river pilot, although seemingly qualified, P filed suit against D alleging violation of 14th amendment in the state’s method of appointing new river pilots.Issue: Does the practice in nepotism in appointing new state river pilots under applicable state statutes violate the Equal protection clause of the 14th Amendment?Holding: No. Nepotism does not violate the 14th Amendment. States have the full power to regulate the pilotage of certain vessels due to the unique nature of river piloting . Some states do have statutes forbidding nepotism, Louisiana does not. But see, Backlund v. Hessen p. 108—an applicant for a firefighter position with the highest test score was passed over in favor of three lower ranking candidates who were related to fire dept. ee’s and the 8th Circuit found that this violated 14th Amendment. Distinguished Kotch b/c the “unique nature of river piloting” was sufficiently important to justify the nepotism policy there. No such justification here.

 EEOC v. Consolidated Service Systems (7th Cir. 1993) p. 109Facts: Korean-owned cleaning service hired ee’s through word-of-mouth recruiting and the result was that 81% of the new ee’s were Korean, though they comprised less than 1% of the workforce in the county.Issue: Whether the circumstantial evidence compels an inference of intentional discrimination or disparate impact?Holding: NO. No duty to inform entire labor pool of job openings. This would put small business owners out of business. Er is not doing anything affirmative, no intentional acts, case emphasizes the er’s passive recruitment style. Word-of-mouth hiring was not considered an “employment practice” in the 7th Circuit, thus the disparate impact claim had to be dropped. If word of mouth hiring is an employment practice, (disparate impact claim lives) you must balance the advantages of the practice against the possible discriminatory effect when the er’s workforce is already skewed along racial or other disfavored lines. B. B.     Legal Restrictions on Access to Jobs

1. Residency RequirementsWardwell v. Bd. of Ed. (6th Cir. 1976) p. 117Facts: City School District required all new teachers to est. residency within the city school district w/in 90 days. P lived outside district and challenges the resolution.Issue: Can school district constitutionally require ee to live in the school district without violating constitutional right to travel and equal protection?Holding: Yes, based on rational relation (review) to interest of the school district. Strict scrutiny only invoked when discrimination is on the basis of a protected class. District’s reasons for requirement include (1) aids in hiring highly motivated and deeply committed teachers (2) more likely to vote for district taxes and less likely to engage in illegal strikes (3) more likely to be involved in school and community activities; contact with students and community leaders; (4) more likely to gain sympathy and understanding for the racial, social, economic and urban problems for the kids they teach (5) keeping with the goal of integration in society and in the schools. Private employer would not be subject to this review; important that this is a Public employer.  2.Undocumented Aliens: Collins Foods International v. INS (9th Cir.1991) p.122

Facts: INS charged Collins with violations of IRCA for hiring an illegal alien unauthorized to work in the United States for a job at Sizzler. Ee showed a fake social security card.

Issue: Did er have knowledge or constructive knowledge that ee was unauthorized to work in the US?Holding: No. As long as document appears satisfactory to a reasonable person, er is off the hook. Only impose duties on er’s that they can fulfill efficiently.

IRCA (Immigration Reform and Control Act) imposes a duty on er to ascertain whether an ee is authorized to work, thus imposes a policing duty on the state. This must be done very carefully so as not to discriminate on race or national origin. Er cannot ask questions relating to national origin before the offer of hire, but must ascertain work authorization within 3 business days of offer. 

C. C.     The Employer’s Information-Gathering ProcessGeneral information: 8th Grade teacher hypo.—teacher exposes himself to student, school district requires his resignation. When his prospective er called 1st school district to get referral, they gave a false glowing recommendation. Is district liable for misrepresenting his credentials? Three Problems associated with poor information-sharing:1) 1)      Mismatching: ee’s may get hired for jobs they are not suited

for2) 2)      Churning: unproductive turnover3) 3)      Scarring: Since er’s do not have good info, good ee’s may get

branded when er’s are not willing to give references 

Three Categories of Information1) 1)      False negative: tell prospective er false negative statements

about ee2) 2)      activity level: er does not give any info. except for dates

employed and title held3) 3)      False positive: er says untrue positive statements about ee

(school teacher) 1. 1.      InterviewsLysak v. Seiler Corp. (Mass. 1993) p. 135Facts: During an interview pregnant woman voluntarily told President of Co. that she had no intention of getting pregnant, but unbeknownst to Pres. she was pregnant at the time.Issue: May an er discharge an ee based on an unsolicited, untrue, statement made during an interview?Holding: Yes. Volunteering an untruthful statement on an illegal topic may provide grounds for termination. The issue is not her pregnancy, but her honesty and credibility. Jury believed er that he felt betrayed and did not believe P. 2. 2.      Applications

Sullivan v. US Postal Service (WDNY 1996) p.129Facts: P alleged violations of the Privacy Act as a result of the postal service’s disclosure to his current er that he had filed an application with postal service in disregard to his denial of permission to contact current er. He is fired by current er and not hired by postal service.Issue: Did postal service intentionally and willfully disclose a protected record which resulted in P’s termination? Is calling an employer considered a disclosure?Holding: Yes. Telephone call was considered a disclosure of employment application. This moves case to second prong, which is proximate cause. 3. 3.      ReferencesChambers v. American Trans Air (Ind.App.1991) p. 138Facts: Defamation action. EE resigns, seeks new employment and has difficulty finding a job, she suspects a false negative. She has her mom call and pretend to be a prospective er and her fears are confirmed.Elements of a defamation:-defamatory imputation, malice, publication (or compelled publication) and damages.-defendant must have been at least negligent-defamation per se does not require showing of damages-defenses to defamation claim: truth, qualified privilege, no publication (but, be aware of compelled self-publication, Lewis)Qualified privilege defense:applies to a “communication made in good faith on any subject matter in which the party making the communication has an interest or in reference to which he has a duty , either public or private, either legal, moral, social, if made to a person having a corresponding interest or duty.” (See page 140 for common examples)How privilege may be lost:1) 1)      communicator was primarily motivated by ill-will in making the

statement 2) excessive publication of defamatory statement or 3) statement was made without belief or grounds for belief in its truth

 qualified privilege doctrine exists to facilitate the free-flow of information

 Lewis v. Equitable Life Insurance (Minn.1986) p.144Facts: After being discharged for gross insubordination, P’s filed claim for self-compelled defamation.Issue: In an action for defamation, may the publication element be satisfied where P was required to publish a defamatory statement to a third person if it was foreseeable to the D that the P would be so compelled?Holding: Yes. Compelled self-publication holds the originator of the statement liable where 1) the originator knows, or should know of circumstances whereby the defamed person has 2) no reasonable means of avoiding publication of the statement or avoiding the resulting damages.

 Privacy torts:1) 1)      Injurious falsehood: publication of a false statement (known

to be false) harming another resulting in pecuniary loss2) 2)      Public disclosure of embarrassing private facts: (e.g. when

disclosing medical matters, info. must be true (mastectomy, impotence)

 4. NEGLIGENT HIRING: When is an E/er Liable?

        When it is foreseeable that a third party may be injured from a false statement – the maker of the statement is liable (i.e.: school teacher, maker of “glowing” recommendation is liable)

        Not liable for all representations, just those that may foreseeably cause injury to third party

        There is NO AFFIRMATIVE DUTY to tell the truth; making it difficult to obtain negative or unflattering information about an applicant.

Malorney v. B&L Motor Freight (Illinois 1986)         FACTS: Violent sex offender applies for position of truck driver,

employer inspects his prior vehicle and traffic record – but not general criminal record, he gets the job and commits a sexual offense in the truck.

        ISSUE: Is D liable for negligent hiring of this man? Did they have a duty to look at his general criminal record, or did they satisfy their duty by just checking for vehicle infractions?

        RULE: Balancing test. Balancing the cost of checking the criminal records of all applicants against the potential utility of doing so. Here, the court did not find the burden to be unduly expensive or inconvenient to prevent them from imposing such a duty on an employer. Big issue was that of foreseeability, which the court thought was too close to call and therefore left it for the fact-finder to determine.

        Catch 22 for e/ers = don’t want to pry too much and invade someone’s privacy, but have to find out enough so that you don’t hire someone totally unqualified for the job.

 D. Truth-Detecting Devices & Psychological and Personality Testing

Soroka v. Dayton Hudson Corp. (Calif. 1993)         FACTS: Target is psychologically screening security guard applicants &

they claim their state protected privacy right has been violated.         ISSUE: Is there a sufficient NEXUS between Target’s rational basis

interest in not having their security guards flip out and the means they employed to protect the interest?

        RULE: Target violated both constitutional and state rights to privacy by asking questions about the religious beliefs and sexual orientation of the applicants. There was not a sufficient nexus to justify the screening practices.

        The injury in this case is the disclosure by the applicants of personal information that had no relevance to the job.

        This is a landmark case applicable only to California employers because it dealt with a state privacy statute.         Lyle v. Mercy Hospital (SD Ohio 1995) – SHE DID NOT COVER

THIS IN CLASS!         FACTS: Group of employees at hospital was questioned about a theft on

hospital premises, all were told that they may be subjected to a lie detector test at some time in the future. Upon search of P’s locker, hr director asked for his views on polygraphs, P stated that he was against them. P was fired. Memo regarding his termination stated that he was anti-polygraph. Friend tried to smooth over the termination and was given impression by hr director that submission to a polygraph could make this whole thing disappear. STATUTE: Employee Polygraph Protection Act (EPPA) forbids an employer from requiring, requesting, suggesting or causing (in any way) an employee to submit to a polygraph. It goes on to further prohibit an employer from discharging, disciplining, discriminating, denying employment or promotion or threatening any of these actions based on submission to a polygraph. This is a Federal Statute codified as 29 U.S.C. 2002 et seq.

        ISSUE: Is hospital e/er liable for violating the EPPA?         RULE: If an e/er discharges someone even partially because of their

attitude against polygraph’s – the question of credibility is one for the jury to decide. Just because there were other reasons articulated for the discharge doesn’t mean the employer is insulated from liability imposed by the EPPA.

 D. D.     Medical Screening1. 1.      Purpose2. 2.      Medical Questionnaires:

Griffin v. Steeltek (10th Circuit 1998) [Supplement]         FACTS: P filed suit asserting that D’s application process violated the ADA

by asking whether applicant had ever received disability or worker’s compensation and by asking if applicant had any physical defects limiting the kind of work to be performed. P is not disabled, but files suit because the ADA prohibits e/er from asking such questions and then not hiring him because of how he responded.

        ISSUE: Does a plaintiff in an ADA claim need to be, or need others to perceive him to be, disabled in order to assert a prima facie claim? Are improper medical questions actionable under the ADA if asked of a non-disabled applicant?

        RULE: The court allowed the claim as per the following reasoning: if improper medical questions were only improper when asked of disabled persons, then disabled persons would have to identify themselves as such so that e/ers know what they can and can’t ask. That just doesn’t make any sense; therefore, the court allows the claim to stand.

        When can e/ers ask what?         Distinction made between “pre-offer” and “conditional-offers”         Pre-offer

        Can’t ask any questions requiring applicant to disclose disabilities         Can ask “can you do this job?” & that’s all

        ADA applies to all hidden physical and mental incapabilities         Griffin represents that any violation at this stage can be remedied on

behalf of non-disabled persons         Urinalysis is NOT a medical test for ADA purposes; they are the only type of

“medical test” permissible at this stage according to Congress – all others are prohibited                     Conditional Offer

        Usually involve some medical screening         Permissible so long as it is administered evenly among all similarly situated

candidates  

Problem: Refusing to Hire SmokersCity of North Miami v. Kurtz (Florida 1995)         FACTS: Employment policy of Miami required all job applicants to sign

affidavit promising that they haven’t used tobacco in the year immediately preceding their application for employment. Once hired, employee is free to use tobacco products.

        ISSUE: Whether applicants seeking government employment have a reasonable (and state constitutionally protected) expectation of privacy with regard to their smoking habits.

        RULE: No privacy violation because applicants have no reasonable expectation of privacy with regard to their smoking habits when applying for government jobs. If such an expectation were acknowledged, the court would have to next determine whether D had a compelling interest to justify the intrusion. With the compelling interest – same outcome; without it – policy may be struck down.

        NB: NY Constitution protects e/ees’ right to privacy of political activity, legal use of consumable products….etc.; Federal Constitution has enumerated a penumbra of rights under the umbrella of privacy – smoking is not one of them.

 New York Labor law section 201-d (in mimeo) 

3. Medical ExaminationsGreen v. Walker (5th Circuit 1990) I HAVE NO CLASS NOTES ON THIS CASE

        FACTS: Annual thorough physical performed by company contracted doctor is condition of continued employment; P was examined and classified as “employable without restriction”; 1 year later diagnosed with lung cancer requiring extensive treatment, surgery and medications.

        ISSUE: Did doctor performing work physical have a duty to e/ee-patient to perform the physical with due care? Does a dr/patient relationship exist in the context of a work physical?

        RULE: The doctor/patient relationship exists because the doctor held him out to be a skilled practitioner and it’s reasonable to assume he would warn of any incidental dangers discovered during his examination.

 

F. TESTING1. Drug TestingNational Treasury Employees Union v. Von Raab (Supreme Court 1989)          FACTS: US Customs Service instituted an employment practice of drug-

testing individuals before they could be promoted or transferred into positions involving: direct involvement in drug interdiction and enforcement, carrying of firearms, or handling classified documents. E/ees testing positive without satisfactory explanation are terminated.

         ISSUE: Whether the 4th Amendment is violated when the US Customs Service requires a urinalysis from e/ees who seek transfer or promotion to certain positions.

         RULE: A urinalysis is a search for 4th Amendment purposes. Have to weigh compelling state interest v. expectation of privacy. Court said e/ees have a lowered expectation of privacy with regard to drug testing for employment purposes and therefore upheld the constitutionality of the employment practice.

  

 Oct. 17, 2000 Case Book 221-44; Supp. 15-16, Stat 38-55  IV. Discrimination

Faced with many candidates who have relatively = qualifications , the e/er will have to find some criterion on which to base the final selection: more education, high test scores, experience, family connections etc. Such unregulated selection methods has resulted in identifiable groups such as women, blacks and other minorities being left out of the most desirable aspects of the workforce.

        Title VII of the Civil Rights (CR) Act of 1964 was enacted to eliminate employment discrimination on the basis of race, religion, color, sex and national origin

        The most important § of Title VII is 703 which states that it is unlawful for an e/er to (1) fail to hire or discharge an individual or to discriminate against an individual with respect to compensation, terms, conditions or privilege of employment due to race, religion, color, sex or national origin, (2) to limit, segregate or classify his e/ees in any way which would deprive them of employment opportunities or otherwise adversely affect his status as an e/ee due to race, color, etc.

 Title VII did not originally apply to gender based discrimination out of fear that it would not be passed because of the gender discrim. provision. §703 also contains provisions as to when discrimination may be permitted. These circumstances include:1) religion, sex or national origin (but not race) is a BFOQ reasonably necessary to the normal operation of the business.

2) the e/er acts pursuant to a bona fide seniority or merit system, or measures earnings by quantity or quality of production3) the e/er acts on the results of a professionally developed ability test that is not designed, intended or used to discriminate because of race, color, religion, sex pr national origin4) differences in pay based upon sex are authorized by the Equal Pay Act of 1963 Title VII has been amended three times: The Equal Employment Opportunity Act of 1972, the Pregnancy Discrimination Act of 1978, the Civil Rights Act of 1991 

State Fair Employment Practice Laws§708 specifically permits parallel state regulation of employment discrimination as long as it doesn’t interfere with Title VII. Most laws are patterned after Title VII with 2 distinctions:

1)state fair employment practice doesn’t exempt small businesses as Title VII does

2) some states have gone beyond federal guidelines and have added proscriptions based on race, color, religion, sex, and national origins (title VII), age (ADEA), disability (ADA) 

Fourteenth Amendment & Civil Rights Statutes§1 – Privileges and Immunities Clause p. 228 in CB§5 – Equal Protection Clause§1981 – actions may be brought up in fed. or state ct. p. 229§1983- civil action for deprivation of rights p. 230§1985- conspiracy to interfere with civil rights p. 230- state action is required before a violation of §1985 can be found. This section cannot be used against federal officers or private discrimination cases. 

Executive Order 11246The key provision is §202 which prohibits employment discrimination by government contractors. – p.231

2. What is unlawful Discrimination?Griggs v. Duke Power Co. (401 US 424 (1971)). p. 232 in CBFacts: On July 2, 1965, the day Title VII became effective the Company enacted a policy of testing for placement in any department but the labor department. The labor department paid significantly lower wages than the other departments. The policy of testing was enacted when the Company ended their previous policy of confining blacks to the Blacks to the Labor Department.

 Issue: Is an e/er prohibited by Title VII from requiring a high school degree or passing of a standardized IQ test as a condition of e/ment or a transfer of jobs when (1) neither standard is shown to be significantly related to successful job performance, (2) both requirements operate to disqualify blacks at a substantially higher rate than whites and (3) the jobs in question were previously held only by white e/ees as part of a longstanding practice of preferential treatment for whites?

 Holding: The intent of the Co. was not discriminatory but tests must measure the person for the job and not the person in the abstract. The judgment of the Ct of Appeals was reversed.  a. Disparate Treatment – CB 244-75, Supp 16 Plaintiff’s Prima Facie Case Must Consist of Either:

1. 1.      Circumstantial (Indirect) Evidencea. a.       Must demonstrate that they’re a member of a protected class,

ANDb. b.      That they applied and was qualified for job, ANDc. c.       They were rejected from employment, ANDd. d.      After they were rejected, the job remained open

**** This Creates a Presumption of Discrimination ****e. e.       Once this burden is met, E/er must DEMONSTRATE (not

prove) that P was not hired for some other non-discriminatory reason

f. f.        Then, P must disPROVE e/er’s “legitimate reason” by attacking the credibility, finding contradictory examples of how they treated others in the past

g. g.       Burden of Persuasion is ALWAYS on Plaintiff 

2. 2.      Direct Evidencea. a.      PriceWaterhouse v. Hopkins (Supreme Court 1989)

        FACTS: woman not promoted because of her appearance and demeanor.

        ISSUE: did e/er violate Title VII because refusal to promote was based on e/ee’s sexuality. (ie: her lack of femininity)?

        RULE: if sex is a “motivating factor”, then the action it motivates is discriminatory, according to the CRA of 1991.

        E/er can attempt to defend the direct evidence produced by P by asserting the “same decision defense”

a. a.       They must PROVE that they would have made the same decision regardless of sex in a parallel situation

b. b.      Must be PROVEN by a preponderance of the evidence (higher std than circum evid cases)

c. c.       If E/er fails to prove SDD = they lose; game over

d. d.      If E/er succeeds in proving SDD = they’re still liable, only P’s recovery is now limited.

 CB 276-304; Supp 17-22 The BFOQ Defense Wilson v. Southwest Airlines (517 F. Supp. 292) p. 277 Issue: Is femininity, or more accurately female sex appeal a bona fide occupational qualification for the jobs of flight attendant and ticket at SW Airline? Facts: SW used sex appeal to sell seats to businessmen. There was an assumption that all business customers are male and that only women flight attendants are sexy. SW saw the need to hire only females for public contact positions but there are many men who would like this type of employment opportunity. This is a BFOQ exception to Title VII. Test applied to Ct to determine if sex is necessary under Title VII1) Does job relatedness require that worker is only of one sex?2) Is this reasonably necessary for business? Holding: Since the primary goal of an airline is to transport passengers from one point to another safely, serve beverages and provide safety instructions both men and women are suited for this task.  Ct. relies on Diaz defense which states that thy hire only women, it’s a BFOQ, women are more psychologically suited for this work.. Taxman v. Board of Education 91 F.3d 1547 (3d Cir 1996) (en banc), cert. dismissed, 118 S. Ct. 595 (1997) Facts: 2 e/ees hired on the very same day, one white and the other black, to work. One e/ee had to be laid off. Issue: Did the Board of Ed. violate Title VII when it made race a factor in selecting which e/ee to lay off? Holding:The district court properly concluded that the affirmative action plan applied by the Board of Ed to lay off Taxman is invalid under Title VII and that the District court did not err in calculating Taxman’s damages or in dismissing her claim for punitive damages. Affirmed the judgment of the district court. 

 V. Conditions of Employment

A. A.     Work Environment 1. 1.      Grooming and Dress: To what extent can an employer regulate

behavior/dress on the job absent a K, what can an employer do to determine dress ON THE JOB. Private v Public employers: A. A.     Public: Protected by constitution

Not STRICT SCRUTANY. Burden on P to show that regulation is arbitrary and capricious. Presumption of legitimacy, i.e. uniformity or safety standards for dress.Standard is RATIONAL SCRUTANY. Private: EMPLOYMENT AT WILL allows employer to set the terms. No constitution protectionTitle VII argument will usually fail when it comes to grooming (b/c they are more for promoting opportunity and based on immutable characteristics).

Kelley v Johnson (US 1976): PUBLIC EMPLOYER Police officer brought clam that requiring hair grooming standards violated the officers rights under the 1st Amendment for freedom of expression and 14th Amendment for due process and equal protection. Holding: Court says that P must show that the regulation is so arbitrary that and therefore deprives the P of their liberty interest under the 1st and 14th Amendments. The court held that having hair grooming standards for police officers is RATIONAL because it makes them recognizable to the public and established an esprit de corps. NO LIBERTY INTEREST VIOLATED.  EEOC v. Sage Reality (SDNY 1981): PRIVATE EMPLOYER Claim under Title VII. P was required to wear a revealing uniform to work. She was harassed, received lewd comments and gestures and was propositioned on several occasions. When she refused to wear uniform, she was fired. Holding: An employer does not have the right to make an employee wear any uniform they want. P must show that i. Term or condition placed on P and ii. That term or condition was based on sex. Court looked to BONA FIDE OCCUPATIONAL QUALIFICATION (bfoq) as a test for uniform. While it is okay for an employer to require an employee to wear certain uniforms (here bicentennial garb), but not okay to make them wear revealing stuff which causes discrimination based on SEX.  REMEMBER BFOQ test: Okay to require Playboy Bunnies and Exotic Dancers to wear revealing uniforms (no Title VII).

 

2. 2.      Harassment Ellison v. Brady (9th Cir. 1991): PUBLIC Title VII claim filed by P for sexual harassment by a fellow EE. Harassing EE wrote love letter to P. P complained and harasser was transferred. But 6 months later he came back. P complained and IRS dismissed suit. ER did nothing else to dissuade harasser’s actions. Holding: 2 issues presented: 1. Should the test under Title VII be for a reasonable person or a reasonable woman. The court held that the test should be for what a REASONABLE WOMEN would consider sufficiently severe or pervasive to alter the conditions of employment and alter the work environment. 2. What remedial actions can shield ER from liability for the actions of EE. Court holds that ER remedies should be REASONABLY CALCULATED to end the harassment. Court also notes that EE should not have to transfer because of the actions of a harasser. Court says that ER must send a strong message to harasser.  See also Farangher v. City of Boca Raton an ER is vicariously liable for the sexual harassment of a supervisor. An ER may defend by showing that they exercised reasonable care to prevent and correct sexual harassment and that the harasser unreasonably failed to take advantage of the opportunity or to avoid harm otherwise.  Harris v. Forklift Co. (US 1993): PRIVATE Title VII claim for sexual harassment. P claimed that boss made her the target of lots of sexual innuendoes, i.e. only a real man can use a forklift and called her a dumbass women and lots of other stuff. Boss promised to stop but didn’t then P quit. Holding: Was an abusive work environment created under the requirements of Title VII. Court takes a middle of the road approach to determining the standard for abusive work environment . Reaffirms standard that mere utterance of epithet which offensive feelings is not enough to create a hostile work environment and reasonable person standard used to determine if environment is abusive. Victim must also perceive environment to be abusive. Psychological injury to P not required. Look at all situations in circumstance. Title VII STANDARD: So long as environment would reasonably be perceived(objective) and is perceived as abusive or hostile(subjective), no need to show psychological injury. The standard also holds that harassment must be reasonable abusive to an objective person and subjectively abusive to victim.  Oncale v. Sundowner Offshore Services (US 1998): PRIVATE Title VII claim for sexual harassment by a MAN. P worked on offshore oil

platform. Was sexually harassed and threatened with rape by other male workers. Holding: Does Title VII bar a claim for sexual harassment when both P and D are same sex. Court holds that Title VII does not bar same sex claims, no presumption that ER will not discriminate against own sex. Objective severity of harassment should be judged from perspective of a reasonable person in the plaintiff’s situation considering all the circumstances. 3. 3.      Privacy Bodewig v. K-Mart (Or.App. 1981): PRIVATE Tort action for outrageous conduct. Case of the missing four 5 dollar bills. Manager took P into restroom and told her to disrobe and strip-searched her. She did and the money was not found. Next day she did not have her own register and quit. Holding: Unless there was the type of SPECIAL RELATIONSHIP between P and K-Mart justifying recovery for outrageous conduct, which was not deliberate, but reckless to its predictable effect. Court concludes that ER’s relationship with EE was a SPECIAL RELATIONSHIP and liability may be imposed if conduct is reckless and beyond social toleration. Golden (lady who yelled about her 20 being stolen): Different standard, conduct must be socially intolerable and deliberate to cause emotional distress.  Bus see McDonnell v. Hunter (8th Cir. 1987) strip search of correctional officer justified if reasonable suspicion exists based on specific objective facts and rational inferences.  Vega – Rodriguez v. Puerto Rico Telephone (1st Cir. 1997): PUBLIC Privacy Right claim and an unreasonable search and seizure under the 4th Amendment b/c P was under constant surveillance at work by cameras. Holding: Business premises have a lesser privacy expectation than do a person’s residence. Intrusion must violate i. Subjective – P’s expectation of privacy and ii. Objective – is that expectation reasonable. EE’s have a reasonable expectation to privacy as to searches of their body, but t he nature of the workplace requires certain infringements of their privacy rights. Court held that here no reasonable expectation of privacy existed b/c action is in plain view and vantage-point is lawful. Also, look to motivation of intrusion, here purpose was an efficient workplace.  Court points out factors to determine if an intrusion is lawful. See O’Conner v. Ortega (US 1987): area under EE exclusive use, extent to which others had access to workplace, nature of employment and if EE

knew of policy at work where they were subject to intrusion. In O’Conner court found that 4th Amendment violated when ER took P’s files.  Smythe v. Pillsbury (ED Penn 1996) PRIVATE Wrongful discharge claim in an employment at will state. ER fired P for inappropriate emails over the company’s email system, despite assurances that email was confidential. Holding: Court notes that there is generally no wrongful discharge claim, but there are circumstances where it is invoked (when it violates a clear mandate of public policy and strikes at heart of EE rights, duties and responsibilities). Here, no reasonable expectation of privacy in emails despite assurances that everything would be confidential. Thus no privacy interest and no wrongful discharge. Court does note that if this was a urinalysis things might be different.  McClaren v. Microsoft (Tex.App. 1999) Tort action for intrusion upon the P’s seclusion or solitude or into private affairs. P’s employment was suspended b/c of allegations of sexual harassment. P fired and sued ER for breaking into his personal files on computer where he had some of his emails stored and released them to third parties. Holding: Does P have a right to privacy in his email. Court compares this to an EE who has a locker with their own lock. Here, reasonable expectation of privacy. But in email, no reasonable expectation of privacy b/c on their system and company’s interest in preventing inappropriate activity (P accused of sex harassment) would outweigh P’s privacy interest. Compare to O’Conner where court held that files taken violated a 4th Amendment violation.  4. 4.      Freedom of Expression Rankin v. McPherson (US 1987): PUBLIC 1st Amendment Claim for freedom of speech. P discharged from position as a deputy of Harris County where she performed only clerical duties. She was fired for saying that she hoped that next time there is an assannation attempt on the President, she hopes that they get him. Holding: Can an ER discharge an EE for engaging is speech that may be categorized as constituting speech on a matter of public concern. B/c court determined that statement was a matter of public concern (killing pres.) a balancing test is required. Test balances i. P interest in making the statement and ii. Interest of state in promoting efficiency of public services it performs through EE. In balancing test look at manner, time, place, if statement is disruptive at work or is detrimental on close work relationships, or impedes performance of workers duties. State interest focuses on effective functioning of the ER’s workplace. Here, ER interests do not outweigh EE’s freedom of expression due to the nature of

their job (clerk) and no danger in EE’s private speech. But if EE was in a policy making, confidential or public contact role, things might be different. Dissent: Scalia says this kind of speech is wrong and she should be disciplined and taught not to do this. B/c this is a law enforcement office, her speech should not be protected.  Smith v. Fruin (7th Cir. 1994): PUBLIC P complained b/c he was given a “sham” assignment because he complained about people smoking at work (there was a law limiting smoking at work). Holding: Is P entitled to protection under the 1st Amendment. Court holds that EE’s statement does not reach the threshold of protected speech, despite the fact that it may be a matter of public concern. P is raising an individual issue/grevence, not protected by 1st Amendment. Novosel v. Nationwide Insurance (3rd Cir. 1983) PUBLIC Tort claim for wrongful discharge based on important public policy or rights conferred on EE as a member of the citizenry at large. P refused to participate in ER’s lobbying effort regarding the No-Fault Reform Act before the state legislature. P was fired. Holding: Does P have a cause of action where termination abridges a significant and recognized public policy. Because no plausible an legitimate reason for terminating employment were disclosed, EE’s discharge would appear to violate public policy. ER has no legitimate interest in this area of an EE’s life (politics) and can’t coerce them by threat of firing. Court suggested these elements for wrongful discharge:1. 1.      Whether because of speech, ER is prevented from efficiently

carrying out its responsibilities2. 2.      Whether speech impairs the EE’s ability to carry out his own

responsibilities3. 3.      Whether speech interferes with essential and close working

relationships4. 4.      Whether the manner, time, and place the speech occurs interferes

with business operations. Court also suggested a balancing test for weighing these issues:1. 1.      nature of actor’s conduct2. 2.      actor’s motive3. 3.      interests of the other with which the actor’s conduct interferes4. 4.      interests sought to be advanced by the actor5. 5.      social interests protecting the freedom of action of the actor and

the contractual interests of the other6. 6.      proximity or remoteness of the actors conduct7. 7.      relationships between parties

 B. Regulation of Off-Work Activity

1. 1.      Personal Associations: Can have Title VII and Disparate Impact issuesPrivate EE – Get constitutional protection through Public Policy Tort

 Rulon-Miller v. IBM (Cal.App. 1984): PRIVATE Tort claim for wrongful discharge and intentional infliction of emotional distress. Romantic relationship between P and boyfriend who worked for a competitor. P told to stop dating her boyfriend or loose her job. Policy in place at IBM regarding conflict of interest. Holding: Can ER terminate EE under the company’s guidelines for Conflict of Interest for dating an EE of the competitor. Court holds that record does not show that IBM’s policy interprets Conflict of Interest as dating. No evidence of sensitive information being passed. ER’s defense could be pretext for unjust firing.  Ozer v. Borquez (Colo. 1997). PRIVATE Claim under Gay Rights Statute for wrongful discharge and invasion of privacy tort. P found out that his partner had HIV. He told his ER and within 2 days everybody at law firm knew he was gay and partner had HIV. 1 week after disclosure, P was fired. ER claimed he was fired b/c firm was having financial trouble. Holding: 1. Was there a wrongful discharge tort. Court established 3 elements for claim: i. P was dismissed by Defendant, ii. P not dismissed BUT FOR his sexual orientation, iii. P suffered damages as a result. 2. Was there an invasion of privacy tort claim. Court says such a claim exists and is based on unreasonable publicity given to one’s public life. Elements are: i. facts must be private in nature, ii. disclosure must be made to the public, iii. must be highly offensive to a reasonable person, iv. facts disclosed cannot be of legit. Concern to the general public, v. Defendant acted with reckless disregard of the private nature of the facts disclosed.  2. 2.      Political Activity Nelson v. McClatchy Newspapers (Wash. 1997). PRIVATE (Constitution involved b/c state statute attempts to regulate freedom of press) P was a lesbian writer for the newspaper. ER told her to stop being so political, but she refused to stop demonstrating etc. P demoted from her writing position at paper to copy editor. P was denied reinstatement to her prior position. Holding: Is state statue that denies a newspaper of its editorial discretion unconstitutional and in violation of 1st Amendment. Court holds that in any job EXCEPT the PRESS, the statute would be fine. Generally, P would be covered and not dismissed b/c of political affiliation under statute. But b/c of unique nature of the press, statute is unconstitutional in application in this particular situation.  3. 3.      Lifestyle Chambers v. Oklahoma Girls Club (8th Cir. 1987): PRIVATE Title VII claim for disparate impact and disparate treatment. After P became pregnant, she was

fired from her job at the OK Girls Club. Club had an established “role model” rule that no single pregnant women could work as an instructor. Holding: 1. Does the rule violate Disparate Impact. EE must show that neutral employment practice has adverse impact on protected group. Burden then shifts to ER to show justifiable business necessity. Court held that “role model” rule was justified business necessity2. Does rule violate Disparate Treatment. P establish prima facie case, then ER must show a legit., non-discriminatory reason for practice (bfoq). Then P may show that bfoq was pretext. Court looked to essence of business operation undermined w/o challenged employment practice, safety w/o challenged employment practice and manifest relationship. Court held that rule was a bfoq.  C. Seniority  2 kinds of seniority: i. i.                     Benefits seniority: EE’s eligibility based on length of service. ii. ii.                   Competitive seniority: more continuous type, involves bidding

systems for job transfers, layoffs, etc. Does EE have a property interest in job (tenure)?  D. Promotions Title VII prohibits discrimination in promotions based on race, color, religion, sex or national origin.  Namenwirth v. Board of Regents (US 1986): PUBLIC Title VII sex discrimination claim. P denied tenure by University. Says it was b/c of sex and provides statistics that show few tenured women at University. Holding: Mere qualification for tenure does not guarantee P that she will receive it. Here there was evidence that she might not have the promise that the academic dept. required. No Title VII.  Autry v. North Carolina Dept. of Human Resources (WDNC 1987) PUBLIC Title VII claim for employment discrimination. P, black female, not promoted by ER. Claims that it was because of her race. Holding: Was she discriminated against. Court requires that P establish that i. That person hired was not qualified for job and, ii. P was not as qualified for job as a result of her experience, college education, etc. Other person promoted was qualified and P offered no direct evidence of discrimination. ER and hired employee (white women) seemed to be friends prior to the employment decision, but the court says this does not matter.

  VI. VI.              Discharge

Justifiable reasons for discharge include: theft, dishonesty, falsification of records, fighting on company premises, possession or use of alcohol or drugs

while on duty, insubordination, use of profane or abusive language to a supervisor, sleeping on the job, etc. While the at-will rule continues to dominate employment relationships, it is viewed as unduly harsh on ee’s since the er’s threat of discharge is a serious one for ee’s, while the relative fungibility of workers in low-level jobs means that the ee’s threat of quitting places few constraints on er’s. What rights should employers and employees have in employment?

 A. A.     Freedom of Contract/ Fairness in EmploymentIn response to the inequity of the at-will rule, a “for cause” standard for discharge was created through unionization and collective bargaining. 98% of all Collective Bargaining Agreements provide a “just cause” standard for discharge or disciplining Just Cause defined: Whether a reasonable man, taking into account all relevant circumstances, would find sufficient justification in the conduct of the ee to warrant discharge; proper cause. Elements of a prima facie case of just cause for disciplinary action:1) 1)      Management must first show that its interests were significantly affected

by the ee’s conduct; OR 2) management may show that even though the ee is unlikely to repeat the wrongful conduct, it is important to deter other ee’s from such conduct and that discharge is the only effective form of deterrence.

 To rebut this showing, a union must prove that management failed to give the ee industrial due process or industrial equal protection, or failed to consider mitigating factors. B. B.     Judicial Erosion of Employment at Will The first few wrongful discharge cases:Petermann v. Teamsters Local 396: Ee was discharged for refusing to perjure himself as instructed by his er. Court recognized a cause of action for wrongful discharge and noted that the right to discharge an ee under an at-will contract could be limited by statute or public policy. Similarly, in Frampton v. Central Indiana Gas Co., a public policy exception was cited as the reason for refusing to allow the discharge of an ee for filing a worker’s compensation claim. Ct. stated that when an ee is discharged for the exercise of a statutorily conferred right, an exception to the at will rule must be found.1. Public Policy

Gantt v. Sentry Insurance (Cal. 1992) p. 914Facts: Gantt complained to D about the repeated sexual harassment of Bruno, a female co-worker. Harassment continued, Gantt made a second complaint. P was ridiculed for his support of Bruno. The in-house attorney (Fribance) for Sentry wants Gantt to change his story about the harassment to protect the co. and threatens to change his performance reviews if he refuses to comply. Fribance also hints to the DFEH investigators to check out Gantt for sexual harassment. Gantt is subsequently demoted and the court treats it as a constructive discharge. (Note: Constructive discharge is presumed when conditions have been made so intolerable that a reasonable person would see no choice but to leave the employment.)Issue: Whether an ee who was terminated in retaliation for supporting a co-worker’s claim of sexual harassment may state a cause of action for tortious discharge against public policy.Holding: Any attempt to induce or coerce an ee to lie to a DFEH investigator is in contravention of public policy of the State; rule is found in a California statute stating it is a misdemeanor to interfere with a DFEH investigation. Er cannot command an ee to commit a criminal act and then discharge ee for his refusal to comply. This claim was brought as a tort action b/c of the possibility of more money. If P brought a claim under state statute, back pay and reinstatement would be the only remedies. California court and many other state courts are split: Narrow view holds that there can be no tort recovery for wrongful discharge, while the broad view allows tort recovery by resorting to statutes, state constitution, administrative rules, regulations, etc. Public policy violations generally fall into one of four categories:1) 1)      Refusing to violate a statute;2) 2)      performing a statutory obligation;3) 3)      exercising a statutory right or privilege; or4) 4)      reporting an alleged violation of a statute of public importance.

 Murphy v. American Home Products (NY 1983) p. 920Facts: Ee is an accountant who reports improprieties he finds in the books and is fired. Brings a wrongful discharge action.Issue: Does NY recognize a public policy tort for wrongful discharge?Holding: No. Just to be different, as we always are, the court states that the legislature is in the better position to impose such liability on er’s. Today, most states recognize a public policy exception to the at-will employment rule, but not NY! Avery says this is a weak argument by the court because the at-will doctrine developed in the courts, so why shouldn’t the exceptions to the rule also be judicially developed? 

3. 3.      Breach of Contracta. Statutory “Good Cause”

Marcy v. Delta Airlines (9th Cir. 1999) (Supp. p. 53)Facts: P worked as a Senior Customer Service Representative for Delta, generally an outstanding ee. P submitted her payroll records with 3 incorrect entries which would have resulted in her collecting $250 in unearned wages. Er claims the records were left out for 3 days to see if P would correct the mistakes, she did not. P claims that mistakes were unintentional.Issue: Whether the Montana Wrongful Discharge from Employment Act (WDEA) provides a cause of action to an ee discharged by her er for a reason based on mistaken facts, but where er exercised good faith in making its decision.Holding: Yes. Once P offered sufficient evidence to raise a genuine issue of material fact that her recording errors were unintentional, the case properly went before a jury.The statute indicates that the stated reason for an ee’s discharge is not legitimate if the reason for the ee’s discharge is 1) invalid as a matter of law under the WDEA; 2) is based on a mistaken interpretation of the facts; or 3) is not the honest reason for the discharge, but is pretextual. D interpreted the statute to require bad faith on their part, but it does not. P argued that if er knew real reason why these entries were made they could not have fired her.  Montana is the only state with a wrongful discharge statute; er can defend claim by showing a legitimate business reason for the discharge (legitimate business reason is a reason that is neither false, whimsical, arbitrary or capricious, and it must have some logical relationship to the needs of the business). b. b.      Written ContractsGorden v. Matthew Bender & Co. (ND Ill. 1983) p. 929Facts: P has an employment agreement with D that contains no definite term (at will employment), but he also has a letter sent to him by D that placed him on probation, but states that if P met his sales goals, he would be restored to the same status of acceptable sales performance as other ee’s (P contends this creates “for cause” employment). P failed to meet his sales goals after his territory was diminished but his sales goals remained the same.Issue: Did these two documents constitute employment that required “just cause” for termination?Holding: No. This is a bit complicated, but here goes: “acceptable sales performance” is a subjective standard—left up to the judgment of er, “just cause” is an objective standard, therefore contract would not be considered employment at will. Here, the court says that if er agrees to employ ee for an indefinite period of time and to only discharge for cause, there must be additional consideration—here there was none. Also important is that court notes you can read a satisfactory or acceptable performance clause into nearly every employment contract—it is not enough to transform at-will employment to just cause employment. no definite term—employment at will

definite term—just cause employment, but court must be able to point to the end of the contract by reference to the calendar or upon the occurrence of some external event, brings us into the realm of contract law and breach an oral contract that is incapable of being performed in one year must be in writing or it violates the Statute of Frauds (note: a lifetime contract is ok because one could die within one year) A bit about how courts interpret contracts:When a contract leaves terms out, you look to practices (ordinary course of business) and past dealings between the parties to clarify the contract Employment contracts require 1) mutuality of obligations (not mirror obligations, but both parties must agree to be bound) and 2) additional consideration Also, when ee establishes that she was discharged in violation of an employment contract, burden shifts to er to prove good cause existed for the discharge c. c.       Implied Terms of Oral ContractsPugh v. Sees Candies (Cal.App. 1981) p. 932Facts: P worked for D for 32 years and worked his way from dishwasher to Vice President. After a business trip to Europe, he is fired. P sues for breach of contract and public policy. Trial court grants D’s motion for nonsuit and this appeal follows.Issue: This is clearly an indefinite hiring, but is there something here that allows the court to find an implied-in-fact contract?Holding: Yes, the court says that because of the duration of P’s employment, the number of promotions, the lack of direct criticism of his work, and the er’s established practice of “just cause” termination, this relationship was instinct with obligation. This practice essentially constituted an offer and P’s performance for 32 years was acceptance. Court here refuses to inquire into the adequacy of consideration, thus ignoring the usual requirement of additional consideration when employment is for an indefinite duration and for just cause. Note: Pugh loses when case is remanded for trial (15 years after termination) b/c evidence of criticism against him is introduced. d. d.      Employee Handbooks and ManualsWoolley v. Hoffmann-LaRoche (NJ 1985) p. 938Facts: P began to work for D in 11/69, he is promoted in 1976, and 77. In 3/78 P is directed to write a report about piping problems in one of D’s buildings. P is then asked to resign, but refuses. P is fired in 7/78. P claims breach of contract.Issue: Whether employment at will may be modified by handbook provisions providing that termination must be for cause.

Holding: Yes. It would be unfair to allow an er to distribute a policy manual that makes the workforce believe that certain promises have been made and then allow er to renege on those promises. Language in the manual provided for the types of termination as layoff, retirement, resignation, disciplinary discharge and discharge due to performance. No category is set forth for discharge without cause. Court finds an implied promise in the handbook, it is construed as a unilateral contract The double bind for employers with handbooks:If er’s want to get benefits from handbooks, they must live up to their promises and enforce them, but enforcing manuals reduces efficiency and may cause er’s to retain incompetent ee’s—marginal ee’s are a problem Without handbooks, er’s would have to negotiate individual contracts with each ee, it would be difficult to induce ee loyalty, also lack of handbooks can be a pre-condition for unionization—many er’s use handbooks to prevent unionization Courts are split on the issue of whether or not additional consideration is needed when er’s unilaterally modify an ee handbook (implied contract) General rule is that disclaimers in handbooks must be clear and conspicuous, but even if they are, that may not be effective if promises of just cause employment are also conspicuous If an er wants to confirm employment at will status in the handbook, er should clearly state that the employment: 1) 1)      is terminable by either party;2) 2)      with or without cause,3) 3)      without notice e. Good Faith and Fair DealingFortune v. National Cash Register (Mass. 1977) p.947Facts: Cash register salesperson made a $5,000,000 deal on 11/29/68 for the delivery of cash registers to be completed over a period of four years (his commission on this deal would be $92,000). P was employed under a written employment contract that was terminable at will. Er sends P termination notice on 12/2/68. P is talked into staying on, but his title is changed to sales support. 6 moths later, P receives 75% of the bonus due to him and is then fired 6 months later.Issue: Can the issue of “bad faith” termination of an employment at will contract be properly submitted to the jury?

Holding: Yes. A termination by the er of a contract of employment at will which is motivated by bad faith or malice constitutes a breach of the employment contract. the covenant of good faith and fair dealing is never an express term in a contract, but it is implied by law (“in every contact there is an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract…there is an implied covenant of good faith and fair dealing in every contract”) in these cases, the er’s interest in running his business as he sees fit must be weighed against the ee’s interest in maintaining his employment and the public’s interest in balancing these two  Foley v. Interactive Data Corp. (Cal. 1988) p. 953Facts: P reported that he knew a co-worker (Kuhne) was under investigation by the FBI. P was then told to forget what he heard about Kuhne. A few months later, P was told he was being replaced for performance reasons, and that he could transfer to another division or be demoted, but not fired. P is then given the option of going on a “performance plan”, but before he could respond he is told to resign or he would be fired.Issue: Can breach of the implied covenant of good faith and fair dealing provide the basis for an action in tort for employment contracts?Holding: No. While such an action is recognized in insurance contracts, the court here refuses to extend the doctrine to employment law. The covenant of good faith is read into contracts in order to protect the express covenants or promises of the contract, not to protect some general public policy interest not directly tied to the contract’s purposes. The relationship of er and ee is not sufficiently similar to that of insurer and insured to warrant judicial extension of the doctrine. recognize that there is a distinction between good faith and fair dealing and just cause employment

 C. C.     Other protections from discharge

1. 1.      Common LawWilson v. Monarch Paper Co. (5th Cir. 1991) p. 964Facts: Wilson is nearly 60 years old, he is the successful VP and Asst. to the President of Monarch. He had recently completed a very successful project. A new president is appointed and Wilson is ousted from his position. He is given three options: 1) take a sales job for ½ his current pay, 2) receive three months severance pay or 3) take job as a warehouse supervisor at the same pay. Wilson chooses the third option and begins working in Houston. However, when Wilson arrives at the new job, he is placed in the position of entry level supervisor and is subjected to harassment and verbal abuse by his supervisor, including references to his age. Wilson’s duties at the new job basically include janitorial duties,

though he continues to receive his executive salary. A few months later, Wilson begins to have respiratory problems and is eventually diagnosed with bipolar disorder. He sues under the ADEA for age discrimination and intentional infliction of emotional distress (IIED).Issue: Did Monarch’s conduct reach the level of extreme and outrageous so as to establish a claim for IIED?Holding: Yes. Although the court expresses concern with extending IIED to the workplace, it affirms the jury verdict of $3,400,000. 4 requirements for establishment of an IIED claim:1) 1)      that the defendant acted intentionally or recklessly;2) 2)      that the conduct was extreme and outrageous3) 3)      that the actions of the defendant caused the plaintiff emotional

distress; and4) 4)      that the emotional distress suffered by the plaintiff was severe

 in this case, the er simply went too far—they paid ee the same salary to ensure that he would stay on and sweep the floors If Wilson would have taken the severance pay or if he was fired, there would be no cause of action 

2. 2.      Discharge in the Public Sector: The Role of the ConstitutionGoetz v. Windsor Central School District (2d Cir. 1983) p. 974Facts: P is employed as a cleaner for one year by the defendant school district. A series of thefts had occurred at the district office and P is suspected. P was arrested during the day at the school and handcuffed publicly. P was suspended by the school district b/c of his alleged participation in the break-ins. The school district’s attorney sent a letter to P requesting a written explanation of his involvement in the matter. He never responded. P’s attorney later requested a hearing on the matter, but the request was denied. P was terminated on 1/22/81.Issue: Can Goetz recover under 42 USC 1983 (civil rights statute) for deprivation of property and liberty interests?Holding: No property interest found, but remanded for further fact-finding on the deprivation of liberty claim. A relevant NY statute here conferred a property interest for ee’s with five or more years of employment, P had only been employed for one year, so he was not protected. Notes: there is no property interest protection in the U.S Constitution, ee must look to state common law, state constitution or statutes for this protection General rule: Supreme court cases make it clear that an at-will ee has no property interest in continued employment. In Roth, however, the court

noted that a person may possess a protected property interest in public employment if contractual or statutory provisions guarantee continued employment absent “sufficient cause” for discharge. A liberty interest has been defined as the freedom to pursue a calling—reputational interest. In order to show that one’s liberty interest has been harmed, the er must have promulgated something to the world that is false and in relation to a discharge that would prevent one from pursuing his calling anywhere else (define relevant area as community or state) Here, this claim survives summary judgment and if it is found that the school board was responsible for disseminating the harmful information, P will likely recover. The remedy here is a name-clearing hearing only, no reinstatement because P had no property interest in the employment. 3. Overlapping & Conflicting Remedies:Lingle v. Norge Division of Magic Chef---Avery says we are not responsible for this b/c we never discussed it in class!!

 VII. VII.           Leaving a Job 

A. A.     Breach of Contract by EmployeeHandicapped Children’s Educ. Bd. v. Lukaszewski (Wis.1983) p. 1007Remember, ee is the defendant here!Facts: P was hired in 1/78 as a speech and language therapist for the spring term. She lives 45 miles from work, commutes 90 miles everyday for the entire term. Sometime during this spring term, D signs a K for the next school year for an annual salary of $10, 760. In 8/78, P is offered a job by Wee Care Day Care which is located close to her home and for a salary of $13,000—obviously she accepts. School District refuses to let her out of her K and she begins work for them in 9/78. A few weeks later D visits her doctor who found that her pre-existing hypertension was becoming serious and believed that she should not be driving 90 miles everyday since it would be dangerous. D resigns subsequent to the dr. visit. Then she begins working at Wee Care Day Care. School district hires the only applicant for D’s position at a salary $1, 026 more than P’s due to applicant’s higher qualifications.Issue: 1) Did D breach her employment contract with the Board? And 2) If so, did the Board suffer recoverable damages therefrom?Holding: yes and yes. Basically, if an ee signs a contract and walks away for reasons other than excuse or impossibility of performance, she will be required to pay the cost of obtaining comparable services and foreseeable consequential damages such as recruitment costs and difference in salary. Avery emphasizes that courts encourage efficient breach of contract by refusing to allow punitive damages in such cases. This case seemed to be an effort by the School Board to discourage other teachers from breaching.

Would not have happened in the private sector, not worth er’s time or money to attempt to recover $1500. Dissent: has a problem with causation and making the medical decision that D caused her own hypertension. Judge believes that D should have been excused from performance because hypertension was pre-existing condition and therefore foreseeable. Er was under a duty to mitigate damages and court finds that they have done so. This duty also limits the amount an er can recover against a breaching ee. 

3. 3.      Breach of Implied TermsMercer Management Consulting, Inc. v. Wilde (DDC 1996) p. 1015Again, Avery said she will not give us facts like these, but here are a few pointers! Basically, this case discusses what a current ee may do in preparation for leaving his job to start a competing one. We all understand that non-compete agreements, when reasonable in duration and geographic scope as well as the restriction imposed are legally binding.  pp. 1019-20 have a great summary of how to interpret a contract—see last paragraph elements of an intentional interference with business relationship claim, P must show:1) 1)      the existence of a business relationship,2) 2)      defendant’s knowledge of the business relationship,3) 3)      intentional interference with the relationship by d, and4) 4)      resulting damages.5) 5)      D’s interference must be improper Not proven in this case because court finds that d’s were merely engaging in competitive activity that was not accomplished by improper means. Business judgment rule: ee with sufficient authority must exercise a duty of care that a reasonable person in similar circumstances would use. To determine if there was a breach of this duty, courts do not question the wisdom or judgment of the ee so long as the director or officer 1)had no conflict of interest when he or she made the decision, 2) gathered a reasonable amount of information before deciding, and 3) did not act wholly irrationally. 

Good luck!!