Employment Law Study Guide PDF

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Employment Law Study Guide Chapter 1 Section 1-7

Section 1.1 Introduction to Law: Purpose and Function of Law Law: A binding set of rules for human behavior established by legitimate authority. The purpose and function of law is to:         

Prevent undesirable, or promote desirable behavior Facilitate for private arrangements between individuals Settle private and public disputes Determine procedures for changing law Regulate the institutions of state to protect individual freedom Keep peace Remedy social injustice Facilitate planning Provide for the orderly change in government

Common Law and Precedent U.S law is based on the English and American common law, which consist of opinions of judges in cases covering hundreds of years. - Precedent: a controlling rule, example or guide established by a judge that provides a framework for other judges to follow in later cases. -Stare decisis: Latin for (let the decision stand) the doctrine of a count following the precedent of an earlier court.

Supreme Law of the Land: The Constitution Every law in the land must comply with the provisions of the Constitution, or that law is void. Judicial Review: The power of the Supreme Court to consider whether a law complies with the Constitution.

Main Functions of the Constitution It first establishes the three branches of the federal government and allocates the divisions of powers between them. Second and most importantly as it pertains to employment law the Constitution enumerates fundamental rights- the Bill of Rights- of citizens and protects them from the government’s ability to restrict those rights.

Branches of Federal Government There are three branches of the federal government. Legislative Executive and Judicial. -Legislative Branch is made up of the two house of congress the Senate and the House of Reps who tasked by the Constitution to make laws for the “general welfare” of the people/ -Executive Branch is composed of the President and other executive leaders such as the VicePresident are elected by the people, while cabinet members, who lead major departs in the federal government, are appointed by the president. This branch also conducts foreign affairs and ensures that sound las are created and enforced -Judicial Branch is the court system of the country and is comprised of the United States Supreme Court and other federal courts. The courts explain and define the meaning of the Constitution and laws passed by Congress. The Supreme Court is the highest count in the land and its decisions are finial Role of the Federal Government in Employment Law -Each branch of the federal GOV plays a role in employment law. In 1963 President Kennedy invited Congress to draft Civil Rights legislation to eliminate employment discrimination. Congress accepted the challenge and passed the Civil Rights Act of 1964 the following year. -Currently the executive branch through the Equal Employment Opportunity Commission (EEOC), ensures the Civil Rights Act of 1964 is enforced. Finally, the courts, through cases brought by the EEOC and private parties, interpret and define the scope of the Civil Rights Act. Supremacy Clause The Constitution contains a Supremacy Clause, which mandates that the Constitution federal law, treaties, and federal regulations are the highest laws of the land and have priority over state law. Noted as important because many laws and regulations governing employment are federal laws. Legal construction of employment has its roots in the traditional maser/servant relationship under the common law. The legal principals surrounding that relationship grew into modern contract and agency law to which we now turn. Section 1.2 Agency and Liability in the Employment Relationship

Agency: Is a contract relationship (contract: legally binding agreement) between a principal and an agent whereby the principal, expressly or implicitly, authorizes the agent to work on his or her behalf and with the power to bind the principal. In the employment relationship. The employer is the principal and the employee is the agent. Both parties have an obligation to act in good faith to fulfill their obligations under the relationship. The employee has power to act as agent only the extent authorized by the employer. This authority may be grate or it may be very limited. If the agency relationship vest the employee with power to contract, the employer is responsible to third parties for the contact obligations entered into on its behalf by the agent.

Liability Tort: A civil wrong which causes someone harm Vicarious Liability: A form of secondary liability that comes from the doctrine of respondent superior- “let the master answer for the servant” best known as Tort Scope of Employment: Employee conduct that is reasonably relative to a job description. The employer can be exposed to liability in tort for the acts or omissions of the employee. This is known as vicarious liability. Under respondeat superior doctrine, and employer is only responsible for the employee action performed within the scope of employment. Frolic and Detour: An employee’s physical departure from the job in order to further his or her own interest and not the employer’s Going and Coming rule: A legal principle that removes an employer’s liability from employee’s actions going to and from their place of employment Dual purpose mission: Occurs when an employee conducts personal and work business at the same time; subjecting the employer to liability for the employee’s actions.

Section 1.3 Definition of an Employee

Independent Contractor: A worker who is not subject to wage, discrimination, tax, or liability laws. However employer obligations to the employee are many and varied. On the other hand, an employer is not vicariously liable for the torts of an independent contractor, and employer obligations are limited to the contract terms. Employers are often eager to classify workers as independent contractors rather than employees. The IRS has a keen interest in ensuring employers are not improperly classifying employees as independent contractors when they are really employees, and the tax penalties for improper classifications are heavy. Is a Worker an Employee or Independent Contractor? There is no clear-cut answer to the question. Most working relationships have elements of both employee and independent contractor characteristics. There are three different test commonly used to determine if a worker is an employee or independent contractor: 

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The common law agency test: A test that classifies a worker as an employer maintains the right to control the method of work performed. The level of control retained by the employer is the central question. The economic realities test: A test that classifies a worker as an employee if the employee is substantially economically dependent on an employer. The deciding point is whether the worker has little freedom to exit the relationship because he or she is economically

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depended on the business to which he or she renders service. Courts which have applied the economic reality test look at the following - The degree of control exerted by the alleged employer over the worker - The workers opportunity for profit or loss - The workers investment in the business - The permanence of the working relationship - The degree of skill required to perform the work - The extent to which the work is an integral part of the alleged employers business. The IRS 20-factor analysis: A guide adopted by the IRS for determining if a worker should be classified as an independent contractor. The 20 factor analysis includes for consideration the following elements 1. Instructions. Who controls when. Where ann. How work is to be done? 2. Training. How much training does the employer give? 3. Integration. How closely are the employer’s business processes linked to a worker’s performance? 4. Services rendered personally. How much right of substitution to allow others to do the work does a work have? 5. Hiring assistants. Does the worker control who is hired as an assistant? 6. Continuing relationship. How long and how often has the worker provide services? 7. Set hours of work. Does the employer set specific and inflexible work hours? 8. Full time required. Is the worker expected to devote all of his or her resources and time to one employer on a full-time basis? 9. Work done on premises. Does the worker have his or her own place of business? 10. Order or sequence set. Does the employer set the order or sequence in which services must be performed? 11. Reports. Does the employer requires submission of regular reports? 12. Payment method. Is the worker paid by the hour or by the job? 13. Expenses. Does the worker cover his or own overhead expenses? 14. Tools and materials. Does the employer furnish tools and equipment? 15. Invest. What is the level of worker investment in the means of doing the work? 16. Profit or loss. Does the worker bear the risk of loss in the arrangement? 17. Works for more than one person at a time. Does the worker work for more than one employer at a time? 18. Services available to general public. Does the worker offer his or services to the general public? 19. Right to fire. Is termination dictated by a contact or does the employer hold a right to fire? 20. Right to quit. May the worker quit without incurring any liability

-For all three test, the factors listed above are not exhaustive or weighted in any particular priority, and they must be viewed according to the type of work being done and the totality of the working circumstances.

- Sometimes a contingent or temporary worker, hired on an ad hoc basis from an employment agency, may become a full-fledged employee for federal law purposes if he or she works for a long time for an employer and performs the same work and in the same circumstances, as a traditional employee. Law Applying to a Workplace Scenario USERRA: Uniformed Services Employment and Reemployment Rights Act NLRA: National Labor Relations Act ADEA: Age Discrimination in Employment Act IRCA: Immigration Reform and Control Act

A human resource professional must recognize when an employment law is applicable to the employer and its employees. An HR professional could use the following steps to determine if a law applies to a workplace situation: 1. The first step is to determining which federal employment statues apply to firm. Some federal laws apply to all employers regardless of size. Such cases of the USERRA and NLRA. Others have application only if a firm has a specified number of employees. For example, Title VII apples to firms with fifteen or more employees, while the ADEA requires twenty and the IRCA four. 2. The second step would be to determine if the employer does contract work for a federal or state government. If that were the case, then Affirmative Action rules and other state mandates would apply 3. Third, after assessing which federal laws apply, the HR professionals must look to state law. Usually state law mirrors the federal law, but often the rules in a given state are stricter than federal law, as is the case with most California and New York state employment law. Many states have same-sex discrimination protections, while the federal government does not. Utah has an anti-discrimination law that applies to firms with 15 or more employees, which expressly revokes any common law employment protections. Michigan protects employees from weight discrimination. 4. The final step would be to understand which common law rules apply in the state where the business operates. Section 1.4 Definition of Employer Integrated enterprise: A business environment in which operations of two or more employers are so intertwined that they can be considered as a single employer for purposes of federal statutory coverage and liability. The definition of an employer is straightforward: an entity that employs another to work on his or her behalf for pay. For employment law purposes, however, and important issue is employer size.

Factors, which are considered in whether two or more firms constitute an integrated enterprise for employment law purposes are: 1. The degree of interrelation between operations, such as sharing management services, payroll, and office space. 2. The degree to which the entities share management, as in having common slate of mangers, officers, and directors. 3. The degree of common control of labor relations, as in human resources administration or personnel policy development. 4. The level of shared ownership. The purpose of these factors is to establish the degree of control exercised by one entity over the operations of another entity. These factors are not exhaustive, nor is any single factor overriding as the integrated enterprise question. Joint employer: Two entities, not engaged in an integrated enterprise, that each exert control over an employee Covered employment agency: An agency that regularly procures employees for at least one covered employer, subject to employment law regulation. Covered employer: An employer that is engaged in commerce industry and employs 15 or more employees. -

A labor organization is subject to federal employment law statutes as if it were an employer if any of the following are true of it 1. It represents the employees of an employer 2. Its membership exceeds a certain level 3. It maintains a hiring hall which procures employees for at least one covered employer. 4. It is engaged in an industry-affecting commerce.

This broad definition bring virtually all unions under federal and state employment law rules.

Section 1.5: The Employment-At-Will Doctrine

Employment-at-will-doctrine: The predominant rule governing employer-employee relations that states that an employer may terminate an employee at any time, for any legal reason, without incurring liability. Legal Framework of Employment Relationships In common law, the employer and the employee were seen as having equal bargaining positions as the doctrine represented the freedom to contract and the greater weight of flexibility over stability. Accordingly, under the at-will doctrine, the employee may also leave a job at any time,

and for no reason, without facing adverse legal consequences. The at-will doctrine has come under much criticism in the modern age due to its potential harsh consequences to employees: the employer may change, at any time and without notice, the terms of wages, benefits, or time off, leaving employees vulnerable and insecure. Exceptions to Employment At-Will Contracts and union collective bargaining agreements many lessen the brunt of the at-will doctrine by providing by providing for specific terms of employment or termination only for cause- poor employee performance or misconduct-or economic exigencies. Recognizing its unequal consequence to employees over employers, the common law has developed three exceptions to the at-will doctrine that protect employees. 1. Public policy: 2. Implied contract 3. Implied covenant of good faith Public Policy Exception

Retaliatory Discharge: Termination of an employee as punishment for engaging in a protected activity -Recognized in at least 44 states, and is invoked when an employee is terminated for reasons which violate a public-policy interest. This can include an employee refusing to break the law exercising a legal right, fulfilling a statutory duty, or engaging in whistleblowing. Not a uniform doctrine and each state varies in how it construes and applies the rule. Most states require that, in order to qualify as public policy, some principle must be expressly stated in a state constitution. -If an employee is terminated for claiming minimum wage or overtime compensation, engaging in union activities, opposing unlawful discriminatory practices, filing for workers compensation, or whistleblowing the employer may face liability for a retaliatory discharge. Mist states protect public employees from retaliatory discharge for reporting government wrongdoing. Seventeen states have extended whistleblowing employee protection to private employers. Implied- Contract Exception Implied Contract: A legally binding agreement which is created, not through formal contact negotiation and documentation, but by the actions of the employer and the employee. Statute of Frauds: A doctrine that requires certain contracts to be in writing. -

The second exception to the at-will doctrine is a principal call implied contact. Fortyone states, along with DC recognize this exception. An explicit contact is an agreement in which the parties state exactly what they do. An implied contact, on the other hand, is a legally binding agreement which is created, not through formal

contract negotiation and documentation, but by the actions of the employer and the employee. The conduct may be oral assurances from the employer that as long as an employee does good work he or she will have a job....