Dynamic business law 4e kubasek 4e CH42

Chapter 42 Employment and Labor Law Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGrawHill Education Overview • LO42-1: What are wage and hour laws? • LO42-2: What are the rights of employees and obligations of employers under the Family and Medical Leave Act? • LO42-3: What is FUTA? • LO42-4: What are the rules regarding workers' compensation? • LO42-5: What is COBRA? • LO42-6: What is ERISA? • LO42-7: What is OSHA? • LO42-8: What does it mean to be an "at-will" employee? • LO42-9: What are the rights of employees and obligations of employers with regard to privacy in the workplace? • LO42-10: What are the rights and responsibilities of employers when hiring foreign workers? • LO42-11: What are the three major pieces of labor law legislation? 42-2 Chapter 42 Hypothetical Case • Bob Gerald is a loading dock worker for American Beauty Supplies, Inc Gerald's supervisor, Candice Futterman, is suspicious that Gerald is a drug user Although the company does not have a dress code for its loading dock employees, Gerald's attire has given Futterman what she believes to be cause for concern Today, for example, Gerald is wearing a T-shirt of his favorite 1960s rock-and-roll band, The Appreciative Deceased The T-shirt has a picture of The Appreciative Deceased's mascot, the PoohBah Man, along with the words "Keep on Tokin'." He is also wearing a peace sign necklace, tattered blue jeans, and sandals Add to his attire Gerald's long, curly hair and his disheveled beard, and Futterman believes her subordinate is a human tribute to the free-love generation Futterman has decided to give Gerald a drug test to determine whether her charge is under the influence of illicit substances Futterman believes she has reasonable suspicion to so based on Gerald's appearance, and the fact that courts have generally upheld the right of employers to drug test employees • Based on these circumstances, does Candice Futterman have the legal right to require that Bob Gerald submit to a drug test? 42-3 Chapter 42 Hypothetical Case • As this chapter indicates, the Fair Labor Standards Act (FLSA) requires that a minimum wage of a specified amount be paid to all employees in covered industries The FLSA covers all employers engaged in interstate commerce or the production of goods for interstate commerce The minimum wage is periodically raised by the United States Congress to compensate for increases in the cost of living caused by inflation The most recent increase took effect on July 24, 2009, when the federal minimum wage increased from $6.55 to $7.25 per hour When the Fair Labor Standards was initially enacted in 1938, the minimum wage was 25 cents per hour Since 1938, it has been increased 22 separate times However, because there have been some extended periods between these adjustments while inflation has generally increased, the real value—or purchasing power—of the minimum wage has decreased substantially over time 42-4 Chapter 42 Hypothetical Case (cont'd) • For more information regarding the eroding purchasing power of the minimum wage, see the following website: Inflation and the Real Minimum Wage: A Fact Sheet • Should the federal government continue to require a mandatory minimum wage, or should it instead allow the free market to dictate wages, even though that might result in many workers receiving less than the current minimum wage of $7.25 per hour? Does the government have an ethical obligation to ensure a livable wage for all workers? Does the business community have a corresponding ethical obligation? 42-5 Wage and Hour Laws • Wage and hour laws: Federal and state laws that impose minimum wage and hour requirements for employees • Fair Labor Standards Act (FLSA): Covers all employers engaged in interstate commerce • Requires that a minimum wage of specified amount be paid to all covered employees • Specified amount periodically raised by Congress 42-6 Family and Medical Leave Act (FMLA) • Family and Medical Leave Act (FMLA): Federal act requiring that certain employers establish a policy that provides all eligible employees with up to 12 weeks of leave during any 12-month period for several family-related occurrences • • • • Birth or adoption of child Foster child Care of seriously ill spouse, parent, or child Serious health condition that renders employee unable to perform any essential functions of job • After leave, employee returned to same or similar position • Does not require employee to be paid, does require continuation of health benefits 42-7 Federal Unemployment Tax Act (FUTA) • Created state system that provides unemployment compensation to qualified employees who lose their jobs • Funded by states through tax on employers • Three states require minimal employee contributions 42-8 Workers' Compensation Laws • State laws that provide financial compensation to employees or their dependents when covered employee injured/killed on the job • To recover workers' compensation benefits, injured party must demonstrate: • He/she is an employee • Both employer and employee are covered by state workers' compensation program • Injury occurred on the job 42-9 Consolidated Omnibus Budget Reconciliation Act (COBRA) • Ensures that when employees lose their jobs or have their hours reduced to level at which they are not eligible to receive medical, dental, or optical benefits from their employer, employees have right to continue receiving benefits under employer's policy for up to 18 months by paying the premiums for the policy • COBRA does not apply if: • Employee fired for gross misconduct • Employer decides to eliminate benefits for all current employees 4210 Employee Retirement Income Security Act (ERISA) • Federal law that sets minimum standards for most voluntarily-established pension and health plans in private industry to provide protection for individuals enrolled in these plans • Under ERISA, employers must provide pension/health plan participants: • Plan information (features and funding) • Assurances of fiduciary responsibility of those in charge of managing and controlling plan assets • Grievance and appeals process for participants to receive benefits from plan • Right to sue for benefits and breaches of fiduciary duty 4211 Occupational Safety and Health Act of 1970 (OSHA) • Requires every employer to "furnish to each of his employees employment free from recognized hazards that are likely to cause death or serious physical harm" • The Occupational Safety and Health Administration is responsible for setting safety standards under OSHA • The Occupational Safety and Health Administration is also responsible for enforcing the Act through inspections and levying of fines against violators 4212 Employment-at-Will Doctrine • Permits employer to fire employee for any reason or no reason at all • Exceptions: • Implied contract • Violation of public policy • Implied covenant of good faith and fair dealing • In states that have adopted any of these three exceptions, employees may be able to sue for wrongful discharge 4213 Employee Privacy in the Workplace • Employer privacy policies should cover matters such as employer surveillance policies, control of access to medical and personnel records, drug testing, and e-mail policies • Omnibus Crime Control and Safe Streets Act of 1968 • Employers cannot listen to private telephone conversations of employees or disclose the content of those conversations • Employers may ban personal calls and monitor calls for compliance, provided that they discontinue listening to any conversation once they determine it is personal • Violators may be subject to fines of up to $10,000 • Electronic Communications Privacy Act (ECPA) of 1986 • Employees' privacy rights extend to electronic forms of communication, including e-mail and cellular phones • ECPA outlaws intentional interception of electronic communications and the intentional disclosure/use of information obtained through such interception 4214 Employer Rights and Responsibilities: Foreign Workers • Immigration Reform and Control Act (1986): Requires employers to verify identity and eligibility of employees to work in the United States • Immigration Customs and Enforcement (ICE): Federal agency responsible for immigration worksite enforcement • Employers required to: • Confirm work authorization • Retain documentation for three years from the date of hire or one year after the employee is no longer employed • Failure to comply results in criminal and civil sanctions 4215 Labor Law • Wagner Act of 1935: Enacted to encourage formation of labor unions and provide for collective bargaining • Collective bargaining: Negotiations between employer and group of employees to determine conditions of employment • Taft-Hartley Act of 1947 (Labor Management Relations Act): Designed to limit some of the powers unions had acquired under Wagner Act • Note: Taft-Hartley Act was an amendment to Wagner Act; collectively referred to as National Labor Relations Act • Landrum-Griffin Act of 1959 • • • • Governs internal operations of labor unions Requires certain financial disclosures by unions Establishes civil and criminal penalties for financial abuses by union officials "Labor's Bill of Rights" (contained in Landrum-Griffin Act) designed to protect employees from their own unions 4216 Labor Law (cont'd) • National Labor Relations Board (NLRB) • Created by Wagner Act • Administrative agency formed to interpret and enforce National Labor Relations Act • Primary functions of NLRB include: • Monitoring conduct of employer and union during an election to determine whether workers want to be represented by a union • Preventing and remedying unfair labor practices by employers/unions • Establishing rules to interpret the National Labor Relations Act 4217 Good Faith Requirements of National Labor Relations Act • Both employer and employee bargaining unit representative must: • Meet at reasonable times and confer in good faith • Sign a written agreement if one is reached • When intent on terminating/modifying existing contract, give 60 days' notice to other party, with offer to confer over proposals, and give 30 days' notice to federal/state mediation services in event of pending dispute over new agreement • Neither strike nor engage in lockout during 60-day notice 4218 Strikes, Pickets, and Boycotts • Strike: Temporary, concerted withdrawal of labor • Picket: Designed to inform public (usually through public demonstration and/or speech) of labor dispute • Boycott: Refusal to deal with, purchase goods from, or work for a business 4219 Chapter 42 Hypothetical Case • James Cuthbert, J.D, one year removed from law school and practicing at the St Louis firm Gibson, Smith, and McGwire, PLLC, is on the fast track for partnership Cuthbert was a prized hire for Gibson, Smith, and McGwire; his imposing physical presence, disarming smile, and ambition enough for an entire courtroom of first-year attorneys, lead most to believe that Cuthbert will be offered a partnership in four years, far sooner than the standard seven years Summer came, and the Gibson firm made plans to field its best-ever recreational softball team The firm team competes annually in the Bar Association of Greater St Louis Softball League Attorneys participating in the league compete just as vigorously on the field as they in the courtroom, and law firms strive to earn bragging rights associated with a league championship A senior partner at the firm, Tom Hackman, has recruited Cuthbert to play first base for the team Cuthbert was at first reluctant to play, but he eventually agreed, realizing that impressing the partnership could happen on the playing field as well as the courtroom The Gibson team excels, powering its way to the Bar Association softball championship game against an impressive foe, the Micah A Mayo Personal Injury Law Firm In the bottom of the ninth inning of a tied championship game, with no one on base and two outs, Cuthbert comes to bat 4220 Chapter 42 Hypothetical Case (cont'd) • He swings for the fence and drives the softball to within five feet of a home run As he reaches third base, Hackman (the team's third-base coach) signals Cuthbert to stay, but he heads for home instead; glory is only 90 feet away, an inside-the-park home run would only add to his legend, and extra innings come with no guarantees Playing catcher for the Mayo firm is Albert Flaherty, an imposing figure himself; at six feet, five inches tall and 230 pounds, Flaherty is determined to use his height, weight, and mass to save the game for his employer Cuthbert and Flaherty collide, a cloud of dust surrounds home plate, and a sickening crack and scream are heard by all in attendance Cuthbert's right leg is severely broken, and he is out Reasonable minds might differ in terms of which hurts worse The Gibson firm loses after 10 innings, and the biggest question back at the office is, "What would have happened if Cuthbert had stayed on third?" Cuthbert is hospitalized; his medical bills and days out of work are accumulating • Is Gibson, Smith, and McGwire, PLLC legally liable for Cuthbert's injury? Is the firm ethically liable for Cuthbert's injury? 4221 Chapter 42 Hypothetical Case • Flaherty's Flowers, a landscaping business owned by Charles Flaherty, has long been a friend to Charleston, South Carolina's, immigrant community Flaherty has always welcomed new immigrants willing to put in a hard day's work at his business, and he has always paid them a fair wage But Flaherty has not been diligent about paperwork, and now he may be in trouble An agent from the Immigration Customs and Enforcement agency has come to his office demanding evidence that all of his employees are legally able to work in the United States • What documents should Flaherty be able to provide? What will Flaherty face if he's unable to come up with the documents? 4222 ... livable wage for all workers? Does the business community have a corresponding ethical obligation? 42-5 Wage and Hour Laws • Wage and hour laws: Federal and state laws that impose minimum wage and... employers • Three states require minimal employee contributions 42-8 Workers' Compensation Laws • State laws that provide financial compensation to employees or their dependents when covered employee... Refusal to deal with, purchase goods from, or work for a business 4219 Chapter 42 Hypothetical Case • James Cuthbert, J.D, one year removed from law school and practicing at the St Louis firm Gibson,