Employment law for human resource practice south western legal studies in business academic

Brief ContentsPreface xvi Acknowledgments xxiv CHAPTER 1 Overview of Employment Law 3 CHAPTER 2 The Employment Relationship 31 CHAPTER 3 Overview of Employment Discrimination 59 CHAPTER

Employment Law for Human Resource Practice

Employment Law for Human Resource Practice

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Brief Contents

Preface xvi

Acknowledgments xxiv

CHAPTER 1 Overview of Employment Law 3

CHAPTER 2 The Employment Relationship 31

CHAPTER 3 Overview of Employment Discrimination 59

CHAPTER 4 Recruitment, Applications, and Interviews 101

CHAPTER 5 Background Checks, References, and Verifying Employment

Eligibility 131

CHAPTER 6 Employment Testing 161

CHAPTER 7 Hiring and Promotion Decisions 193

CHAPTER 8 Affirmative Action 227

CHAPTER 9 Harassment 255

CHAPTER10 Reasonably Accommodating Disability and Religion 293

CHAPTER11 Work-Life Conflicts and Other Diversity Issues 329

PART 4 Pay, Benefits, Terms and Conditions of Employment 365

CHAPTER12 Wages, Hours, and Pay Equity 367

CHAPTER13 Benefits 401

CHAPTER14 Unions and Collective Bargaining 437

CHAPTER15 Occupational Safety and Health 479

v

PART 5 Managing Performance 513

CHAPTER16 Performance Appraisals, Training, and Development 515CHAPTER17 Privacy on the Job: Information, Monitoring, and Investigations 545

CHAPTER18 Terminating Individual Employees 583CHAPTER19 Downsizing and Post-Termination Issues 629

Glossary 665Case Index 687Subject Index 695

Preface xviAcknowledgments xxiv

C H A P T E R 1

Overview of Employment Law 3Heard at the Staff Meeting 3

U.S Employment Law Is a Fragmented Work in Progress 3

Sources of Employment Law 4

Substantive Rights Under Employment Laws 5

Nondiscrimination and Equal Employment Opportunity 6

Freedom to Engage in Concerted Activity and Collective Bargaining 6

Terms and Conditions of Employment That Meet Minimum Standards 6

Protection of Fundamental Rights 6

Compensation for Certain Types of Harm 6

Shero v Grand Savings Bank 7

Determining Which Employment Laws Apply 8

Public or Private Sector Employment 8

Unionized or Nonunion Workplace 9

Employer Size 9

Geographic Location 11

Government Contracts 11

Industry and Occupation 11

Historical Development of U.S Employment Law 11

Procedures for Enforcing Employment Laws 13

What Does an Employee Decide to Do When She Believes

That Her Rights Were Violated? 13

How Long Does the Employee Have to Bring a Case? 14

Can a Lawsuit Be Brought? By Whom? 14

Is There an Administrative Prerequisite to a Lawsuit? 16

Must the Employee Exhaust Internal Dispute Resolution

Mechanisms Before Proceeding? 17

Enforceability of Mandatory Arbitration Agreements 17

Davis v O ’Melveny & Meyers 19

Remedies for Violations of Employment Laws 24

EEOC v Federal Express 24

The Role of Managers in Legal Compliance 27

v i i

C H A P T E R 2The Employment Relationship 31The Importance of Determining Whether an Employment Relationship Exists 32

Who Is an Employee? 33 Independent Contractors 34 Baker v Flint Engineering & Construction 34 Salamon v Our Lady of Victory Hospital 38 Temporary Workers 41

Students 43 Volunteers 44 Partners 45 Other Issues Concerning Employee Status 47 Who Is the Employer? 48

Agency 48 Single, Integrated Enterprise 49 Joint Employers 50

Zheng v Liberty Apparel Co 50

C H A P T E R 3Overview of Employment Discrimination 59The Continuing Reality of Employment Discrimination 59

The Concept of Employment Discrimination 62 Protected Classes 63

Types of Discrimination 64 Disparate Treatment—A Closer Look 67 Types of Disparate Treatment Cases 67 Analyzing Pretext Cases 69

Vincent v Brewer Co 72 Laxton v GAP Inc 78 Adverse Impact—A Closer Look 81 Analyzing Adverse Impact Cases 83 Retaliation —A Closer Look 85 Analyzing Retaliation Cases 85 Moore v City of Philadelphia 86

PART 2 The Hiring Process

C H A P T E R 4Recruitment, Applications, and Interviews 101Recruitment 101

Discrimination in Recruitment 101 Recruitment Methods 102 Applications and Interviews 110 Application Process 110 EEOC v Target Corp 111 Preemployment Inquiries 115

Griffin v Steeltek 118

Statements by Employers 120

Stewart v Jackson & Nash 121

False Statements by Employees 123

Davis v The Board of County Commissioners of Doña Ana County 148

Verifying Employment Eligibility 151

The Immigration Reform and Control Act 153

C H A P T E R 6

Employment Testing 161Drug Tests 161

Lanier v City of Woodburn 163

Drug-Testing Procedures 166

Use of Drug Test Results 167

Medical Examinations 168

Medical Examinations and the ADA 169

Polygraphs and Honesty Tests 173

Scored Tests of Ability 174

Examining Test Items 174

Examining Test Results 175

Establishing That Tests Are Job-Related and Consistent with Business Necessity 176 EEOC v Dial Corp 177

Determining Appropriate Cutoff Levels for Test Scores 181

Facially Discriminatory Policies/Practices—BFOQ Defense 193

Everson v Michigan Department of Corrections 196

“Sex-Plus” Cases 199

Weight and Appearance 200

Contents ix

Sex-Stereotyping 202 Back v Hasting on Hudson Union Free School District 203 Subjective Criteria 206

Dunlap v Tennessee Valley Authority 209 Offering and Accepting Employment 212 Obstacles to Advancement on the Job 214 Promotions 214

Glass Ceilings 217 Seniority and the BFSS Defense 218

C H A P T E R 8Affirmative Action 227When Is Affirmative Action Required? 228

Government Contractors 228 Settlements and Court Orders 229 Distinguishing Legal Affirmative Action from Reverse Discrimination 230 The Legality of Affirmative Action Under Title VII 231

Johnson v Transportation Agency, Santa Clara County 231 The Legality of Affirmative Action Under the U.S Constitution 235 Petit v City of Chicago 236

Dean v City of Shreveport 239 Ingredients of Affirmative Action Plans 242 Reasonable Self-Analysis 243

Reasonable Basis for Affirmative Action 243 Reasonable Affirmative Actions 244 Effects of Affirmative Action 247 Diversity and Affirmative Action 247

C H A P T E R 9Harassment 255Harassment as a Form of Discrimination 255

“Because of Sex” 255 Recognizing Harassment 260 What Behaviors Constitute Harassment? 260 Harassment That Results in Tangible Employment Actions 260 Hostile Environment Harassment 262

Reeves v C.H Robinson Worldwide 264 When Are Harassing Behaviors Unwelcome? 268 Liability for Harassment 269

Harassment by Top Officials, Managers, and Supervisors 270 Hardage v CBS 272

Harassment by Coworkers or Third Parties 275 Engel v Rapid City School District 277

Eliminating Harassment 280

Harassment Policies and Complaint Procedures 280

Responding to Reports of Harassment 282

C H A P T E R 1 0

Reasonably Accommodating Disability and Religion 293Reasonable Accommodation of Disability 293

Disability 294

“Qualified Individual with a Disability” 297

Justice v Crown Cork and Seal Co 300

Reasonable Accommodation 304

The Process of Reasonably Accommodating Disability 305

What Makes an Accommodation Reasonable? 307

EEOC v Convergys Customer Management Group 309

When Does an Accommodation Impose Undue Hardship? 311

Reasonable Accommodation of Religion 312

Religion 312

Failure to Reasonably Accommodate Religion 313

Cloutier v Costco 316

Religious Advocacy and Religious Harassment 319

Religious Organization Exemption 322

C H A P T E R 1 1

Work-Life Conflicts and Other Diversity Issues 329Work-Life Conflicts and Employer Leave Policies 329

Family and Medical Leave Act 329

Stevenson v Hyre Electric Co 335

Bachelder v America West Airlines 339

Pregnancy Discrimination Act 345

Leave to Perform Civic Duties 346

Uniformed Services Employment and Reemployment Rights Act 346

Petty v Metropolitan Gov ’t of Nashville & Davidson County 347

Language Requirements and National Origin Discrimination 352

English Fluency and Accents 352

English-Only Rules 353

Discrimination Based on Sexual Orientation 355

Protection Under Federal Law 355

Protection Under State and Local Laws 358

Transgender and Transsexual Persons 358

PART 4 Pay, Benefits, Terms and Conditions of Employment

Determining Compliance with Wage and Hour Standards 370 Compensation Received 370

Compensable Time 371 Chao v Gotham Registry 372 Exemptions from FLSA Requirements 377 Martin v Indiana Michigan Power Company 381 Other Wage Laws 385

What About Farmworkers? 386 Limitations on Work Hours 387 Discrimination in Pay —Equal Pay Act 388 Proving Pay Discrimination Under the Equal Pay Act 389 Equal Work 389

Factors Other Than Sex 390 Vehar v Cole National Group 391 Comparable Worth 394 Pay Secrecy Policies 395

C H A P T E R 1 3Benefits 401What Benefits Must Employers Provide? 401

What Does ERISA Require? 401 Inform Employees About Their Benefits 403 Deliver on Promised Benefits 404

Provide Claims and Appeals Procedures 405 Manage Plans Wisely and in Employees ’ Interests—Fiduciary Duties 406 Livick v Gillette 407

Refrain from Interference or Retaliation 409 Pensions 410

Vesting and Participation 410 Types of Pension Plans 411 DiFelice v U.S Airways 416 Health Insurance 421 Legal Challenges to Managed Care 421 Maintaining Coverage—COBRA and HIPAA 422 Retiree Health Benefits 424

Vallone v CNA Financial 424 Discrimination and Benefits 427 Domestic Partner Benefits 429

C H A P T E R 1 4Unions and Collective Bargaining 437The Idea of Collective Bargaining 438

The National Labor Relations Act 439 Employee Rights Under the NLRA 440 Five Star Transportation v NLRB 440 Unfair Labor Practices 445 Union Organizing and Representation Elections 448 Union Organizing Campaigns 448

United Food and Commercial Workers Union, Local 204 v NLRB 449

Employer Responses to Union Organizing 453

Representation Election Procedures 457

Bargaining 462

Duty to Bargain in Good Faith 462

Pleasantview Nursing Home V NLRB 463

What Happens When Parties Cannot Reach Agreement? 467

How Safe Is “Safe Enough”? 480

R Williams Construction Co v OSHRC 482

How Is the OSH Act Enforced? 488

Recording and Reporting Requirements 491

Mine Safety and Health Act 492

Preventing Occupational Injuries and Illnesses 493

Workers’ Compensation 495

Exclusive Remedy 496

Arising Out of and in the Course of Employment 498

Wait v Travelers Indemnity Co 498

State Ex Rel Gross v Industrial Commission of Ohio 502

Responding to Workplace Injuries 507

C H A P T E R 1 6

Performance Appraisals, Training, and Development 515Performance Appraisals 515

Performance Criteria and Standards 517

Performance Appraisal Process 519

Raytheon Technical Services v Hyland 522

Feedback on Performance 527

Cortez v Wal-Mart Stores 528

Training and Development 530

When Is Training Legally Required? 532

Common Law Protection 547 Statutory Protection of Privacy 550 Handling Records and Employee Information 550 Personnel Records 550

Medical Information 551 Monitoring and Surveillance of Employees 553 Video Surveillance 554

Electronic Communications 555 Quon v Arch Wireless Operating Co and City of Ontario 559 Investigation of Employee Conduct 564

Searches 565 Warriner v North American Security Solutions 567 Interviews and Interrogations 569

Dietz v Finlay Fine Jewelry 569 Polygraphs 573

Acting on Results of Investigations 574

C H A P T E R 1 8Terminating Individual Employees 583Determining Whether a Termination Has Occurred —Constructive Discharge 583

Employment at Will with Exceptions 586 Impermissible Grounds for Termination 586 Breach of an Implied Contract 587 Dillon v Champion Jogbra 589 Retaliation for an Act Supporting Public Policy 594 Lloyd v Drake University 596

Whistleblower Protection Statutes 601 Discriminatory Termination 604 Ellis v United Parcel Service 605 Just Cause/Due Process 609 Unionized Employees 609 Public Employees 612 Civil Service and Tenure Laws 612 Constitutional Protections 613

D ’Angelo v School Board of Polk County, Fla 615 Montana Wrongful Discharge from Employment Act 619 Handling Terminations 622

C H A P T E R 1 9Downsizing and Post-Termination Issues 629Downsizing 629

The Decision to Downsize 630 Informing Employees Prior to Downsizing —WARN Act 632 Roquet v Arthur Andersen 634

Selecting Employees for Downsizing 637

Wittenburg v American Express 640

Early Retirement Offers 647

Effects of Bankruptcy on Employee Rights 649

This is a book about employment law, the set of legal requirements that govern theworkplace A distinction is often made between“employment law” and “labor law” (thelatter describing laws related to unions and collective bargaining), but I generally use theterm employment law to refer to both This book has two main objectives The first is toexplain the major issues and rules of employment law What things are legal matters?What does the law say about those matters? The second objective is to explain what em-ployment law means for human resource practice What is it that employers should bedoing to comply with the law? What is the legal reasoning behind this practical advice?

Special Features of This TextUnique Employment Life Cycle Approach

This dual purpose of understanding the substance of employment law and its implicationsfor human resource practice account for the way this book is organized The first threechapters provide broad overviews The remainder of the book traces the steps in the em-ployment process and addresses the particular legal issues associated with them We startwith issues that lead up to hiring and promotion, including recruitment, interviewing, back-ground checks, references, and employment testing We then turn to a range of issues thatarise when a person is on the job, including harassment, reasonable accommodation of dis-ability, compensation, benefits, performance appraisal, and occupational safety and health.The last two chapters of the book deal with issues related to the termination of employment.This structure is intended to highlight the legal issues that managers regularly confront.The employee life cycle approach to this text offers students the ability to understandthe employment process, from beginning to end, while considering the legal environ-ment and its implications for business success Walsh’s personnel law book provides asolid foundation for students to successfully navigate the always changing and rarelycertain areas of personnel law within an organization

Professor Sarah Sanders Smith, SPHR, Purdue University

Of all of the texts that I reviewed, this one has the most practical and usable advise forsoon-be-HR practitioners The life cycle approach is strong and the writing easy to read

Nancy K Lahmers, JD, The Ohio State University

Practical Focus

This book is full of advice for carrying out human resource activities in a lawful manner.These guidelines are general principles for sound human resource practice They cannot be—and do not purport to be—specific legal advice for particular situations that you might en-counter Only a trained legal professional thoroughly familiar with the details of your casecan provide the latter

This text offers a unique human resource perspective of employment law that is cally not afforded attention in other comparable texts

typi-Dr Kim LaFevor, Athens State University

x v i

Clippings This feature consists of brief synopses of recent cases, events, or studies thatillustrate the issues dealt with in each chapter The clippings should pique your interestand begin to show how employment law relates to real things that are happening in theworld around us.

I love the Clippings features—they are well chosen and give the students a great introinto why what we are covering is relevant to their businesses

Alexis C Knapp, Houston Baptist University

The Changing Workplace This feature adds a forward-looking flavor to the book byhighlighting contemporary developments in the workplace, the workforce, and humanresource practices that have particular implications for the law The business world isnothing if not dynamic Changes in the workplace raise new legal questions and point

to the types of legal disputes that we can expect to see more of in the future

Just the Facts This feature provides facts from some interesting and recent court sions Thinking through these cases and arriving at a decision is a great way to test yourgrasp of legal concepts In this feature, you are not told the outcomes of the cases; in-stead, you are given the information needed to make your own determinations (“justthe facts”) Use the citations provided to look up the decisions to check your conclusionsagainst the decisions of the courts Or maybe you can prevail upon your instructor to

deci-“spill the beans.”

Practical Considerations Employers need to follow many rules to meet their legal ligations to employees But legal compliance is not entirely cut-and-dried Managers havemany choices about how to comply with the law, and this feature highlights some ofthose choices

ob-Elements of a Claim In any situation that gives rise to a legal dispute, numerous factsmight be considered The facts that we deem most relevant and the order in which weconsider them go a long way toward determining the outcome of our deliberations.When judges decide cases, they typically rely upon established frameworks that spellout a methodology for deciding those cases Who has the burden of proof? What mustthe plaintiff show? What must the defendant show? In what order should certain facts beconsidered? This feature lays out these frameworks—the “elements” of particular legalclaims Grasping this information gives us real insight into how cases are decided Judgesstill exercise considerable discretion and judgment in applying these frameworks, butthey make the process of arriving at decisions in legal disputes far more systematic andconsistent than it would otherwise be

Practical Implications of the Law Each chapter in this book contains many tions for carrying out human resource activities in a lawful manner This advice appears

sugges-in italics to make it stand out from the rest of the text But the advice should still beconsidered in the context of the specific legal problems that it aims to help employersavoid It is important to know not only what to do, but also why those things should bedone

The law is a basic determinant of human resource practice and one that cannot beignored However, the law is best conceived of as providing a“floor,” rather than a “ceiling,”for human resource practices It establishes minimum standards of acceptable treatment

Preface xvii

of employees, but often it is sensible for employers—based on motivational, pragmatic,

or ethical considerations—to go well beyond the bare minimum legal requirements.Thus, our purpose in understanding what the law requires is not to identify“loopholes”that can be exploited or to advocate superficial measures that might look good on paperbut fail to realize the underlying purposes (e.g., equal employment opportunity) of thelaw Instead, this book encourages you to think about the “spirit”—and not merely the

“letter”—of the law It invites you to consider how to achieve these important social poses by implementing policies and practices that also make sense given the operationalrealities of the workplace

pur-Practical Advice Summary For easy reference, the practical advice sprinkled liberallythroughout chapters is collected at the end of each chapter This summary can be used as

a convenient“checklist” for legal compliance

Legal Cases

Each chapter contains three or four substantial excerpts from decisions in court cases.One of the things that is unusual (and admirable) about legal decision making is thatthe decision makers (e.g., judges) set down in writing their rationale for the decisionsthey make in the cases that are brought before them This gives us the opportunity toread firsthand accounts of legal disputes, to have the decision makers explain the rele-vant rules of law, and to see how those principles were applied to the facts of particularcases I describe the law and other cases for you as well, but there is nothing like readingcases to get a real feel for the law Getting comfortable with reading legal cases is a bitlike learning a new language It will take some doing, but with diligent effort and prac-tice, it will pay off in terms of enhanced ability to access and understand the law.The words in the case excerpts are the same as those you would find if you looked upthe cases online or in print However, to maximize readability, I have shortened the casedecisions by focusing on a brief statement of the facts, the legal issue, and (at greatestlength) the explanation of the decision maker’s rationale Where part of a sentence isremoved, you will see three dots ( ) Where more than part of a sentence is removed,you will see three stars (* * *) This is to alert you that text has been removed from thefull case decision Legal decisions are replete with numerous footnotes and citations toprevious cases that addressed similar questions In most instances, I have removed thecitations and footnotes from the case excerpts Occasionally, I have included in brackets[ ] a brief explanation of a legal term

What Is New in This Edition

This edition of Employment Law for Human Resource Practice retains the essential ture and focus of the previous editions Linking a thorough understanding of principles ofemployment law to advice on how to conduct human resource practice remains the cen-tral aim of this book Consistent with this aim, the book continues to be organized aroundstages in the employment process, from the formation of an employment relationshipthrough the termination of that relationship However, this edition incorporates substan-tial revisions and additions that are outlined next Users of this text should also note thatthe resources available to instructors and students, including the Web site accompanyingthe text, have been greatly expanded with this edition

struc-New Features

The Just the Facts and Practical Considerations features are new to this edition Both

of these features appear several times in each chapter They aim to engage students bydrawing them into puzzling over legal and practical problems These features also lend

themselves to lively classroom discussions Often, good questions are better learningtools than eloquently worded text passages.

Another change to this edition involves the Clippings feature Besides being almostentirely new compared to the previous edition, the “Clippings” have been integratedinto chapters rather than collected at the beginning of chapters The thought is that it

is more effective to present the “Clippings” within discussion of the legal concepts towhich they pertain than to refer back to them So “Clippings” fans need not despair.The“Clippings” have not gone away; they’ve just been moved

The end-of-chapter questions have also been substantially revised for this edition Formost chapters, there are now more questions and they are based on more recent cases.These questions lend themselves to class discussions, in-class quizzes, and mini-papers

New Cases

Over half (59 percent) of the excerpted cases are new from the previous edition My proach to selecting cases is to prefer recent cases that best capture contemporary circum-stances and the current state of the law Classic cases (e.g., Griggs v Duke Power) aregiven the attention they deserve, but through discussion in the text rather than by inclu-sion as excerpts If, through a lapse in taste or judgment, I have eliminated one of yourfavorite cases from the previous edition, chances are the case still appears somewhere inthis edition, most likely as a new end-of-chapter question

ap-Significant Revisions

Here are some highlights of the revised contents of this edition

• Chapter 1:This chapter includes three new excerpted cases The issue of awardingpunitive damages receives more extensive treatment Choice of a legal compliancestrategy is discussed Chapter cases include Davis v O’Melveny & Meyers (uncon-scionable arbitration agreements) and EEOC v Federal Express (punitive damages)

• Chapter 2:This chapter includes an updated discussion of distinguishing employeesfrom independent contractors Chapter cases include Salamon v Our Lady ofVictory Hospital (whether doctors are employees of hospitals or independentcontractors)

• Chapter 3:Two new cases are excerpted in this chapter There is more in-depthdiscussion of retaliation and the implications of the Supreme Court’s BurlingtonNorthern decision

• Chapter 4:A discussion of day laborers has been added Coverage of the ment of foreign nationals under the H-1B and other visa programs is expanded.Chapter cases include EEOC v Target Corp (discriminatory recruiting and

• Chapter 7:The chapter provides expanded discussion of discrimination againstcaregivers, discrimination in the interview process, and discrimination in promo-tions Chapter cases include Back v Hasting on Hudson Union Free School District(sex-stereotyping) and Dunlap v Tennessee Valley Authority (discriminatory inter-view process)

• Chapter 8:Constitutional challenges to affirmative action are more closely ined Discussion of the relationship between diversity programs and affirmative

exam-Preface xix

action is expanded Chapter cases include Dean v City of Shreveport (constitutionalchallenge to a consent decree requiring affirmative action).

• Chapter 9:Three new cases are excerpted in this chapter Coverage of the tive defense is expanded Chapter cases include Hardage v CBS (affirmativedefense)

affirma-• Chapter 10:Two new cases are excerpted in this chapter The ADA AmendmentsAct of 2008 is covered in some detail and integrated into a discussion of the ADA’srequirements Coverage of the issue of perceived disability is expanded Chaptercases include Justice v Crown Cork and Seal Co (perceived disability, direct threatstandard) and Cloutier v Costco (religious accommodation and appearance policies)

• Chapter 11:Two new cases are excerpted in this chapter There is enhanced coverage

of the FMLA, including the DOL’s revised regulations, issued in November 2008.Coverage of the USERRA is also expanded Recent developments in legal protectionsagainst sexual orientation discrimination are included Chapter cases include Stevenson

v Hyre Electric Co (adequate notice of the need for FMLA leave) and Petty v politan Gov’t of Nashville & Davidson County (reinstatement rights under USERRA)

Metro-• Chapter 12:Changes to the FLSA regarding the minimum wage are incorporated.There is new discussion regarding the blurring of work and nonwork time (e.g.,employees’ use of BlackBerrys and other communication devices to check e-mailand perform work from home) and its relationship to compensable time under theFLSA Chapter cases include Chao v Gotham Registry (staffing agency’s responsibil-ity for unauthorized overtime work) and Vehar v Cole National Group (Equal PayAct)

• Chapter 13:Two new cases are excerpted in this chapter There is expanded age of the fiduciary duties of employers under ERISA, particularly with respect tothe administration of defined contribution pension plans The provisions of thePension Protection Act of 2006 are outlined Chapter cases include Livick v Gillette(fiduciary responsibility when providing information about retirement benefits) andDiFelice v U.S Airways (fiduciary responsibility to 401(k) plan participants)

cover-• Chapter 14:Two new cases are excerpted in this chapter There is discussion of thefuture of the National Labor Relations Act Legal issues surrounding representationelections receive particular attention The status of card-check procedures forchoosing union representatives is discussed, along with the proposed Employee FreeChoice Act Chapter cases include Five Star Transportation v NLRB (concerted ac-tivity) and United Food and Commercial Workers Union, Local 204 v NLRB (inter-ference with employees’ NLRA rights during organizing campaigns)

• Chapter 15:Three new cases are excerpted in this chapter A discussion of the MineSafety and Health Act has been added Discussion of when injuries and illnesses

“arise out of and in the course of employment” is updated and expanded Chaptercases include Wait v Travelers Indemnity Co (compensability of injuries suffered by

a telecommuting employee) and State Ex Rel Gross v Industrial Commission of Ohio(effect of an employee’s violations of safety rules on eligibility for workers’ compen-sation benefits)

• Chapter 16:Two new cases are excerpted in this chapter Discussion of performanceimprovement programs is added Chapter cases include Raytheon Technical Services

v Hyland (defamatory performance appraisal) and Cortez v Wal-Mart Stores formance improvement program and age discrimination)

(per-• Chapter 17:Two new cases are excerpted in this chapter The privacy of employees’electronic communications receives added attention Chapter cases include Quon v.Arch Wireless Operating Co and City of Ontario (statutory and constitutional claimsbased on unauthorized access and disclosure of employee text messages)

• Chapter 18:Two new cases are excerpted in this chapter Discriminatory dischargesand constitutional protections against wrongful termination available to public em-ployees receive additional attention Chapter cases include Ellis v United Parcel Ser-vice (termination of an employee involved in an interracial relationship for violation

of a no-fraternization policy) and D’Angelo v School Board of Polk County, Fla.(termination of a school principal for advocating conversion to charter schoolstatus)

• Chapter 19:Two new cases are excerpted in this chapter Coverage of downsizing andits legal implications is expanded Discussion of restrictive covenants is updated andenhanced Chapter cases include Roquet v Arthur Andersen (notification requirementsunder the WARN Act), Wittenburg v American Express (age discrimination in RIFs),and Syncom Industries v Wood (enforceability of a noncompetition agreement)

Test Bank

www.cengage.com/blaw/walsh

The Test Bank questions for this edition not only test student comprehension of keyconcepts, but also focus on business application and ethical implications The questionshave been updated to reflect the new content and cases of the third edition and ex-panded to include hypothetical questions that ask what the student, as a human re-sources manager, should do in particular situations Donna J Cunningham of ValdostaState University edited and updated the Test Bank for the third edition

PowerPoint1 Slides

www.cengage.com/blaw/walsh

New to this edition, PowerPoint1slides have been created to highlight the key ing objectives in each chapter—including case summaries and hyperlinks to relevant ma-terials In addition, “Smart Practice” and “What Would You Do?” slides emphasizeapplying legal concepts to business situations (answers to these questions are provided

learn-in “Instructor’s Note” slides at the end of the presentation) The PowerPoint1 slideswere prepared by Donna J Cunningham of Valdosta State University

Text Companion Web Site

www.cengage.com/blaw/walsh

The companion Web site for this edition of Employment Law for Human ResourcePractice has been greatly enhanced to streamline necessary resources In addition to pro-viding access to the Instructor’s Manual, Test Bank, PowerPoint1slides, and Court CaseUpdates, the Web site now offers links to the following: important labor and employ-ment law sites, labor and employment law blogs, legal forms and documents, free legalresearch sites (comprehensive and circuit-specific), help in the classroom, labor andemployment law directories, departments, agencies, associations, and organizations In

Preface xxi

addition, a list of recent labor and employment law cases with links to each full case isavailable.

Court Case Updates

www.cengage.com/blaw/casesSouth-Western’s Court Case Updates provide monthly summaries of the most impor-tant legal cases happening around the country

Westlaw1 Access

www.westlaw.comWestlaw1, West Group’s vast online source of value-added legal and business informa-tion, contains over 15,000 databases of information spanning a variety of jurisdictions,practice areas, and disciplines Qualified instructors may receive ten complimentary hours

of Westlaw1for their course (certain restrictions apply; contact your South-Western salesrepresentative for details)

Business Law Digital Video Library

www.cengage.com/blaw/dvlThis dynamic online video library features over sixty video clips that spark class dis-cussion and clarify core legal principles, including fourteen videos that address employ-ment law topics (such as employment at will, and employment discrimination, andemployee privacy) The library is organized into four series:

• Legal Conflicts in Businessincludes specific modern business and e-commercescenarios

• Ask the Instructorcontains straightforward explanations of concepts for studentreview

• Drama of the Lawfeatures classic business scenarios that spark classroomparticipation

• LawFlixcontains clips from many popular films, including Bowfinger, The MoneyPit, Midnight Run, and Casino

Access to the Business Law Digital Video Library is available at no additional charge as

an optional package with each new student text Contact your South-Western sales resentative for details

rep-Business Law Community Web Site

www.cengage.com/community/blawVisit South-Western’s Community Web site for a wealth of resources to help you de-liver the most effective course possible, including our“Great Ideas in Teaching BusinessLaw” section Our Community Web site offers teaching tips and ideas for making thesubject interesting and appealing to your students Ideas include class presentations, dis-cussion topics, research projects, and more

Note to the Instructor

Since I have been touting the contents of this book, it is only fair to acknowledge materialthat is largely omitted Beyond a glancing blow struck in Chapter 1, this book providesrelatively little information about such matters as the legislative process, courtroom pro-cedures, and the historical development of employment laws These are all very worth-while topics, but they are not emphasized in this book because its focus is the currentsubstance of employment law and the implications for human resource practice Thetreatment of labor law in this book does not reach a number of the more specialized

issues in this area, but I do attempt to show how labor law continues to be relevant toboth unionized and nonunion workplaces Additionally, while cross-national compari-sons can enhance our understanding of U.S law, a comparative perspective is beyondthe scope of this book.

Dedication

In memory of Martin Walsh

Preface xxiii

Thanks to the many faculty and students who have used Employment Law for Human source Practice I hope that this edition will serve your needs even better If you are notpresently using this book, I hope that you will consider adopting it Please do not hesitate

Re-to contact me regarding any questions you have about the book (and ancillary materials) orsuggestions for improvement (walshdj@muohio.edu)

Many thanks also to Krista Kellman, Developmental Editor; Darrell Frye, ContentProduction Manager; Ruchika Vij, Senior Project Manager; Marianne Miller, FreelanceConsultant; Jeff Weaver, Production Technology Analyst; Erin Donohoe, Freelance Con-sultant; and numerous others at South-Western and its business partners Being an au-thor provides a small glimpse of the “cast of thousands” who are needed to produce awork of this type

Finally, I wish to thank and publicly acknowledge the following individuals who vided valuable comments and suggestions that helped shape this third edition:

pro-Frederick R BrodzinskiThe City College of New YorkLisa A Burke

University of Tennessee at ChattanoogaBruce W Byars

University of North DakotaTerry Conry

Ohio UniversityDiya DasBryant UniversityThomas DaymontTemple UniversityJason M HarrisAugustana CollegeLinda Sue FichtIndiana University, KokomoMichael A Katz

Delaware State UniversityAlexis C Knapp

Houston Baptist University

Kim LaFevorAthens State UniversityNancy K LahmersThe Ohio State UniversitySusan Lubinski

Slippery Rock UniversityJeanne M MacDonaldDickinson State UniversityJames F Morgan

California State University, ChicoDiane M Pfadenhauer

St Joseph’s CollegeSarah Sanders SmithPurdue University North CentralVicki Fairbanks Taylor

Shippensburg UniversityChristine M WestphalSuffolk University

x x i v

C H A P T E R 1

Overview of Employment Law

The purpose of this first chapter is to present a big picture of the body of law that we willapply to particular human resource practices throughout this book The chapter contains

an overview of employment laws, the rights they confer on employees, and the processesinvolved in enforcing these laws Special attention is given to recent developments in theuse of alternatives to litigation to resolve employment disputes

Heard at the Staff Meeting

Congratulations on your new job as human resources manager! You pour a cup of coffeeand settle into your seat to hear the following reports from staff members:

“We have a number of jobs in our production facilities that are physically demanding

To avoid hiring people who cannot do these jobs or might hurt themselves, we havedecided to ask all applicants whether they have any health problems that might inter-fere with their ability to work.”

“Some of our people have been working long hours to develop a new product line Anadministrative assistant has complained about not receiving overtime pay for the fifty-hour weeks that she has been putting in Because we pay her a salary, we don’t have

to worry about overtime, right?”

“A number of our employees are in the Army Reserves One of them has been ployed to Iraq twice and has missed over two years of work She will be returning tothe United States soon and has indicated that she wants her job back Her supervisorbelieves that since her job skills are now out of date and she might be deployed again

de-at any time, it would be best not to reinstde-ate her.”

“We need to cut employment drastically at one of our facilities We have asked thesupervisors to use their best judgment in deciding who should be let go To minimizedisruption, we’ll announce the downsizing two weeks in advance.”

You get up to get another—large—cup of coffee and feel very fortunate that you werepaying attention during that employment law class you took

What legal issues emerged during this staff meeting? What should this company bedoing differently to better comply with the law? Although you might not encounter thismany legal problems in one sitting, employment law pervades virtually every aspect ofhuman resource practice and managers regularly confront employment law questions.U.S Employment Law Is a Fragmented

Work in Progress

“Just tell me what the law is, and I’ll follow it.” Were matters only that simple! No singleset of employment laws covers all workers in the United States Instead, the employmentlaw system is a patchwork of federal, state, and local laws Whether and how laws applyalso depend on such things as whether the employees work for the government or in theprivate sector, whether they have union representation, and what the size of the em-ployer is Our principal focus will be on federal laws because these reach most widely

3

across U.S workplaces and often serve as models for state and local laws However, wewill also mention significant variations between employment laws in different areas ofthe country and types of workplaces.

There is another problem with the idea of just learning the legal rules and adhering tothem Employment law is dynamic New law is created and old law is reinterpreted con-tinuously Further, changing workplace practices pose new legal questions At any point

in time, there are“well-settled” legal questions on which there is consensus, other ters that are only partially settled (perhaps because only a few cases have arisen or be-cause courts have issued conflicting decisions), and still other questions that have yet to

mat-be considered by the courts and other legal decision makers Attaining a solid grasp ofemployment law principles will allow you to make informed judgments in most situa-tions You must be prepared to tolerate some ambiguity and keep learning, however, asthe law of the workplace continues to develop

Sources of Employment LawWhat comes to mind when you think of the law? Judges making decisions in courtcases? Congress legislating? The Constitution? All of these are parts of the law in generaland employment law in particular Legal rules governing the workplace are found in theU.S Constitution and state constitutions, statutes enacted by legislatures, executive or-ders issued by presidents and governors, regulations created by administrative agencies,and judicially authored “common law.” All of these pieces of law are regularly inter-preted and expanded upon by the courts as they are presented with specific legal dis-putes (cases) to decide Distinguishing between these basic sources of law is usefulbecause some forms of law are more authoritative than others, apply to particular groups

of employees, or provide for different enforcement mechanisms and remedies

Constitutions

Constitutions are the most basic source of law in that all other laws must conform orrisk being struck down as unconstitutional Constitutions address the relationships be-tween different levels of government (e.g., states and the federal government) and be-tween governments and their citizens A legal claim based on a constitution mustgenerally assert a violation of someone’s constitutional rights by the government (in legalparlance, the element of “state action” must be present) In practical terms, this meansthat usually only employees of government agencies—and not employees of private cor-porations—can look to the U.S Constitution or state constitutions for protection in theworkplace Examples of constitutional protections available to government employees in-clude speech rights, freedom of religion, protection from unreasonable search and sei-zure, equal protection under the law, and due process rights

Statutes

In the U.S democratic system, voters elect representatives to legislative bodies such asthe U.S Congress These bodies enact laws, or statutes, many of which affect the work-place Among the many important statutes with implications for human resource prac-tice that we will consider are Title VII of the Civil Rights Act of 1964, the National LaborRelations Act, the Equal Pay Act, the Americans with Disabilities Act, the Family andMedical Leave Act, and the Employee Retirement Income Security Act

Executive Orders

The executive branch of government has the power to issue executive orders that affectthe employment practices of government agencies and companies that have contracts to

provide goods and services to the government Executive orders function much like tutes, although they reach fewer workplaces and can be overridden by the legislativebranch The most important example of an executive order affecting employment is Ex-ecutive Order (E.O.) 11246, which establishes affirmative action requirements for compa-nies that do business with the federal government.

sta-Regulations, Guidelines, and Administrative Decisions

When Congress enacts a statute, it often creates an agency, or authorizes an existing one,

to administer and enforce that law Legislators do not have the expertise (and sometimes

do not have the political will) to fill in all the details necessary to put statutes into tice For example, Congress mandated in the Occupational Safety and Health Act thatemployers provide safe workplaces, but largely left it to the Occupational Safety andHealth Administration (OSHA) to give content to that broad principle by promulgating(creating) safety standards governing particular workplace hazards Formal regulationsare put in place only after an elaborate set of requirements for public comment and re-view has been followed Regulations are entitled to considerable deference from thecourts (generally, they will be upheld when challenged), provided that the regulationsare viewed as reasonable interpretations of the statutes on which they are based.1Agen-cies also contribute to the law through their decisions in individual cases that arebrought before them

prac-Common Law

Many disputes are resolved through courts interpreting and enforcing the types of lawdiscussed earlier However, sometimes courts are asked to resolve disputes over mattersthat have not been objects of legislation or regulation Over time, courts have recognizedcertain common law claims to remedy harm to people caused by other people or com-panies Common law is defined by state courts, but broad similarities exist across states.One branch of common law is the traditional role of the courts in interpreting and en-forcing contracts The other branch is recognition of various tort claims for civil wrongsthat harm people Tort claims relevant to employment law include negligence, defama-tion, invasion of privacy, infliction of emotional distress, and wrongful discharge in vio-lation of public policy

Substantive Rights Under Employment Laws

Employment laws confer rights on employees and impose corresponding ties on employers Paradoxically, the starting point for understanding employee rights

responsibili-is a legal doctrine holding that employees do not have any right to be employed or toretain their employment This doctrine, known as employment at will, holds that inthe absence of a contract promising employment for a specified duration, the employ-ment relationship can be severed at any time and for any reason not specifically pro-hibited by law Statutory and other rights conferred on employees have significantlyblunted the force of employment at will But in the absence of any clear right that em-ployees can assert not to be terminated, employment at will is the default rule that per-mits employers to terminate employment without needing to have“good” reasons fordoing so

Broadly speaking, employees have the following rights under employment laws

1 Chevron U.S.A., Inc v National Resources Defense Council, 467 U.S 837 (1984).

Chapter 1: Overview of Employment Law 5

Nondiscrimination and Equal Employment Opportunity

A central part of employment law is the set of protections for employees against ination based on their race, sex, age, and other grounds The equal protection provisions

discrim-of the U.S Constitution (Fourteenth Amendment), Title VII discrim-of the Civil Rights Act discrim-of

1964, the Age Discrimination in Employment Act, the Equal Pay Act, and the Americanswith Disabilities Act are examples of federal laws that prohibit discrimination in employ-ment and express the societal value of equal employment opportunity

Freedom to Engage in Concerted Activity and Collective Bargaining

Another approach to protecting workers is to provide them with greater leverage in ing with their employers and negotiating contractual standards of fair treatment Laborlaws exist to protect the rights of employees to join together to form labor unions andattempt to improve their terms and conditions of employment through collective bar-gaining with their employers Important federal labor laws include the National LaborRelations Act, the Railway Labor Act, and the Civil Service Reform Act (covering collec-tive bargaining by federal government employees)

deal-Terms and Conditions of Employment That Meet MinimumStandards

Some employment laws protect workers in a more direct fashion by specifying minimumstandards of pay, safety, and other aspects of employment Federal laws exemplifying thisapproach include the Fair Labor Standards Act (minimum wage and overtime pay re-quirements), the Occupational Safety and Health Act (workplace safety standards), andthe Family and Medical Leave Act (leave policy requirements)

Protection of Fundamental Rights

Some legal challenges to employer practices are based on broader civil liberties andrights Public employees have availed themselves of the First Amendment’s guarantees

of freedom of speech, religion, and association A variety of privacy protections exist, cluding the Fourth Amendment (prohibiting unreasonable search and seizure), privacytorts, and the Fair Credit Reporting Act (limiting access to and use of information aboutemployees when gained through third parties)

in-Compensation for Certain Types of Harm

Employees can take legal action to recover damages when, for example, they are the tims of employer negligence, are defamed, or have emotional distress inflicted uponthem; their employment contract is breached; or they are wrongfully discharged

vic-In the Shero v Grand Savings Bank case that follows, a terminated employee sues hisemployer Although one might sympathize with the employee under the facts of thiscase, it is apparent from this decision that employment at will still presents a large hur-dle for terminated employees to clear

This excerpt from Shero v Grand Savings Bank is the first of a number of ment law cases that you will have the opportunity to read in this text The words arethose of the judge who wrote the decision You would find the same words if you looked

employ-up the case (which you can easily do by using an online legal database and searching foreither the names of the parties or the citation that appears below the names of the par-ties) The only difference is that we have shortened the case by selecting only the mostessential details and by removing internal citations and footnotes By seeing the law

SHERO v GRAND SAVINGS BANK

161 P.3d 298 (Okla 2007)

O P I N I O N B Y J U S T I C E L A V E N D E R :

The issue in the present cause is whether termination

of an at-will employee for his refusal to dismiss his

pending claims against a third party…constitutes a

violation of Oklahoma’s public policy such that would

support a wrongful discharge action against the

em-ployer under the limited public policy exception to the

employment-at-will doctrine We answer in the

nega-tive * * * The trial court correctly dismissed Plaintiff/

Appellant’s Petition in this matter and we therefore

affirm

The facts giving rise to Employee’s termination are

as follows: At some point during Employee’s

employ-ment at the Bank, Employee became a party to

liti-gation initiated by the City of Grove, which was a

customer of the Bank Employee filed…[a]

counter-claim in that action, seeking attorney fees and costs

for defending the action in addition to a declaratory

judgment that certain documents sought were public

records subject to inspection, copying and/or

mechan-ical reproduction pursuant to the Open Records Act

Bank insisted that Employee abandon his counterclaim

against the City of Grove, and relayed that Employee

would be terminated if he persisted with his

counter-claim Employee refused to drop his counterclaim

against the City of Grove and he ultimately was forced

to resign and/or was terminated from his employment

Employee asserts, and Bank does not dispute the fact,

that Employee ultimately prevailed in his action

against the City of Grove * * *

The longstanding employment at-will rule is

gener-ally that an employment contract is of an indefinite

duration and may be terminated without cause at any

time without the employer incurring liability for

breach of contract In Burk [an earlier decision of

this court], we created“the Burk tort” with our

adop-tion of the public policy excepadop-tion to the at-will

termi-nation rule to apply “in a narrow class of cases in

which the discharge is contrary to a clear mandate of

public policy as articulated by constitutional, statutory

or decisional law.” At the time of our recognition of

this narrow tort, we further provided,“[in light of the

vague meaning of the term public policy we believe the

public policy exception must be tightly circumscribed.]”

“An actionable tort claim under Oklahoma law is where

an employee is discharged for refusing to act in

viola-tion of an established and well-defined public policy or

for performing an act consistent with a clear and pelling public policy.”

com-Plaintiff/Employee in this action alleges wrongfultermination “in violation of the public policies of theState of Oklahoma,” and cites only one alleged source

of the purported public policy, which is the Open cords Act The precise question before us is whetherthis Act is a basis for an action in tort against an em-ployer for an at-will employee’s discharge * * * TheOpen Records Act generally provides for public inspec-tion and copying of records… * * * While the OpenRecords Act expressly sets forth the public policy con-cerning the people’s right to know and be fully in-formed about their government, it is silent as to anypublic policy against conditioning continued employ-ment on the abandonment of claims pursuant to theAct It is the latter alleged public policy which must bededucible from the Act in order for the Employee tostate a claim under the limited Burk tort public policyexception to the employment at–will doctrine * * *While we recognize the Open Records Act speaksexplicitly of public policy—specifically concerning thepeople’s right to knowledge and information abouttheir government—in keeping with that particularpublic policy, Employee here made the choice to foregohis employment with the Bank and ultimately wasvictorious in his pursuit of his rights and remediesafforded under the Open Records Act in his actionagainst the City of Grove Employee was not ordered

Re-to perform an illegal act or denied an opportunity Re-toexercise his legal rights such that might serve as publicpolicy grounds giving rise to liability for an at-willemployee’s discharge Rather, the Bank’s decision toterminate Employee upon Employee’s refusal to aban-don claims against Bank’s customer was a private busi-ness decision * * *

In Hayes, while we openly criticized the employer’sdecision to terminate an employee for uncovering co-employee embezzlement and reporting it to the com-pany hierarchy, and specifically noted“we might eventhink it is morally wrong,” we nevertheless concluded

“the Burk tort does not protect an employee from hisemployer’s poor business judgment, corporate foolish-ness or moral transgressions, but only protects the em-ployee from termination by the employer when suchdischarge has violated a clear mandate of publicpolicy.” Thus, even if we believe Bank’s decision to

Chapter 1: Overview of Employment Law 7

applied to particular factual circumstances and reading the judges’ rationales for theirdecisions, you will gain a fuller understanding of the law.

When reading cases, it is important to pay attention to how the legal issues areframed One might be tempted to say that the legal issue in the Shero case was whetherthe bank had the right to terminate this employee for maintaining a lawsuit against one

of its customers, or more generally, whether the termination was fair But these ments do not get to the heart of the legal issue in this case Under employment at will,

state-a terminstate-ated employee hstate-as the burden of proving thstate-at he or she hstate-ad some specific rightnot to be terminated under the circumstances In the Shero case, the terminated em-ployee looked to the public policy exception to employment at will as the basis for hiswrongful discharge claim Thus, the court defined the issue to be decided as “whethertermination of an at-will employee for his refusal to dismiss his pending claims against

a third party…constitutes a violation of Oklahoma’s public policy such that would port a wrongful discharge action against the employer under the limited public policyexception to the employment-at-will doctrine.” The court’s mission was to decidewhether the employee’s actions were linked to a clear public policy that would be under-mined if employees could be fired for acting as this employee did The court was notdeciding whether the termination was wise, necessary, or fair Not finding a sufficientpublic policy basis for the wrongful discharge claim, the court dismissed the case Theemployee was left without a legal remedy for his termination

sup-Note also that the court draws upon earlier decisions to decide this case Courtssometimes change their minds about the law, but they have a strong preference for ad-hering to prior decisions (“precedents”)—or at least giving the appearance of doing so.This desire for consistency and stability in the law is sometimes captured by the Latinphrase stare decisis (“let the decision stand”)

Determining Which Employment Laws ApplyBecause U.S employment law is a patchwork of legal protections that apply to somegroups of employees but not others, it is necessary to briefly elaborate on some of thekey contextual factors that determine which, if any, employment laws apply in a givensituation You need to consider these factors when presented with situations posing po-tential legal problems

Public or Private Sector Employment

The legal environment differs substantially depending on whether public sector (i.e.,government) employees or private sector employees are being considered Public and

terminate Employee in this case was contrary to good

business decision-making or even morally wrong, we

find the termination violates no clear mandate of

pub-lic popub-licy * * *

In sum, we hold the trial court correctly dismissed

Employee’s Petition for failure to state a claim

Employer/Bank did not violate public policy when it

conditioned Employee’s employment upon Employee’s

abandonment of his counterclaim pursuant to the Open

Records Act against the Employer/Bank’s customer * * *

em-3 Do you agree with the court’s decision? Why orwhy not? How far should courts go in protectingemployees from wrongful termination?

private sector does not refer to whether a company trades its stock on the stock market(i.e., publicly traded versus privately held companies), but rather whether the employer is

a government agency or a corporation (including private, nonprofit agencies) Public ployees make up roughly 15 percent of the workforce One reason that public employeesare a different case has already been mentioned In general, constitutional protectionspertain only to public employees and not to private sector employees Beyond this, pub-lic employees are often covered by state or municipal civil service laws (regulating hiring,promoting, and discharging practices) and tenure provisions

em-Not all the comparisons favor public employees Public employees are subject to strictions on their political activities (Hatch Acts), excluded from coverage under the Na-tional Labor Relations Act and the Occupational Safety and Health Act, and limited intheir ability to sue for violations of federal law This last point should be underscored Aseries of U.S Supreme Court decisions has held, based on the Eleventh Amendment andthe broad concept of state sovereignty, that state governments cannot be sued by theirpublic employees, whether in state or federal court, for violations of such federal employ-ment laws as the Fair Labor Standards Act and the Americans with Disabilities Act(however, the Court reached the opposite decision regarding suits under the Family andMedical Leave Act).2Thus, even though these federal laws still apply to state governmentemployees, options for enforcement are limited

re-Unionized or Nonunion Workplace

When employees opt for union representation and negotiate a collective bargainingagreement with their employer, the employer is contractually committed to live up tothe terms of the agreement In contrast to the vast majority of employees who lack em-ployment contracts, unionized employees have many of their terms and conditions ofemployment spelled out in enforceable labor agreements These contractual terms typi-cally go well beyond the minimum requirements of the law (e.g., by providing for dailyovertime rather than the weekly overtime required by federal law) Employers in union-ized workplaces are also more limited in their ability to make unilateral changes in work-place practices without first negotiating those changes with unions Discipline ordischarge of a unionized employee is contractually limited to situations where the em-ployer can establish “just cause” for the discipline or discharge, which stands in starkcontrast to the at-will employment of most nonunion workers

Employer Size

The legal environment also varies depending on the size of the employer Size can bevariously construed For purposes of some statutes, including the Fair Labor StandardsAct and the National Labor Relations Act, size is measured in financial terms and cover-age is limited to employers that exceed a minimum level of sales (e.g., the general mini-mum for coverage under the FLSA is $500,000) More often, statutes specify a minimumemployer size in terms of number of employees For instance, both Title VII of the CivilRights Act and the Americans with Disabilities Act limit coverage to companies thathave fifteen or more employees, the Age Discrimination in Employment Act applies toemployers with twenty or more employees, and the Family and Medical Leave Act ap-plies only to employers with fifty or more employees (within a seventy-five-mile radius

if the company has multiple work sites) These size limitations are not trivial Considerthe following data on firm size (note that these figures pertain to entire companies ratherthan individual establishments such as offices and plants)

2 Alden v Maine, 527 U.S 706 (1999); University of Alabama v Garrett, 531 U.S 356 (2001); Nev Dep ’t of Human Res v Hibbs, 538 U.S 721 (2003).

Chapter 1: Overview of Employment Law 9

Table 1.1 shows that 89.5 percent of firms have fewer than twenty employees, whichmeans the major federal employment laws exclude the vast majority of U.S firms Thereare two countervailing factors to consider, however First, although the major federal em-ployment laws do not cover most firms due to their small size, the minority of companiesthat are covered nonetheless employ most U.S workers (because each larger company em-ploys many more people) Thus, the approximately 10 percent of all firms that have twenty

or more employees employ fully 81.7 percent of the workforce The second important fact

is that most states have enacted laws that mirror federal employment laws and that apply tosmaller workplaces In Ohio, for example, the Ohio Civil Rights Act covers employeeswhose employer has four or more employees.3 Thus, in Ohio, employers with betweenfour and fourteen employees would fall under state law, but not federal law, whereas em-ployers with fifteen or more employees would be subject to both federal law and state law.Only employers with fewer than four employees would not be subject to civil rights statutes

There is another aspect to the size issue Counting the number of employees that anemployer has is more complex than it first appears For one thing, employment levels canchange rapidly A smaller company could easily vacillate above and below the minimumnumber of employees specified in a statute When must the employer have the requisitenumber of employees? At the time of the alleged violation? When the claim is filed? Oversome longer period of time?

Another set of questions in regard to size stems from the use of different types of ployees How, for example, should part-time employees be counted? Temporary workers?Congress addressed these questions partially in Title VII of the Civil Rights Act of 1964(parallel language appears in other employment statutes) An employer is defined assomeone“who has fifteen or more employees for each working day in each of twenty ormore calendar weeks in the current or preceding calendar year….”4 “Current” calendaryear refers to the year in which the alleged discrimination occurred The Supreme Courthas ruled that the proper method for counting employees is the payroll method Underthis method, an employee is counted for each full week between when she is hired andwhen she leaves employment, regardless of the number of hours she worked during thoseweeks.5Thus, employers should use the payroll method to track how many employees theyhave and realize that growth of their businesses may be accompanied by changes in thelegal environment

em-TABLE 1.1 EMPLOYMENT SIZE OF FIRMS (2005)

E M P L O Y M E N T S I Z E ( N O O F E M P L O Y E E S )

F I R M S E M P L O Y E E S ( n ) ( % ) ( n ) ( % )

Source: Adapted from U.S Census Bureau, Statistics of U.S Business, viewed March 14, 2008 (http://www.census.gov).

3 O.R.C Ann § 4112.01(A) (2) (2008).

4 42 U.S.C.A § 2000e(b) (2008).

5 Walters v Metropolitan Educational Enterprises, Inc., 117 S Ct 660 (1997).

Geographic Location

An employee’s rights are affected by where he happens to live Some states and cities gomuch further than others, and also further than the federal government, in conferringrights on workers States and cities have become increasingly important as sources ofemployment laws in recent years The interrelationship between federal and state laws

is a complex legal matter At the risk of oversimplification, states are free to enact lawspertaining to issues not addressed by federal law State laws also can match or exceed theprotections available under federal laws dealing with the same matters, but they cannotreduce the rights employees have under federal law Thus, state laws are important notonly because they reach smaller workplaces than federal employment laws, but also be-cause they sometimes provide employees with rights not available under federal law Ex-amples of state laws that often exceed federal law include higher minimum wages in somestates, laws regulating the handling of personnel records, limitations placed on drug andHIV testing, and prohibitions against discrimination based on sexual orientation

Government Contracts

Federal, state, and local governments sometimes use the contracting process as leverage

to get employers to implement desired workplace practices Employers that contract to

do business with the federal government (e.g., defense contractors, construction nies, computer suppliers) and that meet certain other criteria are required to engage inaffirmative action as a condition of their contracts Likewise, both the Drug-Free Work-place Act (requiring that employers take certain actions to stop workplace drug use) andthe Rehabilitation Act (prohibiting discrimination against and requiring affirmativeaction on behalf of disabled persons) apply to private employers based on their contractswith the federal government

compa-Industry and Occupation

Most employment laws apply to any industry, but some are more narrowly targeted Forexample, the Omnibus Transportation Employees Testing Act of 1991 mandates exten-sive drug (and alcohol) testing, but only for employees in industries regulated by theDepartment of Transportation (e.g., airlines, railroads, trucking companies) Likewise,employees in the historically very dangerous mining industry are not covered under theOccupational Safety and Health Act, but instead under a separate statute, the MineSafety and Health Act Agricultural workers, despite their generally poor working condi-tions, are wholly or partly excluded from the protection of many employment laws,including the National Labor Relations Act, the Fair Labor Standards Act, and stateworkers’ compensation statutes An important example of an occupation-based distinc-tion is the National Labor Relations Act’s exclusion of supervisors and managers

Historical Development of U.S Employment LawDetailing what the law said previously and how it has changed over time is beyond thescope of this book However, you should have some sense of when employment lawscame into existence Figure 1.1 is a timeline of major employment laws (ignoring, forthe most part, amendments to these laws)

At the turn of the twentieth century, employment law was virtually nonexistent in theUnited States The first significant departure from an unregulated workplace was theadoption of state workers’ compensation laws to deal with the severe problem of injuredand disabled workers A major breakthrough came in the 1930s, when the National La-bor Relations Act and the Fair Labor Standards Act were enacted Employment law took

Practical

Considerations

How should employers

that operate in different

states and cities deal

with lack of uniformity

in employment laws?

Chapter 1: Overview of Employment Law 11

large strides forward in the 1960s with the passage of major antidiscrimination statutes,including the Civil Rights Act of 1964, the Age Discrimination in Employment Act, andthe Equal Pay Act Common law claims, particularly for wrongful discharge, came intovogue in the late 1970s and throughout the 1980s Benefits have been the object of anumber of employment laws since the 1970s, with health insurance and pensions being

at the center of recent legislative efforts

Legislation does not emerge in a vacuum Nor do legislators simply wake up one day andsee the need for it Many of our employment laws reflect the work of social movements,organized efforts to create needed changes in workplaces and society The workers’ com-pensation statutes adopted in the early part of the twentieth century were influenced bythe progressive movement that addressed the social problems of that time The NationalLabor Relations Act was enacted in 1935 during the early part of the New Deal and inthe depths of the Depression The act both reflected and furthered the efforts of ordinaryworkers and their unions, joined together in the labor movement, to gain some control

FIGURE 1.1 Timeline of Major U.S Employment Laws

1900 Workers’ Compensation (most states between 1911 and 1920)

1920 Railway Labor Act (1926)

National Labor Relations Act (Wagner Act) (1935) Social Security Act (1935)

Fair Labor Standards Act (1938)

1940 Labor-Management Relations Act (Taft-Hartley Act) (1947)

1960 Equal Pay Act (1963)

Title VII of the Civil Rights Act (1964) Executive Order 11246 (1965) Age Discrimination in Employment Act (1967)

1970 Occupational Safety and Health Act (1970)

Rehabilitation Act (1973) Employee Retirement Income Security Act (1974) Pregnancy Discrimination Act (1978)

1980 Common Law Wrongful Discharge Claims (majority of states adopted one or more of these from the

late 1970s through the 1980s) Consolidated Omnibus Budget Reconciliation Act (COBRA) (1985) Immigration Reform and Control Act (1986)

Employee Polygraph Protection Act (1988) Worker Adjustment and Retraining Notification Act (1988)

1990 Americans with Disabilities Act (1990)

Older Workers Benefit Protection Act (1990) Civil Rights Act of 1991 (1991)

Family and Medical Leave Act (1993) Uniformed Services Employment and Reemployment Rights Act (1994) Health Insurance Portability and Accountability Act (1996)

2000 Pension Protection Act (2006)

ADA Amendments Act (2008) Genetic Information Nondiscrimination Act (2008)

over their work lives Likewise, the Civil Rights Act of 1964 was a crowning achievement

of the civil rights movement The civil rights movement had to overcome enormous position to obtain legislation protecting the basic civil rights of all people, and the strug-gle to realize this law’s promise continues Thus, although we will focus on the effects ofemployment laws on the human resource practices of companies, the major employmentlaws mean much more than that; they are windows into important periods in our his-tory, express basic societal values, and represent hard-won accomplishments that shouldnot be taken for granted

op-The timeline in Figure 1.1 covers over a century, but most of the laws are clustered inthe second half of this period As a consequence, many interesting legal questions haveyet to be resolved by the courts Is there “too much” employment law now? Opinionsdiffer on this point Certainly, in comparison to the not-so-distant past, the workplace

is far more regulated than it used to be On the other hand, U.S employers enjoy siderably more freedom to carry out human resource decisions as they see fit than doemployers in most of the other major industrialized nations in the world, particularly inEurope

con-Procedures for Enforcing Employment Laws

Simply conferring rights on employees is not enough Means of enforcing those rightsmust be available when employers do not comply with the requirements of the law TVlawyers get cases and emerge victorious—largely by dint of their rousing courtroomoratory—in the space of single episodes In the real world, the process of resolvingemployment disputes is anything but simple and quick A wide variety of enforcementprocedures exist for bringing and resolving claims related to violations of employmentlaws The applicable procedure depends on the particular law that forms the basis forthe claim However, it is possible to convey some of the more typical ways in which em-ployment law claims proceed

What Does an Employee Decide to Do When She Believes

That Her Rights Were Violated?

In a few situations, employment laws are enforced by government agencies at their owninitiative, such as when OSHA elects to inspect a workplace based on the occurrence of aserious accident or because it operates in a particularly dangerous industry However, as

a general rule, both the courts and government agencies rely on individual employees tocome forward with complaints before enforcement actions are undertaken Thus, thedecision of an employee to challenge some action of her employer is a key part of theenforcement process

Some maintain that an avalanche of frivolous employee lawsuits is making the place unmanageable and needlessly clogging the courts.6 Although there are doubtlesssome frivolous claims brought against employers, it is a mistake to assume that mostemployee complaints are baseless and rooted in opportunism In fact, contesting an em-ployer in the legal system is an expensive, protracted, uncertain, and emotionally drain-ing process Most likely, the cases that are brought are just the tip of the iceberg Mostemployees who have their rights violated by their employers do something other thantake legal action; they quit, join a union, withhold commitment and discretionary effort,just let it go, or talk it over with the employer and work things out Ultimately, although

work-no employer can be expected to like it, our system of employment law depends on

6 Walter Olson The Excuse Factory: How Employment Law Is Paralyzing the American Workplace (New York: Free Press, 1997).

Chapter 1: Overview of Employment Law 13

employees being willing to come forward and assume the burden of taking legal actionagainst their employers to both remedy the harm that was done to them as individualsand to uphold public policy.7

How Long Does the Employee Have to Bring a Case?

An important feature of any enforcement procedure is the length of time that an grieved person has to come forward with a complaint This is the limitations period.Time limits for filing lawsuits or charges with administrative agencies vary Unfair laborpractice charges must be brought to the National Labor Relations Board within sixmonths of their occurrence In discrimination cases, employees generally have 300 days

ag-to file a charge with the EEOC (180 days in states that do not have their own state civilrights agencies), but only 90 days to file suit if the EEOC’s efforts to resolve the caseconclude unsuccessfully Wage and hour cases brought under the Fair Labor StandardsAct can go back as far as three years State laws typically allow tort claims to be broughtbased on events that occurred several years in the past A major practical consequence isthat employers must be prepared to defend actions taken well in the past by individualswho might no longer work for their companies The only way to do this is to maintainsolid documentation regarding all human resource decisions

Employees who fail to bring charges in a timely fashion generally lose their right topursue legal action The clock usually starts ticking on the limitations period when theemployee receives unequivocal written or oral notice of a decision (e.g., termination),rather than on the effective date of that decision (if these differ) However, if an em-ployee is unaware of her rights because she was actively misled by her employer or theemployer failed to meet its legal obligation to post information in the workplace, acourt might excuse an untimely filing (a practice known as equitable tolling).8 Addi-tionally, courts distinguish between “discrete acts” such as non-hiring and terminationthat occur at particular points in time and acts that recur and have a cumulativeimpact Repeated acts of harassment that, over time, create a “hostile environment”are a prime (and perhaps the only) example of the latter The Supreme Court has deter-mined that employees who claim that they were subjected to a hostile environment canchallenge all of the harassing acts, even if these go back well beyond the limitations pe-riod, provided that at least one incident of harassment occurred during the limitationsperiod.9

Can a Lawsuit Be Brought? By Whom?

Most employment laws enable employees to enforce their rights through lawsuits againsttheir employers The Occupational Safety and Health Act is an exception in this regard.When an employee believes that a safety hazard exists in his workplace, he needs to con-tact OSHA and get an inspector to come If the inspector does not agree that there is aproblem and the employer is not cited, no course of legal action is available to the em-ployee Likewise, if the General Counsel of the National Labor Relations Board declines

to bring a complaint regarding an alleged unfair labor practice, the employee is out ofluck Suits in discrimination cases can be brought by individuals or the EEOC However,because the Commission goes to court in only a very small percentage of the cases itreceives, the burden of taking legal action to enforce antidiscrimination laws falls mainly

7 McKennon v Nashville Banner Publishing Co., 115 S Ct 879, 884 (1995).

8 Mercado v The Ritz-Carlton San Juan Hotel, Spa & Casino, 410 F.3d 41 (1 st Cir 2005).

9 National Railroad Passenger Corporation v Morgan, 536 U.S 101 (2002).

on individual employees Finding an attorney willing to take an employment law case,particularly on a contingent fee basis (the attorney incurs most of the cost of litigationwith the promise of a substantial share of any award if the litigation is successful), can bedifficult Employment lawyers accept only an estimated 5 percent of the employment dis-crimination cases brought to them Lower-wage workers, for whom provable damagesare relatively low, are particularly likely to have their cases turned away.10

A great deal happens between when a lawsuit is filed and when the case is actuallyheard in court (if the action proceeds that far) Considerable managerial time is spentresponding to requests for records, answering interrogatories (sets of questions), and giv-ing sworn depositions (statements) regarding the facts of the case If you are involved inmaking human resource decisions, you can expect to experience this part of the litigationprocess firsthand The best advice is to testify truthfully and succinctly and to have docu-mentation to back you up Settlement negotiations are likely, both at this point andthroughout the course of the litigation Settlements are a common outcome oflitigation

Employment law cases are brought in both state and federal courts Where the casewill end up depends on such factors as what the legal basis for the claim is, where theparties to the case reside or are incorporated, and what the strategic choices of the partiesare A case that goes into the federal court system starts at the district court (trial court)level The role of the district court is to establish the facts of the case and to reach a deci-sion about the merits of the employee’s claim However, many cases filed against employ-ers are thrown out (the employer is granted summary judgment) because the courtdetermines that even if the allegations of the plaintiff (the employee who is suing) areaccepted as true, they are not sufficient to support a legal claim If the case makes it totrial, the plaintiff bears the burden of proof to show, generally by a“preponderance (themajority) of the evidence,” that his rights were violated Cases that go to trial are some-times decided by juries and other times by judges District court decisions can be appealed

by either party to a federal appeals court (circuit court) Appeals courts typically acceptthe facts of cases as given and focus on whether the lower courts properly applied the law

in deciding cases Appeals court decisions can be appealed to the U.S Supreme Court

J U S T T H E F A C T S

Lilly Ledbetter was one of only a few female managers ever employed by Goodyear Tire and Rubber at its Gadsden, Alabama plant Pay increases for salaried employees were based on supervisors ’ evaluations Ledbetter argued that biased evaluations re- ceived over the course of her nearly twenty-year career resulted in substantially lower pay By the time she left Goodyear, her male colleagues were being paid 15 –40 per- cent more than she was Ledbetter filed a charge of sex discrimination in pay in March

1998 She did not claim that any of the biased evaluations or pay decisions were made during the limitations period (180 days in Alabama), but argued instead that her rela- tively low pay during that period was the result of earlier discriminatory evaluations and pay decisions Does Ledbetter have a timely claim of sex discrimination in pay?

See, Ledbetter v Goodyear Tire & Rubber, 127 S Ct 2162 (2007).

10 Elizabeth Hill “Due Process at Low Cost: An Empirical Study of Employment Arbitration Under the pices of the American Arbitration Association.” Ohio State Journal on Dispute Resolution, 18 (2003), 777–783.

Aus-Chapter 1: Overview of Employment Law 15

However, because the Supreme Court exercises its discretion as to which cases it hears(when the court decides to hear a case, it grants certiorari), and it hears relatively fewcases each year, rarely does the case go that far Thus, although you will read many U.S.Supreme Court cases in this book, these cases are included because they raise importantemployment law issues and because the Court has decided them authoritatively, not be-cause they are typical cases.

Lawsuits are not limited to claims brought by individual employees In class-actionlawsuits, numerous plaintiffs join forces in claiming that their rights were violated inessentially the same manner by their employer Any award is shared by the class members.Class-action lawsuits are controversial Plaintiffs’ counsel see them as an efficient means forpursuing the claims of many individuals who might not otherwise be able to take legal action,whereas corporate defendants tend to see them as collections of disparate allegations strungtogether by attorneys seeking to maximize their earnings Whether multiple employees haveclaims that are sufficiently similar to justify certification as a“class” is a key determination inthese cases

Is There an Administrative Prerequisite to a Lawsuit?

Many employment laws require that a charge be filed with an administrative agency (e.g.,the Equal Employment Opportunity Commission, the Wage and Hour Division of theDepartment of Labor) and that the agency be given the chance to resolve the matter be-fore an employee can go to court In discrimination cases, an employee usually starts by

Clippings

Few people would be surprised that the number of cases filed in federal courts hasincreased markedly over the past several decades Less well known is that only asmall proportion of these cases ever go to trial In 2002, only 1.8 percent of federalcivil lawsuits filed went to trial The trend in cases going to trial is downward (11.5percent of civil cases went to trial in 1962) Although settlements are common(occurring in about 35–40 percent of cases), summary disposition of cases byjudges based only on papers filed has become even more routine (occurring inabout 50 percent of cases)

Adam Liptak “Federal Trials Drop as Court Cases Rise in a Longtime Trend.” New York Times (December 14, 2003), A-1.

Clippings

How about a class-action lawsuit on behalf of a million and a half employeesnationwide? Walmart is facing just that In 2007, a panel of the Ninth CircuitCourt of Appeals approved class certification for the plaintiffs in a massive sexdiscrimination case It is alleged that the retailer systematically discriminatedagainst women with respect to pay and promotions The precise size of the class ofplaintiffs is still in dispute, but the case easily qualifies as the largest employmentclass action in U.S history

Michael R Triplett “Ninth Circuit Revises Wal-Mart Ruling, Possibly Chipping Away Some Class Members ” Daily Labor Report 238 (December 12, 2007), AA-1.