Employment Relations

Healthy Workplace Act

An abusive work environment exists when the defendant, acting with malice, subjects the complainant to abusive conduct so severe that it causes tangible harm to the complainant

An employment contract with a for-cause termination provision but not a definite durational term is considered...

Continuous-for-cause contract

Proximate Causation

Employment torts

An employee is not a supervisor if...

They are not empowered by the employer to take tangible employment actions (hiring, firing, promoting, declining to promote, and reassigning) against the victim

Modifications to the Employment Relationship

· When the employer notifies an employee of changes in employment terms, the employee must accept the new terms or quit o If the employee continues working with knowledge of the changes, he has accepted the changes as a matter of law

IIED Elements

(1) The defendant acted intentionally or recklessly; (2) The conduct was extreme and outrageous; (3) The actions of the defendant caused the plaintiff emotional distress; and (4) The emotional distress suffered by the plaintiff was severe · Does not lie for ordinary employment disputes

Vicarious Liability for Harassment (Non-Supervisors)

Negligence→the plaintiff must prove that the employer knew or should have known of the harassment

Can a threat to exercise that right count as coercion that would invalidate the agreement?

No

Motivating Factor

Title VII Discrimination→was the original standard for all Title VII disputes, but is used in retaliation claims now

Principal or Primary Causation

Used in Winters v. Houston Chronicle, but rejected by SCOTX for Whistleblower Act violations

What constitutes a breach of good faith and fair dealing?

Where an employer's termination of an at will employee is motivated by bad faith or malice

Key Question for Intentional Interference

Whether a third party has unjustifiably interfered with that relationship o An employer wrongfully interferes with an employee's employment or prospective employment with another employer when the employer, by improper means or without a legitimate business interest, intentionally causes another employer: § (i) to terminate the employment of the employee; or § (ii) not to enter into an employment relationship with the employee

Parol Evidence→what will the court ask?

o "Does the contract appear to be complete?" § If yesthen no parol evidence allowed § If noparol evidence for those terms that are incomplete · The court allows parties to supplement, but not contradict the terms of the contract (i.e., evidence must be "consistent with the writing")

Good cause

o Can usefully be divided into the categories of: (1) economic conditions and (2) employee conduct or job performance

Naturally excluded test

o Whether the oral understanding sought to be admitted might "naturally" have been excluded from the written contract § Tends to favor the admission of extrinsic evidence that stricter approaches would exclude

Employee handbook may modify the at-will employment relationship if it...

§ Specifically and expressly curtails employer's right to terminate employee · Handbook must restrict the at will relationship in a meaningful and special way and must contain specific contractual term altering at-will status

Hostile Environment Requirements

(1) Conduct that is severe or pervasive to create an objectively hostile or abusive environment; and (2) Plaintiff subjectively perceives the environment to be abusive or harassing

Defamation Elements

(1) Defamatory statement of fact (2) An unprivileged communication to a third party (3) Statement caused harm to plaintiff (4) Statement was made negligently or with reckless disregard for the truth

Employer is vicariously liable, unless the employer proves affirmative defense:

(1) Employer took steps to mitigate chance that harassment would occur and to address it when it did: (a) Employer had a policy against harassment; and (b) Employer included a mechanism for employees to report suspected harassment; and (c) Employer investigated claims and took appropriate remedial action; and (2) Plaintiff failed to take advantage of our policies and mechanisms

False Imprisonment Elements

(1) Intentional confinement (2) Without consent (3) Victim knew they were being held against their will (4) Victim was not aware of any means of escape

Analysis for Wrongful Discharge

(1) Is there already a policy exception? If yes, move to the second consideration. If not, move to these questions. § Is there a public policy that the court has not addressed? · What proof is there that a policy exists? § Would dismissing the case under the circumstances jeopardize a potential important policy? (2) Apply the factors of a public policy case § Was the plaintiff engaging in a protected activity either by status or conduct? § Was the plaintiff terminated, disciplined, or discriminated against? § Was there a causal connection? · Different casual standards apply for different exceptions

In-House Attorneys and Whistleblowing

(1) Majority position o The hardline position is that lawyers do not have the public policy exception (duty of confidentiality trumps) § We do not need this tort because the rules of ethics to professional responsibility adequately protect the public. (2) Minority position o The flexible position is that they can proceed with a wrongful discharge cause of action, but they must do so without disclosing any type of client confidentialities § This creates difficulties and huge hurdles for the attorney to overcome

Defenses to Defamation

(1) Truth (2) Qualified privileges: § Investigations of employee misconduct; § Communications to prospective employer, on a need-to-know basis § Performance appraisals

Elements of Intentional Interference

(1) Valid contract subject to interference; (2) Defendant willfully and intentionally interfered; (3) Interference was the proximate cause of the plaintiff's injury; and (4) The plaintiff incurred actual damage or loss

Disclaimers on employment manuals are generally found to be effective if they are:

(1) clearly and specifically stated; (2) conspicuously displayed in the handbook, (in large type, in a typographically prominent location, or in a contrasting color or font); and (3) communicated to the employee

An employment relationship exists...

(1) whenever a worker acts, at least in part, to serve the interests of the employer; (2) the employer consents to receive the services of the worker; and (3) the worker is not rendering services as an independent business, which means that the worker does not exercise entrepreneurial control over the manner and means of the work

To establish actionable retaliation, a plaintiff must demonstrate that...

A reasonable employee would have found the challenged action to be materially adverse o A materially adverse action is an action that would cause a reasonable worker to avoid engaging in protected activity

ABC Test

A worker is presumed to be an employee unless the principal can prove the worker is: § (A) is worker free from control/direction both contractually and in fact; § (B) the worker performs work that is outside of the usual course of the hiring § entity's business (i.e. not integral to the business); and § (C) is the worker customarily engaged in an independently-established trade, occupation, or business of the same nature of the work performed by the hiring company?

But For

ADEA, ADA, and Title VII Retaliation Claims

Whistleblowing

Act of reporting an employer's violation of law to some authority, either within the employer's organization or outside it o The employee must reasonably believe that the violation existed

Oral promise made after the consummation of a written agreement will not modify the agreement unless...

Additional consideration is provided for the promise § Material terms discussed during preliminary negotiations that would normally be included in a contract should not become an enforceable part of the final written contract unless provided for in writing

Common Law (Control) Test

Assesses the degree of control the principal may exercise over someone's work o The more a worker depends on the principal, the more likely that worker is to be an employee o The more a worker acts independently to procure assignments, supplies, and customers, the more likely that worker is to be an independent contractor

Cat's Paw Theory

Case is one in which an unbiased decisionmaker was influenced by someone who had a discriminatory motive § The employer can be liable if the biased action was a but-for cause of the decision, even if the decisionmaker lacked a forbidden motivenot an independent theory of liability because it does not create a COA where none exists · May establish the necessary causal connection if there is an element of an existing COA

Indefinite-term employment contracts

Considered performable within one year→do not fall within section of statute of frauds which applies to agreements not to be performed within one year from date of making agreement and do not have to be in writing

Statute of Frauds

Contract must be in writing if it cannot be fully performed within one year

Entrepreneurial control

Control over important business decisions, including whether to hire and where to assign assistants, whether to purchase and where to deploy equipment, and whether and when to service other customers

Economic Realities Test

Court assesses the extent to which the worker relies on the principal for the opportunity to work as compared to the extent to which the worker is in business for themselves

Employer's general oral assurances that employee would not be terminated if their work was satisfactory and that they would not be terminated without good reason or good cause...

Did not modify employee's at-will status, absent a definite stated intent to be bound not to terminate employee except under specific circumstances and absent an agreement on what would encompass good reason or good cause for termination

A business decision to terminate an at-will employee that is motivated by personal greed...

Does not violate a fundamental and well-defined public policy · Employment at will may be terminated by either party at any time for any reason or no reason o An employer may not terminate an at-will employee if the termination violates a clear mandate of public policymaking a business decision based on greed does not violate any clear public policy § Greed is the foundation of much of our economic system and drives increased production and better goods and services

For a binding contract of employment to exist...

Employer must unequivocally indicate a definite intent to be bound not to terminate employee except under clearly specified circumstances

Employment at Will (EAW)

Employment relationship exists at the will of both the employer and the employee, either can terminate the relationship without risk of liability, for any reason or no reason at all

A worker is an employee unless...

Exert entrepreneurial control

When is the Economic Realities Test used?

Fair Labor Standards Act (federal wages)

When may a business be liable as a joint employer to the employee of another?

If the employee is integral to the business and the business exercises control over the employee

Internal whistleblowing

Involves reporting violations within the employee's organization, e.g., to a supervisor or higher management o Must actually affect the public

Franchise Status Determination

Is there control over the employee (hiring, firing, discipline) or is the control over the operations of the franchisee?

An employer's handbook that creates implied-in-fact contract terms...

May not be modified unilaterally

Is the specific targeting of an individual's known weak point considered outrageous conduct?

Maybe · Conduct that would not otherwise be considered extreme and outrageous may rise to such a level if the actor knew that the individual was peculiarly susceptible to emotional distress due to a physical or mental condition

Test for determining completeness

Naturally excluded test

The inclusion of a for-cause termination provision in an employment agreement...

Negates the presumption of at-will employment

Integration

Parties have agreed that the writing reflects their final agreement · Partial: on that term · Complete: the entire contract

Implied employment contracts can arise from...

Parties' conduct, the parties' statements, or other aspects of the employment relationship such as longevity

Immigration Reform and Control Act

Prohibits employers from knowingly hiring, recruiting, or retaining "unauthorized aliens"

Summary of Contract Based Exceptions

Step 1: start with the employee at will presumption Step 2: find an express contract that creates something more than employment at will § Ex: a collective bargaining agreement, an individual agreement, a handbook § Step 2a: do not forget about oral contracts, but remember the statute of frauds Step 3: look to see if promissory estoppel will get you anywhere (but it doesn't really work in Texas (see Roberts & Vida)) Step 4: try to create an implied contract (i.e., the terms are so clear that it must have been what the parties intended (a clear expression that the employer does not fire for other than cause)) - remember that Pugh is not the law anymore

A written contract for an indefinite length of time that does not specify the grounds for termination is generally considered to be...

Terminable at will

A person cannot interfere with their own contract

The alleged bad actor must be legally capable of interference, i.e. a stranger to the contract · Agents, acting within the scope of their employment, aren't strangers to the contract. · If an agent is an alleged wrongdoer, the plaintiff's claim is not interference, but breach of contract only

Malice

The desire to see another person suffer psychological, physical, or economic harm, without legitimate cause or justification

An employer may terminate an employee for just cause if...

The employer based its decision on an objective, good-faith reason · Just cause is given its ordinary meaning if the parties to the contract lack the intent to give the term a unique meaning · The reason for termination is not made in good faith if it serves merely as a pretext for a capricious or illegal termination o The employer need only reasonably believe the reason for termination is true

A terminated employee is entitled to a jury determination on the reason for termination if...

The reason given by the employer is unclear or ambiguous

Oral promises are not part of an employment contract if...

They are not reduced to writing in the final written agreement

Constitutional Protections for Public Employees

Threshold question is whether an employee has a reasonable expectation of privacy in the area being searched

An employer may disclose information...

To a prospective employer of the current or former employee on the request of the prospective employer or the employee

Oral Contracts

Typically require clear and unambiguous promises of continued employment o Contract does not arise if the employer merely expresses hope for a long and productive employment relationship→akin to puffery and do not have the force of a contract

Quid Pro Quo

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when: (1) submission to such conduct is made either explicitly or implicitly a term or condition of an individual's employment; or (2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual

Sole Causation

Used for refusing to engage in wrongdoing (Sabine Pilot v. Hauck)

Hostile Environment

Verbal or physical conduct of a sexual (or racial, etc.) nature constitutes sexual harassment when such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment

Private Individuals and Defamation

When a private individual sues a nonmedia defendant, the individual's interest in reputation predominates and the constitution plays a far lesser role in limiting the common law of defamation

Joint Employment

When an employee has more than one employer while performing particular work · Can exist when two or more employers direct and control (hiring, supervising, disciplining, assigning, or terminating) the employee in the performance of her duties

Public Figures and Defamation

When public officials or public figures sue the media for defamation, the media's free speech interests predominate, and constitutional standards play a large role in the case

Defamation

When statements made in writing (libel) or orally (slander) "harm the reputation of another so as to lower him in the estimation of the community or to deter third persons from association or dealing with him"

When is an agent acting outside the scope of their agency?

When the agent is acting so contrary to the corporation's best interest that his actions could only be motivated by personal interest

Can an at-will employee assert a promissory-estoppel claim to recover damages resulting from the employee's resignation from former employment?

Yes

Can a principal and a worker agree between themselves to characterize the worker as an independent contractor?

Yes, not dispositive

Continuous-for-cause contract

o Do not require special consideration to be valid § Continuous-for-cause contracts are generally promises to employ a worker until just cause for termination arises

Modification or amending a handbook may be treated as a contractual offer

o Employees are deemed to accept such offers by continuing their employment, and no additional consideration is required

Refusal to Engage in Wrongdoing

o Employer dismisses an employee for engaging in conduct protected by a clear public policy and if no overriding business justification for termination existed § The public policy must be well recognized and promoted by statute or a constitution · Administrative regulations may not constitute expressions of clear public policy § The requirement that the employee engaged in protected conduct may be satisfied if the employer knew the employee intended to engage in protected conduct · The employee must show that his dismissal by the employer had a chilling effect on other employees to engage in similar conduct

External whistleblowing

o Involves reporting a violation to an outside party, typically a government authority such as a regulatory or law-enforcement agency

An employer is a joint employer if...

o It uses and benefits from the services of workers employed by another party; o The workers are an essential part of the putative joint employer's operations; and o The employer exercises control over the workers

Fraud

o Most typically arises in the employment context when an employee is discharged after being recently hired and typically after being recruited from another position and/or relocating to the new job o A variation on this scenario occurs when an employer makes false statements in order to retain an employee who is considering a competing offer o Turn on the elements of justifiable reliance and damages

Promisor Estoppel Damages:

o Only damages based on the prior employment may be recovered o Damages for lost wages from the prospective employer are not recoverable

In the absence of an employment agreement...

o Policy manual is the only written expression of the terms and conditions of employment o The employee reasonably believes that the termination provision in the manual was legally binding

Participation clause

o Prohibits retaliation against an employee or applicant who brings a Title VII charge or who testifies, assists, or otherwise participates in an investigation, hearing, or other Title VII proceeding o Forbidden retaliation includes any actions that are materially adverse to a reasonable employee, (i.e. actions that might deter a reasonable person from bringing or participating in a charge)

Good Faith and Fair Dealing

o Requires each party to act fairly, reasonably, and in accordance with the other party's justified expectations o Requires a contract

Integration Clause

o States that written document supersedes all other understandings § Do not necessarily preclude parol evidence, but are usually effective in doing so

Employment manuals and other written policies can be contractually binding if:

o The language is sufficiently clear and definite to constitute an offer of employment, o The offer is communicated to the employee through receipt of the handbook or some other means, and o The employee accepts the offer by entering or continuing employment

Improper Interference Factors:

o The nature of the actor's conduct, o The actor's motive, o The respective interests of the actor and the parties to the contract, and o Societal interests in protecting the actor's freedom and the parties' contractual interests

Texas Standard for "Just Cause"

§ Closest Standardemployee's failure to perform duties in the scope of employment that what a person of ordinary prudence would have done in the same or similar circumstances (negligence standard in effect) · Constitutes good cause if it is inconsistent with the continued existence of the employer and employee relationship (really does not mean anything) § Generally, you'll get a court giving an expression or statement without an explanation

"Just Cause" Steps

§ Determine Intent of the Partiesthe evidence on record does not indicate that the parties understood the 'just cause' provision to have a unique meaning particular to the agreement · No Extra Intent Presentapply plain meaning · Extra Intent Presentweigh the reasonable interpretations of the parties

When is language sufficiently clear and definite to constitute an offer of employment?

§ Must be sufficiently clear that a reasonable employee would believe it to be an offer of contractual employment protections · General policy statements or hopes for a good employment relationship usually are not sufficient § Courts sometimes find the requisite clarity by construing the handbook as a whole rather than looking for a discrete guarantee

Roberts v. Geosource Servs.

§ Promissory Estoppel according to this court: · Promise · Foreseeable reliance · Plaintiff suffered detriment · Other Texas courts have not followed it because it effectively abrogates the employment at will doctrine

Promissory Estoppel Elements

§ Representation or promise that maker should expect will induce action or forbearance; § Promise does induce action; and · Representation or promise need not have the same degree of specificity as one would have with an offer that forms the basis of a contract § If action occurs, it would be inequitable not to enforce the promise or representation

In determining whether an implied-in-fact promise for continued employment exists, courts look to:

§ The personnel policies of the employer, § The length of employment, § Any acts or communications of the employer suggesting continued employment, and § Industry practice

An oral agreement may not be a binding contract if...

§ significant terms are unresolved and the parties contemplated consummation by written agreement · A meeting of the minds and an intent to create a contract are required to form a binding agreement o If material terms are left undecided, there can be no meeting of the minds o Further, a written contract is not consummated until signed by all parties to the contract

Modifications to Compensation Terms

· A terminated employee may be entitled to compensation arising out of post-termination income of the employer if the employment contract provides a right to such income o An employer may not terminate an employee just before bonus pay is due to avoid paying the employee his fair compensation § Employment contracts may be constructed so that employees are paid for profits that they bring in, and if the payments are triggered, the employer must pay even if the employee was already terminated · An employer may not terminate an at-will employee in bad faith solely to avoid paying the employee commissions he reasonably expected to receive for services rendered under the employment contract

Economic Conditions arising to Good Cause

· Economic conditions such as business downturns, cessations, or reorganizations generally can provide good cause to terminate an employee · Termination must be made for bona fide economic reasons and not as a pretext for some reason unrelated to good cause

Economic Realities Test Factors

· Is the work an integral part of the employer's business? · What is the worker's opportunity for profit or loss, based on initiative or investment? · How does the worker's relative investment compare to the employer's investment? · Does the work performed require special skill and initiative? · Is the relationship between the worker and the employer permanent or indefinite? · What is the nature and degree of the employer's control? o No one factor is dispositive

Intentional Interference

· Provides a remedy against someone who deliberately interferes with someone else's employment. Significantly, a party cannot be liable in tort for interfering with its own contract o Imposes liability on third parties and not on the employer or the employee

Employee Conduct arising to Good Cause

· Requires substantial problems with an employee's behavior or performance that interfere with the employer's conduct of its business · Occasional or minor problems do not provide good cause, nor do arbitrary or petty reasons for termination

Refusal to Engage in Wrongdoing Rules

· The exception recognizes a cause of action in tort for an employee who was terminated because he refused to perform an illegal act o The employee must only reasonably and in good faith believe the conduct to be illegal or a violation o Statute must carry criminal, not civil, penalties in order to invoke the public policy exception · The supreme court also held that the employee must carry the burden of proving that his termination was based solely on his refusal to perform the illegal act · Economic damages for loss of pay and punitive damages are available for this cause of action provided evidence of malice or gross negligence is shown

Control Test Factors

· Who schedules the worker · Who owns the equipment · Profitability/entrepreneurial opportunities · Control of premises · Ability to determine how work is done · Supervisory/disciplinary authority over others · How and when paid · Tax withholding