Chapter 1 - The Regulation of Employment

Forum Selection Clause

A clause in a contract that identifies the state law that will apply to any disputes that arise under the contract.

IRS 20 Factor Analysis

A list of 20 factors compiled by the IRS from court cases to determine whether someone is an employee or an independent contractor.

Agency Relationship

A relationship involving an agent, the actor, and a principal, the one who give the agent the authority to act on his behalf.

Economic Realities Test

A test used by the courts to decide if a worker is economically dependent on the business or is in business for himself.

Common Law Agency Test

A test used to determine employee status, though it consider several factors, the most critical is whether the employer has the right or ability to control the work.

FLSA

Federal Labor Standards Act, legislation that establishes minimum wage standards, overtime, employer record-keeping, and child labor laws, among other labor standards.

Valid Restrictive Covenant

1) Protects a legitimate business interest. 2) It is ancillary to a legitimate business relationship. 3) It provides a benefit to the employee and employer. 4) It is reasonable in scope and duration. 5) It is not contrary to public interest.

Economic Realities Test Factors

1) What is the degree of control exerted by the alleged employer over the workers? 2) What are the worker's opportunities for profit or loss? 3) What is the worker's investment in the business? 4) Is the working relationship permanent? 5) What degree of skill is required? 6) How integral is the work to the alleged employer's business?

Tests to determine employee status

1) common law agency; 2) IRS 20 factor test; 3) economic realities analysis

ADEA Exemptions

American employers who control foreign firms where compliance with ADEA to an American employee would cause the foreign firm to violate the laws of the country in which it is located.

Non-Compete

An agreement by the employee not to disclose the employer's confidential information or enter into competition with the employer for a specified period of time and/or within a specified region.

Title I of the Americans with Disabilities Act (ADA)

Applies to Employers engaged in commerce with 15 or more workers, including state and local government employers, employment agencies, labor unions, and joint labor-management committees. Prohibits discrimination in employment against otherwise qualified individuals with disabilities who cannot perform the essential functions of their jobs, with or without reasonable accommodations.

Title VI of the Civil Rights Act of 1964

Defines Employer as any government agency that receives federal funding and applies the race, color, and national origin proscriptions of Title VII to any program or activity that receives federal financial assistance.

ADA Exemptions

Executive agencies of the U.S. government, corporations fully owned by the government, Indian tribes, tax exempt, bona fide private membership clubs that are not labor organizations.

FICA

Federal Insurance Contribution Act, which governs Social Security and Medicare payroll deductions, which employers are obligated to withhold for employees.

Independent Contractor

Generally, a person who contracts with a principal to perform a task according to his own methods and who is not under the principal's control with regard to the physical details of the work.

Exempt from Title VII Prohibitions

Government-owned corporations, Indian tribes, and bona fide private membership clubs.

NLRA

National Labor Relations Act of 1935, also known as the Wagner Act, protects employees against discrimination for involvement in union activities and protected concerted activities.

Age Discrimination in Employment Act (ADEA) of 1967

Prohibits discrimination in employment against anyone over the age of 40 and defines Employer as all entities or their agencies that employ 20 or more emplyees on each working day for 20 or more weeks during the current or preceding calendar year.

Title VII

Prohibits discrimination in employment based on specified protected classes, applying to all firms or their agents engaged in an industry affecting commerce that employ 15 or more employees for each working day of 20 or more weeks in the current or preceding calendar year.

Individual Coverage (FLSA)

Protections offered to employees if their work regularly involves them in interstate commerce and domestic service workers, such as housekeepers, babysitters, and cooks.

Enterprise Coverage (FLSA)

Protections offered to employees under the FLSA who work for certain businesses or organizations that have at least two employees and do at least $500,000 a year in business OR involved in industries such as hospitals, nursing homes, schools and preschools, and government agencies.

Rehabilitation Act of 1973

Similar to the ADA, prohibits covered agencies from discriminating against otherwise qualified disabled individuals and applies not only to all entities, programs, and activities that receives federal funds, government contractors, executive agencies, and U.S. Postal Service.

Vicarious Liability

The imposition of liability on one party for the wrongs of another. Liability may extend from an employee to the employer on this basis if the employee is acting within the scope of his employment at the time the liability arose.

Inevitable Disclosure

The theory under which a court may prohibit a former employee from working for an employer's competitor if the employer can show that it is inevitable that the former employee will disclose a trade secret by virtue of his position.

Contingent Workers

Their jobs with an employer are temporary, sporadic, or differ from the norm of full-time employment, including those hired through staffing firms, temporary, seasonal, and part-time workers, and those considered to be independent contractors rather than employees.