MBA 650, Business Law (Ch. 12, The Employment Agreement)

True or false: The Fair Labor Standards Act provides that children who are fourteen or fifteen may work in manufacturing occupations as long as they are not considered hazardous as determined by the secretary of labor.

False

True or False: Unionized workers, public employees that work for government agencies, and employees who have express employment contracts for a fixed term are not subject to the employment-at-will rule.

True

True or false: Employers can face federal criminal penalties as well as charges of manslaughter or reckless homicide under OSHA.

True

True or false: The National Labor Relations Act (NLRA) grants rights to employees.

True

True or false: The Worker Adjustment and Retraining Notification Act does not apply to the closing of a temporary facility or a layoff that occurs as a result of a strike not intended to evade the act.

True

True or false: When a business misrepresents its position to convince employees to join or stay with the company, it can result in liability for the tort of fraudulent inducement.

True

A covenant not to compete: a. All of these answers are correct. b. must be ancillary to another agreement. c. must be reasonable in geographic scope. d. must be reasonable in time duration.

a. All of these answers are correct.

Which of the following is included in the Sarbanes-Oxley Act of 2002? a. All of these answers are correct. b. Criminal penalties for employers retaliating against employees who provide truthful information about federal offenses to law enforcement officers c. Prohibition of publicly traded companies from harassing an employee who believes that federal fraud statutes and Securities and Exchange Commission (SEC) rules and regulations have been violated d. Prohibition of publicly traded companies from discriminating against an employee who engages in the lawful act of sharing information with a supervisory authority over the employee

a. All of these answers are correct.

Which of the following is a generally enforceable agreement between employer and employee that protects the business's trade secrets? a. Confidentiality agreements b. Clawback provisions c. Fraudulent inducement

a. Confidentiality agreements

Hector worked on a manufacturing line at a glass plant where car windows were made. His job was dangerous and required him to wear certain protective gear. The company pays its employees under a system called "gang time" which compensates them only for time spent at their workstations and not for putting on or taking off their protective gear. Although the company did not record the time each employee spent donning and doffing their gear, an industrial relations expert observed that each employee spent approximately 18 minutes each day in such activities. Under which of the following would an employee be entitled to overtime pay? a. If the employee worked at least 40 hours inclusive of putting on and taking off his protective gear, the employee must be paid for any time above the 40 hours spent in any work activity. b. This type of employee is not entitled to overtime pay. c. Because putting on and taking off gear is not covered under a collective bargaining agreement, the employee must work more than 40 hours exclusive of such activity and cannot be paid regular or overtime for that activity but can be paid for other work. d. If the employee worked at least 40 hours exclusive of putting on and taking off his protective gear, the employee must be paid overtime for time spent in any work activity including putting on and taking off their gear.

a. If the employee worked at least 40 hours inclusive of putting on and taking off his protective gear, the employee must be paid for any time above the 40 hours spent in any work activity.

Too Big To Fail Hedge Funds was interested in recruiting new talent to help attract investors and manage accounts. Too Big went to several universities and interviewed candidates, promising them a bright future with lots of bonuses. One candidate, Margaret, had several other job offers which she turned down to work for Too Big, but this was the only offer another candidate, Rhett, received. If after a year of working, both Rhett and Margaret were let go due to the company going bankrupt, do they have a claim for fraudulent inducement? a. No; neither have a claim for fraudulent inducement. b. Yes, for Margaret, but not for Rhett. c. Yes; they both have a claim. d. Yes for Rhett, but not for Margaret.

a. No; neither have a claim for fraudulent inducement.

Which of the following protections are provided for employers who disclose former employees' performance references in good faith? a. Statutory immunity b. Noncompete agreements c. Confidentiality agreements d. Defamation immunity

a. Statutory immunity

A type of pension plan where the employer guarantees that the participant will receive an annual benefit for life following retirement is known as: a. a defined benefit plan. b. an insured plan. c. an ERISA plan. d. a defined contribution pension plan.

a. a defined benefit plan.

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a person may continue coverage on an employer's group health care plan after termination of employment: a. for a period of twelve months. b. for a period of eighteen months. c. for a period of two months. d. for a period of six months.

a. for a period of twelve months.

Individuals with H-1B visas can stay and work in the United States for: a. up to six years. b. up to four years. c. up to five years. d. up to three years.

a. up to six years.

At one time, many employers required employees or job applicants to take polygraph examinations in connection with their employment. To protect the privacy interests of employees and job applicants, in 1988 Congress passed the: a. Employer Polygraph Protection Act. b. Employee Polygraph Protection Act. c. National Polygraph Protection Act.

b. Employee Polygraph Protection Act.

A new casino was going to open and the owner started accepting applications for employment as well as recruiting managers for top level positions. With security being at the forefront of his mind, he intensely scrutinized each applicant's background for any signs of theft, financial trouble, or connections with criminal organizations. As part of the application process, he required each candidate who was going to be interviewed (for any job at the casino) to take a polygraph test. Is this permissible under the Employee Polygraph Protection Act? a. Yes, because they are only applicants and not yet employees. b. No; this type of testing is prohibited under the Act. c. Yes, if the applicants first sign a waiver. d. Yes, because the reasoning behind it is to maintain security.

b. No; this type of testing is prohibited under the Act.

At the federal level, the primary legislation protecting employees' health and safety is the: a. Occupational Health Act of 1970. b. Occupational Safety and Health Act of 1970. c. Environmental Safety and Health Act of 1970. d. Occupational Safety Act of 1970.

b. Occupational Safety and Health Act of 1970.

Which of the following is NOT covered by the Fair Labor Standards Act (FLSA)? a. Overtime pay b. Workers' compensation c. Minimum wage d. Child labor

b. Workers' compensation

Marcy's employer, Sam, asks her to commit perjury when she testifies in a lawsuit against him for selling defective products in his appliance store. Marcy refuses, and Sam promptly fires her. In most jurisdictions, which of the following would likely provide Marcy with a cause of action against Sam for the firing? a. Violation of the due process clause of the U.S. Constitution b. Wrongful discharge in violation of public policy c. Violation of First Amendment right to free speech contained in the U.S. Constitution d. Breach of employment-at-will contract

b. Wrongful discharge in violation of public policy

A type of pension plan where the employer makes no guarantee as to any particular benefit upon retirement is known as: a. an ERISA plan. b. a defined contribution pension plan. c. an insured plan. d. a defined benefit plan.

b. a defined contribution pension plan.

An employer's termination of an employee's employment in violation of the law is: a. a wrongful firing. b. a wrongful discharge. c. an illegal discharge. d. an illegal firing.

b. a wrongful discharge.

A common law doctrine under which either party may terminate an employment relationship at any time for any reason, unless a contract specifies otherwise, is: a. employment by public policy. b. employment at will. c. employment at sufferance.

b. employment at will.

Certain employees—usually executive, administrative, and professional employees; outside salespersons; and computer programmers—are: a. not exempt from any provisions of the Fair Labor Standards Act. b. exempt from the overtime provisions of the Fair Labor Standards Act. c. not exempt from the overtime provisions of the Fair Labor Standards Act.

b. exempt from the overtime provisions of the Fair Labor Standards Act.

For the most part, courts have held that an employer's monitoring of electronic communications in the workplace does: a. violate employees' privacy rights. b. not violate employees' privacy rights. c. violate an employer's privacy rights. d. not violate an employer's privacy rights.

b. not violate employees' privacy rights.

If all other requirements are met, The Worker Adjustment and Retraining Notification Act (WARN Act) requires an employer to give: a. thirty days' advance notice of a plant closing. b. sixty days' advance notice of a plant closing. c. ten days' advance notice of a plant closing. d. ninety days' advance notice of a plant closing.

b. sixty days' advance notice of a plant closing.

All employers in the United States must verify the employment eligibility and identity of newly hired workers by completing an I-9 Employment Eligibility Verification form. This form must be kept on file for: a. ten years from the worker's commencement of employment. b. three years from the worker's commencement of employment. c. six years from the worker's commencement of employment. d. six months from the worker's commencement of employment.

b. three years from the worker's commencement of employment.

Fred quits his employment at Big National Bank, Inc., who has five hundred workers. Fred wants to continue his health insurance with Big National Bank's group insurance plan (which paid the entire premium for his health insurance). Fred: a. will not be able to use COBRA since he does not have another job. b. will be able to continue coverage for 18 months under COBRA coverage and he will have to pay for it himself. c. will not be able to use COBRA since he quit the job. d. will be able to continue coverage for 18 months under COBRA coverage and Big National Bank will have to pay for it.

b. will be able to continue coverage for 18 months under COBRA coverage and he will have to pay for it himself.

As an exception to the employment-at-will doctrine, some courts have held that: a. no implied employment contract ever exists. b. an express employment contract exists between an employer and an employee. c. an implied employment contract exists between an employer and an employee.

c. an implied employment contract exists between an employer and an employee.

A __________ is an activity that is engaged in with the authority of other employees, and not solely by and on behalf of the employee himself or herself and related to the terms and conditions of employment. a. union formation activity b. gathering activity c. concerted activity d. group activity

c. concerted activity

To comply with the Occupational Safety and Health Act, which of the following needs to be posted at the job site? a. Notices of imminent dangers to employees, including exposure to toxic substances b. Any OSHA citations for violations of the Act c. A summary of all work-related injuries and illnesses d. All of these answers are correct.

d. All of these answers are correct.

Harper worked for a fast food restaurant for three years but hoping to make more money applied for another retail position in the city. Her interview went well and the company called her supervisor at the fast food restaurant for a reference. The supervisor had a negative opinion of Harper, felt she was lazy, and was hoping Harper would take a position someplace else so he could fill the spot with a more engaged worker. Although he didn't feel he could give a good recommendation for her work ethic, he strongly wanted her to be offered the job so she would leave. Which of the following statements would be the most appropriate for the manager to make as it relates to Harper? a. I thought Harper may have stolen something once, but I was never able to prove it. b. Harper is an excellent employee and you should definitely hire her. c. Harper is lazy and is a bad employee. d. Harper has been employed with the company for three years as a cashier.

d. Harper has been employed with the company for three years as a cashier.

In general, which of the following is true of OSHA inspectors? a. OSHA inspectors can enter and inspect a workplace at any reasonable time, if prior notice is given. b. OSHA inspectors can enter and inspect a workplace at any time, without prior notice. c. OSHA inspectors can enter and inspect a workplace only with a search warrant. d. OSHA inspectors can enter and inspect a workplace at any reasonable time, without prior notice.

d. OSHA inspectors can enter and inspect a workplace at any reasonable time, without prior notice.

DeShawn was the foreman of a construction crew. Upon arriving back to the job site from lunch he noticed Walter seemed unstable on his feet. He stumbled around, having trouble with his balance, and was starting to become belligerent with the other guys on the crew. Walter was supposed to operate a crane that afternoon, which is a piece of heavy machinery requiring the utmost care and skill. DeShawn confronted Walter and asked if he had been drinking. Walter denied it, but DeShawn was still concerned. Can DeShawn send Walter to be tested for alcohol before he allows him to operate the crane? a. No, because DeShawn is targeting Walter as an individual rather than testing all employees. b. Yes, and if he is under the influence may immediately terminate him. c. No, employers may not test employees for alcohol use. d. Probably, because he has a reasonable suspicion that Walter is under the influence and would be a threat to the safety of the crew, but he may not be able to discipline him.

d. Probably, because he has a reasonable suspicion that Walter is under the influence and would be a threat to the safety of the crew, but he may not be able to discipline him.

Which of the following pieces of legislation requires an employer to provide adequate notice to its employees if it is reducing its workforce? a. The Patient Protection and Affordable Care Act b. Health Insurance Portability and Accountability Act c. The Consolidated Omnibus Budget Reconciliation Act d. The Worker Adjustment and Retraining Notification Act

d. The Worker Adjustment and Retraining Notification Act

Issa was newly employed by a tree trimming service. He was unaware of the rules and regulations surrounding tree trimming, especially around power lines. However, his supervisor sent him and two other employees out to a job site of a homeowner, to have a tree trimmed near power lines. While they were working, a rival company drove past the job site, and seeing what they believed to be a violation called OSHA. Upon arriving at the scene, the OSHA inspector asked for the workers' certifications, which they could not produce. What will likely happen next? a. The workers will be subject, personally, to fines and penalties. b. The workers will be arrested. c. Both the workers and the company will be subject to fines and penalties. d. The company will be subject to fines and penalties.

d. The company will be subject to fines and penalties.

Ultrasonics Co. develops and manufactures sensitive calibration equipment which is used by a number of companies in classified projects. Because security of Ultrasonic's facilities is important to maintaining its trade secrets as well as protecting the manufacturing of its products, it implemented an employee surveillance plan. It installed hidden cameras throughout the facility, began monitoring all computer activities, and recorded all phone conversations on company phones. Additionally, it implemented a software connected to the cameras that can use facial recognition to monitor where an employee is at all times. What is an employee's best argument against the lawfulness of this monitoring? a. Employers do not have a legitimate interest in monitoring employees. b. All employees have a reasonable expectation of privacy, regardless of their working environment. c. Employers must notify employees prior to reading emails sent on company computers. d. The employees had a reasonable expectation of privacy, if they had a private office.

d. The employees had a reasonable expectation of privacy, if they had a private office.

Adonde worked as a sales rep for a pharmaceutical company. He knew that the law required him to disclose any money spent on physicians; however, his employer would tell him to record meals spent on physicians as "employee meals" so that they weren't reported. Yet, Adonde continued to report all the meals as being spent on physicians. Several weeks later, Adonde was told that he was being terminated but was not given a reason other than it was pursuant to the "at-will employment" law. Has Adonde been wrongfully discharged? a. No, because the company had just cause to terminate Adonde for insubordination. b. No, because a company has the right to discharge employees at-will without providing a justification. c. Yes, because Adonde had an implied contract with the company. d. Yes, because Adonde has met one of the public policy exceptions to the employment at-will doctrine.

d. Yes, because Adonde has met one of the public policy exceptions to the employment at-will doctrine.

T.J. worked as an administrative assistant for a judge at the local court. He has always done a good job and his performance reviews have been positive. Recently, the city has come under scrutiny for wasteful spending and the court, to gain public support, decided to make budget cuts including terminating T.J.'s position. The H.R. department notified T.J. that he was no longer needed and not to come to work on Monday. May the court terminate T.J. in this manner? a. No, because it is against public policy to eliminate government workers. b. No; because he works for the government, he can only be terminated for just cause. c. Yes, because the employers can terminate any employee at-will. d. Yes, because eliminating the position for budget reasons does not violate any at-will exceptions.

d. Yes, because eliminating the position for budget reasons does not violate any at-will exceptions.

In 2015, Sail Boats Inc. hired Mary to help maintain the facilities and included basic janitorial services and some landscaping. In 2016, Sail Boats also posted a job opening for another role; on the request of the company president, Lance, the crew foreman, interviewed John for the position. John was the father of two of the president's grandchildren, and the president had known John for about eight years and was aware that his daughter had twice called the police on John for domestic violence. Although Sail Boats inquires about felonies on its background applications, it does not conduct a criminal background check before hiring an employee. On his application, John truthfully answered that he had not been convicted of any felonies, as the two domestic violence charges against him had been misdemeanors. Lance was pleased with his interview and hired John. One day, while both Mary and John were on duty, John became angry and assaulted Mary. He fled the facility and was later arrested, convicted, and sent to prison. Is Sail Boats Inc. liable for the tortious conduct of John because it was negligent or reckless in hiring and supervising him? a. No, because it was not informed about his criminal past. b. Yes; an employer is always liable for the conduct of its employees. c. No, because John's actions were outside the scope of his employment. d. Yes, because it knew or should have known about his propensity towards violence and failed to take precautions to keep its other workers safe.

d. Yes, because it knew or should have known about his propensity towards violence and failed to take precautions to keep its other workers safe.

The manager at Sam's Salon wanted to attract the best hair stylists in the region and provided a generous training and compensation package for employees. As part of the employment on-boarding, new employees were required to sign a non-compete agreement that prevented them from working for any salon or spa within 50 miles for at least two years after leaving Sam's Salon, whether they left voluntarily or were terminated. In a state that allows for non-competes, would this contract be valid? a. No; employers cannot restrict an employee's right to future employment. b. No, because the employee was required to sign it and therefore was under financial duress. c. Yes; non-competes are valid as long as they are entered into voluntarily. d. Yes, if the restrictions are deemed reasonable.

d. Yes, if the restrictions are deemed reasonable.

Tammy works for a dry-cleaning company that has a contract with the U.S. government. To save on cleaning fluid, her boss orders her to wash some clothes in a washing machine that are supposed to be dry-cleaned. When the courier hired to pick up the cleaned garments arrives, Tammy tells him about her boss's actions. Tammy tells no one else about what is going on and is later fired. Tammy: a. is not protected by the state whistleblower statute. It is inapplicable because the contract was with the federal government. b. is protected by the whistleblower statute in her state because she spoke up about her employer's actions. c. will be reinstated to her former job because when she told the courier of the problem she was merely exercising her First Amendment right to free speech. d. is not protected by the whistleblower statute because she failed to inform the proper party of the contract violation.

d. is not protected by the whistleblower statute because she failed to inform the proper party of the contract violation.

Intentional interference with __________ provides a basis for a victim to bring a legal action against a wrongdoer for intentionally interfering with a prospective business relationship. a. constitutional protection for whistleblowers b. a noncompete agreement c. wrongful discharge d. prospective economic advantage

d. prospective economic advantage

An employee's disclosure to governmental authorities, upper level managers, or the press that the employer is engaged in unsafe or illegal activities is: a. turning in wrongdoers. b. illegal. c. required by the employee's employment contract. d. whistleblowing.

d. whistleblowing.

State statutes establishing an administrative procedure for compensating workers for injuries that arise out of—or in the course of—their employment, regardless of fault, are: a. state compensation laws. b. compensation laws. c. employees' compensation laws. d. workers' compensation laws.

d. workers' compensation laws.