BLaw Exam 3
Faragher defense to harassment
- If plaintiff suffered a tangible job detriment, employer in strictly liable - If no, employer has a defense a. supervisor -- offer evidence that (1) employer took reasonable steps to prevent and correct the situation and (2) employee unreasonably failed to take advantage of the corrective or preventative opportunity b. co-worker -- employer may be liable if he knew or should have known about the harassing behavior and failed to take remedial action **It was policy for the employee to tell the supervisor that they were a victim of harassment. However, the harasser was the supervisor. This was not a reasonable remedial policy***
What are the sources of implied contractual limitations on an employer's right to terminate an employee at will?
- Statement of salary per period: employee must be employed for whatever the stated period is - Statement of job assurance: Have to have reasonably certain and definite terms in agreement - Statements in a handbook: procedural statements regarding termination
What are the sources of exceptions to an employer's right to terminate an employee at will?
- Statutes: examples include the Title VII of the Civil Rights act of 1964. Also it violates statutory law in Texas to fire an employee for missing work for jury duty -Public Policy *1) Refusing to perform an illegal act 2) Reporting illegal activity 3) Exercising legal rights 4) Performing public duties **In Texas, an employer cannot fire an employee who refuses to commit an illegal act that would result in criminal penalties
List and discuss the elements of tortious interference with contract.
1) A valid, enforceable contract or an established business relationship must exist between two parties 2) A third party must know that this contract or relationship exists 3) This third party must intentionally induce a party to sever the relationship
Under the TUTSA, when is one liable for misappropriation of trade secrets for merely acquiring a trade secret?
1) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means, or
What common law duties does the principal owe to the agent?
1) Compensation: Principal must pay the agreed-on (or reasonable) value for the agent's services. 2) Reimbursement and Indemnification: Principal must reimburse the agent for any funds paid out at the principal's request, as well as for necessary expenses 3) Cooperation: Principal must cooperate with and assist an agent in performing his or duties 4) Safe Working Conditions: Principal must provide a safe working environment for agents and employees.
What are four common pitfalls in ethical decision making?
1) Failing to identify stakeholders 2) Focusing only on the legalities 3) Focusing only on the short term 4) Failing to recognize conflicts of interest
Discuss the administrative process that a prospective plaintiff must take before filing a lawsuit alleging a violation of Title VII, the ADA or the ADEA?
1) File EEOC Document 2) Will also ask to resolve the dispute 3) Can take up to 180 days to complete the investigation
What steps can a business take to embed ethics into its culture?
1) Have a code of ethics 2) Have training on the code of ethics 3) Have proper reporting procedures 4) Have strong leadership
Give five examples of means of maintaining secrecy information
1) Identify and value trade secrets 2) Implement a proactive plan for safeguarding trade secrets 3) Secure physical and electronic versions of your trade secrets 4) Confine intellectual knowledge on a "need-to-know" basis 5) Provide training to employees about your company's intellectual property plan and security
How can an employer mitigate the risk of liability for harassment based on the Faragher defense analysis?
1) Implement written anti-sexual harassment policies which include accessible grievance procedures, 2) Immediately and thoroughly investigate complaints, 3) Implement reasonable remedial action, and 4) Carefully screen, train and monitor supervisors
Under the TUTSA, what are proper means of obtaining a trade secret?
1) Independent development 2) Reverse engineering unless prohibited e.g., by contract or licensing agreement
What are the four components of an agents duty of loyalty?
1) Outside Benefits or Secret Benefits: An agent is not entitled to receive benefits from outside the agency relationship unless the principal knows about and agrees to the agent's receipt of the benefits. 2) Representation of More than One Principal: An agent may not act on behalf of two or more principals whose interest conflict. 3) Competition with the Principal: An agent may not compete with the principal in any matter within the scope of the agency business during the course of the agency relationship. 4) Confidential Information: An agent can neither disclose nor use for his own benefit confidential information required during the course of the agency. This duty survives termination of the relationship. Thus, an agent who discloses or uses such confidential information after the agency relationship has been terminated may still be liable for breach of the duty of loyalty
What common law duties does the agent owe to the principal?
1) Performance: Agent must use reasonable diligence and skill when performing duties 2) Notification: Agent is required to notify the principal of all matters that concern the subject of the agency 3) Loyalty: Agent has a duty to act solely for the principal's benefit 4) Obedience: Agent must follow all lawful and stated instructions from the principal 5) Accounting: Agent must provide records of all property and funds received or paid out on the principals behalf
List the theories of discrimination that apply to Title VII, the ADA and the ADEA
1) Retaliation 2) Disparate Treatment 3) Disparate Impact 4) Harassment
Under the TUTSA, what are improper means of obtaining a trade secret?
1) Theft, 2) Bribery, 3) Misrepresentation, 4) Breach or inducement of a breach of a duty of maintain secrecy, or 5) Espionage through electronics or other means.
What is threatened misappropriation of trade secrets?
1) a defendant possesses trade secrets and "actually has misused or disclosed some of those trade secrets in the past"; 2) a defendant possesses trade secrets and "intends to improperly use or disclose some of those trade secrets"; and 3) a defendant possesses trade secrets and "wrongly refuses to return the trade secrets after a demand for their return has been made."
Under the TUTSA, when is one liable for misappropriation of trade secrets based on the use of disclosure of a trade secret?
2) Disclosure or use of a trade secret of another without express or implied consent by a person who: a) used improper means to acquire knowledge of the trade secret, or b) at the time of the disclosure or use, knew or had reason to know that the person's knowledge of the trade secret was 1. derived from or through a person who had utilized improper means to acquire it, 2. acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, or 3. derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use, or c) before a material change of the person's position, know or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.
NDA (Non-Disclosure Agreement)
A legally binding contract signed by both parties stating that they will not reveal any trade secrets or intellectual property owned by the other.
What relief is available to a plaintiff who successfully proves misappropriation of trade secrets under the TUTSA?
A prevailing plaintiff may be entitled to injunctive relief and/or compensatory damages and unjust enrichment or a reasonable royalty.
What is required for a covenant not to compete to be enforceable in Texas?
A specified activity, duration of time, and geographical area
What restrictions on the employee must be included in the CNC for it to be enforceable
A specified activity, duration of time, and geographical area
What does the Age discrimination Act (ADEA) prohibit?
Act that prohibits discrimination in employment for persons age 40 and over except where age is a bona fide occupational qualification
Agency: Formation and Duties
Agency: Formation and Duties
What does it mean to "waive" a conflict of interest?
An agent can have a conflict of interest waive by gaining permission from the principal to engage in the activity that is the conflict of interest
Federal Insurance Contribution Act (FICA)
An employer must withhold from the employee's paycheck the employee's FICA contribution to the Social Security Fund
Conflict of Interest
Any relationship that creates a bias or impairs the agent's ability to have the state of mind that enables them to best serve the principal
To what remedies might a prevailing plaintiff be entitled under Title VII?
Backpay: the amount of money the plaintiff would have made Front pay: compensatory damages for non-economic damages, and reinstatement
Federal Unemployment Tax Act (FUTA)
Both employers and employees are obligated to pay unemployment taxes, and employers are required to withhold from the employee's paycheck the employee's FUTA contribution
How is an agency relationship formed?
By Agreement: The agency relationship is formed through express consent (oral or written) or implied by conduct. By Ratification: The principal either by act or by agreement ratifies the conduct of a person who is not, in fact, an agent. By Estoppel: The principal causes a third person to believe that another person is the principal's agent, and the third person acts to his or her detriment in reasonable reliance on that belief. By Operation of Law: The agency relationship is based on a social or legal duty- such as the need to support family members. Or, it is formed in emergency situations when the agent is unable to contact the principal and failure to act outside of the scope of the agent's authority would cause the principal substantial loss.
Define corporate social responsibility ("CSR") generally and the shareholder and stakeholder theories of CSR specifically
Combines a commitment to good citizenship with a commitment to making ethical decisions, improving society, and minimizing environmental impact. Triple bottom line of Profits, People, and Planet 1) Shareholder Theory: Corporations have a duty to shareholders to maximize profits 2) Stakeholder Theory: Corporations have a duty not just to shareholders, but also to other groups affected by corporate decisions
What are the sources of law that govern agency relationships?
Common Law: Judge-made law that includes interpretations of constitutional provisions, statues enacted by legislatures, and regulations created by administrative agencies Also a part of this is, Stare decisis- the practice of deciding new cases with reference to former decisions or precedents - Under stare decisis § 1. A court should not overturn its own precedent unless there is a compelling reason § 2. Decisions made by higher courts are binding on lower courts
To what damages is a plaintiff who successfully proves the breach of a covenant not to compete entitled?
Compensatory damages
Competition V.S. Preparation to Compete
Competition: competing with the principal in any matter within the scope of the agency business during the course of the agency relationship Preparation to Compete: Preparing to compete with the principal in any matter within the scope of the agency business during the agency relationship after the relationship has concluded
Explain Consequentialism generally and Utilitarianism specifically, including criticisms
Consequentialism: If the result of the action or decision is ethical, then the action or decision is ethical. Utilitarianism: The greatest good for the greatest number of people. 1) Identify stakeholders 2) Cost-benefit analysis: asses the negative and positive effects of alternative actions on the stakeholders 3) Choose the action or decision that will produce the greatest positive net benefits for the greatest number of individuals. *Criticisms: doesn't consider the degree of positivity or negativity, and always sacrificing the minority for the majority.
Generally, what is a covenant not to compete aka non-compete agreement?
Contract that provides a seller of a business or an employee will not engage in a similar business or occupation within: - Specified geographical area for a specified time following the sale of the business or termination of employment
Covenants Not to Compete and Non-Solicitation Agreements
Covenants Not to Compete and Non-Solicitation Agreements
How does an employer determine whether a worker is an employee or an independent contractor?
Criteria used by the courts: 1) ***How much control does the employer exercise over the details of the work? Greater weight of the evidence test. -If the employer exercises considerable control over the details of the work and the day-to-day activities of the worker, this indicates employee status. Most important factor weighed by the courts in determining employee status. 2) Is the worker engaged in an occupation or business distinct from that of the employer? 3) Is the work usually done under the employer's direction or by a specialist without supervision? 4) Does the employer supply the tools at the place of work? 5) For how long is the person employed? 6) What is the method of payment- by time period or at the completion of the job? 7) What degree of skill is required of the worker?
Explain Deontology generally and the Universality and Reversibility Principles specifically.
Deontology: If one is fulfilling one's duties, they are acting ethically. Universality Principle: Six universally accepted fundamental duties 1) Not to harm others, 2) Respect others' privacy, 3) Respect others' right to freedom of association, 4) Honor others' property rights and agreements, 5) Treat equals equally, and 6) Tell the truth. Reversibility: Reversing positions with someone and thinking about the outcome of your action or decision on them
What does the ADA prohibit?
Discrimination on the basis of disability in employment, state and local government, public accommodations, commercial facilities, transportation, and telecommunications
Explain the theoretical difference between disparate treatment and disparate impact discrimination
Disparate treatment: the plaintiff must prove that he was treated differently because of his protected status. -Employee's Prima Facie Case - The employee must prove that: 1) He is a member of a protected class 2) He was qualified for the position at issue 3) He suffered an adverse employment decision 4) Others not in the same protected class did not suffer similar adverse employment decisions *Employer may offer a legitimate, non-discriminatory reason for his employment decision or he may rebut an element of the prima facie case **Employee may rebut the employer's proffered reason for the employment decision by offering evidence that this is a pretext for discriminatory motive. Disparate Impact -Employee's prima facie case: The employee must prove that an employment policy or practice has a disparate impact on a protected group *If the employer can establish that the policy or practice is a business necessity, he will prevail. The employer may also disprove the employee's disparate impact evidence. **If the employee can prove that less discriminatory means of satisfying the business necessity were available and the employer refused to adopt them, the employee will prevail
Identify three statutes that address the theft of trade secrets and major differences between them
Economic Espionage Act (federal statute) - Criminal statute and it imposes upon the culprit penalties, fines, monetary penalties, and potentially imprisonment. - Defendant can be an individual or entity - Applies when defendant has misappropriated information used in interstate or international commerce (punishment increases if the information is used to benefit foreign commerce) Defense Trade Secrets Act (federal statute) - Provides a private civil cause of action for victims of trade secret espionage or theft where a trade secret has been misappropriated, and requires that the misappropriated trade secret is related to a product or service used in, or intended for use in, interstate commerce Uniform Trade Secrets Act (State Statute) - A bit different from state to state *Plaintiff has to establish 1) Information is a trade secret and 2) Trade secret was misappropriated
What must an employee must prove to establish disparate treatment by failure to accommodate his religious practices?
Employee Prima Facie Case: Must demonstrate that he 1) has a bona fide religious belief that conflicts with an employment requirement, 2) informed the employer of this belief, and 3) was disciplined for failure to comply with the conflicting employment requirement
Who must comply with Title VII?
Employers in both the private and public sectors that have 15 or more employees, the federal government, employment agencies, and labor organizations
Employment Discrimination
Employment Discrimination
National Labor Relations Act of 1935 (NLRA)
Establishes the rights of employees to engage in collective bargaining to strike, defines a number of employer practices as unfair to labor, established the National Labor Relations Board (NLRB) which oversees union elections, prevents employers from engaging in unfair and illegal union-related labor practices and otherwise enforces the NLRA
Ethics
Ethics
What relief is available to a plaintiff who successfully proves threatened misappropriation of trade secrets under the TUTSA?
For threatened misappropriation, a prevailing plaintiff is entitled to injunctive relief only
What are the risks of misclassifying an employee as an independent contractor?
If an agency such as the IRS or the Department of Labor determines that an a worker has been misclassified, the employer could be fined thousands of dollar per day per employee
Under TUTSA, when is one liable for misappropriation of a trade secret acquired accidentally or by mistake?
If the information was acquired by mistake, then one may be liable for use or disclosure of the information if he knew or had reason to know that the information was a trade secret before he materially changed his position
In what contexts might the issue of whether a worker is an employee or independent contractor arise?
If the worker is inured on the job or if the workers actions cause another party damage or harm
As a practical matter, what is a trade secret?
Information, including but not limited to, "a formula, pattern, compilation, program, device, method, technique, process, financial data, or list of actual or potential customer or supplier" that meets the following criteria: 1) Derives independent economic benefit, actual or potential, 2) From not being generally known to, 3) And not being readily ascertainable by proper means by, 4) Other persons who can obtain economic value from its disclosure to use; and 5) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy
NDA
NDA
Does designating a worker as an independent contractor in a contract of employment definitively establish his status as such?
No, because an employer could be misclassifying the worker if they have not performed the proper tests to classify
If there is an express contract of employment, does it necessarily alter the employee's at-will status?
No, but If the express contract includes term of employment, this limits the employers right to terminate... It limits cause of termination to a work- related reason
Does an employer have an absolute duty to accommodate an employee's religious practices?
No. Employers have to reasonably accommodate the employee's religious practices until it causes the employer undue hardship
Might an agent be liable for breaching its duty to a principal for preparing to compete with the principal if no competition occurs until after termination of the agency relationship?
No. The agent will only be liable if they do compete during the duration of the agency relationship.
In a particular situation, if a conflict of interest can be cured or waived, does that necessarily mean it should be? Why or why not? In other words, consider the ethical issues regarding asking a principal to waive a conflict of interest.
No. When the agency relationship is formed, it is expected that the agent will act in the best interest of the principal at all times. The principal allowing the agent to waive a conflict of interest may leave room for decision making on the agent's part that is not in the principal's best interest
Contrast a trade secret to other forms of intellectual property e.g., patents
Patents aren't kept secret because they are publicly published
Sarbanes-Oxley Act of 2002 (SOX)
Primarily mandates corporate governance standards of publicly traded companies. SOX anti-retaliation provision prohibits employers from retaliation against employees who "provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of SOX, any rule or regulation of the SEC, or any provision of Federal Law relating to fraud against shareholders
English Only Policies
Prohibit the use of other languages in the workplace and they are illegal in California unless certain conditions are met, including business necessity and employee notice
Texas Whistleblower Protection Act
Protects Texas state employees who report alleged illegal activity to an appropriate law enforcement official from retaliatory action
Whistleblower Protection Act of 1989
Protects federal employees who report alleged illegal activity to an appropriate law enforcement official from retaliatory action
Dodd-Frank Wall Street Reform and Consumer Protection Act
Provides a private cause of action to an individual who is retaliated against for engaging in whistleblowing activities such as filing a claim or testifying in any proceeding under Dodd-Frank or objecting to or refusing to participate in activity they reasonably believe to be a violation of Dodd-Frank, SOX, or any other statute in regulation subject to SEC jurisdiction
What are the two types of harassment?
Quid Pro Quo Sexual harassment: Quid Pro Quo means "this for that". It is the most blatant form of sexual harassment and is generally easy to recognize. It involves the exchange of sexual favors to gain a tangible job benefit or to avoid tangible job detriment Hostile Environment: Proving this type generally requires that the harassment 1) Be unwelcome by the victim, 2) Be based on any of the prohibited bases, 3) Be sufficiently severe or pervasive to create an abusive working environment, and 4) Affect a term, condition or privilege of employment
Employee Retirement Income Security Act (ERISA)
Regulates employee retirement plans that employers establish to supplement Social Security Benefits
Family and Medical Leave Act (FMLA)
Requires employers to provide qualified employees with up to twelve weeks of family or medical leave during any twelve-month period
Fair Labor Standards Act of 1938 (FLSA)
Requires that employees who work more than 40 hours per week get paid time and a half overtime
Occupational Safety and Health Administration 1970 (OSHA)
Requires that employers maintain a safe workplace. It provides for specific health and safety standards that employers must meet depending on the employer's particular industry, the employee's particular position
Consolidated Omnibus Budget Reconciliation Act of 1995 (COBRA)
Requires the employer to continue to provide medical, optical, and dental insurance coverage for workers upon the voluntary or involuntary termination of their employment for up to eighteen months
Social Security Act of 1935 (OASDI)
Retired or disabled workers are entitled to monthly payments from the Social Security Administration
Employee Leave
Several statutes require the employer to allow the employee leave
What are the prohibited bases of discrimination under Tile VII of the Civil Rights Act of 1934?
Sex, Color, National Origin, Race, and Religion (SCORR)
Statutes Regulating Employment
Statutes Regulating Employment
What administrative responsibilities or risks does an employer have vis a vis an employee that it does not have vis a vis an independent contractor?
Statutes governing Social Security, withholding taxes, workers' compensation, unemployment compensation, workplace safety, and employment discrimination apply only if an employer-employee relationship exists. These laws do not apply to independent contractors
Affordable Care Act of 2010 (ACA)
The Affordable Care Act requires most employers with 50 or more full time employees to provide health insurance benefits
The At-Will Employment Doctrine and Wrongful Discharge
The At-Will Employment Doctrine and Wrongful Discharge
The Employment Relationship
The Employment Relationship
What affirmative defense is available to the defendant in a tortious interference suit?
The defendant has a right to interfere
From the employer's perspective, what are the advantages of hiring an independent contractor rather than an employee?
The employer does not have to abide by statutes governing Social Security, withholding taxes, workers' compensation, unemployment compensation, workplace safety, and employment discrimination, in regards to its relationship with an independent contractor
Medicare
The employer must withhold from the employee's paycheck the employee's Medicare Contribution
What is the Equal Employment Opportunity Commission (EEOC)
The federal agency charged with enforcing Title VII of the Civil Rights Act of 1964 and other anti-discrimination laws
What does the prohibition on gender discrimination ban?
The prohibition on discrimination based on sex includes that based on pregnancy, childbirth and related medical conditions, and sexual harassment
What does the prohibition on national origin discrimination ban?
The prohibition on national origin discrimination is broadly construed to include physical, cultural, and linguistic characteristics of a group. It does not prohibit discrimination based on citizenship.
What does the prohibition on race discrimination ban?
The prohibition on race discrimination applies to all racial groups. It includes discrimination based on the race of an applicant's or employee's spouse, children, and racial harassment
What must a plaintiff prove to establish retaliation?
To establish retaliation, an employee must offer evidence that he is protected from retaliation under a specific statute and that the employer violated the statute by engaging in retaliatory conduct and had a retaliatory motive Secion 704 of Title VII - the anti-retaliation provision -prohibits an employer 1) from engaging in any actions which might dissuade a reasonable employee from makin an allegation of discrimination or engaging in other activity protected by Title VII and 2) from discrimination against an employee "because he has opposed any practice made an unlawful employment practice by [Title VII] or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under [Title VII]
Explain the employment at will doctrine
Under this doctrine, either party may terminate the employment relationship at any time and for any reason, unless doing so violates an employee's statutory or contractual rights
Unfair Competition: Protection of Proprietary Information
Unfair Competition: Protection of Proprietary Information
Unfair Competition: Tortious Interference with Contractual Relationships
Unfair Competition: Tortious Interference with Contractual Relationships
Define wrongful discharge
Whenever an employer discharges an employee in violation of an employment contract or a statutory law protecting employees
Can an established business relationship be the subject of tortious interference?
Yes
Who must comply with the ADA
employers, transit systems, private agencies, government agencies, telecommunication companies
Workers' Compensation Statutes
state statutes that establish an administrative procedure for compensating workers who are injured on the job
