Employment Law

Affirmative Defenses to Public Policy Tort

(*Note - similar defenses apply here, to invasion of privacy, and defamation.) 1. Justification defense 2. Privilege defense

Tortious interference with a Contract

(aka Intentional Interference with the Employment Relationship) - Basic Idea: A third party intentionally interferes with two contracting parties. This tort travels under many different names, depending on the jurisdiction, and this can affect the outcome. · Tort. Interference with a Contractual Relationship. · Tort. Inducement of Breach (note - if employment at-will, then cessation of employment relationship does not cause breach.) · Tortious Inducement with a Prospective Contractual Relationship · Tortious Inducement with a Business Relationship

Garland Dissent in FedEx (and why it is arguably correct

-Company's contractors do regular work that Company does -Company trains them -Must wear Company uniform -Contractors don't actually use entrepreneurial opportunity -Contract of adhesion -Employer can unilaterally configure contractor's work -The things the Ct. thought were important didn't actually happen -majority focused on one factor instead of several

Dynamex

-Drivers don't own routes, otherwise a lot of the same facts as FedEx -Issue Employees or contractors for purpose of wage laws -Court wanted more of a rule than a standard -Used ABC Test

McCary Test

1. ER has the power to terminate at will 2. ER receives output without the presence of a middleman a. There was direct contact between the EE and ER. Note the presence of a labor broker cuts against the existence of an employment relationship 3. Ability to supervise the work as it is being performed (i.e. looking over the shoulder situation.

Elements of Wrongful Termination in Violation of Public Policy.

1. Existence of a clear public policy [Clarity Element] 2. The dismissal of employee under the circumstances alleged in the case would jeopardize that public policy [Jeopardy Element] a. "Dismissal would have a chilling effect on the public policy by discouraging the conduct." b. Or it could encourage a positive action. 3. The plaintiff engaged conduct protected by the public policy and the conduct was the reason for the dismissal. [Causation Element.] 4. The employer lacked an overriding business justification for the dismissal. [Lack of Justification Elements]

Elements of Tortious Interference

1. Intentional—Fault. 2. Improper (Non-Privileged)—Must prove malicious impropriety or motives or independently tortious conduct. 3. Contract between 2 or more parties. —One cannot interfere with their own contract. 4. Resulting in Economic Loss.—The harm.

Administrative Procedure for SOX Claims

1.) 180 day agency statute of Limitations (OSHA) 2.) P must give 15 day notice of filing 3.) OSHA has 180 days to give a decision

Brock Test

1.) Degree of control exercised by employer over workers 2.) Workers' opportunity for profit/loss and their investment in the business 3.) Degree of skill and independent initiative to perform work 4.) Permanence/Duration of working relationships 5.) Extent to which work is integral part of employers' business

Remedies for Sarbanes Oxley

1.) Goal is for voluntary remedy 2.) administrative remedy Provides for "all relief necessary to make the employee whole, including reinstatement w/same seniority status" and backpay w/ interest

Workers Comp Test for compensability

1.) Injury in question must be accidental 2.) Injury must arise in the course and arise out of employment · Arise Out of employment. o This points to the cause or origin of the accident and requires some causal connection between the accidental injury and the employment. · In the course of employment o Relates to the time, place, and circumstances under which the accident occurred and means the injury happened while the worker was at work in the employer's service.

Basic Structure of Workers Comp

1.) Insurance: Employers must purchase/cover all employees 2.) Entitlement: If injury was at all "arisen out of/in the course of employment" then employee gets $$$ 3.) Benefits: Broader coverage, lessens individual financial burden 4.) Administration: conferred on administrative tribunals 5.) Exclusivity: Employees are foreclosed from bringing tort claims against employers

Tortious Invasion of Privacy

1.) Physical intrusion into a place where the P has secluded themselves in a way that is highly offensive to a reasonable person 2.) Public disclosure of private facts in a way that is highly offensive to a reasonable person 3.) Portrayal of P in a false light highly offensive to a reasonable person 4.) Unauthorized appropriation of P's name/likeness **Difference w/ defamation: these statements are true

Sarbanes-Oxley Act

2002 -made in response to market crash caused by Enron's corporate fraud "No publicly traded company (or its agents) may discharge, demote, suspend, threaten, harass, or discriminate against an employee in the terms/conditions of their employment because of any lawful act done by the employee." —causal connection requirement: contributing/motivating factor; extremely broad; did protected conduct have any influence on the decision at all.

Restatement § 502 Formulation of Public Policy Tort

An employer is subject to tort liability for discharing an employee because the employee, acting in a reasonable manner, a) Refuses to commit an act that they reasonably and in good faith believes violates a law or other well-established public policy. a. Refusing to commit an illegal act is the least controversial situation to invoke the wrongful discharge tort. Even NY has a statute which allows one to sue an employer for aiding an abetting an illegal act. b. Performs a public duty or an obligation that the employee believes is imposed by law. i. Jury Duty case. c. Files a charge or claims a benefit under the procedures of an employment statute or law. i. Cannot fire an employee for filing a worker's compensation claim. d. Refusing to waive an unwaivable right i. We will hire you so long as you don't get married. e. Catchall provision.

Restatement 3rd of Employment Law (Tortious interference)

An employer wrongfully interferes with an employee's employment or perspective employment with another employer when the employer by improper means or without a legitimate business justification intentionally causes another employer to (1) terminate the employment or (2) not to enter into an employment relationship with the employee.

Economic Realities Test (Fitzgerald)

Another Factor Analysis, but the weight is different. ii. Control is still very important. 1. Ask whether the worker receives daily directions from the ER. (Note: It is irrelevant is the worker failed to follow these directions on isolated occasions.) iii. Payment of regular wages 1. As opposed to general fee for regular output) 2. Indirect Payment through a middleman, such as a labor broker is sufficient. iv. The ER's right to hire, fire, and discipline the worker; 1. The power to stop a specific worker from working. v. Work integral part of the employer's business; vi. Worker Dependence on employer for livelihood = distinguishing feature of this test.

ABC Test for Employee/Independent Contractor

Burden on employer to establish that worker is a contractor. Must prove A.) That the worker is free from hiring entity's control and direction...of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; B.) that the worker performs work that is outside the usual course of the hiring entity's business, AND C.) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity Used in California, Delaware, and Massachusetts

Difference between Common Law Test and ABC test

Common law test does not require that the worker be free from hiring entity's control and direction...of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;

Contract Law Protections for Employee Job Security

Courts will often use common-law contract doctrine to increase protections to workers from the harsh consequences of the at-will presumption. Reliance on Offers of Employment (Promissory Estoppel)

FedEx v. NLRB (2009)

Drivers' abilities to own, sell, and contract their routes out led the court to conclude that they were independent contractors, not employees. Court emphasizes whether there is an opportunity for entrepreneurial profit or loss

Written Employment Manuals and Contracts for Employment

Employment manuals and other written policies can provide a textual anchor for an employee's implied contract claims.

Restatement (3rd) of Employment Law §101

Employment relationship exists when -a worker acts, at least in part, to serve the interests of the employer; -employer consents to receive services of worker; -worker is not rendering services as an independent business; -worker does not exercise entrepreneurial control over the manner/means of work

Genberg v. Porter (10th Cir. 2018)

Facts: P and D are both executive shareholders, not board members, of Ceragenix. Merger of Ceragenix w/old company entitled shareholders to shares of Ceragenix. Ceragenix was uses proxy to entrench power, increase pay, not release shares. P ghostwrites email urging Ceragenix to abandon proxy and allow shareholders to exercise their own voting rights. Board meets, D outs P as ghostwriter. P sends another email 2 days later, alleging D is an inside trader. Board has attorney investigate, finds no inside trading, does find P's relationship with group trying to acquire Ceragenix. Board fires P for cause -Second email is protected because SEC regulation is part of SOX coverage. -First email is protected bc SEC Rule 14 —this is a standard of employee's reasonable belief, not "definitively/substantially" related standard used by district court. ——because this is disputed, summary judgment is improper

McCary v. Wade

Held that driver was IC because he could choose when he worked, how much product he would cut, he owned all of his timber, and the proposed employer did not place any requirements on him otherwise.

Fitzgerald v. Mobil Oil

Held that truck driver hurt on job was able to claim worker's compensation because he was an employee. (Note: Interesting Litigation Strategy. Here, the employer wanted the worker to be an employee so that the worker's remedy would be limited to workers compensation. This leaves the employer open to the other consequences of the relationship.) Using the above factors, the court found that the driver received daily directions about which jobs to perform; the presence of payment through a labor broker did not mean that the money was not coming through the employer; and that delivery of goods was the employer's business.

Hanson v. Central Show Printing Co. (Iowa 1964)

P was a skilled printer who wanted assurances of steady employment. He turned down an opportunity with new ER because D wrote a letter assuring him work until he chose to retire. D later discharged P without cause. The court held that a contract for lifetime employment required additional consideration. The plaintiff's continued services or his relinquishing another business opportunity were insufficient consideration. The court acknowledged that if P paid for the promise or surrendered a competing business, then that consideration would likely be adequate.

Who is an employer? (Context)

In the modern business enterprise, fewer worker and firms engages in a long-term relationship in which the managers of a single firm exerts exclusive control over their workers' day-to-day activities. Firms are now often splintered into smaller, independent parts. Under this arrangement, "end-user" firms typically engage "labor brokers" to provide workers for their production.

Problems with the Common Law definition of Employee

It does not give a straight answer. · Courts engage in a fact-specific inquiry to determine the employment relationship. · On one hand, this creates uncertainty and increases transaction costs (both ex ante (planning) and ex post (litigation)). · On the other hand, a bright line rule would live be too over inclusive or under inclusive.

Compare Clackamas with Yates

Key difference is that ERISA provides guidance on whether the working owner is entitled to coverage, whereas the ADA did not. · Facts: Another professional corporation. Yates was the sole shh and president of Yates, MD, PC, a professional corporation. The corporations maintained a profit-sharing/pension plan. The plan contained an anti-alienation provision (spend-thrift clause), which basically stated that no benefit contained in the plan was subject to assignment. Essentially, if Yates was a covered employee under ERISA, he did not have to transfer his assets to a bankruptcy trustee. · Rule- A working owner can still be an employee for ERISA purposes. · Analysis - "ERISA's text contains multiple indications that Congress intended working owners to qualify...because these indications combine to provide 'specific guidance' there is no need to resort to the common law." The court points to certain exemptions seemingly targeting working owners. Under ERISA, a working owner may have dual status, i.e., he can be an employee entitled to participate in the plan and , at the same time, the employer who established the plan.

Microsoft Hypo—Fix the following policy: -Highly skilled industry -No profit sharing -work longer hours than normal -no overtime -employees don't pay taxes or insurance -higher pay for workers -based on contract -worked on site -received card keys, office equipment, and supplies -contractors worked with employees

Look to Contract first, then to practice Tell them to -limit time/duration -have break between contracts -have workers work at home -have workers on different hours than employees -make smaller contracts -outsource certain departments

What are some significant enforcement obstacles for workers' vindicating their rights?

Many labor brokers are under-capitalized, which presents challenges for workers seeking redress (unpaid judgments, heavily discounted settlements, or unprosecuted claims.) As a result, contracting with labor brokers may provide employers with the leeway to avoid the risks associated with non-compliance of worker protections while also paying under-market value for the workers services.

Federal Whistleblower Protection

Many states, and even the federal government, protect some activities because they are beneficial to the public. These protections are cousins of the public policy tort. Essentially, they are policies deemed to be important enough for the government to provide increased security to employees. Our example is Sarbanes-Oxley, a federal statute which imposes disclosure requirements on corporations and offers protection to employees who make the proper disclosures. (Whistleblower). Historically, this statute followed major scandals involving financial fraud by major corporations (such as ENRON.)

Statutory Exceptions to At-Will Presumption

Montana adopts a minority position and weakens the at-will presumption directly by statute —They impose a 90-day probationary period where the employment relationship is at-will, but after this period an employer must provide some form of job security. Additionally, statutory civil rights protections are the main exception to the at-will doctrines. —Anti-discrimination statutes, such as Title 7, ADEA, ADA, and FMLA, prevent employers from discharging employees because of the employee's membership in a protected class. ——Difficulty in these cases is the requirement that the plaintiff must prove that the firing decision was motivated by their class.

Does the court tortious interference apply to at-will employment

Most courts will say yes. They interpret at-will employment as a series a one day, unilateral contracts. The intentional interference reaches interference with the "prospective advantage" of a contract.

Economic Realities Test

Multi-factor/totality of circumstances test No one factor is dispositive, the ultimate concern is whether the workers depend on someone else's business for the opportunity to render services

OSHA

Occupational Safety and Health Administration, seeks to prevent workplace injuries

Borse v. Piece Goods Shop (3d Cir. 1992)

P fired for refusing to consent to urinalysis test, sues under wrongful termination in violation of public policy. Sources of Public Policy -US Constitution (No) -Penn Constitution (No) —see state action doctrine -Penn common law (Yes) —Well-recognized doctrine for intrusion on seclusion -more invasive is permissive when there is reasonable suspicion HIPPA: protects privacy of medical records Step 1 of breach: proving duty to protect info ADA makes it unlawful to ask about disability during job interview Genetic Information Non Discrimination Act

Shannon v. Taylor AMC/Jeep

P fired, D tells customers it was "for stealing" D argues qualified privilege, which must be: -bona fide -made by a party who has interest/duty to communicate -made to a party who has corresponding interest/duty

Guz v. Bechtel

P was a 20-year employee of the plaintiff. He began working for the company as an admistrative assistant. Guz had received numerous good reviews over the years. While there was no bilateral writing between the parties, D issued a policy manual for their employees. · Policy Manual contained Personnel Policy 1101, which stated that employees were employed at will. However, it limited D's ability to terminate by laying out a notice requirement and assuring employees the opportunity to improve their performance before termination (progressive discipline procedure). 1101 also addressed layoffs and place no limitations on employer's ability to conduct reductions in force · Guz was in the BNI Management sub-group when Bechtel decided to eliminate that group. Guz sued Bechtel, alleging that he had an implied contract to be terminated for good cause. Guz also alleged that Bechtel breached the implied covenant of good faith and fair dealing. · Legal Analysis o Implied-in-Fact K - The court in Guz applies the Foley factors (similar to Pugh, supra.) These include: (a) personnel policies; (b) longevity of the ee's service; (c) actions or communications by the employer reflecting assurances of continued employment; and (d) standard practices of the industry in which the employee is engaged. § Here, the court summarizes post-Foley case law to suggest that longevity of service, good performance review, raises, and commendations do not, without more, suggest ER's intent to provide more than "at-will employment." § As such, Guz's longevity of service and Bechtel's apparent approval of Guz's work are insufficient to provide him with protection. § This case narrows the strength of the Foley factors as seen in Pugh. —Much More difficult for a court to find an implied-in-fact K because employers have begun drafting their documents and designing their policies and practices in such a way as to avoid liability. o Covenant of Good Faith and Fair Dealing - A classic fellow traveler of any breach of contract claim. The covenant is an automatic term of every K, which is implied-in-law and cannot be discharged. It requires both parties to refrain from unfairly denying the other party of the benefits of their bargain. § Here, Personnel Policy 1101 did raise an issue of fact as to whether Guz had an implied right to be terminated for cause. However, PP 1101 did not place any restriction on Bechtel's right to eliminate Guz's work unit. § The Covenant of Good Faith and Fair Dealing does not impose substantive duties beyond what the parties have actually agreed upon. As such, Guz's argument that the covenant implied job security protections under the covenant also fails.

Fitzgerald v. Salsbury Chemical

P was an employee at a chemical company. A employee he was supervising failed to effectively monitor a temperature gauge on a chemical mixing tank. That employee was fired. During a follow-up meeting, Fitzgerald defended the employee. The employer also urged to give favorable testimony on the employer's behalf, which would have allegedly required perjuring himself. He was fired after he remained silent. · Fitzgerald alleged two potential public policies which were violated by his termination. o To protect the unlawful termination of a coworker. o Providing truthful testimony in a court proceeding. · The court details a general retaliation circumstantial proof structure. o Protected Conduct; o Termination or Adverse Action; o And Causal connection. · The court then outlines the actual elements of the tort. See Above. · Towards the first, P points towards several anti-discrimination statutes at the state and federal level. However, this is insufficient for the court. à The plaintiff must identify the public policy with sufficient clarity to evaluate the ramifications of its breach. · Towards the second, the court is more favorable to the plaintiff's claim. o The public certainly has an interest in the integrity of the justice system. o The court cites Peterman and recognizes a cause of action for wrongful discharge for failure to perjure oneself at the employer's request. o This court believes that having a good faith intent to engage in the protected activity is the same as performing the activity. The contrary holding would discourage from engaging in the protected conduct otherwise. à Fitzgerald must only show he had only a good-faith attempt to truthfully testify. o Here, the employer asked Fitzgerald to choose sides in a foreseeably pending lawsuit and this inference is enough to survive summary judgement. · Towards the causation element: o The employer must have knowledge that the employee engaged in the protected activity. o High standard - it requires the court to determine if a reasonable jury would conclude that Fitzgerald's intent to testify truthfully was the determinative factor in the decision to discharge him. · Note - the business judgement exception was not at issue in this case. Clearly, it would be hard to envision a business justification for perjury.

traditional torts related to workplace

Personal Injury Battery IIED Invasion of privacy Terminations False Imprisonment Defamation Tortious interference w/ Contract

Pugh v. See's Candies

Pugh was a long-time employee of D, where he had started as a low-level employee and worked his way up to being executive VP. He had received numerous awards throughout the years. He did not get along with the current President of the company. D fell further from the presidents good graces when he took employee's side during a union negotiation · Factors to determine the existence of a contract implied-in-fact (Did the parties conduct form a contractual relationship?) o Personnel Policies or practices of the employer. o The longevity of the employee's service. o Actions or communications by the employer reflecting assurances of continued employment. o Industry Practice. o Is there a written or oral assurance? How do they treat employees? When Pugh was first hired, the president at the time told him that if he was "loyal to See and do a good job" then his "future was secure." Further, he continually received awards, commendations, and promotions. As such, the court holds that P had a triable case for breach of a contract implied in fact. · Remanded · Burden Shifting Procedure (How this case operates.) 1. P shows prima facie case (leading to inference of implied contract.) 2. Defendant proffers reason for termination. 3. Burden shifts back to the plaintiff to disprove defendant's reasonàArgue that the reason is pretextual (i.e. cover-up for a real, illegal reason) or that the reason is insufficient to meet their contractual or legal burden. Here, Pugh Lost on Remand.

Debate between legal standards and legal rules

Standards are unpredictable, flexible, and fact specific Rules are more predictable, but end up excluding some people

Greene v. Oliver Realty, Inc.

Takes a more lenient, and modern approach. According to the court, clear evidence of the parties' intent is sufficient to rebut the presumption of at-will employment. There, the court reasoned that additional consideration (such as lower pay rate) was evidence of parties' intent, along with the parties' communications and surrounding circumstances. --· Note on Remedy - Reinstatement is unlikely, so look for contract damages.

Economic Realities Test (Ansomana Version)

The Key is dependence, and it is reciprocal. 1. Does the ER depend of the EE, and does the ER depend on the ER? ii. There are still factors 1. Control, of which hiring, and firing is a part. 2. Workers' opportunity for profit and loss; a. This incorporates the EE's dependence of the ER. 3. Degree of skill and independent initiative required to perform the work. 4. Duration of the working relationship a. Note: In Duane Reed, the relatively short nature of the employment did not cut against the employment relationship because that was simply the nature of the job. 5. Extent to which the work is an integral part of the ER's business. a. This incorporates the ER's dependence on the EE.

Can an officer or director of an employer be liable for causing the employer to fire someone?

The answer typically depends on whether the officer or director was acting within the scope of his employment In other words, search for a private purpose rather than a business purpose 1. X wants ER to fire Y because Y is not performing. à Good. 2. X wants ER to fire Y because Y beat X at golf. à Bad. Note - There will often be a fellow traveler claim of the breach of good faith and fair dealing.

Goff-Hamel v. Obstetricians & Gynecologists,

The court held that P reasonably relied on D's offer of employment to her detriment and promissory estoppel was necessary to prevent an unjust result o Facts - Goff-Hamel was sought after by the defendant. She initially declined the position, but after D offered her several benefits and an increased salary; she accepted. After she accepts, Goff-Hamel quits her job and prepares to being working for D. However, 1 day prior to her start date, D rescinds the offer (turns out that the wife did not care for P.) o This is a promissory estoppel case because the agreement was to be for at-will employment. P did not have an express contract right to start working. As such the court must find another legal principle to reach the conclusion that P was entitled to begin working. o Promissory Estoppel Elements: § A promise § Intended or foreseeably likely to induce reliance § Which P actually relies on to their detriment § And the reliance was reasonable. § High Threshold for Promissory Estoppel Elements (p. 91, n.7) o Court deals with divided jurisdictional issue. § Some courts recognized that prospective employees can recover using promissory estoppel if the prospective employer knows or should have known that the promise of employment would cause the employee to quit his or her previous job. In those case, courts awarded damages based on lost wages at the previous job. § Other courts say that the prospective employee should have known that employment could have been revoked, so it was not reasonable for them to rely, o Court cites Grouse v. Group Home, which stated that a prospective employee has the right to assume he would be given a good faith opportunity to perform his duties satisfactorily. This implies that an employee has a reasonable amount of time to meet the employer's satisfaction. § Open Question as to how long is long enough. In Gorham v. Benson Optical, the Minnesota Court of Appeals suggested that one day was not long enough. o Here, the court allows the use of promissory estoppel. o Damages - Tricky in PE cases. Front-Pay, or the pay that employer would have received at the new employer, is very difficult to show. Typical measure of damages is reliance. § Note 4, pg. 89 - Damages are calculate based on prior employment. (Pay at old job - whatever replacement pay the employee had.) o Additionally, typically those who are let go have a duty to mitigate damages (i.e. they have to make reasonable efforts to find replacement employment in a timely manner.)

Attorneys on the Public Policy Tort

The ethical duties of attorneys, namely client confidentiality, complicates the public policy analysis by providing a competing public policy to contend with. In other words, the ethical duty to keep client information confidential may conflict with a supposed public policy to disclose wrongdoing. Some courts find that the special role attorneys have in our society is best captured by the code of ethics, rather than the public policy tort. Other jurisdictions recognize that lawyers' ethical duties require special protection and recognize specific statutes providing a cause of action for terminating attorneys for adherence to that duty.

At-Will Doctrine and Implied Contract Terms

The general rule in the United States is that employment is at-will. This means, that both the EE and the ER may end their relationship at any time and for any reason, provided that neither fall into a covered statutory exemption or there is not contractual agreement between EE and ER which provides job security. In litigation, the burden of proof is on the EE to rebut the at-will presumption. As a practical matter, most employers do not terminate employees for capricious reasons. Typically, they fire employees for business-related reasons, such as poor performance or economic necessity. Think about it - employee morale, and therefore employee effectiveness, would be lower if they were constantly in fear of being let go. That being said, most employers do not contract for job security. They want to have their cake and eat it to (i.e. they want the morale benefits of for-cause employment without confining themselves to actually providing job security.)

Murphy v. American Home Products Corp.

There, an employee made a proper report to the SEC, and was fired. There, the court states that the legislature is the only body which can override the at-will doctrine. "No matter the degree to which public policy may be implicated, a firing is not actionable unless there is a statute expressly according such a right to an employee." Minority Rule

Defamation

Tort aimed at protecting an individual's reputation against false and harmful words. It is typically presumed to cause damages. (First Amendment enters the field and protects defending parties.) Traditionally, there are two forms of defamation. Libel - writing or placed in some permanent medium (meaning that it can live forever even if corrected.) Historically, damages were presumed. Slander - spoken, and not recorded. One must prove they were specifically damaged economically, unless it was slander per se. Certain acts: falsely claiming that person committed crime, committed adultery, violated professional ethics, etc....) All defamation claims are subject to a qualified privilege, a good faith interest in communicating information. The listener must have a good faith effort in receiving the information. Additionally, the First Amendment protects speech targeted at public figures. To claim a privilege defense - Show that speaker had good faith interest; listener interest; and actual malice (required to get punitive damages from private figures, and need for anything for public figures.)

Petermann v. International Brotherhood of Teamsters

Union employee was let go after refusing to give false testimony to Congress. Court adopted a narrow rule - an employee cannot be fired for refusing to commit a felonious act.

1. Restatement 220 Test

a. A non-exhaustive multi-factor analysis which includes: i. Extent of ER's control over the details of the work. 1. Ask whether the employer controls how the work is completed. 2. Consider the time, place, manner, and output of the work and then assess the degree to which the ER controls each of those. 3. Consider whether the worker has discretion over when and how long he/she works. (Consider traveling salesman with a quota example) 4. If the ER cares about the means of performance, then the worker tends to be an employee. If, however, the ER cares only about the final product, then the balance seems to favor an IC. ii. Whether or not the servant is engaged in a distinct business; iii. Whether the kind of work is usually done by an EE; iv. The level of skill required to do the work; v. Duration of the relationship b/w worker and employer; vi. Method of payment (hourly, salary, or paid by the job.) 1. Does the employee absorb any costs of performing the work? vii. Is the worker a part of the employer's regular business; viii. The expectations of the parties.

NO DEFINED TERM AND NO JUST-CAUSE PROVISION

at-will employment

3 common law defenses for employers in tort actions prior to workers comp

contributory negligence fellow servant rule assumption of the risk

What is the central factor in determining whether an individual worker is an employee or an independent contractor in any of the tests used by courts

control (i.e. the extent to which ER directs and manages EE's actions.) Because of the fact-sensitive nature of these inquiries, the same factor can often include arguments on both sides of the debate.

Whistleblower Elements

eenPlaintiff must prove 1.) Protected Conduct 2.) Decision Maker's Knowledge —Catspaw liability: Getting another person w/ no knowledge of protected conduct to be the decisionmaker. (Lockheed Martin) 3.) Adverse (employment?) action —any action that would dissuade future actions counts as adverse action (does not have to be predicated on terms/conditions of employment. 4.) causal connection between protected conduct/adverse action (MULTIPLE TESTS) —determinitive factor--but-for test —motivating factor/contributing factor (any role at all —sole causation: only cause; no other cause; v difficult to prove —NOTE: Temporal proximity can draw the causal line -no bright line for how soon it could be after for it to count -if only evidence, must be very close -if other evidence, can be longer Defendant must then prove 1.) Would have made same decision anyway -In Genburg, D says P breached fiduciary duty of loyalty

Economic Reality Test (see Fitzgerald)

i. Another Factor Analysis, but the weights is different. ii. Control is still very important. 1. Ask whether the worker receives daily directions from the ER. (Note: It is irrelevant is the worker failed to follow these directions on isolated occasions.) iii. Payment of regular wages 1. As opposed to general fee for regular output) 2. Indirect Payment through a middleman, such as a labor broker is sufficient. iv. The ER's right to hire, fire, and discipline the worker; 1. The power to stop a specific worker from working. v. Work integral part of the employer's business; vi. Worker Dependence on employer for livelihood-> distinguishing feature of this test.

Winfrey (Reid) Test

i. Another non-exhaustive factor test. Additional factors include: 1. Rights to assign additional projects to EE; 2. Provision of employee benefits; 3. And Tax Treatment of the worker.

TERM K WITHOUT JUST-CAUSE TERM

material breach (harder than a just-cause agreement)

Ansoumana v. Gristede's Operating Corp. (Issues)

o (1) Were the workers independent contractors or employees of Hudson/Chelsea? o (2) Was Duane Reed a joint employer alongside Hudson/Chelsea? o (3) Are the officers and managers of Hudson/Chelsea liable individually?

Phillips v. U.S. Bank

o Employee receives a bonus so long as she is an employee when bonus is due [seat-time bonus]. At-will employee with no protection like Weiss got if he was terminated without good-cause. The plaintiff was called into her supervisor's office and was asked about a co-worker's plan to leave. Phillips says she did not, however, none of supervisors believed her. Therefore, the supervisor terminated her for violating the Bank's Code of Ethics for failing to be honest. § GOOD FAITH AND FAIR DEALING ARGUMENT IS THE ONLY THING LEFT: · Covenant argument: based on intent; only purpose of termination is due to the bonus. o This is an extremely hard argument to make because you must get into the cranium of the employer. o The employer's defense is that there was just-cause: § Disloyalty: there was an opportunity to warn company of another employee leaving and she did not do so. § Because there is a genuine issue of material fact (i.e. conflicting testimony between plaintiff and defendant] and the termination condition alone precluded the plaintiff from obtaining the bonus then it is for the jury to decide. § While it is true that the bank argues that in the at-will employee context there is no duty to terminate in good-faith, there is, however, A REQUIREMENT THAT THE PARTIES ACT IN GOOD-FAITH AND THEREFORE AN EMPLOYER MUST COMPLY IN GOOD-FAITH WITH CONTRACTUAL OBLIGATIONS.

Compensation Terms

o Failure to pay earned compensation is a common source of employment litigation and usually arises with respect to contractual terms, such as whether the employer's promise is binding and whether it has breached.

Ansoumana v. Gristede's Operating Corp. (Facts)

o Faty Ansoumana (Π) was a delivery worker for supermarket and drug stores, including Duane Reed, one ∆. The Hudson/Chelsea group, ∆2, served as a labor broker and hired the plaintiff and the class of workers that would both work as delivery drivers and in-store personnel for Duane Reed. o The Hudson/Chelsea defendants hired delivery workers and then supplied them to grocers/supermarkets. H/C regarded the delivery drivers as independent contracts and filed 1099-forms reflecting that treatment. o Basically, H/C and DR were trying to get cheap labor. DR would pay H/C $200-$300/week per worker. H/C would then pay each worker $20-30 per day (well below federal and state min. wage.) o DR would manage employees on-site; and H/C paid the salary & had hiring/firing control

· ALL OF THE JUST-CAUSE FRAME WORKS:

o Good faith (deferential approach) § Subjective belief of employer § HOW DO YOU REBUT A GOOD FAITH CLAIM? · You can show no investigation occurred, but this is hard for the employee to do. o Good faith, reasonable belief § Same as above and adds reasonableness § Subjective then tested on a reasonable test—analysis of everything the employer did. · Employee must attack the foundation of belief o Factual Corrections § Hardest on the employer and easiest for the employee § Employer's just-cause proffered MUST HAVE ACTUALLY HAPPENED in the real world. · Facts in the real world must support the employer's reason.

Hess V. Kanoski & Associates

o Hess worked for law firm and had several cases pending when he was fired. Hess was paid on a bonus structure based on the cases that he won and "fees generated." Hess alleges that the firm fired him before the cases he was working on settled for millions of dollars so it did not have to pay him the bonuses. § To succeed on a breach of contract claim Hess must show: · (1) the existence of a valid contract · (2) performance by the plaintiff · (3) breach of contract by the defendant · (4) resulting in injury to the plaintiff § There was an interpretative problem with "generated" so the court turned to parol evidence. · The extrinsic evidence looked to was: similar situations (course of dealings), other similar firms (trade norms), and conversations. § The firm won BUT this cost them a lot of money when the firm could have just defined the word "generally" which was ambiguous. · Moral of the story: always define terms with more than one meaning.

Cochiara v. Lithia Motors

o P had a heart attack and needed a job with less physical stress. He told his boss that he found a job elsewhere that would suit those needs. His boss then attempted to convince him to stay by offering him a corporate, desk job with the employer, D. He told him to meet the big boss the next day. P turned down the other job. During the meeting the next day, P discovered that he did not have a job waiting and would have to interview. He did not receive the job, took another job with a big pay cut, and sued his employer. o Court defines at-will doctrine: "The general rule is that an employer may discharge an employee at any time and for any reason, absent a contractual, statutory, or constitutional requirement to the contrary with or without notice." o Plaintiff brings promissory estoppel claim in the traditional way (i.e. substitute for consideration.) —The court states that an employer has a right to fire an at-will employee for any lawful reason. However, that does not mean that a prospective employee can never reasonably rely on promise of future employment. o Additionally, the Court declines to decide if an at-will employee can never prove front-pay damages

Conner v. City of Forest Acres [Bad Handbook with Disclaimer]

o The court ruled that it would be unjust to allow an employer to couch a handbook as mandatory and the allow the employer to ignore these policies as nonbinding when it benefits him.· Here, the plaintiff was an employee of the police department for several years. During the course of her employment, she received numerous reprimands. Eventually, she was terminated. The police department issued two separate employee handbooks, which contained three disclaimers where the employee was required to show that they understood the handbook. o The handbook itself contained several sections describing actions which violated department policy and detailing the department's responses to such violations. The first section of the handbook contained a disclaimer stating that all employees were at-will. By contrast, the second section included a non-exhaustive list of actions that will require discipline, outline progressive discipline procedures o Additionally, the disclaimer contained highly legalistic language that a layperson would not understand. o The court ruled that it would be unjust to allow an employer to couch a handbook as mandatory and the allow the employer to ignore these policies as nonbinding when it benefits him. o The conspicuousness of a disclaimer is question of fact for the jury. o The court remanded the case to determine if the employer had just cause for terminating the plaintiff. —Did the employer have a reasonable, good faith belief that there was misconduct on the employee's part.

Woolley v. Hoffman-LaRoche [No Disclaimer]

o The court stated in dicta that an employer can avoid having the handbook being binding by putting a disclaimer in a conspicuous location.· P was an engineering section head. Employees were given a manual which stipulated 5 different ways to be terminated. The manual also contained "for-cause" termination requirements, and it did not contain any specified at-will provisions. o Under a totality of the circumstance's analysis, the court found that the manual bound the employer as an implied-in-fact K. The courts analysis depended in large part on the fact that an employee would have interpreted themselves as being bound by the employment manual (with emphasis on the importance of the word "policy.") o In this way, the court established that an employment manual is, in effect, a unilateral contract. The manual is the offer, the employee showing up to work every day is the continued, bargained for acceptance of that offer. —Tension here - Often the employer will want to give confidence to employee without actually creating a binding legal obligation. o If no disclaimer, then the employee almost always wins. When there is a disclaimer, an employee's chances gets a lot more difficult and they must prove that the disclaimer was in some way deficient.

Benson v. AJR

o The employees at AJR are randomly drug tested. In between the test and the results, there is a meeting where the manager asks if anyone knows of an employee using drugs and Benson says nothing. It turns out that he failed the drug test and is fired for "using an illegal substance." Benson was given the choice of voluntarily resigning or being termination which he chose. § Benson was guaranteed employment for a period of eight years. AJR had the right to terminate Benson, but was required to continue paying Benson his salary for the balance of the eight-year term of employment in the absence of: (1) dishonesty; (2) conviction of a felony; and (3) voluntary termination of the agreement by the appellant. § The issue is: "was the plaintiff fired for drug use or dishonesty?" § When Benson was terminated by AJR all of the documents stated he was terminated for "controlled substance testing and tested positive for cocaine." It was not until Benson brought up he had a contractual right to still be paid that AJR brought up the "dishonesty" loophole component. AJR argued that drug use was inherently dishonest and that by failing to speak in the meeting that Benson was dishonest; therefore, violating the terms of the contract. · The Court states that the competing positions the employer raises is a question for the jury as to the true motivating factor (the jury found there was a material breach and the employer had to pay 7.5 years of salary to the employee). § The Justice Starcher concurrence notes, THAT THIS CASE SHOWS THAT SMALL EMPLOYER SHOULD NOT GIVE THEIR EMPLOYEES OPEN-ENDED CONTRACTS GUARANTEEING THEM EMPLOYMENT. Buyout provisions are actually extremely common

Weiss v. DHL Express, Inc

o Weiss's subordinate is offering prices way below the company standard. Weiss catches this and orally warns the subordinate about the conduct. Weiss, however, did not write this warning down (could be because he wanted to maintain a positive relationship). The subordinate does not correct his behavior and costs the company several thousands of dollars. He gets terminated. Weiss also gets fired because it was his subordinate, and challenged because he was supposed to get a bonus around the same time and did not receive it and argues he was fired with no just-cause. § Like Benson where bonus triggers some just-cause right (p.186), but if there is just-cause termination then no bonus rights. At will=bonus rights. § Weiss argues that the employer breached the contract and also of the implied covenant of good faith and fair dealing. · The issue is Weiss's contract contains plain language that designates the "committee" as the sole arbiter of whether an employee is terminated for good-cause and whether he eligible for the bonus. § This is a classic covenant of good faith and fair dealing fact pattern but why is the case not about it? · Because Weiss had a bad lawyer that did not object at the trial level to the good faith argument. · ABANDONMENT DOCTRINE: must preserve argument objection. o Also abandoned the argument on appeal. § JUST-CAUSE ARGUMENT · Weiss failed to properly supervise and did not write down the oral warning, per company policy. · Weiss's argument against: similarly situated treated differently because he was not the only supervisor of the employee and the others were not fired. o This argument fails, though, because the committee has decision making discretion which is set up as unreviewable and the company had contracted around judicial review. § Could attack these arguments by arguing the decision was arbitrary and capricious/a personal decision.

Practical Use of knowing who an employer is in the labor broker situation

the question of who is an employer concerns the ability of the worker to seek redress from an entity who deeper pockets might have than the labor broker who they contracted with.

ROADMAP TO EMPLOYMENT CONTRACT ANALYSIS

§ 1. Look ambiguous terms or clauses in the contract § 2. Look for "for-cause" provisions. § 3. Look for a "fixed term" or "duration" § 4. Plain language interpretation

Spacesaver System v. Adam

§ Shelving Unit Company; parents retire and give the business to the children. The sisters buy out the third sibling. One of the sisters becomes the CEO and the other is her subordinate. The employment agreement has a for-cause termination clause. · The CEO (sister) fires the other who sues for breach of contract. The employer argues the employment contract is at-will because there is no term of years included. · All of the siblings signed an ambiguous "term of employment agreement" and where a specific term is not provided or if there is an indefinite term then it is simply an at-will contract so long as there is no for-cause language.

Fortune v. National Cash

§ The employee was working on commission and on a multiyear deal resulting in a multi-million dollar contract with a government entity. · 25% commission and 75% on the day the sale consummated and money changed hands. § He was terminated after 25 years between the bonuses. · Employee brought in: o 25 years employment; proximate day he was supposed to get the bonus; competing against him to get sale made; plus employer higher him back to sale support which did not qualify him for bonus (had to be a sales manager) § CLEAR EXAMPLE OF A BREACH OF THE CONVENANT OF GOOD FAITH AND FAIR DEALING.

Uphoff v. Wachovia Securities

§ This occurred during the recession. Wachovia was selling off pieces of the company because they were being acquired by Wells Fargo so many of the Wachovia employees were "jumping ships" to save themselves. · The employees were told that if they were a financial advisor or higher than, they would receive a meaningful retention bonus o The employees were thinking it would be a substantial bonuses (~$100,000 which is reasonable) o The defendant withdrawals the offer and employees sue for breach of contract to bonus. · Weakness in contract claim: offer (insufficiently definite) · Court applied promissory estoppel which is used primarily with a flaw in consideration, not offer o Weakness: reasonability—look at the year when promise was made. § Courts have rules they can use to act in equity.

Objective Reasonableness Approach to just-cause termination

§ To establish just-cause the defendant, the defendant need only show that the board acted in good-faith by adequately considering the facts it reasonably believed to be true at the time it decided to terminate the plaintiff. · BURDEN SHIFT: o Plaintiff—prima facie case o Defendant—just cause o Plaintiff—rebuttal depending on the defendant's just-cause approach

What advantages does an independent contracting relationship provide to an employer?

· A principal is not vicariously liable for the conduct of independent contractor. o Incentive for principals to use IC for work that is highly risky to the public. o As such, Π must prove EE-ER relationship and EE was acting within scope of his employment to prove respondeat superior liability. · Avoid compliance costs: Tax costs, immigration documentation. · Many statutory protections for workers require employee status (Wage/Hour laws etc....)

CONTRACT WITH NO DEFINED TERM WITH JUST-CAUSE LANGUAGE

· CONTINUOUS-FOR-CAUSE o Can never lapse—like a lifetime contract, but there is not a guarantee for life.

What advantages does the employment relationship provide to the employer?

· EE's exclusive remedy against its employer workplace injury is workers' compensation. o The incentive is for principals to use EE for work that is highly risky to EE. · Employees will owe the employer Fiduciary Duties. This protects confidential information and clients. · Any copyright produced by EE within scope of their employment belongs to ER. (with some exceptions.) · If a worker is an employee, then the employer typically can exercise greater control over the work product. This is less important for low-skilled jobs which tend to be replaceable. · Employment relationship, while often at will, still tends to be more permanent that an IC relationshipàThis aids worker retention.

Uintah Basin Medical Center v. Hardy:

· Exclusivity agreement with for-cause termination and a ninety day notice. If there is no notice, then the wages for the amount of time missed in the notice are due. Further, the contract does not define just-cause. Hardy was terminated because the medical center found someone else willing to work cheaper. · What does the just-cause provision in the agreement actually mean? Is economic reasons just-cause? · Dr. Hardy's interpretation of just-cause is at odds with the ordinary meaning of the term. Unlike an at-will employment agreement, termination for-cause is understood to permit discharge only for "fair and honest cause or reason regulated by good faith, as opposed to one that is trivial, capricious, unrelated to business needs, or pretextual." (Guz v. Bechtel Nat'l) o This broad definition of just-cause means that an employer can terminate an employee for ECONOMIC REASONS as well as misconduct or poor performance. · Courts have recognized in deciding whether just-cause exists, there must be a balanced approach to determine if the employer had a good-faith reason supported by facts reasonably believed to be true by the employer. o Objective view. o The court here, agrees with this majority approach and adopts the OBJECTIVE REASONABLENESS APPROACH. § Thus, to establish just-cause the defendant, the defendant need only show that the board acted in good-faith by adequately considering the facts it reasonably believed to be true at the time it decided to terminate the plaintiff. · BURDEN SHIFT: o Plaintiff—prima facie case o Defendant—just cause o Plaintiff—rebuttal depending on the defendant's just-cause approach · ALL OF THE JUST-CAUSE FRAME WORKS: o Good faith (deferential approach) § Subjective belief of employer § HOW DO YOU REBUT A GOOD FAITH CLAIM? · You can show no investigation occurred, but this is hard for the employee to do. o Good faith, reasonable belief § Same as above and adds reasonableness § Subjective then tested on a reasonable test—analysis of everything the employer did. · Employee must attack the foundation of belief o Factual Corrections § Hardest on the employer and easiest for the employee § Employer's just-cause proffered MUST HAVE ACTUALLY HAPPENED in the real world. · Facts in the real world must support the employer's reason. o In this case, Hardy was fired for economic reasons BUT plaintiff showed employer did not have a reasonable economic reason. § The employer did nothing to determine if economic reasons were the real reason and the employer must show more than economic necessity (typically it must be bona fide necessity) or show beyond "he was cheaper."

Cockram v. Genesco

· Facts - Plaintiff, retail employee, typed a generic number into the system during transaction. A former employee had programmed that code to print a racial slur on receipt. This caused a public outcry. The employer released a statement to remedy its public image. This statement implicated the plaintiff as the one who entered a racial slur, rather than the former employee. They did not retract this statement, but released a second statement which further muddied the water. · Application o A statement is not false simply because it contains an erroneous fact. Rather, if a statement is essentially true, such that its divergence from the truth would not change the reader/listeners mind, then it is not defamation o The gist or sting must be false. o The ambiguity in the first statement could plausibly state

Clackamas Gastroenterology Associates v. Wells (2003)

· Facts - Professional corporation (in this case private practice positions.) 14 regular employees alongside 4 shh-doctors. Plaintiff was former bookkeeper who was let go, she alleged, in violation of the ADA. However, the ADA has a small business exemption, requiring a work place to have 15 or more employees to be counted as an employer under the statute. As such, the fight is over whether the shh-officers can be counted as employees. · Issue - Are the owners be considered employees under the ADA? · Holding - No. Where the statute is unclear on its face, look to the common law to provide guidance on unclear terms. Here, the court applies a Restatement family test, with control being its central feature. Therefore, an employer is one who owns and manages the enterprise. This is just an application of the test à The employer can hire and fire people, assign tasks and supervise workers, and direct the profits and losses of the business. As such, they resemble the employer more than the employee. o An individual's title does not matter. Nor does the existence of an employment agreement which specifies the employee as one kind of worker. · Dissent (Ginsburg) - Why can't they be both? On a day to day basis, they look an awful lot like employees. The provide services on behalf of the corporation which they work for. They have employment contracts with the corporation; they claim ERISA benefits as employees. As such, the dissent argues that the ADA's coverage should be interpreted broadly to include owner and managers, notwithstanding their control, in order to best effectuate the ADA's remedial purpose.

Kumpf v. Steinhaus

· Facts - The parent company decides to rearrange its Midwestern groups and combine them into a singular firm based in Chicago. Plaintiff is president of Lincoln Wisconsin, one of the former groups. The defendant is vice-president of Lincoln Life (parent of all the subs). The effect is that plaintiff loses his interest in the company, and the defendant gains a large amount of equity. · Is good faith and fair dealing problem? No—maybe if he was let go right before the payout was owed. This was a large-scale decision. · Judge Easterbrook applies a business judgment standard to the decision à very deferential standard. Basically, was there a business reason for the rearrangement? o Collateral matter —To get around business judgement, show that there is a personal motivation or other illegitimate business end.

Is a manager-owner an EE or ER?

· First, recognize exemption for Small Businesses (see page 57, n.4) -Many statutes limit the statutory definition of employer to workplace above a certain size. For instance, Title VII as a 15-employee floor. FMLA a 50-employee floor (among other requirements, see infra.) · Additionally, recognize that whether an employer is public or private changes the calculus significantly as well. Many labor acts only apply to private employers (for instance, NLRA and LMRA. On the other hand, may federal constitutional protection apply only in public workplaces.

Ansoumana v. Gristede's Operating Corp. (Hold/Reasoning)

· Holding o All three survive the summary judgment stage and are triable claims. · Reasoning o The court begins with an overview of FLSA à Key points for this case = Employee is defined very broadly (consistent with the statutes remedial purpose) and as such we must look to the common law in order to find a workable definition. Additionally, FLSA "contemplates" that an employee may have more than one employer in the regulations which implement it (CFR 791.2(a)) o First, the court employed an economic realities test to determine that the delivery workers must be considered employees of the Hudson/Chelsea group. The court notes that the employer treated the workers as IC's for tax purposes and in the course of their business. However, the court stated, "an employer's characterization of an employee is not controlling." It would go against the purpose of the statute. § In applying the ER test, the court held that H/C exercised substantial control over the workers because they paid the workers and controlled their hiring, firing, and transfer to the end user store. The court noted that control need not require the employer to "look over the shoulder" of the worker. Broader than that. Second, the workers had no opportunity or requirement to invest in the business. Third, the job required very little independent initiative (low "skill"). Fourth, the permeance of employment *may* cut in favor of H/C because most workers do not stay for a long time. However, the court holds that is simply the nature of the position, and not a reflection of the workers being able to move freely about a job market. Finally, the work is integral to the business. o Second, the court notes that officers and owners of a corporation may be found individually liable for FLSA wage violations provided that "the individual has overall operational control of the corporation, possesses an ownership interest in it, controls significant function of the business, or determines the EE's salaries and hires them. à Basically, ask whether the alleged employer possessed the power to control the worker and assessed their operational control under the totality of the circumstances. Here, the court found them to have operational control. o Third, under FLSA, an employee can have more than 1 employer. Question depends on an economic realities test "which takes into account the real economic relationship between the employer who uses and benefits from the services of workers and the party that hires or assigns the workers to that employer. The central question is whether performed an integral service to the employer. Ask how integrated they are into the employer's system of production; whether they work on the premises of the employer; and whether or not the prospective employer depends on the employer to function normally. Here, this is pretty easy—grocery delivery was a huge part of DR's business

§ When there is AMBIGUITY THEN PAROLE EVIDENCE can come in (extrinsic supplemental evidence)

· Merger clause: what courts look for to determine if contract is fully integrated, or if parole evidence can be used to supplement evidence for a partially integrated contract. · Can always be used to define ambiguous term if contract is completely integrated. If the contract is completely integrated then no other extrinsic evidence can be admissible.

What advantages does an independent contracting relationship provide to a worker?

· Mobility. Able to work for competitors. Free of control (the ability to capitalize on demand) · High skill workers tend to benefit from this relationship. *Note: Statutory Civil Rights Protection for Race apply equally to employees and independent contractors.

Tropicana Hotel Corporation v. Speer

· P accepted the GM position at the Tropicana Hotel Corporation. Speer negotiated express job security provisions and an equity stake in the casino. These agreements were made orally, during the drafting process. Additionally, the parties orally agreed as to who his subordinates would be. However, the K never came to final terms, how the stocks compensation plan would would (disagreement was whether they would be grossed up, basically taxes or after taxes.) Speer begins working, but never signs the written deal. After some time, D fires the two subordinates and P resigned. He sues for wrongful termination and breach of contract for a constructive termination discharge. o The court dismissed damages for the stock option due to statute of frauds. o Legal Analysis hinges upon whether D breached an oral employment contract. Here, the record shows that the negotiations of the parties contemplated that an agreement would only be effective when reduced to writing and signed by the parties. § Here, P did not intend to be bound by the contract. He did not sign it to get leverage over his employer. o Before a written draft is prepared, some measure of agreement must be reached and there must be evidence that the parties intend to be presently bound. o Note on Constructive Discharge - if a work situation is made so intolerable that a person of reasonable sensibilities would feel compelled to leave, then this would be a discharge. o Other fellow travelers - Restitution: Parties clearly anticipated some form of increased compensation, but never came to terms. P performed work for less than they bargained for.

Foley v. Interactive Data Corp

· P told employer that a new employee was under investigation for embezzlement by his former employer. After he reported the investigation, he was let go. o Court rejected the tort because Foley's report was solely internal and not subject to any public disclosure requirement. The goal behind the wrongful discharge tort is to protect the public. This was merely a dispute between employer and employee; it serves only a private interest. An employee's conscientious performance of their job duties is not a public policy protected by the tort.

Modern Elements of Defamation

· Publication: Oral or Written to at least 1 other person. · Purportedly factual statement · False and Defamatory · About the plaintiff · Fault, at least negligence. · Damages (usually presumed)

Shebar v. Sanyo

· Shebar received several negative evaluations during his tenure with Sanyo, but also kept getting promoted during his employment. He hired a "headhunter" to find him a new job, and he found one at Sony. Shebar tells Sanyo's president that he is leaving, but the President refuses to accept his resignation. He assures P that the company is committed to him, and that the negative performance evaluations were a motivation technique. A short time later, P is terminated. · Contract Implied in Fact case The court found the oral assurances considered together provided job security. o This looks kind of like a promissory estoppel claim, but it is not. Why does this matter? Damages, a breach of an implied in fact contract is expectation damages.

Demasse v. ITT Corp

· The company issued several handbooks to employees over a period of years. o Before 1989, senior employees were provided with greater job security. Basically, the last hired would be the first fired and so on. o In 1989, a disclaimer was added to the manual. Along with a unilateral modification provision. o In 1993, a modified reduction in force provision was added, which imposed a performance-based layoff system. o After the change, P was let go and several junior employees were retained.

What advantages does the employment relationship provide to an employee?

· Worker qualifies for statutory protections: Workers Compensation; FLSA; ERISA · Typically, increased worker protection comes from employment relationship. · Lower skill/lower wage workers typically benefit from this arrangement due to their reduced negotiating power.

TERM K WITH JUST-CAUSE TERMINATION

· don't have to materially breach the contract but only what the contract states BUT the terms cannot be vague or ambiguous.

The FOR-CAUSE AGREEMENT OBJECTIVE VIEW

· whether a reasonable person, in the parties' position, would have thought the contract provided any measure of job security—the contract is ambiguous if the agreement is susceptible to of more than one meaning. · The court stated the contract was best described as a "continuous for-cause" agreement.

LIFETIME EMPLOYMENT K's

·They are valid: "...and continues to operate as long as the employer remains in the business and has work for the employee and the employee is able and willing to do his work satisfactorily and does not give good cause for his discharge." o There is an uphill climb to prove a lifetime contract, though. o Lifetime contracts can be terminated if you materially breach the contract or you do not perform.

Rationales in Support of the At-Will Rule:

—-Traditionally, the at-will doctrine was supported by freedom of contract. However, this rationale transformed the doctrine from a rebuttable presumption into a "substantial limitation whereby the employment relationship was conclusively at will." Under this analytical framework, courts struck down a number of agreements that seemed to be for cause. (Also, analytically, it doesn't matter where the presumption is placed if parties can still contract around it.) -· Another argument was that contracts with job security violated the contractual requirement of mutuality of obligation. This manifested in the traditional requirement that job security/for cause/term agreement required additional consideration· o This theory stated that at the formation of an employment contact that was not at-will, the employee received 2 promises (wages and job security) for 1 promise (work.) o However, this traditional requirement has lessened considerably—Additional Consideration is strong circumstantial evidence to rebut the presumption of at-will employment · Another argument is that the at-will doctrine supports principles of fairness and equity. It provides the employer with protection against vexatious and frivolous litigation by imposing a high standard on the employee to prove job security. (Additionally, many of these cases can be handled at the 12(b)(6) and 56 stages, so it reduces risk of jury verdicts.) · Many court rely on the assumption that at-will employment effectuates the intent of the parties. (Greene - "The at-will presumption is simply a legal recognition of the parties' normal intentions.")—Dubious.

Rackley v. Fairview Care Centers

—Big Idea = Where are the proper sources of a public policy? · Facts - Child of a nursing home tenant asked staff not to tell her mother-in-law about the arrival of the mothers checks for fear of her using those checks to move out of the home. Employee claims that she did not know of this request and informed the mother of the check. Being upset at the violation of her request, the child called Plaintiff. A verbal altercation ensued, and plaintiff was discharge for her involvement of the incident. · The employer seeks to define the public policy narrowly—Good defense: the more specific that the public policy is, the less likely it is to be found in an approved source. (Proposed policy = Duty to notify residents of the arrival of their personal funds.) · Court rules that this is too narrow - favoring the plaintiff- and states the public policy is whether nursing home residents have a right to manage their own funds. · Factor 1 - Clear and Substantial Public Policy o This jurisdiction recognizes 3 proper sources for a public policy - (1) Constitutional Law; (2) Legislation; or (3) Judicial Decisions. o In this case, the court finds that no public policy can be found in any of those sources. o Importantly, the plaintiff provides an administrative regulation that is on point, But the court denies this argument because regulations are not a proper source of law. o Additionally, the dissent notes that there seems to be a decision on point which the majority does not treat.