lecture 15 & 16- employment law

LAWS AGAINST DISCRIMINATION Civil Rights Act of 1964 / TITLE VII (7)

"Unlawful for any employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual, with respect to compensation, terms, conditions, or privileges of employment because of such individuals' race, color, religion, sex, or national origin." The groups of protected peopled are referred to as "protected classes" - but note which groups are, and are not, within those groups...

Unequal pay is allowed on the basis of

(1) seniority; (2) merit; (3) quality or quantity; or (4) any other factor other than gender, e.g., working the less desirable night-shift, etc.

Why is it important to know what the relationship is?

1. Liability (if an "employee" does something wrong, the employer is usually liable). 2. Employment Security. 3. Benefits.

There is a perverse incentive for ordinary employers and principals to misclassify employees/agents as independent contractors. Why? A person who employs an independent contractor is relieved from having to

1. Keep time records; 2. Withhold taxes, and remit taxes to government. 3. Pay workers compensation insurance, or overtime. 4. No fringe benefits, including medical, vacation, stock options. 5. Respondeat superior does not apply. 6. Virtually all non-discrimination laws do not apply.

Cases can be brought by individual and by the EEOC:

1. Plaintiff makes a showing of discrimination; 2. Burden shifts to employer to show a legitimate reason for the practice that results in disparate impact. 3. Plaintiff has the chance to show the employer's reason is not legitimate, but pretextual (e.g. a made up / false explanation). If the plaintiff wins, attorney fees are paid by losing party.

There are 3 broad ways to characterize employment:

1. Principal - Agent (Agency Relationship) 2. Employer - Employee 3. Contractor - Contractee

Policy Reasons for the Respondeat Superior Doctrine

A. Employer / Principal controls the employee / Agent B. Employer / Principal benefits from the acts of the employee / agent C. Employer / Principal has deep pockets ($ to pay damages)

If improper discrimination appears to be occurring, it may be lawful if the employment practice conforms to a "bona fide" (in other words, a real! Not "made up" reason) --

A. pre-act seniority system (ok to pay them more b/c of their seniority; or B. MERIT SYSTEM (those who produce more get paid more, even if the top producers happen to be all of one race, or sex); or C. System that measures results of a professionally developed ability test NOT designed to discriminate; AND provided that the test is related to the job (don't need to test for calculus if you want to be a waiter...)

NATIONAL ORIGIN

Also unlawful to discriminate based upon national origin ancestry where you born linguistics

AMERICANS WITH DISABILITIES ACT (1990)

Applies to public + private sector employers. The disabled person must alert the employer, and seek reasonable accommodations. Business must improve access to handicapped if "readily achievable". Applies to businesses with more than 15 or more employees. Applies to "public accommodations General test: Businesses must improve access to the disabled if "readily achievable" without "undue hardship". This is a balancing test. In general, covered employers may not discriminate against disabled people who are capable of performing the essential functions of the job and are expected to make reasonable accommodations if necessary to allow them to do so. Employers need not suffer "undue hardships" in complying with this law.

NON COMPETE CLAUSES

As a condition of employment, new employees may be required to sign a "non-compete" contract. (This is also discussed in Contracts and Anti-trust law). If an employee leaves the company, they cannot go to a competitor. Makes some sense, because you might have trade secrets, or customer lists. This is because certain professions rely upon goodwill. Customers may follow the employee, rather than stay with the company. But there is considerable evidence that non-compete agreements stifle the economy and hinder individual employee's opportunity for job advancement.

Under Federal Title VII -

Charges must be brought within 180 days of an alleged discriminatory act. Applies to ALL employers affecting interstate commerce w/15 or more employees. States are free to pass laws extending the rule to employers w/less than 15.

RELIGION

Employers must make "reasonable accommodations" for religious beliefs, unless such accommodations create an "undue hardship" for the business. This is a balancing test. Five part test: 1. Member of a protected class, e.g., has religious beliefs 2. Qualified to do the job 3. Suffered some adverse employment action 4. Somebody outside the protected class was treated differently 5. Employer failed to make a reasonable accommodation that was not an undue hardship.

FAMILY AND MEDICAL LEAVE ACT (1993).

Employers w/50+ employees. Permits unpaid time off (up to 12 weeks) to tend to self or immediate family members or parents; includes new children. Employee must get same (or similar) position back.

WHAT IS A REASONABLE ACCOMMODATION? WHAT IS AN "UNDUE HARDSHIP"?

Essentially, this is a comprehensive cost/benefit analysis that asks: "How easily can the employer make things work for the disabled person, and at what cost to the company? This area of the law is being supplemented by the common law. If there is a lawsuit, plaintiff must prove s/he is disabled and that a reasonable accommodation is possible, then the burden shifts to the employer to show that the accommodation is unreasonable, or would create an undue hardship. Additional defense: Employees need not place a disabled person in a position where that person could endanger that person or others in the workplace.

2. DISPARATE IMPACT

Facially neutral policy that results in people of different races/ sexes being treated differently.

RIGHTS OF EMPLOYEES

GETTING PAID FOR WORK Some employees are exempt (meaning the min wage rules do not apply to them) from the Fair Labor Standards Act (FLSA): lawyers, and other professionals and accountants Employees have a right to SAFE WORKING ENVIRONMENT (Occupational Safety and Health Act OSHA) monitors work places. DUTY TO WARN OF LAYOFFS (Statutory right). 60-Day advance Notice of large scale layoff FRINGE BENEFITS (No Constitutional Right to these). Compare other industrialized nations, where there is a statutory right to vacation, etc., to the U.S. No Constitutional, or (in most case) state laws, that require health care be included in employment packages. It's also generally legal for an employer to fire an employee who will not quit smoking (unprotected conduct) which adds significantly to health care costs.

DRUG TESTING IN THE WORKPLACE

Government: Only allowed if "reasonable suspicion" OR "threat to public safety" (pilots, bus drivers, etc) Private Industry: No Constitutional restriction; but state laws may restrict. In the absence of a State law, private employers are essentially free to adopt whatever polices they desire in this area. LIE DETECTORS - Congress restricted this, except for Government employees

How the "law" characterizes the relationship between two parties (ordinary employee vs. independent contractor), one paying the other to do something, is based upon the objective "relationship" between the parties, NOT how the parties to the relationship describe the relationship.

If the rule were different - and the relationship between the employer/employee was based upon how they described it -- that would that incentivize people to act in ways contrary to the law.

CONTRACTING EMPLOYER - INDEPENDENT CONTRACTOR

Independent contractors are not ordinary employees; they are engaged to accomplish a task/job. The party who contracts for their services usually has little control over how the job is performed. (You hire somebody to do a specific job for you, e.g., paint your house, etc. This is an independent contractor). In hiring an independent contractor, certain employment laws (interview questions) do not apply, including most non-discrimination laws, and major Federal Civil Rights laws.

1. DISPARATE TREATMENT = Intentional Discrimination

Intentionally treating employees differently because of race (all the white employees get off at 3:30, while the non-white employees work to 4:30, for the same pay.)

Equal Pay Act (1963) / Enforced by EEOC (1972) (Equal Employment Opportunity Commission - which investigates complaints and has the authority to institute Civil Actions to eliminate violations of the law).

Prohibits wage discrimination of the basis of gender.

GENERAL DEFENSE TO CHARGES OF DISCRIMINATION

Note that in every case of alleged discrimination - except race or color -- an employer has a defense that the unequal treatment of employees, even if members of a "protected class" was justified because the job classification has a "bona fide occupational qualification". BFOQ essentially means that the selection criteria serves a legitimate business interest, which is justified although it may also have a disparate impact. BFOQ is an available defense for gender, age, religion and national origin discrimination, but NEVER for discrimination based upon race or color.

Lawsuit unfolds as follows:

Note that plaintiffs must generally start by going to the EEOC, within 180 days of discrimination. Government must be given the first chance at starting the lawsuit; but if the government declines, plaintiffs are free to sue alone.

SEXUAL HARASSMENT / A TYPE OF TITLE VII VIOLATION

QUID PRO QUO This typically occurs in a supervisor / supervisee situation. This occurs when job opportunities, promotions are given/denied on the basis of sexual favors. "You can have the job...if you hook up with me." This applies in hiring, promotion, or potential continuing employment.

EMPLOYER - ORDINARY EMPLOYEE

Ordinary employees work AT WILL, meaning that they can generally quit, or be fired, at any time, for any reason that is not illegal. For instance, an employer may fire the employee if she/he doesn't shower, or come to work too tired to do the job, because there are no laws making these reasons illegal. Employees can quit at any time (AT WILL), unless quitting breaches an employment contract, union agreement, or if quitting damages the employer. "duty of loyalty" fiduciary obligation includes confidential information. Frequently, employers will require employees to sign non-disclosure or non-compete agreements as a condition of employment. But, employees do not have to do work that is illegal, contrary to public policy (illegal), or "immoral" (this last exception is so vague that is subject to litigation.... If under an employment contract, don't have to do work outside the contract. Employees cannot be FORCED to work if they quit an employment contract, BUT the Court may ENJOIN them from working elsewhere (for a competitor, for instance) Employees usually do not have independent business discretion

LIABILITY

Ordinary employers are also generally liable, via respondeat superior, for the negligent, or reckless conduct of employees.

Age Discrimination In Employment Act of 1967

Outlaws "arbitrary age discrimination in employment" of persons over 40. Applies to business w/20 or more employees, engaged in interstate commerce (plus min hours worked requirement.) Certain employees must retire at age 65 in certain conditions. Exceptions are made based upon BFOQ.

WHAT IS A DISABILITY

Person has a physical or mental impairment (regardless of whether it is being treated) that substantially limits one or more major life activities OR has a record of such impairment OR is regarded of having such an impairment.

1998: Washington State: Initiative I-200 - Passed by popular vote:

Shall government be prohibited from discriminating or granting preferential treatment based on race, sex, color, ethnicity or national origin in public employment, education, and contracting?[2]

Employee or Independent Contractor?

Significant benefits accrue businesses that employ independent contractors, rather than employees. Businesses properly perceive it is to their economic advantage to do this - and the employed person also understands it's usually to their economic disadvantage.

MINIMUM WAGE LAWS / OVERTIME / FAIR LABOR STANDARDS ACT (FSLA)

The Fair Labor Standards Act Sets maximum workweek; overtime rules; breaks. But it does not apply to every employee: commissioned sales computer professionsals drivers farmworkers exec, admin

There are some limitations, and the ultimate question usually is: WAS THE EMPLOYEE (of AGENT - the rule also applies to "agents and principals) ACTING WITHIN THE SCOPE OF EMPLOYMENT?

The following factors will be considered if there is a dispute: 1. Did the employer authorize the act? This often ends the inquiry. 2. What was the time, place and purpose of the act? 3. Was the act commonly done by employees? 4. To what extent was the employer's interests advanced by the act? 5. To what extent were the private interests of the employee advanced? 6. Did the employer furnish the means or instrumentality? (a car) that was responsible for the act? 7. Did the employer expect that the employee would do the act? 8. Did the act involve the commission of a serious, intentional act? If so, then the doctrine usually does not apply.

THE PRINCIPAL - AGENT RELATIONSHIP

The principal hires the agent to work on his/her behalf. The relationship is often contractual, and always consensual. The agent must always work in the best interest of the principal; this is often referred to as the "fiduciary obligation". The agent must place the principal's interest above his own. Agents may bind the principal, provided that the agent is acting within his/her authority. Even if the agent's act was foolish, the principal is bound if the agent acted within his/her authority. If an agent acts outside his/her authority, he is said to be acting "ultra vires", and cannot bind the principal (though 3rd parties can sue the agent, not the principal). The law presumes that if YOU are doing business with an agent that YOU will verify that the agent has the necessary authority to act on behalf of the principal, by checking with the principal.

RESPONDEAT SUPERIOR

The principal is liable for the actions (torts) of the agent if the agent was acting within the scope of employment AND in the course of employment.

HOSTILE ENVIRONMENT:

This occurs when an employee must put up with a work environment where sexual jokes, comments are pervasive / or unreasonably interferes with a person's work performance: Multi-part non-dispositive test that assesses: 1. Verbal/physical 2. Frequency 3. Hostile or patently offensive 4. Co-worker or supervisor 5. Did others join in, participating in the objectionable conduct? 6. Was the conduct directed at more than one person

Protecting the Business:

This type of conduct presents issues for businesses, which SHOULD respond by taking steps to prevent this from happening. (1) Clear standards, which all employees should sign; and (2) A complaint system that allows employees to file grievances + prompt follow-up will limit liability (or potentially end it).

JOINT EMPLOYEES -- Who is your boss?

We know that when a business hires a traditional employee, that's expensive, and the employee has lots of legal protections. Two Federal entities affect this area of the law. The Department of Labor, and the National Labor Relations Board (an independent agency that serves as the Federal Government's main labor law enforcer).

INDEPENDENT CONTRACTOR OR EMPLOYEE?

key: control 1. What control does employer have over details of work? 2. Does the employed person work in a distinct business? If the answer is "yes," it typically means that the second party is an independent contractor, though it's possible to rig this system, too. 3. Is the work usually supervised, or independent? The less supervision, the more likely the person is an independent contractor. 4. Does the employer supply tools or equipment? (If so, more likely employee). 5. How long is the period of employment? (Shorter = Independent) 6. What is the method of payment: hourly / by the job? (By job suggests independent contractor) 7. What degree of skill is required? The higher the skill, the more likely the person is an independent contractor.