MGT 301 CH 28 Employment, Immigration, and Labor Law

Exceptions Based on Contract Theory Some courts have held that an implied employment contract exists between an employer and an employee.

If an employee is fired outside the terms of the implied contract, he or she may succeed in an action for breach of contract even though no written employment contract exists.

An employer's oral promises to employees regarding discharge policy may also be considered part of an implied contract.

If the employer fires a worker in a manner contrary to what was promised, a court may hold that the employer has violated the implied contract and is liable for damages. Most state courts will judge a claim of breach of an implied employment contract by traditional contract standards.

The Walsh-Healey Act (Public Contracts Act) (1936)

Guarantees prevailing wages to employees of government contractors with contracts of $10,000 or more. It requires that a minimum wage, as well as overtime pay at 1.5 times regular pay rates, be paid to employees of manufacturers or suppliers entering into contracts with agencies of the federal government.

Family and Medical Leave Act of 1993

Act that gave unpaid emergency medical leave for employees with a guarantee that their job would not be taken away in the interim.

Often, U.S. businesses find that they cannot hire enough domestic workers with specialized skills. For this reason,

U.S. immigration laws have long made provisions for businesses to hire specially qualified foreign workers.

Lie-Detector Tests The Employee Polygraph Protection Act (EPPA)

generally prohibits employers from requiring or requesting that employees or job applicants take lie-detector tests. It also prevents employers from asking about the results of a polygraph or taking any negative employment action based on such results. The act applies to most private employers (those with at least two employees and an annual volume of business of $500,000), but not to public employers (federal, state, and local government employers).

A worker may sue an employer who has

intentionally injured the worker, however.

Even companies that anticipate filing for bankruptcy normally must

provide notice under the WARN Act. Many states also have statutes requiring employers to provide notice before initiating mass layoffs. These laws may have different and even stricter requirements than the WARN Act.

It is illegal for employers to require

union membership as a prerequisite to employment, but it is not illegal to require that workers join the union after being employed for a period of time.

Lockout

An action in which an employer shuts down to prevent employees from working, typically because it cannot reach a collective bargaining agreement with the employees' union.

Social Security benefits are fixed by statute but increase

automatically with increases in the cost of living.

The LMRA also prohibited unions from refusing to

bargain with employers, engaging in certain types of picketing, and featherbedding —causing employers to hire more employees than necessary. The act also allowed individual states to pass their own right-to-work laws, which make it illegal for union membership to be required for continued employment in any establishment. Thus, union shops are technically illegal in the twenty-three states that have right-to-work laws.

The WARN Act is intended to give workers advance notice so that they can start looking for new jobs

while they are still employed and to alert state agencies so that they can provide training and other resources for displaced workers. Employers thus must provide advance notice of the layoff both to the affected workers (or to their representative, if the workers are members of a labor union) and to state and local government authorities.

The Social Security Act provides for

• old-age (retirement), • survivors', and • disability insurance. Hence, the act is often referred to as OASDI. Both employers and employees must "contribute" under the Federal Insurance Contributions Act (FICA) to help pay for Social Security retirement benefits.

(IRCA) If an investigation reveals a possible violation, ICE will bring an administrative action and issue a

Notice of Intent to Fine, which sets out the charges against the employer. The employer has a right to a hearing on the enforcement action if a request is filed within thirty days. This hearing is conducted before an administrative law judge, and the employer has a right to counsel and to discovery. The typical defense in such actions is good faith or substantial compliance with the documentation provisions.

OSHA Inspections and Employee Complaints

OSHA compliance officers may enter and inspect facilities of any establishment covered by the Occupational Safety and Health Act. Employees may also file complaints of violations and cannot be fired by their employers for doing so. Under the act, an employer cannot discharge an employee who files a complaint or who, in good faith, refuses to work in a high-risk area if bodily harm or death might result.

Appropriate Bargaining Unit. The proposed union must represent an appropriate bargaining unit. Not every group of workers can form a single union.

One key requirement of an appropriate bargaining unit is a mutuality of interest among all the workers to be represented by the union. Factors considered in determining whether there is a mutuality of interest include the similarity of the jobs of all the workers to be unionized and their physical location.

Today, the majority of U.S. workers continue to have the legal status of "employees at will." In other words, this common law doctrine is still in widespread use.

Only one state (Montana) does not apply it.

EXAMPLE 28.9 Owners of the teams in the National Football League (NFL) imposed a lock-out on the NFL players' union in 2011 after negotiations on a new collective bargaining agreement broke down.

The NFL owners had proposed to reduce players' salaries and extend the season by two games because of decreased profits due to the struggling economy. A settlement was reached before the start of the 2011 football season. The players accepted 3 percent less of the revenue generated (47 percent rather than 50 percent) in exchange for better working conditions and more retirement benefits. The owners agreed to keep the same number of games per season.

The National Labor Relations Board (NLRB).

The NLRA also created the National Labor Relations Board to oversee union elections and to prevent employers from engaging in unfair and illegal union activities and unfair labor practices.

In 1959, Congress enacted the Labor-Management Reporting and Disclosure Act (LMRDA).

The act established an employee bill of rights and reporting requirements for union activities. The act also outlawed hot-cargo agreements, in which employers voluntarily agree with unions not to handle, use, or deal in goods produced by nonunion employees working for other employers.

Collective Bargaining If the NLRB certifies the union, the union becomes the exclusive bargaining representative of the workers.

The central legal right of a union is to engage in collective bargaining on the members' behalf.

The owners of the teams in the National Basketball Association (NBA) also locked out their players in 2011 after the two sides failed to reach a collective bargaining agreement.

The dispute involved the division of revenue and a salary cap. During the lockout, the players could not access NBA facilities, trainers, or staff, and the owners could not trade, sign, or contract with players. The lock- out lasted 161 days and resulted in the cancellation of all preseason games and several weeks of regular season games.

Employers that make the Internet, e-mail, smartphones, and social networking sites available to their employees face some obvious risks.

The employer could be liable if an employee harasses another employee via e-mail or a social networking site such as Facebook. Similarly, the employer could be liable if an employee uses the Internet to violate copyright or other intellectual property laws. Another risk is that an outside party might intercept confidential information or trade secrets contained in communications transmitted via the Internet.

After a Strike Ends In a typical strike, the employer has a right to hire permanent replacements during the strike.

The employer need not terminate the replacement workers when the economic strikers seek to return to work. In other words, striking workers are not guaranteed the right to return to their jobs after the strike if satisfactory replacement workers have been found. If the employer has not hired replacement workers to fill the strikers' positions, however, then the employer must rehire the economic strikers to fill any vacancies. Employers may not discriminate against former economic strikers, and those who are rehired retain their seniority rights.

Managers who work for companies that are targets of union-organizing drives must com- ply with the latest NLRB decision, pending any reversal on appeal.

The new rules are clear. Once an organizing election is scheduled, a company must turn over all telephone numbers and home and e-mail addresses of the company's employees within two days. Union organizers can then communicate with employees via the company's e-mail system. Failure to comply with NLRB rules can cause any negative vote on organizing a new union to be rendered null and void.

Collective bargaining

The process by which labor and management negotiate the terms and conditions of employment, including working hours and workplace conditions.

EXAMPLE 28.8 Teachers in Eagle Point, Oregon, engage in an economic strike after contract negotiations with the school district fail to bring an agreement on pay, working hours, and subcontracting jobs.

The unionized teachers picket outside the school building. Classes are canceled for a few weeks until the district can find substitute teachers who will fill in during the strike.

Once an employer and a union sit down at the conference table, they must negotiate in good faith and make a reasonable effort to come to an agreement.

They are not obligated to reach an agreement. They must, however, approach the negotiations with the idea that an agreement is possible. Both parties may engage in hard bargaining, but the bargaining process itself must be geared to reaching a compromise—not avoiding a compromise.

Norris-LaGuardia Act of 1932

This law protects employees' rights to organize, peacefully strike, picket, and boycott. The statute restricted the power of federal courts to issue injunctions against unions engaged in peaceful strikes. In effect, this act established a national policy permitting employees to organize.

Davis-Bacon Act of 1931

This law requires the payment of "prevailing wages" to employees of contractors and subcontractors working on government construction projects.

The H-1B Visa Program The most common and controversial temporary visa program today is the H-1B visa system.

To obtain an H-1B visa, the potential employee must be qualified in a "specialty occupation," meaning that the individual has highly specialized knowledge and has attained a bachelor's or higher degree or its equivalent. Individuals with H-1B visas can stay in the United States for three to six years and can work only for the sponsoring employer.

Immigration Law The United States did not have any laws restricting immigration until the late nineteenth century.

Today, the most important laws governing immigration and employment are the Immigration Reform and Control Act (IRCA) of 1986 and the Immigration Act of 1990.

CASE EXAMPLE 28.6 Roundy's, Inc., which operates a chain of stores in Wisconsin, became involved in a dispute with a local construction union.

When union members started distributing "extremely unflattering" flyers outside the stores, Roundy's ejected them from the property. The NLRB filed a complaint against Roundy's for unfair labor practices. An administrative law judge ruled that Roundy's had violated the law by discriminating against the union, and a federal appellate court affirmed. It is an unfair labor practice for an employer to prohibit union members from distributing flyers outside a store when it allows nonunion members to do so.

When extensive collective bargaining has been conducted and an impasse results, the union may call

a strike against the employer to pressure it into making concessions. A strike is an extreme action. Striking workers lose their rights to be paid, and management loses production and may lose customers when orders cannot be filled. Labor law regulates the circumstances and conduct of strikes.

Workers Protected by the NLRA. To be protected under the NLRA, an individual must be

an employee, as that term is defined in the statute. Courts have long held that job applicants fall within the definition (otherwise, the NLRA's ban on discrimination in hiring would mean nothing). Additionally, individuals who are hired by a union to organize a company are to be considered employees of the company for NLRA purposes.

Many immigrant workers are not already self-authorized, and an employer that wishes to hire them can

attempt to obtain labor certification, or green cards, for them. A limited number of new green cards are issued each year. A green card can be obtained only for a person who is being hired for a permanent, full-time position. (A separate authorization system provides for the temporary entry and hiring of non immigrant visa workers.)

Union Organization Typically, the first step in organizing a union at a particular firm is to have the workers sign

authorization cards. An authorization card usually states that the worker wishes to have a certain union, such as the United Auto Workers, represent the workforce.

To be eligible for unemployment compensation, a worker must

be willing and able to work. Workers who have been fired for misconduct or who have voluntarily left their jobs are not eligible for benefits. Normally, workers must be actively seeking employment to continue receiving benefits.

The Immigration Act placed

caps on the number of visas (entry permits) that can be issued to immigrants each year, including employment-based visas. Employment-based visas may be classified as permanent (immigrant) or temporary (non-immigrant).

New NLRB Rules Expedite Elections. New NLRB rules that took effect early in 2015 have significantly reduced the time between the filing of a petition and the ensuing election—

from an average of thirty-eight days to as little as ten days. This change favors unions because it gives employers less time to respond to organizing campaigns that unions often spend months preparing. The NLRB now requires that a company hold a pre-election hearing within eight days after it receives a petition for an organizing election. On the day before the hearing, the company must also submit a "statement of position" laying out every argument it intends to make against the union. Any argument that the company does not include in its position paper can be excluded from evidence at the hearing. Once the hearing is held, an election can be scheduled right away.

The NLRB has the authority to

investigate employees' charges of unfair labor practices and to file complaints against employers in response to these charges. When violations are found, the NLRB may issue a cease-and-desist order compelling the employer to stop engaging in the unfair practices. Cease-and-desist orders can be enforced by a federal appellate court if necessary. After the NLRB rules on claims of unfair labor practices, its decision may be appealed to a federal court.

Medicare is a federal government health-insurance program that

is administered by the Social Security Administration for people sixty-five years of age and older and for some under the age of sixty-five who are disabled.

A lawful permanent resident can prove his or her status to an employer by presenting an I-551 Alien Registration Receipt

known as a "green card," or a properly stamped foreign passport.

To gain authorization for hiring a foreign worker, an employer must show that

no U.S. worker is qualified, willing, and able to take the job. The government has detailed regulations governing the advertising of positions as well as the certification process. Any U.S. applicants who meet the stated job qualifications must be interviewed for the position. The employer must also be able to show that the qualifications required for the job are a business necessity.

Voting. If an election is held, the NLRB supervises the election and ensures

secret voting and voter eligibility. If the proposed union receives majority support in a fair election, the NLRB certifies the union as the bargaining representative for the employees.

If employers pay at least the federal minimum wage,

the FLSA allows them to take employee tips and make other arrangements for their distribution.

An employer may campaign among its workers against the union, but

the NLRB carefully monitors and regulates the tactics used by management. Otherwise, management might use its economic power to coerce the workers into voting against unionization. If an employer issued threats ("If the union wins, you'll all be fired") or engaged in other unfair labor practices, the NLRB could certify the union even though it lost the election. Alternatively, the NLRB could ask a court to order a new election.

Until the early 1900s, most employer-employee relation- ships were governed by

the common law. Even today, private employers have considerable freedom to hire and fire workers under the common law. Numerous statutes and administrative agency regulations now govern the workplace, however. Thus, to a large extent, statutory law has displaced common law doctrines.

Employers, with some exceptions, must inform an employee of COBRA's provisions when

the employee faces termination or a reduction of hours that would affect his or her eligibility for coverage under the employer's health-insurance plan. An employer that does not comply with COBRA risks substantial penalties, such as a tax of up to 10 percent of the annual cost of the group plan or $500,000, whichever is less.

Immigration Violation Penalties (IRCA) In determining the penalty, ICE considers

the seriousness of the violation (such as intentional falsification of documents), the employer's past compliance, and whether the employer cooperated with authorities during the investigation.

A company seeking to hire a non-citizen worker on a permanent basis may do so if

the worker is self-authorized —that is, if the worker either is a lawful permanent resident or has a valid temporary Employment Authorization Document.

Under the Affordable Care Act, starting in 2015, high-income earners have been subject

to an additional Medicare tax of 0.9 percent (for a total rate of 3.8 percent). This additional tax applies to wages earned above $200,000 for single earners and wages above $250,000 for married couples.

The LMRDA strictly regulates unions' internal business procedures, including

union elections. For example, it requires a union to hold regularly scheduled elections of officers using secret ballots. Ex-convicts are prohibited from holding union office. Moreover, union officials are accountable for union property and funds. Members have the right to attend and to participate in union meetings, to nominate officers, and to vote in most union proceedings. The LMRDA holds union officers to a high standard of responsibility and ethical conduct in administering the affairs of their union.

Union Election Campaigns Many disputes between labor and management arise during union election campaigns. Generally, the employer has control over

unionizing activities that take place on company property during working hours. Employers may thus limit the campaign activities of union supporters as long as the employer has a legitimate business reason for doing so. The employer may also reasonably limit the times and places that union solicitation occurs so long as the employer is not discriminating against the union.

In Arizona v. United States, the United States Supreme Court

upheld the controversial "show-me-your-papers" provision that requires police to check the immigration status of per- sons stopped for another violation. All other provisions of Arizona's law were struck down because they were preempted by federal laws. The Supreme Court's decision does not prohibit states from enacting laws related to immigration, but it does set some limits.

Strikers are not allowed to use

violence against anyone or to prevent others from entering a facility. Furthermore, a strike may be illegal if it contravenes a no-strike clause that was in the previous collective bargaining agreement between the employer and the union.

The Labor-Management Relations Act (LMRA), also called the Taft-Hartley Act

was passed in 1947 to proscribe certain unfair union practices, such as the closed shop. Although the act made the closed shop illegal, it preserved the legality of the union shop.

Union Elections If the employer does not voluntarily recognize the union—or if less than a majority of the workers sign authorization cards—

—the union organizers present the cards to the NLRB with a petition for an election. For an election to be held, the unionizers must demonstrate that at least 30 percent of the workers to be represented support a union or an election on unionization. Once the NLRB receives a petition for an organizing election, it determines if an election should be conducted.

Immigration Violation Penalties (IRCA) An employer who violates the law by hiring an unauthorized alien is subject to substantial penalties. The employer may be fined up

• $2,200 for each unauthorized employee for a first offense, • $5,000 per employee for a second offense, and • up to $11,000 for subsequent offenses. Employers who have engaged in a "pattern or practice of violations" are subject to criminal penalties, which include additional fines and imprisonment for up to ten years. A company may also be barred from future government contracts for violations.

H-2, O, L, and E Visas Other specialty temporary visas are available for other categories of employees.

• H-2 visas provide for workers performing agricultural labor of a seasonal nature. • O visas provide entry for persons who have "extraordinary ability in the sciences, arts, education, business or athletics which has been demonstrated by sustained national or international acclaim." • L visas allow a company's foreign managers or executives to work inside the United States. • E visas permit the entry of certain foreign investors and entrepreneurs.

Therefore, if you are an employer and find it necessary to monitor your employees' use of the Internet and social media, you should take care when creating your policy.

• Inform Employees of the Monitoring and Obtain their Consent • Spell Out Permissible and Impermissible Uses • Policies for Social Media CHECKLIST for the Employer: 1. Inform employees that their Internet and social media communications will be monitored, and indicate which communications and which devices will be monitored. 2. Obtain employees' written consent to having their electronic communications monitored. 3. Develop a comprehensive policy statement that explains how the Internet and social media should and should not be used. 4. Designate someone in the company to whom employees can go with questions or concerns about the firm's policies on Internet or social media use.

Failure to comply with HIPAA regulations can result in civil penalties of up to

$100 per person per violation (with a cap of $25,000 per year). The employer is also subject to criminal prosecution for certain types of HIPAA violations and can face up to $250,000 in criminal fines and imprisonment for up to ten years if convicted.

National Labor Relations Act

A 1935 law, also known as the Wagner Act This act established the rights of employees to engage in collective bargaining and to strike. The act also specifically defined a number of employer practices as unfair to labor: 1. Interference with the efforts of employees to form, join, or assist labor organizations or to engage in concerted activities for mutual aid or protection. 2. An employer's domination of a labor organization or contribution of financial or other support to it. 3. Discrimination in the hiring of or awarding of tenure to employees based on union affiliation. 4. Discrimination against employees for filing charges under the act or giving testimony under the act. 5. Refusal to bargain collectively with the duly designated representative of the employees.

Authorization Card

A card signed by an employee that gives a union permission to act on his or her behalf in negotiations with management. If a majority of the workers sign authorization cards, the union organizers (unionizers) present the cards to the employer and ask for formal recognition of the union. The employer is not required to recognize the union at this point in the process, but it may do so voluntarily on a showing of majority support. (Under pro-labor legislation that has been proposed repeatedly, the employer would be required to recognize the union as soon as a majority of the workers had signed authorization cards—without holding an election, as described next.)

Union Shop

A firm that requires all workers, once employed, to become union members within a specified period of time as a condition of their continued employment.

Closed Shop

A firm that requires union membership by its workers as a condition of employment, which is illegal.

Lockouts Lockouts are the employer's counterpart to the worker's right to strike.

A lockout occurs when the employer shuts down to prevent employees from working. Lockouts usually are used when the employer believes that a strike is imminent or when the parties have reached a stalemate in collective bargaining.

The H-1B Visa Program The recipients of these visas include many high-tech workers, such as computer program- mers and electronics specialists.

A maximum of sixty-five thousand H-1B visas are set aside each year for new immigrants. That limit is typically reached within the first few weeks of the year. Consequently, many businesses continue to lobby Congress to expand the number of H-1B visas available. These companies contend that limits on H-1B visas are keeping some of the world's brightest scientific and engineering minds out of the United States.

Exceptions Based on Tort Theory In a few situations, the discharge of an employee may give rise to an action for wrongful discharge under tort theories.

Abusive discharge procedures may result in a suit for intentional infliction of emotional distress or defamation.

EXAMPLE 28.7 A union is seeking to organize clerks at a department store owned by Amanti Enterprises. A

Amanti can prohibit all union solicitation in areas of the store open to the public because that activity could seriously interfere with the store's business. If Amanti allows solicitation for charitable causes in the workplace, however, it may not prohibit union solicitation.

Strike

An action undertaken by unionized workers when collective bargaining fails. The workers leave their jobs, refuse to work, and (typically) picket the employer's workplace. Most strikes take the form of "economic strikes," which are initiated because the union wants a better contract.

Hot-Cargo Agreement

An illegal agreement in which employers voluntarily agree with unions not to handle, use, or deal in the nonunion-produced goods of other employers.

Until 2010, immigration and the treatment of illegal immigrants were governed exclusively by federal laws. Then

Arizona enacted a law that required Arizona law enforcement officials to identify and charge immigrants in Arizona who were there illegally, potentially leading to the immigrants' deportation. Among other things, that law required immigrants to carry their papers at all times and allowed police to check a person's immigration status during any law enforcement action.

Services Employees International Union v. National Union of Healthcare Workers

Background and FacTS The Services Employ- ees International Union (SEIU) consists of 2.2 million members who work in healthcare, public ser- vices, and property services. United Health Work- ers (UHW) is affiliated with SEIU and represents 150,000 healthcare workers in California. The SEIU, under its constitution, has the authority to realign local unions. The SEIU constitution also grants the SEIU the authority to place a local union into trust- eeship "to protect the interests of the membership." The SEIU proposed moving 150,000 long-term care workers from three separate unions, including 65,000 from the UHW, into a new union chartered by the SEIU. The UHW opposed the move. The SEIU placed the UHW into trusteeship. UHW officials blocked access to its buildings to prevent the trust- ees from entering, removed UHW property from the buildings, and instructed its members not to recognize the trustees' authority. Meanwhile, the UHW officials, while still on the UHW payroll, created and promoted a new union—the National Union of Health- care Workers (NUHW). The SEIU filed a suit in a federal district court against the NUHW and the UHW officials for breach of fiduciary duties. The jury returned a verdict against the NUHW and the UHW, on which the court entered a judgment. The defendants appealed. Decision and Remedy The U.S. Court of Appeals for the Ninth Circuit affirmed the lower court's judgment. Section 501 of the LMRDA creates a fiduciary duty owed by union officials to the union as an organization, not only the union's rank-and-file members. Officials who divert union resources to establish a new competing union breach this duty.

Good Faith Bargaining. Under the NLRA, employers and unions have a duty to bargain in good faith.

Bargaining over certain subjects (such as wages, hours, and benefits) is mandatory, and a party's refusal to bargain over these subjects is an unfair labor practice that can be reported to the NLRB. An employer may be required to bargain with the union over the use of hidden video surveillance cameras, for instance.

ERISA does not require an employer to establish a pension plan. When a plan exists, however,

ERISA specifies standards for its management, including establishing rules on how funds must be invested and records kept.

Wrongful Discharge Whenever an employer discharges an employee in violation of an employment contract or a statute protecting employees, the employee may bring an action for wrongful discharge.

Even if an employer's actions do not violate any provisions in an employment contract or a statute, the employer may still be subject to liability under a common law doctrine, such as a tort theory or agency.

Can union organizers use company e-mail during campaigns?

Generally, company policies have prohibited the use of company-owned and -operated e-mail systems for other than job-related communications. The first major case concerning this issue was decided by the National Labor Relations Board (NLRB) in 2007.a The NLRB allowed an employer's written policy that prohibited the use of a company-provided e-mail system for nonjob-related solicitations. This decision was affirmed in relevant part by a federal court two years later. In late 2014, the NLRB reversed its 2007 position. "We decide today that employee use of e-mail for statutorily protected com- munications on non-working time must pre- sumptively be permitted by employers who have chosen to give employees access to their e-mail systems."c The NLRB argued that its 2007 decision had failed to adequately protect "employees' rights under the NLRA." The board also stated that it had a responsibility "to adapt the Act to the changing patterns of industrial life."

Exceptions Based on Public Policy The most common exception to the employment-at-will doctrine is made on the basis that the worker was fired for reasons that violate a fundamental public policy of the jurisdiction.

Generally, the public policy involved must be expressed clearly in the jurisdiction's statutory law.

To comply with the IRCA, an employer must perform

I-9 verifications for new hires, including those hired as "contractors" or "day workers" if they work under the employer's direct supervision. The three-day period is to allow the employer to check the form's accuracy and to review and verify documents establishing the prospective worker's identity and eligibility for employment in the United States.

U.S. Immigration and Customs Enforcement (ICE) is the largest investigative arm of the U.S. Department of Homeland Security.

ICE has a general inspection program that conducts random compliance audits. Other audits may occur if the agency receives a written complaint alleging an employer's violations. Government inspections include a review of an employer's file of I-9 forms. The government does not need a subpoena or a warrant to conduct such an inspection.

FMLA - Coverage (military)

In addition, an employee may take up to twenty-six weeks of military caregiver leave within a twelve-month period to care for a family member with a serious injury or illness incurred as a result of military duty.

The right to strike is guaranteed by the NLRA, within limits.

In addition, certain strike activities, such as picketing, are protected by the free speech guarantee of the First Amendment to the U.S. Constitution. Nonworkers have a right to participate in picketing an employer, and workers have the right to refuse to cross a picket line of fellow workers who are engaged in a lawful strike.

An employer who wishes to submit an H-1B application must first file a

Labor Certification application on a form known as ETA 9035. The employer must agree to • provide a wage level at least equal to the wages offered to other individuals with similar experience and qualifications. • The employer must also show that the hiring will not adversely affect other workers similarly employed. • The employer is required to inform U.S. workers of the intent to hire a foreign worker by posting the form. The U.S. Department of Labor reviews the applications and may reject them for omissions or inaccuracies.

Social Security - Tax Contributions

For Social Security, the basis for the contributions is the employee's annual wage base—the maximum amount of the employee's wages that is subject to the tax. As of 2015, the maximum amount subject to the tax was $118,500, and the tax rate was 12.4 percent.

The Affordable Care Act An employer who fails to provide health benefits as required under the statute can be fined up to

$2,000 for each employee after the first thirty. (This is known as the 50/30 rule— employers with fifty employees must provide insurance, and those failing to do so will be fined for each employee after the first thirty.) An employer who offers a plan that costs an employee more than 9.5 percent of the employee's income may have to pay a penalty of $3,000 per insured worker.

When an employee receives tips while on the job, the employer is required to pay only

$2.13 an hour in direct wages—but only if that amount, plus the tips received, equals at least the federal minimum wage. If an employee's tips combined with the employer's direct wages do not equal the federal minimum wage, the employer must make up the difference.

The FLSA provides that a minimum wage

(now $7.25 per hour) must be paid to employees in covered industries. Congress periodically revises this minimum wage. Additionally, many states (and some cities) have minimum wages. When the state (or city) minimum wage is greater than the federal minimum wage, the employee is entitled to the higher wage.

Workers Compensation Exclusions

1. Intoxicated P 2. Intentionally injures self 3. Injured during voluntary off-duty athletic contests. *Illegal activity will not bar a worker's compensation claim Typically, domestic workers, agricultural workers, temporary employees, and employees of common carriers (companies that provide transportation services to the public) are excluded, but minors are covered.

In general, only two requirements must be met for an employee to receive benefits under a state workers' compensation law:

1. The existence of an employment relationship. 2. An accidental injury that occurred on the job or in the course of employment, regardless of fault. (An injury that occurs while an employee is commuting to or from work usually is not considered to have occurred on the job or in the course of employment and hence is not covered.)

FMLA - Coverage (normal) An eligible employee may take up to twelve weeks of leave within a twelve-month period for any of the following reasons:

1. To care for a newborn baby within one year of birth. 2. To care for an adopted or foster child within one year of the time the child is placed with the employee. 3. To care for the employee's spouse, child, or parent who has a serious health condition. 4. If the employee suffers from a serious health condition and is unable to perform the essential functions of her or his job. 5. For any qualifying exigency (non-medical emergency) arising out of the fact that the employee's spouse, son, daughter, or parent is a covered military member on active duty.11 For instance, an employee can take leave to arrange for child care or to deal with financial or legal matters when a spouse is being deployed overseas.

Under the FLSA, employees who work more than forty hours per week normally must be paid

1.5 times their regular pay for all hours over forty. Note that the FLSA overtime provisions apply only after an employee has worked more than forty hours per week.

Fair Labor Standards Act of 1938

1938 act which provided for a minimum wage and restricted shipments of goods produced with child labor Extended wage-hour requirements to cover all employers engaged in interstate commerce or in producing goods for interstate commerce, plus selected other types of businesses. The FLSA, as amended, provides the most comprehensive federal regulation of wages and hours today.

Worker Adjustment and Retraining Notification Act

1988 law that requires employers who will make a mass layoff or plant closing to give 60 days advance notice to affected employees.

Employment relationships have traditionally been governed by the common law doctrine of employment at will.

A common law doctrine under which either party may terminate an employment relationship at any time for any reason, unless a contract specifies otherwise. Under this doctrine, either party may terminate the employment relationship at any time and for any reason, unless doing so would violate an employee's statutory or contractual rights.

FMLA Violations

An employer that violates the FMLA can be required to provide various remedies, including the following: 1. Damages to compensate an employee for lost benefits, denied compensation, and actual monetary losses (such as the cost of providing for care of the family member) up to an amount equivalent to the employee's wages for twelve weeks (twenty-six weeks for military caregiver leave). 2. Job reinstatement. 3. Promotion, if a promotion has been denied.

The Occupational Safety and Health Act

At the federal level, the primary legislation protecting employees' health and safety is the Occupational Safety and Health Act,13 which is administered by the Occupational Safety and Health Administration (OSHA). The act imposes on employers a general duty to keep workplaces safe.

Bailey v. TitleMax of Georgia, Inc.

Background and Facts Santonias Bailey was an employee of TitleMax of Georgia, Inc., in Jonesboro, Georgia. Bailey's supervisor told him that TitleMax did not pay overtime, so he regularly worked off the clock. For example, on some Saturdays, he would work from 8:30 a.m. to 5:30 p.m., but—as ordered by his supervisor—would log only seven hours despite having worked nine. His supervisor also edited Bailey's time records to report fewer hours than he actually worked by, for instance, subtracting a one-hour lunch break when there had been none. Bailey resigned from TitleMax and filed a suit in a federal district court against the employer to recover for the unpaid overtime under the Fair Labor Standards Act (FLSA). TitleMax argued that Bailey was responsible for the unpaid time. According to TitleMax, he never complained about his supervisor, and he violated company policy with respect to keeping accurate time records. The court issued a judgment in the defendant's favor. Bailey appealed. Decision and Remedy The U.S. Court of Appeals for the Eleventh Circuit reversed the judgment of the lower court and remanded the case for further proceedings. "Where, as here, an employer knew or had reason to know that its employee underreported his hours, it cannot invoke [a] defense based on that underreporting to bar the employee's FLSA claim.

Ballard v. Chicago Park District (2014)

Background and Facts Beverly Ballard worked for the Chicago Park District. She lived with her mother, Sarah, who suffered from end-stage congestive heart failure. Beverly served as Sarah's primary caregiver with support from Horizon Hospice & Palliative Care. The hospice helped Sarah plan and secure funds for an end-of-life goal, a "family trip" to Las Vegas. To accompany Sarah as her caretaker, Beverly asked the Park District for unpaid time off under the Family Medical and Leave Act (FMLA). The employer refused, but Beverly and Sarah took the trip as planned. Later, the Park District terminated Beverly for "unauthorized absences." She filed a suit in a federal district court against the employer. The court issued a decision in Beverly's favor. The Park District appealed, arguing that Beverly had been absent from work on a "recreational trip." Decision and Remedy The U.S. Court of Appeals for the Seventh Circuit affirmed the lower court's judgment. Under the FMLA, an eligible employee is entitled to take leave from work to care for a family member with a serious health condition. The care is not restricted to a particular place (such as "at home").

EXAMPLE 28.1 BDI Enterprise's employment manual and personnel bulletin both state that, as a matter of policy, workers will be dismissed only for good cause.

Exception based on contract theory If an employee reasonably expects BDI to follow this policy, a court may find that there is an implied contract based on the terms stated in the manual and bulletin. n Generally, the employee's reasonable expectations are the key to whether an employment manual creates an implied contractual obligation.

EXAMPLE 28.2 Goldfinch, Inc., induces Jarvis to leave a lucrative job and move to another state by offering "a long-term job with a thriving business."

Exceptions based on tort theory In fact, Goldfinch not only is having significant financial problems but also is planning a merger that will result in the elimination of the position offered to Jarvis. If Jarvis takes the job in reliance on Goldfinch's representations and is fired shortly thereafter, she may be able to bring an action against the employer for fraud.

FMLA Violations (continued)

In addition, a successful plaintiff is entitled to court costs and attorneys' fees, and, in cases involving bad faith on the part of the employer, two times the amount of damages awarded by a judge or jury. Supervisors can also be held personally liable, as employers, for violations of the act. Employers generally are required to notify employees when an absence will be counted against leave authorized under the act. If an employer fails to provide such notice, and the employee consequently suffers an injury because he or she did not receive notice, the employer may be sanctioned.

CASE EXAMPLE 28.4 Robert Moroni negotiated a deal to provide consulting services for Medco Health Solutions, Inc., a third party administrator of prescription-drug plans.

Note that an employment contract may be established or modified via e-mail exchanges. Medco's agent, Brian Griffin, sent Moroni an e-mail setting forth the details of the parties' agreement. Moroni e-mailed a counteroffer suggesting that he would work on Medco's projects two days a week for thirteen months, in exchange for $17,000 a month plus travel expenses. Medco accepted via e-mail, and Moroni began performing the contract, but Medco refused to pay him. Moroni sued for breach of contract. Medco argued that no enforceable contract existed and that the e-mail showed only an agreement to agree. The court, however, ruled that the e-mail amounted to an agreement to the essential terms of an employment contract.3

EXAMPLE 28.5 Martha works for Baily Snowboards in Vermont.

One day at work, Martha receives a text from her son saying that he has been taken to the hospital. Martha rushes to the hospital and does not return to work for several days. Bailey hires someone else for Martha's position, and Martha files for unemployment benefits. Martha's claim will be denied because she left her job voluntarily and made no effort to maintain contact with her employer.

FMLA coverage and applicability

The FMLA requires employers who have fifty or more employees to provide employees with up to twelve weeks of unpaid family or medical leave during any twelve-month period. The FMLA expressly covers private and public (government) employees who have worked for their employers for at least a year.

Drug Testing - Private Employers

The Fourth Amendment does not apply to drug testing conducted by private employers. Hence, the privacy rights and drug testing of private-sector employees are governed by state law, which varies widely. Many states have statutes that allow drug testing by private employers but place restrictions on when and how the testing may be performed. A collective bargaining agreement may also provide protection against drug testing (or authorize drug testing under certain conditions). The permissibility of a private employee's drug test often hinges on whether the employer's testing was reasonable. Random drug tests and even "zero-tolerance" policies (which deny a "second chance" to employees who test positive for drugs) have been held to be reasonable.

Medicare - Tax Contributions

The Medicare tax rate is 2.9 percent. Unlike Social Security, Medicare has no cap on the amount of wages subject to the tax. So even if an employee's salary is well above the cap for Social Security, he or she will still owe Medicare tax on the total earned income. For Social Security and Medicare together, typically the employer and the employee each pay 7.65 percent—6.2 percent (half of 12.4 percent) for Social Security plus 1.45 percent (half of 2.9 percent) for Medicare—up to the maximum wage base. A

OSHA notices, records, and reports

The act requires that employers post certain notices in the workplace, perform prescribed record keeping, and submit specific reports. For instance, employers with eleven or more employees are required to keep occupational injury and illness records for each employee.

Vesting

The creation of an absolute or unconditional right or power. A key provision of ERISA gives an employee a legal right to receive pension benefits at some future date when he or she stops working. Before ERISA was enacted, some employees who had worked for companies for as long as thirty years received no pension benefits when their employment terminated because those benefits had not vested.

Minimum Wage

The lowest wage, either by government regulation or union contract, that an employer may pay an hourly worker.

I-9 Verification

The process of verifying the employment eligibility and identity of a new worker. It must be completed within three days after the worker commences employment.

Private Retirement Plans The major federal act regulating employee retirement plans is the Employee Retirement Income Security Act (ERISA).

This act empowers a branch of the U.S. Department of Labor to enforce its provisions governing employers that have private pension funds for their employees.

Health, Safety, and Income Security

Under the common law, employees who were injured on the job had to file lawsuits against their employers to obtain recovery. Today, numerous state and federal statutes protect employees and their families from the risk of accidental injury, death, or disease resulting from employment.

FMLA Benefits and Protections

When an employee takes FMLA leave, the employer must continue the worker's health-care coverage on the same terms as if the employee had continues to work. On returning from FMLA leave, most employees must be restored to their original position or to a comparable position (with nearly equivalent pay and benefits). An important exception allows the employer to avoid reinstating a key employee—defined as an employee whose pay falls within the top 10 percent of the firm's workforce.

CASE EXAMPLE 28.3 Donald Waddell got a job at the Boyce Thompson Institute for Plant Research. W

Whistleblowing Waddell did not have an employment contract for a fixed term, and the institute's employee manual said that his job was "terminable at will." Soon after he was hired, the institute implemented a whistleblower policy designed to encourage "the highest standards of financial reporting and lawful and ethical behavior." Waddell repeatedly told his supervisor, Sophia Darling, that she needed to file certain financial documents more promptly. Darling fired Waddell, telling him that he was disrespectful and insubordinate. Waddell then sued the institute, contending that he should not have been fired because he was acting under the company's whistleblowing policy. A New York appellate court, however, found that Waddell was not protected under the whistleblower policy because it was implemented after his employment. Moreover, Waddell failed to allege that he passed up other job opportunities based on the policy. Because Waddell was employed at will and did not rely on the whistleblower policy, he could be fired.

Usually, the statutes allow employers to purchase insurance from

a private insurer or a state fund to pay workers' compensation benefits in the event of a claim. Most states also allow employers to be self-insured—that is, employers that show an ability to pay claims do not need to buy insurance.

If an employer does not pay unemployment taxes,

a state government can place a lien (claim) on the business's property to secure the debt.

Immigration Reform and Control Act (IRCA) When the IRCA was enacted, it provided

amnesty to certain groups of illegal aliens living in the United States at the time. It also established a system that sanctions employers who hire immigrants lacking work authorization.

Immigration Reform and Control Act (IRCA) The employer must declare, under penalty of perjury, that

an employee produced documents establishing his or her identity and legal employability. A U.S. passport establishing the person's citizenship is acceptable documentation, as is a document authorizing a foreign citizen to work in the United States, such as a Permanent Resident Card or an Alien Registration Receipt (discussed shortly).

A mass layoff is a layoff of a

at least one-third of the full-time employees at a particular job site. The act applies to employers with at least one hundred full-time employees.

ERISA created the Pension Benefit Guaranty Corporation (PBGC), an

independent federal agency, to provide timely and uninterrupted payment of voluntary private pension benefits. The pension plans pay annual insurance premiums (at set rates adjusted for inflation) to the PBGC, which then pays benefits to participants in the event that a plan is unable to do so.

An employee's underreporting of hours worked

can undercut his or her claim for overtime.

Employer-Sponsored Group Health Plans The Health Insurance Portability and Accountability Act (HIPAA)

contains provisions that affect employer-sponsored group health plans. HIPAA does not require employers to provide health insurance, but it does establish requirements for those that do. For instance, HIPAA strictly limits an employer's ability to exclude coverage for preexisting conditions.

In addition, HIPAA restricts the manner in which

covered employers collect, use, and disclose the health information of employees and their families. Employers must designate privacy officials, distribute privacy notices, and train employees to ensure that employees' health information is not disclosed to unauthorized parties.

Unemployment Insurance The Federal Unemployment Tax Act (FUTA)

created a state- administered system that provides unemployment compensation to eligible individuals. Under this system, employers pay into a fund, and the proceeds are paid out to qualified unemployed workers.

An employer may not fire an employee if

doing so would violate a federal or state statute, such as one prohibiting employment discrimination. The courts have also created several exceptions, discussed next.

Nonetheless, employers do have considerable leeway to monitor

employees in the work- place. In addition, private employers generally are free to use filtering software to block access to certain Web sites, such as sites containing sexually explicit images. The First Amendment's protection of free speech prevents only government employers from restraining speech by blocking Web sites.

COBRA The Consolidated Omnibus Budget Reconciliation Act (COBRA)

enables workers to continue, for a limited time, their health-care coverage after they are no longer eligible for their employers' group health-insurance plans. The workers—not the employers—pay the premiums for the continued coverage.

Certain employees—usually executive, administrative, and professional employees, as well as outside salespersons and computer programmers—are

exempt from the FLSA's overtime provisions. Executive and administrative employees are those whose primary duty is management and who exercise discretion and independent judgment. Employers are not required to pay overtime wages to exempt employees.

The Family and Medical Leave Act (FMLA) allows employees to take time off from work for

family or medical reasons. Additional categories of FMLA leave have been created for military caregivers and for qualifying emergencies that arise due to military service. A majority of the states have similar legislation. In addition, many employers voluntarily offer paid family-leave plans for their workers.

Because of the sometimes harsh effects of the employment-at-will doctrine for employees, the courts

have carved out various exceptions to it. These exceptions are based on contract theory, tort theory, and public policy.

The IRCA makes it illegal to

hire, recruit, or refer for a fee someone not authorized to work in this country. Through Immigration and Customs Enforcement officers, the federal government conducts random compliance audits and engages in enforcement actions against employers who hire undocumented immigrants.

Under ERISA, generally all employee contributions to pension plans vest

immediately, and employee rights to employer contributions to a plan vest after five years of employment.

State workers' compensation laws establish an administrative procedure for compensating workers

injured on the job. Instead of suing, an injured worker files a claim with the administrative agency or board that administers local workers' compensation claims. • Most workers' compensation statutes are similar. • No state covers all employees.

Social Security covers almost all

jobs in the United States. Nine out of ten workers "contribute" to this protection for themselves and their families.

COBRA prohibits an employer from eliminating a worker's

medical, optical, or dental insurance when the worker's employment is terminated or when a reduction in the worker's hours would affect coverage. Termination of employment may be voluntary or involuntary. Only workers fired for gross misconduct are excluded from protection.

Employees are covered by the full range of employment laws, including minimum wage and anti-discrimination statutes. In contrast,

most independent contractors are not covered by the main employment laws. Enter the digital age of on-demand workers who obtain job assignments via apps—for example, cleaning service workers who work through Handy and transportation service providers who work through Uber and Lyft. These companies provide workers on demand to online customers. The service providers who get work through the companies are not employees but independent contractors.

Most employers that engage in electronic monitoring notify their employees about the monitoring. Nevertheless,

notifying employees of a general policy may not sufficiently protect an employer who monitors forms of communications that the policy fails to mention. For instance, notifying employees that their e-mails and phone calls may be monitored does not necessarily protect an employer who monitors social media posts or blogs.

The Affordable Care Act Employers will be fined for failing to provide benefits only if

one of their employees receives a federal subsidy to buy health insurance through a state health-insurance exchange. The act established state exchanges to provide a marketplace for business owners and individuals to compare premiums and purchase policies.

Medicare originally had two parts,

one pertaining to hospital costs and the other to non-hospital medical costs, such as visits to physicians' offices. It now offers additional coverage options and a prescription-drug plan. People who have Medicare hospital insurance can also obtain additional federal medical insurance by paying small monthly premiums, which increase as the cost of medical care increases.

The FLSA prohibits

oppressive child labor. Children under fourteen years of age are allowed to do certain types of work, such as deliver newspapers, work for their parents, and be employed in entertainment and (with some exceptions) agriculture. Children aged fourteen and fifteen are allowed to work, but not in hazardous occupations. There are also numerous restrictions on how many hours per day and per week children can work.

The FUTA and state laws require employers that fall under the provisions of the act to

pay unemployment taxes at regular intervals. The proceeds from these taxes are then paid out to qualified unemployed workers.

An injured employee must notify her or his employer

promptly (usually within thirty days of the accident). Generally, an employee must also file a workers' compensation claim with the appropriate state agency or board within a certain period (sixty days to two years) from the time the injury is first noticed, rather than from the time of the accident.

(IRCA) Most legal actions for violations of I-9 rules are brought against employees who

provide false information or documentation. If the employee enters false information on an I-9 form or presents false documentation, the employer can fire the worker, who then may be subject to deportation. Nevertheless, employers must be honest when verifying an employee's documentation. If an employer "should have known" that the worker was unauthorized, the employer has violated the rules.

In Brazil, though, workers who answer work e-mails on their smartphones or other electronic devices after work are entitled to

receive overtime wages. Under legislation enacted in 2012 and approved by President Dilma Rousseff, e-mail from an employer is considered the equivalent of orders given directly to an employee, so it constitutes work. A few other nations also require payment to workers for staying connected through smart-phones and other devices after hours.

Some legal scholars believe that there should be a new category of workers with "dependent-contractor" status who

receive some of the protections traditionally given only to employees. Some aspects of current labor law would be attached to the relationships between dependent contractors and their employers. Those might include overtime eligibility under the FLSA and minimum wage laws. In 2015, two judges allowed separate lawsuits to go before juries in San Francisco over the question of whether on-demand drivers should be considered employees rather than independent contractors.

Whenever a work-related injury or disease occurs, employers must

report directly to OSHA. If an employee dies or three or more employees are hospitalized because of a work-related incident, the employer must notify OSHA within eight hours. A company that fails to do so will be fined and may also be prosecuted under state law. Following the incident, a complete inspection of the premises is mandatory.

The Affordable Care Act The Affordable Care Act (commonly referred to as Obamacare)

requires most employers with fifty or more full-time employees to offer health-insurance benefits. Under the act, any business offering health benefits to its employees, even if it is not legally required to do so, may be eligible for tax credits of up to 35 percent to offset the costs.

Also exempt from the EPPA are

security services firms and companies that manufacture and distribute con- trolled substances. Other employers may use lie-detector tests when investigating losses attributable to theft, including embezzlement and the theft of trade secrets.

Working times and hours are not restricted for persons between the ages of

sixteen and eighteen, but they cannot be employed in hazardous jobs or in jobs detrimental to their health and well-being. None of these restrictions apply to individuals over the age of eighteen.

Employers can voluntarily pay overtime to ineligible employees but cannot

waive or reduce the overtime requirements of the FLSA.

Drug Testing In the interests of public safety, many employers, including government employers, require their employees to

submit to drug testing. • Public Employers. Government (public) employers are constrained in drug testing by the Fourth Amendment to the U.S. Constitution, which prohibits unreasonable searches and seizures. Drug testing of public employees is allowed by statute for transportation workers and is normally upheld by the courts when drug use in a particular job may threaten public safety. Also, when there is a reasonable basis for suspecting government employees of using drugs, courts often find that drug testing does not violate the Fourth Amendment.

An employee's acceptance of workers' compensation benefits bars the employee from

suing for injuries caused by the employer's negligence. By barring lawsuits for negligence, workers' compensation laws also prevent employers from raising common law defenses to negligence, such as contributory negligence and assumption of risk.

The public-policy exception may also apply to an employee who is discharged for whistleblowing

that is, telling government authorities, upper-level managers, or the media that her or his employer is engaged in some unsafe or illegal activity. Normally, however, whistleblowers seek protection from retaliatory discharge under federal and state statutory laws, such as the Whistleblower Protection Act of 1989.

If employees are not informed that certain communications are being monitored, however,

the employer may be held liable for invading their privacy.

Employee Privacy Protection Employees of private (non-government) employers have some privacy protection under

tort law and state constitutions. In addition, state and federal statutes may limit an employer's conduct in certain respects. For instance, the Electronic Communications Privacy Act prohibits employers from intercepting an employee's personal electronic communications unless they are made on devices and systems furnished by the employer.

Reasonable Expectation of Privacy When determining whether an employer should be held liable for violating an employee's privacy rights, the courts generally

weigh the employer's interests against the employee's reasonable expectation of privacy. Normally, if employees have been informed that their communications are being monitored, they cannot reasonably expect those interactions to be private. Also, if the employer provided the e-mail system or blog that the employee used for communications, a court will typically hold that the employee did not have a reasonable expectation of privacy in those communications.