LSTD 3

cause in fact

After establishing that a breach of duty has occurred, the injured party must also prove that the tortfeasor's conduct was the cause in fact of the damages suffered by the injured party. In other words, there must be a link between breach of duty and damages. The overwhelming majority of courts use a simple test, known as the but-for test, to establish a link. Thus, the question that must be answered is this: "But for (except for) the breach of duty by the tortfeasor, would the injured party have suffered damages?" If the answer is no, then there is a link between the tortfeasor's conduct and the harm suffered by the injured party. The question can also be asked this way: "If the tortfeasor had complied with her legal duty, would the injured party have suffered damages?" Again, a no answer indicates a link and, thus, cause in fact. For example, suppose that Donald checks into Hotel's 20th-floor luxury suite. He watches a beautiful sunset while leaning on the balcony railing, but the railing snaps and Donald falls 20 stories. In a negligence analysis, one can reasonably conclude that Hotel owes Donald both a general duty and a special duty (innkeeper) and that the duty was breached because the rail was assumably defective in some way. To establish cause in fact, one would ask: But for the breach of duty by Hotel, would Donald have suffered damages? The answer is clearly no because if Hotel hadn't breached its duty (e.g., had inspected and kept the railing in good repair), Donald would not have suffered damages. Thus, the breach of duty by Hotel was the cause in fact of Donald's injuries.

wages and hours

Although the statute is expansive, its primary provisions mandate (1) payment of a minimum wage,11 (2) a maximum 40-hour workweek, (3) overtime pay, and (4) restrictions on children working in certain occupations and during certain hours.

vesting

An ERISA (Employee Retirement Income Security Act) guideline stipulating that employees are entitled to their benefits from various employer-contributed benefit plans within a certain period of time, even if they no longer work for the employer

reform efforts

Beginning in 2007, several efforts have been made to amend the NLRA with the Employee Free Choice Act (sometimes referred to by the media as the Card Check Act), which would provide workers an option of procedures for having a union certified as the legal representative of the bargaining unit. The most controversial provision of the law would authorize the NLRB to certify unions either when an NLRB-supervised election results in a majority of pro-union votes or when the bargaining unit can show that over 50 percent of the employees in the bargaining unit have signed an authorization card. The proposed law is supported by labor unions on the basis that it protects the unionization process from employers that are resistant to collective bargaining. Employers are generally against the law on the basis that it puts undue pressure on employees to sign authorization cards and the employees' cards would not be secret.

statutory exceptions

Certain federal and state statutes also displace common law employment-at-will rules. Perhaps the best examples are the antidiscrimination laws that prohibit termination (and many other workplace actions) based on certain discriminatory motivations such as race or gender.5 Other statutes prevent employers from terminating employees for specific reasons such as being absent due to jury duty6 or attempting to form a union

Employment Regulation

Congress and state legislatures have passed laws intended to protect employees from oppressive or unfair practices in the workplace.8 These employment protection laws are intended to safeguard the welfare of individual workers who have little or no bargaining power in the employer-employee relationship.

defect

For a party to recover for an injury caused by a product, the product must have been defective and must have created a danger that is outside the reasonable consumer's expectations. Courts have recognized several theories of unreasonably dangerous defects.

employment at will doctrine

Fundamentally, the doctrine permits employers to terminate an at-will employee with or without advance notice and with or without just cause, subject to certain exceptions. So long as the termination does not fall under one of the exceptions, the employer is insulated from a wrongful-termination lawsuit. The employment-at-will doctrine reflects the principal's wide latitude in decision making when exercising the power and right to terminate an employee.

damages

In a business context, the aggrieved party must be able to prove that he or she suffered some pecuniary harm. Examples of damages in a defamation suit include situations in which the victim has lost a valuable client due to the tortfeasor's defamatory comment or the victim is unable to secure employment because of a tortfeasor's defamatory comment during a reference check.

misuse of product

In a case where the injured party may not know of a certain risk and yet fails to use the product in a manner in which an ordinarily prudent person would, the seller may use product misuse as a defense. Courts have been reluctant to allow this defense unless the particular use of the product is so far from its ordinary use that it is not reasonably foreseeable by the seller.

social security

In addition to any pension or retirement plans offered by employers, workers are entitled to a retirement income from the federal government by virtue of the Social Security Act (SSA) of 1935. The SSA provides a broad set of benefits for workers that are funded by mandatory employment taxes paid by both employer and employee into a trust fund administered by the federal government. The SSA also provides for payments to be made when a worker becomes disabled, and it provides survivor benefits for spouses and children upon the death of a worker.

liability laws

Laws that cover individuals who are injured by a product, known as products liability laws, may take the form of state common law or state statutes that expressly impose liability for injuries that result from products. These statutes are based primarily on the Restatements and are relatively uniform from state to state.

negligance

Negligence is an accidental (without willful intent) event that causes harm to another party

causation and damages

Once it has been established that the product is unreasonably dangerous, the injured party must prove only that the defective product was the cause of the injuries and that the product caused an actual injury that resulted in damages.

tortfeasor

One who commits a tort is known as the

products liability

Products liability refers to the liability of any seller (including the manufacturer, retailer, and any intermediary seller such as a wholesaler) of a product that, because of a defect, causes harm to a consumer. Note that modern products liability law protects not only the actual purchaser but also any ultimate users who are harmed by the product's defect. In a products liability case, the injured party may pursue a legal remedy against the seller under one of three theories: (1) negligence, (2) warranty, or (3) strict liability.

Occupational Safety and Health Administration (OSHA)

The OSHA statute created the Occupational Safety and Health Administration, under the jurisdiction of the Department of Labor, to administer and enforce the statute. The administration has expansive enforcement authority, including routine or unscheduled worksite inspections, in carrying out the provisions of the law.

Misfeasance

The performance of a lawful act in an illegal or improper manner

specificity

The statement must be about a particular party, business, or product. Thus, any general statement about a profession as a whole cannot constitute defamation, but a false statement about a specific company can be the basis of a reputation claim

tortious conduct

The tortfeasor's wrongful conduct is described as

three torts

Torts fall into one of three general categories: intentional torts, negligence, and strict liability

missclasification

Unless an employee is clearly exempt from the FLSA coverage, she should be classified as a covered (nonexempt) employee under the FLSA provisions until such time as the employer has legal assurances that the employee is exempt.

union formation

While major labor unions such as the AFL-CIO are a well-known part of the American landscape, regional unions or even unions that have only one employer are recognized by the NLRA as well. If an employer has not already recognized a union, and a group of employees decides that it wants to form a collective bargaining unit to deal with labor-management matters such as negotiating a contract, the NLRA sets out a procedure for forming a union.

pension

a sum paid regularly to a person, usually after retirement

qualified privilege

-defendant must offer evidence of good faith and be absent of malice to be shielded from liability -Media: Employees of media organizations (e.g., television, radio, periodicals) are afforded a qualified protection from defamation liability. So long as the media has acted in good faith, absent of malice, and without a reckless disregard for the truth, the media is protected from liability through privilege as a defense for unintentional mistakes of fact in their reporting. -Fair report privilege: If one relies on an official public document or a statement made by a public official and cites the document or public statement when making an allegedly defamatory statement, no cause of action for defamation occurs unless the speaker knows the statement is false. -Employers: An increasing number of states have extended some liability protection for employers who are providing a reference for an ex-employee. In most cases, employers do not have liability if the employee's defamation claim is connected to a reference check. However, an employer may lose this privilege if it provides false information or acted with malice.

absolute privilege

-the defendant need not offer any further evidence to assert the defense -Government officials: The framers of the Constitution recognized the need for free debate among members of Congress and gave immunity in the Constitution via the Speech and Debate Clause, which shields members of Congress from liability for any statement made during a congressional debate, hearing, and so on, while in office. The U.S. Supreme Court later extended that protection to all federal officials.6 -Judicial officers/proceedings: All states now recognize some protection of participants of a judicial proceeding for statements made during the proceeding. This includes judges, lawyers, and, in some cases, witnesses. -State legislators: Similar immunity has been extended by the states to protect state legislators for statements made in the course of carrying out their duties.

defamatory statement

A false statement concerning a party's reputation or honesty or a statement that subjects a party to hate, contempt, or ridicule. In order to qualify as defamatory, the statement must have a tendency to harm the reputation of the plaintiff.4 Because many statements can be interpreted in more than one way, the law provides that the statement is defamatory so long as a defamatory interpretation is an objectively reasonable one and the plaintiff shows that at least one of the recipients did in fact make that interpretation. Note that the statement must be false, not merely unkind. Moreover, if a statement was pure opinion, that statement is not defamatory. That is, a defamatory statement is one that must be provable as false.

Workers Compensation

A form of insurance paid by the employer providing cash benefits to workers injured or disabled in the course of employment.

Merchant's Privilege

A narrow privilege, provided for in the Restatements, that shields a merchant from liability for temporarily detaining a party who is reasonably suspected of stealing merchandise.

American Law Institute

A private organization of lawyers, judges, and legal scholars that wrote and adopted the Model Penal Code

improper packaging

A product can be rendered unreasonably dangerous by a defect in the packaging. Cases that have recognized this theory of defect are primarily asserted against manufacturers of products that require safety-proof containers as well as food or beverage packages that clearly indicate whether the product is sealed or whether there is evidence of tampering (e.g., a seal on a bottle of juice).

design or manufacturing defect

A product may become dangerous if it is designed improperly in that foreseeable risks of harm posed by the product could have been reduced or avoided by some alternative design. Even products that are designed properly may still be rendered dangerously defective by some mistake made during the manufacturing process. For example, suppose CarCo designs a new car intended to have higher-than-average gas mileage. It achieves this by moving the gas tank to a different position on the car. The design, however, results in the gas tank rupturing during a rear-end crash. This is a classic design defect.27 On the other hand, suppose CarCo designs the new car properly but one of the factory workers improperly installs the brakes and this eventually results in an injury. In this case the product has been rendered unreasonably dangerous via a manufacturing defect

tort

A tort1 is a civil wrong where one party has acted, or in some cases failed to act, and that action or inaction causes a loss to be suffered by another party. The law provides a remedy for one who has suffered an injury by compelling the wrongdoer to pay compensation to the injured party. Tort law is best understood as law that is intended to compensate injured parties for losses resulting in harm from some unreasonable conduct by another

sudden loss jobs

After the Great Depression sent unemployment rates soaring to 20 percent and higher, Congress responded with the Federal Unemployment Tax Act (FUTA)25 of 1935, which provided limited payments to workers who had been temporarily or permanently terminated from employment through no fault of their own. FUTA established a state-administered fund to provide payments to workers who have suffered sudden job loss. Only the employer pays FUTA taxes. In order to obtain unemployment benefits, the worker must actively seek new employment and, if necessary, retraining in a different field. Unemployment compensation is intended to cover workers who lose their jobs because of economic difficulties; it is not intended to reward an employee who was terminated for cause. However, because states set their own standards and procedures, the exact eligibility requirements and the amount available vary among different jurisdictions. The amount paid to those who qualify for assistance is generally nowhere near the gross or even net salary the displaced worker was earning.

Assumption of Risk

Although courts apply this defense narrowly,32 it is still recognized as a defense for sellers in a strict product liability case. An injured party has assumed the risk if the party knows or should have known about the risk and disregards this risk by continuing with the activity at issue for her own benefit. For example, suppose that WidgetCo owns a high-speed machine for producing widgets and a foreign object lodges in the machine while it is operating. The instructions warn to shut down the machine before removing the object, but the plant manager decides against a shutdown, fearing it will cost money from lost production time. If the plant manager is injured while removing the object from the operating machinery and sues the machine's manufacturer under a strict product liability theory, the manufacturer may successfully assert the assumption-of-the-risk defense.33 Sometimes a large quantity of goods is sold to the public before a dangerous defect in the product is discovered. That product may then be recalled. If a consumer is made fully aware of a product recall due to a design or manufacturing defect but continues to use the product, assumption of risk may be asserted if injury and a lawsuit result

Contractual employee

An employee who works under an agreement that defines when the employee begins employment and when the employment ends.

FMLA scope and coverage

An employee, to be eligible for benefits, must have worked for the company for at least 12 months and have worked 1,250 hours during the past 12 months. The law mandates that the employers provide up to 12 weeks of unpaid leave to employees for purposes related to family medical matters during any 12-month period. An eligible employee may take an FMLA leave when the employee needs to care for a newborn or newly adopted baby or when a serious health condition affects the employee or the employee's spouse, child, or parent. For an employee to be eligible for an FMLA leave, the serious health condition must require continued treatments by a health care provider and must be of such severity as to render the person unable to care for herself for three consecutive days. The employee must give 30 days' notice of his intent to take a leave unless an emergency arises, which allows reduced notice

implied contracts

An employment-at-will relationship may be converted to a contract relationship if the employer acts in a manner that would lead a reasonable person to believe that the employer intended to offer the employee protection from termination without cause. This protection, called an implied contract, may arise in two circumstances. First, a manual or bulletin (such as an employee handbook) that is drafted and distributed by the employer may give rise to an implied contract theory if the manual extends some protections or process to the employee that she would not have under the employment-at-will doctrine. If the employee shows that she would reasonably conclude that the employer was presenting the manual as a statement of the conditions under which employment could continue, an implied contract may exist. This may be true even where the employer has inserted disclaimer language (e.g., "This handbook is not a contract") so long as it was reasonable for an employee to assume that they were entitled to a benefit by virtue of the handbook's provisions

restatement of torts

An influential document issued by the American Law Institute that summarizes the general principles of U.S. tort law and is recognized by the courts as a source of widely applied principles of law. ALI has amended the Restatements twice, resulting in the Restatement (Second) of Torts and the Restatement (Third) of Torts.

intentional tort

An intentional tort is one in which the tortfeasor is willful in bringing about a particular event that causes harm to another party

assumption of duty

Another exception to the no general duty to act/rescue is when one party voluntarily begins to render assistance even when there is no legal obligation to do so. This is known as assumption of duty and it requires that the party rendering assistance must proceed with reasonable care. This includes the duty to continue rendering aid and to take care not to leave the injured party in a worse position.19 For example, suppose that Davis, a delivery truck driver, hears a call for help during one of his deliveries. He discovers that the call is coming from a nearby apartment that is on fire. Davis enters the building and rescues the caller. Although Davis has no legal duty to rescue, he undertakes the rescue and therefore assumes the duty to keep the caller safe. For example, if the caller is unconscious, Davis must use reasonable care to secure medical help and cannot abandon the caller.

Family and Medical Leave Act (FMLA)

As American society has changed since the industrial revolution, so has society's need to provide for employees who are faced with choosing between caring for a loved one and losing a job, seniority, or a promotion. In response to pressures on the workforce to care for a family member, in 1993 Congress passed the Family and Medical Leave Act (FMLA), 29 which sets out the basic protections for workers who need a brief leave from work to care for themselves or an immediate family member.

ORIGINS OF EMPLOYMENT REGULATION AND LABOR LAW

As the American economy boomed with the dawn of the industrial age, employment opportunities shifted away from agriculture and toward industrial production beginning in the mid-1880s. The Industrial Revolution was fueled in part by the availability of an abundant workforce consisting of immigrants and displaced farmers willing to work long hours for low wages. Conditions in the industrial plants were brutal and dangerous, and exploitation of unskilled labor was common and of little concern to most politicians of that era. Workers who were injured on the job were terminated and given no compensation for medical care. In the absence of any compulsory education laws or financial alternatives, industrial labor families sent young children to work, including work in coal mines and slaughterhouses. Attempts by workers to organize or to bargain were met by industrialists with physical intimidation, assault, and job loss. However, in the early 1900s, a growing labor movement, inspired by the increased political power of immigrant groups and a growing intolerance of the public for corporate abuses,1 forced the federal government to legislate federal protections for employees regarding working conditions, unionization, and child labor laws. Eventually, additional worker protections related to wages and hours, injuries on the job, workplace safety, and layoffs were added to the federal labor statutes

fraudulent misrepresentation

Contract Enforceability and Performance." It is important to note that there are some important overlapping legal principles of tort and contract law. For example, in some cases contract law allows a contract to be canceled if one party has made false representations concerning a material fact. This means that the misrepresented fact must involve an important aspect of the basis of the contract, such as a change in the value of the contract or an increase in one party's risk. Fraudulent misrepresentation (sometimes referred to simply as fraud) is alsoPage 280 recognized as a tort in cases where the law provides a remedy to recover damages when the innocent party suffers a pecuniary loss as a result of the false representation. In cases of fraudulent misrepresentation, the law allows the innocent party to recover if (1) the misrepresentation was a material fact known to be false by the tortfeasor (or was a reckless disregard for the truth); (2) the tortfeasor intended to persuade the innocent party to rely on the statement, and the innocent party did, in fact, rely on it; and (3) damages were suffered by the innocent party. For example, Buyer asks Seller whether Seller's property is properly zoned for a manufacturing facility. In an effort to induce Buyer to purchase the property, Seller misrepresents that the property is zoned for manufacturing. Buyer then enters into a purchase agreement for the property with a 10 percent down payment, balance due in 30 days. Buyer then proceeds to spend money by hiring an architect to visit the site and draw plans for the new facility. The day after the agreement is signed, Seller applies to the zoning board for a change in zoning, hoping that it will be changed before Buyer completes the agreement by paying the balance owed. The zoning board does not change the status. In a case against Seller for fraud, Buyer would be entitled to cancel the contract and recover any losses in tort suffered as a result of Seller's fraudulent misrepresentation (such as the money spent on hiring the architect)

Negligent Misrepresentation

Courts will also allow recovery for misrepresentations that are not intentional but are negligent misrepresentations. In most cases, the parties have to have some type of business relationship for the innocent party to recover. Any statement made by a party that turns out to be inaccurate may still allow the innocent party to recover if the tortfeasor's statement was negligent. In the Buyer-Seller case discussed earlier, suppose that Seller had no actual knowledge of the zoning status for the property but made a statement that it was zoned for manufacturing. Buyer would still be able to recover despite the fact that Seller did not know that the statement was false. Seller is still liable because he was negligent in his duty to know such an important fact

retirement

Employers are not required to establish retirement plans for their employees, although as a competitive matter many often do so to attract and retain high-quality employees. If an employer does offer retirement benefits, they are typically offered in the form of a pension or through a tax-deferred retirement savings account such as a 401(k)19 plan. In a pension plan, the employer promises to pay a monthly sum to employees who retire from the company after a certain number of years of service. The amount is ordinarily based on the length of service and the employee's final salary rate as of the date of retirement. In a retirement savings account, the employee commits to saving a certain percentage of base pay in an account that is controlled directly by the employee and not the employer. The employee then has the ability to allocate her savings via various investment vehicles that range from very safe to high risk. Some employers match the employee's contribution by paying an extra amount into the account based on a certain percentage of the employee's base salary.

lockouts and replacement workers

Employers who are faced with the prospect of a strike have several options under the law. First, any employer that reasonably anticipates a strike by a group of employees may employ a lockout by shutting down the business and preventing employees from working, thus depriving them of their employment and putting economic pressure on the union's members before the union can do the same to the employer through a strike. A second option for employers who are subject to a strike is to hire nonunion replacement workers in order to continue operations during the strike. When the strike is over, employers may either retain the replacement workers or discharge them (without liability) in favor of returning workers.

federal whistle blower statutes

Federal employees are protected from retaliation for whistle-blowing by the Whistleblower Protection Act of 1989.7 The law also covers employees of companies that contract with the government to provide goods or services (e.g., a construction company building a federal highway)

warranty

Historically, warranty laws have been an important protection for purchasers because they impose liability even in the absence of negligence. When the seller makes a representation of fact about a product, this is known as an express warranty. If the seller has not made a specific representation about the product, the buyer may still be protected by a Uniform Commercial Code-imposed implied warranty. Warranties are set out in Article 2 (Sales) of the UCC and are discussed in detail in Chapter 21, "Consumer Protection Law.

key employees

If an employee's salary range is in the top 10 percent of all salaries in the company, the FMLA classifies him as a key employee. Although key employees are entitled to the FMLA protections, employers have a right not to reinstate the employee if reinstatement would cause a "substantial and grievous economic injury."

Employee Retirement Income Security Act of 1974 (ERISA)

If employers establish either a pension fund or a retirement savings plan, the employer is subject to the requirements of a federal statute called the Employee Retirement Income Security Act (ERISA)20 of 1974.

violation of safety statute

If the legislature has passed a statute intended to promote safety and one party violates the statute, there is a strong presumption that the party violating the statute has also breached her general duty to those who are protected by the law. Violations of safety statutes are sometimes referred to as negligence per se. For example, suppose the state legislature passes a law requiring that construction companies provide hard hats for all workers and visitors on a construction site. One day a prospective tenant visits an office building construction site to check on its progress, but there are not a sufficient number of hard hats available. The site manager allows the visitor on the site without a hard hat. The visitor is then injured by falling debris. In this case, the construction company has violated the state safety statute, and a court may find a breach of duty occurred without delving into a reasonably prudent person analysis. States also pass statutes intended to establish specific liability standards in certain circumstances. For example, dram shop laws, enacted in most but not all states, impose liability on the owners and employees of a public establishment where alcohol is being served. These laws allow a third party who has been injured or harmed by an intoxicated tortfeasor to recover damages against the owner or employee who served the obviously intoxicated patron

public figure standard

If the victim is a public figure, such as a candidate for political office or a celebrity, the defamation must have been committed with malice or reckless disregard for the truth.Page 277 This "public figure" rule is based on the U.S. Supreme Court's landmark ruling in New York Times v. Sullivan.5 The case involved a public official, the police commissioner of New York City, who sued The New York Times for defamation based on allegations printed in the newspaper that accused him of complicity in criminal activity. In announcing the public figure standard, the Court ruled that, in order for a public figure to prevail in a defamation case, the plaintiff must provide evidence that the defamer either had "actual knowledge" that the statement was false or made the defamatory statement with a "reckless disregard for the truth."

Tortious Interference with Prospective Advantage

In addition to providing protection against interference from third parties in existing contracts, the law also protects interference with potential contract (prospects) or other business relationships. The protections and definition of interference are similar to the existing contractual interference rules discussed earlier. However, because no contract actually exists, courts allow recovery for this tort only under limited circumstances in which the tortfeasor's conduct was highly anticompetitive. For example, assume that OldCo intendsPage 284 to sabotage NewCo's efforts to obtain a new customer through a competitive bidding process. An OldCo employee hacks into NewCo's computer and destroys the proposal forms. NewCo cannot submit the bid before the deadline and, thus, doesn't get the contract. Assuming that NewCo can prove it suffered damages, OldCo could be held liable for interference with prospective advantage

trade libel

In cases where a competitor has made a false statement that disparages a competing product, an injured party may sue for trade libel. This tort requires that the statement (1) be a clear and specific reference to the disparaged party or product (e.g., using the actual brand name of the product), (2) be made with either knowledge that the statement is false or reckless disregard for the truth, and (3) be communicated to a third party (similar to defamation).

comparitive negligence

In cases where the injured party's conduct has played a factor in the harm suffered, the Restatements allow the tortfeasor to assert the defense of comparative negligence. This defense requires a jury to allocate the proportion of negligence committed by each party in terms of percentage (see Table 9.3). Ultimately, successfully asserting comparative negligence reduces (but does not eliminate) the final award to the plaintiff.

actual damages

In order to recover in a negligence case, the tortfeasor must have caused another party actual damages. This means that the party alleging injury must prove that she has suffered some type of physical harm derived from an injury caused by the tortfeasor. An injured party may not prevail if the injuries are limited to mental and/or emotional harm alone. However, once a party has proved some physical harm, she is eligible for a variety of other types of damages, including out-of-pocket economic losses (such as medical bills), pain and suffering, lost time from employment, and similar categories. Punitive damages may be awarded but are rare because they can be awarded only when the tortfeasor's conduct has been extremely reckless or willful and wanton.

course of employment

In order to trigger protection under workers' compensation laws, the injury must meet two main criteria: (1) The injury was accidental, and (2) the injury occurred within the course Page 371of employment.

Labor-Management Reporting and Disclosure Act

In response to increasing allegations of corruption in major trade unions, Congress enacted the Labor-Management Reporting and Disclosure Act in 1959,39 which established a system of reporting and checks intended to uncover and prevent fraud and corruption among union officials. The law (1) regulates the internal operating procedures of a union, including election processes, procedures, and rights of members at membership and officer meetings; (2) requires extensive financial disclosures by unions; and (3) gives the NLRB additional oversight jurisdiction for internal union governance.

landowners

Landowners owe a general duty to parties off the land from any unreasonable risks to them caused by something on the land. Courts use a reasonableness standard to determine the point at which the landowner should have acted. For example, the owner of GreenAcre plants several trees on the edge of his property, which is adjacent to a busy suburban street. One month later, one tree is dead, with no green vegetation and evidence of decaying bark and cracks in the roots. Eventually, the tree falls onto the road and injures a passerby. In this instance, a court may find that the landowner had a duty to inspect and remove the tree because it was foreseeable that the dead tree would be a risk to passersby if it fell.17 Landowners also owe a special duty to certain parties based on categories spelled out in the Restatements. It is important to understand that in a situation where a tenant is in possession of leased space, the tenant has the same special duties and level of liability that is imposed on landowners. Once a landlord/owner has given possession of the property to the tenant, the landlord is generally not held liable except for certain common areas (e.g., common stairwells, restrooms, or lobby).18 The expected level of care varies by category. Table 9.2 sets out the categories of special relationship duties owed by landowners to licensees, invitees, and trespassers

breach of duty

Once it has been established that one party owes another a general or special duty, the next factor in the analysis is whether or not the party has fulfilled her obligations. Failing to meet these obligations is known as a breach of duty. As discussed earlier, duties includePage 289 (1) general obligations to act in a reasonable manner so as not to put another in harm's way, (2) special duties to certain parties, including the duty to inspect or the duty to warn of defects, and (3) assumption of duty. While the Restatements don't actually list events of breach, courts have traditionally looked to certain guideposts for determining whether a breach of duty has occurred

election

Once the union organizers obtain authorization cards from at least 30 percent of the members of a bargaining unit, the authorization cards are filed with the NLRB. The formal union certification process begins when the NLRB sets a date for an election (a vote to elect or reject unionization) by the entire bargaining unit. During the period of time prior to the election, union organizers are permitted to campaign, for example, by distributing flyers and leaflets to employees. However, employers still have a right to limit any union campaign activities that take place on the employer's property and/or during the regular workday so long as they can justify the limits as being based on business reasons (such as safety or interference with business operations) and not simply an effort to stop unionization. Employers also have a right to campaign against unionization, but they are subject to regulatory restrictions designed to prevent employers from using economic pressure to influence employee voting. The NLRA regulations prohibit employers from using threats of termination or demotions or incentives (such as a bonus or additional vacation time) in exchange for a nonunion vote

scope of but-for test

One problem in applying the but-for test is its overreaching broadness. Its application may result in holding a tortfeasor liable for injuries that occurred well beyond the foreseeable scope of the wrongdoing. For example, in the Donald-Hotel case, suppose that after Donald's balcony rail snaps, Donald falls but the broken balcony rail also falls and penetrates the windshield of a car on the street below, injuring the driver. The injury causes the driver of the car to swerve, hit a pedestrian, and crash into an adjacent canal. A witness to the accident then attempts to rescue the driver of the car from the canal but drowns doing so. Five blocks away, a shopkeeper is so startled by the noise from the accident that she drops a priceless vase on her foot. In this set of accidental chain reactions, using the but-for test would impose liability on Hotel for each injury and damage, including those sustained by Donald, the driver of the car, the struck pedestrian, the drowned rescuer, and the shopkeeper who suffered foot injuries resulting from the destroyed vase. Nevertheless, a sense of fairness demands that the law cannot reasonably impose all of this liability on Hotel. At what point, if any, is the tortfeasor relieved from liability? The broad sweep of the but-for test requires a further step to establish liability. This step, known as proximate (legal) cause, is discussed next

Exempt employees

Perhaps the most important concept that business owners and managers should understand about the FLSA is that the act does not cover all employees. Employers are not bound by the FLSA for employees classified as exempt employees. The underlying concept behind the FLSA is to level the playing field for employees who are in an untenable bargaining position with employers. Consistent with that concept, the law imputes a certain level of bargaining power for professional and management-level employees and, therefore, exempts them from FLSA protections. When the FLSA was first enacted, the division between management and labor was relatively clear and classification was based on salary thresholds. However, as the lines between labor and management blurred during the rise of the information age and the general rise in the skill, education, and wages of workers, classification became increasingly problematic. In 2016, the U.S. Department of Labor Page 364issued a rule which updated the annual salary threshold below which workers qualify for FLSA protection (including overtime pay). To be considered exempt, an employee must make a minimum annual salary of $47,476 per year, or $913 per week. Those earning more than $134,004 are classified as highly compensated employees and are always presumed to be exempt. The rule also included a new system of automatic updates of the annual salary threshold beginning in 2020 that ensures the threshold amount is raised to the 40th percentile of full-time salaried workers in the "lowest-wage Census region."17 Typically, workers paid by the hour are not considered exempt. However, being paid a salary does not automatically make an employee exempt. Exempt duties can be classified as either executive, administrative, or professional. Note that although the term white-collar employees is term is somewhat outdated, in the context of FLSA law, white-collar employees typically engage in employment that does not require physical labor or involve repetitive tasks, and they are typically paid an annual salary rather than on an hourly basis. In classifying an employee as covered or exempt, employers must take into account multiple factors that are known as the duties test: Education or skill level or certifications required for the position, salary level, and compensation method (i.e., commission versus hourly). Amount of physical labor required. Amount of repetitive tasks (e.g., performing an unskilled task over and over again, as does a clerk in a company mailroom). Degree of supervision required by the employer.

Inadequate Warnings

Products that are ostensibly safe may carry risks unknown to a reasonable consumer. In such cases, the law requires the product to carry sufficient warnings and instructions. Failure to warn may render the product unreasonably dangerous even absent any manufacturing or design defect. One common category of inadequate-warning cases involves prescription drugs, but the theory of unreasonable danger applies to all products that carry some danger in use (such as a lawn mower or snow thrower).

unavoidably unsafe

Some products are inherently dangerous. That is, some products are designed and manufactured correctly, and adequate warning has been given, but the product is still dangerous (such as a handgun). Courts have struggled to adjudicate strict liability standards in cases relating to prescription drugs, cigarettes, and guns. In each case, the product was properly manufactured and designed. The evolving view of products liability theories for cigarettes and guns is explored in more detail in Legal/Ethical Reflection and Discussion

product disparagement statutes

Some states have passed product disparagement statutes intended to protect the interest of a state's major industries, such as agriculture, dairy, or beef.7 In perhaps the most famous product disparagement case, the Texas Cattle Ranchers Association sued Oprah Winfrey under a Texas law allowing recovery for any rancher who suffers damages as a result of false disparagement. On her television show, Winfrey agreed with statements made by one of her guests that alleged certain U.S. market hamburger meat could cause mad cow disease, which is fatal to humans. At the end of the segment, Winfrey took the position that she would cease eating any hamburgers. The ranchers showed evidence that beef sales dropped precipitously immediately after the broadcast and alleged that Winfrey's statements were false and caused the ranchers lost revenue. The jury rejected the cattle ranchers' claim as too broad and without sufficient evidence that the remarks alone were the cause of the losses

superseeding case

Sometimes an intervening event takes place after the tortfeasor's negligent act. The intervening act may also contribute to the negligence by producing additional damages to the injured party. Some (but not all) intervening acts may be the basis for limiting a tortfeasor's liability. These acts are called superseding causes (i.e., they supersede the tortfeasor's liability) and they are also defined by foreseeability. For example, in the Donald-Hotel case, suppose that Donald falls only one story and sustains a broken wrist. While being driven to the hospital, a freak tornado hits the car that Donald is in and the wrist injury is made worse. In a case for damages related to the injury, even though the but-for test would impose liability on Hotel even for the aggravated broken wrist, Hotel's liability is discontinued (though not eliminated for the original injury) once the tornado hits the car. The tornado is a superseding cause and thus Hotel is not liable for the aggravated injury. This limit applies because it was not reasonably foreseeable by Hotel that Donald would be injured by a tornado en route to the hospital.

restatements

The ALI has amended the Restatements twice, and, therefore, these sources of law are called the Restatement (Second) of Torts and the Restatement (Third) of Torts. Remember that courts are not bound by any of the Restatements, but they do recognize them as widely applied principles of law. The Second Restatements have the benefit of volumes of case law and wide acceptance, and therefore references to the Restatements in this chapter refer to the Second Restatements unless otherwise noted.

Bammert v. Don's Super Valu, Inc.

The Bammert decision illustrates an important point in understanding the public policy exception to the employment-at-will doctrine: it is limited in scope. Absent a specific statutory protection (such as a whistle-blower law) the threshold for relief using a public policy justification is very high. Some examples include refusal to commit an illegal act (such as filing a false tax return), exercising a legal right (such as refusal to take a polygraph test), or performing an important act (such as the prevention of a violent crime). For example, in Gardner v. Loomis Armored Inc.,4 the Washington Supreme Court ruled that an armored car guard who was fired after he violated company rules by leaving his armored car was entitled to be reinstated in his job. Gardner had left his truck to save a bank manager who was running from the bank and being chased by a knife-wielding bank robber.

Minimum Wages and Maximum Hours and overtime

The FLSA establishes a minimum wage to be paid to every employee covered under the act. Over the years, Congress has raised the minimum wage to its current level of $7.25.12 However, states are permitted to set a higher minimum wage level for employees working within a state's jurisdictional boundaries. Many legal issues that surround the wage and hour Page 362provisions of the FLSA involve whether employees are entitled to be paid for time in the workplace that is not directly related to the employee's job

child labor laws

The FLSA outlaws the once common practice of sending school-age children to work instead of to school by imposing restrictions on hiring workers under 18 years old. Table 11.1 sets out restrictions for the age requirements that have been issued by the Department of Labor pursuant to its FLSA authority Every state has passed a child labor statute to supplement the federal law. For example, while the FLSA sets no limits on the hours a 16- or 17-year-old may work, most states have implemented their own hour limits for this age group. The FLSA is silent regarding employment certificates, commonly called working papers, yet most states have mandated some sort of documentation policy. It is imperative that a manager be aware of both federal and state law requirements

FMLA protections

The FMLA also affords employees certain protections related to job security: (1) Employers are restricted from taking or threatening any adverse job action against the employee because of an FMLA leave; (2) upon returning from the leave, employees are guaranteed employment in the same or a similar job at the same rate of pay; and (3) employers must reinstate an FMLA-leave employee immediately upon the employee's notification that the leave is over. The FMLA does not require, however, that returning employees be credited with seniority that was accrued while on leave

Good Faith Bargaining Requirements

The NLRA requires that both parties engage in good faith negotiations. This is not a requirement that one side or the other concede a particular term. Rather, the parties are obligated to demonstrate that they are engaged in moving toward an agreement. Tactics by either side that are intended to delay, stall, or hinder the process or to undermine the union through economic pressure on workers constitute unfair labor practices, and the NLRB may opt to intervene and conduct labor negotiations or pursue enforcement action for unfair labor practices if appropriate.

strike

The NLRA specifically provides that union employees can commence a strike in order to induce the employer to concede certain contract terms during collective bargaining. Certain occupations, though, may be restricted from striking via statute if allowing a strike would significantly jeopardize public health or safety (such as air traffic controllers, law enforcement, or emergency services). Although the right to strike is protected, the NLRA also provides guidelines on when, where, and how a strike may be carried out

labor law

The National Labor Relations Act (NLRA),35 originally passed in 1935, is the centerpiece of labor-management regulation statutes. It provides general protections for the rights of workers to organize, engage in collective bargaining, and use economic weapons (such as a strike) in the collective bargaining process. Collective bargaining is the process of negotiating an agreement on behalf of an entire workforce, as opposed to individuals negotiating privately on their own behalf (or not negotiating at all). The statute also contained an enabling provision that formed the National Labor Relations Board (NLRB) to administer, implement, and enforce the law's wide-sweeping provisions. In addition to the traditional administrative agency duties of implementation and enforcement, the NLRB monitors union elections for fraud and sets guidelines for employers and unions in regard to fair labor practices

Strict Liabilty torts

The Restatements also provide for liability in certain cases where neither intent nor negligence need be proved. This category of tort is known as strict liability and is recognized in the Restatements primarily for abnormally dangerous activities and for defective products (discussed in the next section).24 Strict liability is a concept rooted in the notion that the general public benefits when liability is imposed on those who engage in certain activities that result in harm to another party, even if the activities are undertaken in the most careful manner possible (without negligence)

substantial change

The Restatements draw a line of liability based on the condition of the product at the time it leaves the seller's control. For strict liability to apply, the product must reach the end user without substantial change. Thus, if a product leaves the manufacturing plant in a reasonable condition (not dangerous) and then is contaminated or damaged in the next stage of the commercial chain of delivery, any resulting harm is outside the strict liability model. Depending on the circumstances, of course, the manufacturer may still be liable for negligence but not under strict liability

abnormally dangerous activities

The Restatements set out a six-factor test to determine whether abnormally dangerous activities trigger strict liability for any harm caused by the activity: Does the activity involve a high degree of risk of some harm? Is there a likelihood that the harm that results will be great? Is it possible to eliminate the risk by exercising reasonable care? Is the activity relatively common? Is the location of the activity appropriate to the risk? Is there any community value that outweighs the dangerous attributes?

difference between negligence and intentional tort

The difference between the two is the mind-set and intent of the tortfeasor. For example, suppose that Pangloss is the delivery van driver for Cultivate Your Garden Flowers Inc. One day while on a delivery he spots his archenemy crossing the street, so he accelerates his truck and hits him. In this case, Pangloss has committed an intentional tort (battery). If, on the other hand, Pangloss is late for his delivery, carelessly speeds around a turn, and accidentally hits a pedestrian crossing the street, he has committed the tort of negligence.

res ipsa loquitur (the thing speaks for itself)

The doctrine of res ipsa loquitur (a Latin phrase meaning "the thing or matter speaks for itself") is deep-seated in American tort law. This doctrine allows an injured party to create a presumption that the tortfeasor was negligent by pointing to certain facts that infer negligent conduct without showing exactly how the tortfeasor behaved.21 An English judge first used this Latin phrase over a century ago in a case involving a pedestrian who was struck by a flour barrel that fell from a warehouse owned by the defendant. Although the injured party could not actually show how or why the barrel fell, the court held that the facts themselves were sufficient to impute a presumption of negligence

no general duty to act

The duty of care, discussed above, does not include a general duty to act or to rescue another. Tort law allocates liability based on a fundamental difference between some act by one party that harms or endangers another party, known as misfeasance, and the failure to act or intervene in a certain situation, known as nonfeasance. While injured parties may generally recover for misfeasance, injured parties may not hold a defendant liable for failing to act unless the parties had a special relationship to each other. Special relationships that are set out in the Restatements include those of a common carrier (such as a bus company) to its passengers, innkeepers to guests, employers to employees, a school to students, and a landlord to tenants.16 One important special relationship of interest to business owners and managers is a business's duty to warn and assist any business visitors or patrons in regard to potential danger or harm (such as a slippery floor) on business premises. Therefore, businesses have a special relationship with their visitors and patrons that would allow recovery even in a case of nonfeasance

Nonfeasance

The failure to act when one should

duty

The initial consideration in a negligence analysis is whether or not the tortfeasor owed the injured party a legal duty. The law imposes a general duty on all parties to act reasonably and not to impart unreasonable risk to others. In addition to having this general duty, some parties owe a special (heightened) duty of conduct to avoid liability for negligence

General Duty of Reasonable Conduct

The law imposes a general duty on every party to act as a reasonably prudent person would under the circumstances. That is, everyone owes a duty to everyone else to act in a manner that does not impose unreasonable risk. The reasonably prudent person standard emphasizes that the conduct must be objectively reasonable. This means that at trial a fact finder (such as the jury) could conclude that a reasonably prudent person in the same circumstances should have realized that certain conduct would be risky or harmful to another person. In general, the scope of that duty is defined by foreseeability. In tort law, the term person in the reasonably prudent person standard is meant to be a generic term. The scope of duty is frequently defined by a particular industry or occupation. For example, the level of duty for a physician is defined by what a reasonably prudent physician would have done under the circumstances.Page 286 It is important to understand that duty is an element that expands and contracts based upon whether or not it was foreseeable that the conduct in question would cause an unreasonable risk of harm. For example, Cain is a guest on a shock-host television show. The owners of the show arrange to have Abel surprise Cain on the show with an embarrassing secret. Cain is embarrassed and runs off the stage, and no further incident ensues. Three days later, Abel persists in calling Cain and harassing him about this secret. Cain then shoots and kills Abel later that afternoon. Cain is sentenced to a life term, so Abel's heirs sue the owners of the shock-host television show for negligence, claiming they owed Abel a duty to protect him from Cain. In this case, a court will likely rule that due to the time period between the show and the shooting (three days) and the fact that no incident occurred on the show or immediately thereafter, the duty owed to Abel ended when the show ended and did not extend to the time of the incident. This is primarily because it was not reasonably foreseeable under the factual circumstances of this case that Cain would act in such a rash manner then or thereafter.

health care

The law primarily relies on a combination of employer plans and government managed health care exchanges. While the public policy goal is that businesses will provide their employees with health care coverage, a business may choose not to provide coverage and instead pay a penalty fee to the U.S. government. As a competitive matter, many companies do provide employees with a health care plan option whereby the employer and employee share the costs of the insurance plan. If the employer does provide a health care plan, two federal statutes regulate certain aspects of administering the plan. First, the Health Insurance Portability and Accountability Act (HIPAA) sets administrative rules and standards designed to protect employee medical information and records from disclosure to a third party.

defamation

The law recognizes an individual's or a company's reputation as a valuable asset by imposing liability on any party that makes false and defamatory statements affecting another party's reputation. In this context, the term party means an individual, business, or product. Just as in all civil lawsuits, the untrue statements must have caused the victim to suffer damages

elements of negligence

The law requires that specific elements be proved in order to recover in a lawsuit against a tortfeasor for negligence. The injured party must prove five fundamental elements by answering certain questions about the conduct in question: Duty: Did the tortfeasor owe a duty of care to the injured party? Breach of duty: Did the tortfeasor fail to exercise reasonable care? Cause in fact: Except for the breach of duty by the tortfeasor, would the injured party have suffered damages? Proximate (legal) cause: Was there a legally recognized and close-in-proximity link between the breach of duty and the damages suffered by the injured party? Actual damages: Did the injured party suffer some physical harm that resulted in identifiable losses?

closest-in proximity

The majority of courts favor using foreseeability to define the scope of the risk. In the Donald-Hotel example discussed above, the jury would be charged with determining the scope of Hotel's liability. Liability would hinge on whether or not it was foreseeable that a faulty balcony railing would result in damages to be suffered by Donald (probable liability), the driver of the car (possible liability), the pedestrian (possible liability), the drowned rescuer (improbable liability), and the owner of the vase (very improbable liability). The Restatements define proximate cause as that which helps draw the line that determines when a tortfeasor is "not liable for harm different from harms whose risk made the [tortfeasor's] conduct tortious."

Greenman v. Yuba Power Products

The most appealing option for pursuing a products liability case is the doctrine of strict liability because the injured party need not prove the elements of negligence. In Greenman v. Yuba Power Products, Inc.,26 the California Supreme Court decided a groundbreakingPage 297 case that paved the way for adoption of a strict liability standard for product defects by ruling that "a manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect which causes injury to a human

Negligence

The negligence analysis covered earlier in this chapter may also be applied to the seller of a product. Although historically negligence was severely limited as a remedy because the law protected only the actual purchaser, a revised rule announced in the landmark case of MacPherson v. Buick25 has been adopted in every state. Under the MacPherson rule, one who negligently manufactures a product is liable for any injuries to persons (and, in some limited cases, property) proximately caused by the negligence. For example, suppose that Holmes purchases a motorcycle from a dealer and gives it to his son Wendell. Wendell is injured on the motorcycle and sues the manufacturer for negligence. So long as Wendell can prove negligence, the manufacturer will be liable for Wendell's injuries despite the fact that Wendell was not the one who entered into the purchase agreement with the dealer or the manufacturer. Courts have found that manufacturers have the duty of care regarding proper design, manufacturing, testing, inspection, and shipping. Retailers do not have as comprehensive a duty as the manufacturer but still have a duty to warn consumers of any product they know or suspect to be unreasonably dangerous.

Illegal Work Stoppages and Boycotts

The term strike implies a statutorily authorized work stoppage under the NLRA. Other types of work stoppages (or slowdowns) are illegal, and employers may terminate employees, unionized or not, for engaging in illegal work stoppages. Most importantly, if peaceful picketing turns violent or union members threaten management, then the strike becomes an illegal work stoppage and union members engaged in that conduct are not protected under the NLRA. Other illegal work stoppages include: Wildcat strikes: When individual union members or small groups of union members go on strike for short bursts of time without union authorization, this is called a wildcat strike. Wildcat strikes are illegal, but sometimes the form of a wildcat strike can be subtle, as when several employees simultaneously use sick time to perpetrate a work stoppage or slowdown. Sit-in strikes: Any occupation of an employer's facility for the purpose of a work stoppage is illegal. Strikes during a cooling-off period: The NLRA allows a federal court to enforce a strike prohibition for a period of 80 days if a strike threatens national public health or security. During this cooling-off period, the government facilitates negotiations between the parties, and any strike during this time is illegal. Secondary boycotts: Efforts to increase the pressure on an employer involved in collective bargaining by directing a strike against a third party (such as a supplier or customer of the employer) is illegal.

False Imprisonment

The tort of false imprisonment is defined by the Restatements as the "intentional infliction of a confinement upon another party." In the business context, a merchant most commonly encounters these circumstances in cases of suspected retail theft. While the merchant has the right to briefly detain a suspected shoplifter, she must be cautious about giving rise to a false-imprisonment claim when detaining an individual or attempting to recover the merchandise. The Restatements provide for a merchant's privilege12 to shield a merchant from liability for temporarily detaining a party who is reasonably suspected of stealingPage 282 merchandise.

labor management relations

These laws deemed certain labor practices illegal, thus making them unfair labor practices under the NLRA.

workplace injuries

These statutes establish a structure for an injured employee to be compensated through a statutorily mandated insurance program as the exclusive remedy for workplace injuries or illnesses. Employees with job-related injuries or illnesses are paid based on a percentage of the employee's salary at the time of the occurrence. Workers' compensation statutes typically require the establishment of a system for processing claims through the state workers' compensation board (or a similarly named agency), and the compensation is funded through employer-paid insurance policies. Companies may also be self-insured if they meet their individual state's requirements for establishing a fund that is sufficient to make payments to injured employees. The most important aspect of the workers' compensation system is that the employee is generally paid regardless of any issues related to fault or negligence of the employee, the employer, or any third party; however, certain defenses to a workers' compensation claim may be asserted by the employer

Labor Management Relations Act

This created a backlash sufficient to cause Congress to limit certain union practices and rights by amending the NLRA with the Labor Management Relations Act37 in 1947. The amendment prohibited employers and employees from agreeing that union membership is required as a condition for employment. The law also authorizes states to enact right-to-work laws, which make it illegal for employers to agree with unions that union membership be required for continuing employment

More on Negligence

Tort law also applies when one party fails to act reasonably and harm occurs, even though that party did not intend to cause harm. The negligent party is liable for any injuries or damages suffered by another party as a result of his unreasonable conduct. This category of tort is called negligence. Recall from the first section of this chapter that the primary difference between intentional torts and negligence is the mind-set of the tortfeasor. When a tortfeasor causes harm to an injured party by creating an unreasonable risk of harm, the law provides the injured party a remedy regardless of the tortfeasor's intent. The Restatements also recognize certain defenses that may be asserted in a negligence case

truth

Truth is an absolute defense to a charge of defamation. If the statement made is truthful, no defamation has occurred. To assert truth as a defense, the defendant must prove that the statement was either literally true or substantially true.

intentional actions or recklessness of the employer

Two important exceptions to the workers' compensation laws are cases in which (1) an employer has engaged in actions that intentionally create conditions that result in harm or (2) an employer acts with a reckless disregard for the safety of its employees. In these cases, the injured or ill party may bypass the workers' compensation system and sue the employer for a full recovery including punitive damages

authorization cards

Typically, a group of employees organizes an effort to have other workers sign authorization cards indicating that they wish to form a local union and/or join an existing union. At least 30 percent of the authorization cards must be signed by employees in a certain bargaining unit.

grievances

Union contracts normally specify the means of arbitrating union grievances against an employer action or practice. Enforcement is initiated when an affected union member files an employee grievance. The union is given the exclusive authority to invoke the arbitration provisions of the agreement, and it conducts the proceedings before the arbitrator on behalf of the employee If the union chooses not to bring a grievance to arbitration, the individual union member is normally not authorized to pursue a lawsuit against the employer to enforce contract provisions. The union has broad discretion in deciding when to seek arbitration on the basis of a union member grievance.

Tortious Interference with Existing Contractual Relationship

When one party induces another party to break an existing contract with a third party, the inducing party may be liable for any damages suffered by the innocent party as a result of breaking the contract. For the injured party to recover damages, the tortfeasor must have (1) had specific knowledge of the contract, (2) actively interfered with the contract, and (3) caused some identifiable damages (losses) to the injured party. Business owners and managers may encounter contract interference torts in the context of employment contract restrictions against working for competitors (known as a restrictive covenant13) or in defending an allegation of interference in the process of hiring a new employee away from a competitor. For example, Lee is a talented software programmer and signs a contract with Computer Researchers Inc. (CRI) for three years. The contract stipulates that Lee will not work for any of CRI's competitors during that time even if he is terminated or voluntarily resigns from CRI. After one year, one of CRI's competitors, MultiCom, contacts Lee and attempts to convince him to leave CRI and work for MultiCom. During the negotiations, Lee shows MultiCom his contract with CRI, and MultiCom's manager then offers a higher salary and a $1,000 signing bonus to Lee. Lee resigns from CRI with two years left on his contract and goes to work for MultiCom. CRI must then spend several thousand dollars recruiting and training a new programmer to finish Lee's projects. In this case, many courts would consider holding MultiCom liable for CRI's damages because CRI was injured as a result of MultiCom's tortious interference with the CRI-Lee contract. Of course, CRI would also be entitled to recover damages from Lee for breaking the contract.

assumption of risk

When the injured party knows that a substantial and apparent risk is associated with certain conduct and the party goes ahead with the dangerous activity anyway, the Restatements allow the tortfeasor to assert the defense of assumption of the risk so long as (1) the injured party/plaintiff knows or should know (by virtue of the circumstances, warning signs, etc.) that a risk of harm is inherent in the activity and (2) the injured party/plaintiff voluntarily participates in the activity. Certain activities are considered to be "inherently dangerous" (such as bungee jumping or parachuting), and companies that are providers of these activities may have limited protection from liability if they act reasonably in minimizing the dangers and make full disclosures of the risks to participants.

express contracts

When the parties enter into a contract, the rights of the contractual employee in the case of termination are spelled out in the contract. Typically, an employment contract will provide that employers may terminate the employee only for "good cause," such as a violation of a workplace rule or commission of a criminal act in the course of his employment. The contract ordinarily lists the events that cause termination, and the parties agree on any posttermination obligations. The parties may also formally agree to some type of severance pay in the event that the employer terminates the employee for any other reason than the causes listed in the contract.

poststrike rehiring

While a strike is a potent economic weapon of a union, its impact on striking union members can be harsh. Workers are cut off from any pay, medical benefits, and other compensation until the strike is over. Moreover, employers have no legal obligation to rehire striking workers or provide retroactive pay in cases of a strike for economic reasons. Although, as a practical matter, the rehiring of striking workers and partial or full retroactive pay are frequently guaranteed by the poststrike contract agreement, it is still a risk for some workers. However, if a strike is commenced due to an unfair labor practice rather than for economic reasons, the striking employees are entitled to immediate reinstatement with back pay once they unconditionally return to work. Economic strikes typically arise in the context of union members' failing to agree with the employer on wages or benefits Strikers have the right to engage in picketing at the employer's facilities, although there is no right to picket at the actual property site owned by the company. Picketing must be peaceful and not interfere with the operations of the employer. Picketing cannot be used to prevent or harass customers or nonstriking employees.

labor contracts

While some employment agreements are contracts between managers and a business entity, some contracts give rights to nonmanagement employees as well. These contracts, called collective bargaining agreements (CBAs), are negotiated by a labor union on behalf of a group of employees. CBAs often provide protection by prescribing a process that must be used by the employer before terminating an employee. The process is designed to ensure that treatment of employees is consistent with the standards in the CBA. CBAs and labor unions are covered in detail later in this chapter.

regulation and workplace safety

While workers' compensation laws are designed to protect workers who are injured, the federal statute intended to prevent workplace injuries is the Occupational Safety and Health Act (OSHA),26 passed in 1970. The objective of OSHA statutes and regulation is to make the workplace as safe as possible for workers engaged in business operations through (1) setting national safety standards, (2) mandating information disclosure and warnings of hazardous working areas and assignments, (3) establishing record-keeping and reporting requirements, and (4) imposing a general duty upon employers to keep a workplace reasonably safe. The OSHA law has broad coverage encompassing virtually every private employer. Federal, state, and local government units are exempt.

whistle blowers statutes

Whistle-blower is a colloquial term used in reference to an employee or agent who reports unlawful conduct or a statutory violation by his employer to the authorities. In general, employers may not terminate an employee for making a report to the authorities (i.e., "blowing the whistle") about the employer's conduct

2 types of privilege

absolute and qualified

privileged defense

f the injured party meets all of the requirements of a defamation claim, the defendant may still avoid liability if the defamatory statement falls into the category of privileged statements. Privilege is a defense that recognizes either a legal or public policy-based immunity from a defamation claim

strict liability

in which a tortfeasor may be held liable for an act regardless of intent or willfulness, applies primarily in cases of defective products and abnormallyPage 276 dangerous activities (such as major construction demolition). Owning a wild animal or even some breeds of dogs can result in strict liability should the animal harm an individual, regardless of the precautions taken by the animal's owner

overtime compensation

n addition to setting the minimum wage, the FLSA sets a standard workweek at 40 hours in a seven-day period. Any hours worked by an employee over the standard workweek are entitled to overtime compensation. Overtime compensation is calculated by multiplying the hourly base rate of the employee times one and one-half. Thus, an employee making $10 per hour in her normal base pay is entitled to $15 per hour for overtime compensation

proximate (legal) cases

n addition to showing that the tortfeasor's breach of duty was the cause in fact of the damages, the injured party must also prove that (1) the tortfeasor's conduct was also the closest-in-proximity cause of the damages and (2) the tortfeasor's liability wasn't canceled due to a superseding cause. These proximate cause concepts protect tortfeasors from liability for far-reaching and out-of-the-ordinary injuries resulting in damages from the tortious act.

defense to workers compensation

n many states, an injured worker is not entitled to workers' compensation if the injury is intentionally self-inflicted or was the result of a knowing violation of safety rules by the employee, the employee's willful misconduct or horseplay not condoned by the employer, or the employee's intoxication or illegal drug use. Should the employee fail to give the employer timely notice of the injury as determined by state statute, the claim is lost, and a failure to bring a claim within the state's statute of limitations can bar a claim.

dissimenation to the party

n the Restatements, this requirement is referred to as publication, but in this context it does not literally require the statement to be published. Rather, this element requires that the statement must somehow reach the ears or eyes of someone other than the tortfeasor and the victim. For example, suppose a manager telephones one of his employees and says, "You are the one who stole $100 in petty cash, so you're fired." Even if the accusatory statement is false, the manager has not defamed the employee based on that action alone. No third party heard the statement, and, thus, the dissemination element is missing.

collective barganing

ollective bargaining is the process of negotiating terms and conditions of employment for employees in the collective bargaining unit. These terms are typically negotiated and, if a collective bargaining agreement is reached, the parties enter into a binding contract. The NLRA regulations set out certain guidelines regarding which terms must be negotiated and which terms are not subject to the bargaining requirements