Employment Law

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EMPLOYMENT LAW

The body of law that governs the employer-employee relationship, including individual employment contracts, the application oftortand contract doctrines, and a large group of statutory regulation on issues such as the right to organize and negotiate collective bargaining agreements, protection from discrimination, wages and hours, and health and safety.

Beyond establishing an economic relationship between employer and employee, work provides a powerful structure for organizing social and cultural life. The employment relationship is more than the exchange of labor for money. In U.S. society, self-worth, dignity, satisfaction, and accomplishment are often achieved by one's employment responsibilities, performance, and rewards. The development of employment law demonstrates the importance of work. Since the 1930s, employees have acquired more legal rights as federal and state governments have enacted laws that give them the power and authority to unionize, to engage in collective bargaining, and to be protected from discrimination based on race, gender, or disability.

History

English common law, and subsequently early U.S. law, defined the relationship between an employer and an employee as that of master and servant. The master-and-servant relationship arose only when the tasks performed by the servant were under the direction and control of the master and were subject to the master's knowledge and consent.

Company Obligations to Work-at-Home Employees

The purpose of the occupational safety and health act of 1970 (OSH Act), 29 U.S.C.A. §§ 651 et seq, is to "assure so far as possible every working man and woman in the Nation safe and healthful working conditions." (Section 2(b)). The OSH Act applies to a private employer who has any employees doing work in a workplace in the United States. It requires these employers to provide employment and a place of employment that are free from recognized, serious hazards, and to comply with Occupational Safety and Health Act (OSHA) standards and regulations (Sections 4 and 5 of the OSH Act). By regulation, OSHA does not cover individuals who, in their own residences, employ persons for the purpose of performing domestic household tasks.

OSHA has never conducted inspections of home offices, and such an inspection would, in fact, be contrary to OSHA policy. OSHA will not hold employers liable for employees' home offices and does not expect employers to inspect the home offices of their employees. If OSHA receives a complaint about a home office, the complainant will be advised of OSHA policy. If an employee makes a specific request, OSHA may informally let employers know of complaints about home office conditions but will not follow-up with the employer or employee.

OSHA will, however, conduct inspections of other home-based worksites, such as home manufacturing operations, when OSHA receives a complaint or referral that indicates that a violation of a safety or health standard exists that threatens physical harm or that an imminent danger exists, including reports of a work-related fatality. The scope of the inspection in an employee's home will be limited to the employee's work activities. Employers are responsible in home worksites for hazards caused by materials, equipment, or work processes which the employer provides or requires to be used in an employee's home.

In April 2001 the Bush administration announced plans to call for an amendment to the Occupational Safety and Health Act to preclude home office inspections when employees primarily work on the telephone, computer, and/or with other electronic devices. As part of the administration's larger New Freedom Initiative, the move was intended to help disabled workers buy computers and other equipment needed to work at home, without OSHA intervention, in return for tax incentives to encourage employers to provide such equipment.

cross-references

Occupational Safety and Health Act of 1970.

With the rise of industrialization and mass production in the 1800s, the U.S. economic structure changed dramatically. Employers needed masses of employees to run the equipment that produced capital and consumer goods. By the end of the nineteenth century, the U.S. economy was attracting millions of immigrants. In addition, migration from country to city accelerated.

Nineteenth-century employment law was based on the concept of liberty of contract: a worker had the freedom to bargain with an employer for terms of employment. This concept was challenged when workers organized into unions and engaged employers in collective bargaining. The U.S. legal and economic systems at the time were opposed to the idea of collective bargaining. Union organizers noted the inequality of bargaining power between a prospective employee and an employer.

Judges were hostile to attempts by state governments to regulate the hours and wages of employees. In lochner v. new york, 198 U.S. 45, 25 S. Ct. 539, 49 L. Ed. 937 (1905), the U.S. Supreme Court, on a 5–4 vote, struck down a New York State law (N.Y. Laws 1897, chap. 415, art. 8, § 110) that specified a maximum 60-hour week for bakery employees. The Court ruled that the law was a "meddlesome interference" with business, concluding that the regulation of work hours was an unjustified infringement on "the right to labor, and with the right of freedom of contract on the part of the individual, either as employer or employee."

The U.S. labor movement's persistent attempts to break free of the freedom-of-contract doctrine ultimately led to major changes in employment law. The new deal era of the 1930s brought federal recognition of the right of workers to organize themselves as unions and to bargain collectively with management. The passage of the wagner act, also known as the National Labor Relations Act of 1935 (29 U.S.C.A. § 151 et seq.), established these rights and also proscribed unfair labor practices (i.e., actions taken by employers that interfere with the union rights of employees). The act also established the national labor relations board, a federal administrative agency, to administer and enforce its provisions.

Since the 1950s, the federal government has led the way in providing employees more rights concerning the employment relationship.

Physical Safety

Federal and state statutes regulate workplace hazards to avoid or minimize employee injury and disease. These laws concern problems such as dangerous machinery, hazardous materials, and noise. A more recent trend has been the banning of smoking in the workplace. All of these laws place the burden on employers to maintain a safe and healthy workplace.

The federal government's main tool in workplace safety is the occupational safety and health act of 1970 (OSHA) (29 U.S.C.A. §§ 651–678 [1988]). OSHA attempts to balance the employee's need for a safe and healthy working environment against the employer's desire to function without undue government interference. OSHA issues occupational safety and health standards, and employers must meet these standards or face civil and, in rare occurrences, criminal penalties.

When an employee is injured on the job, the employee may file a compensation claim with the state workers' compensation system. Prior to world war i, an injured employee had to sue his or her employer in state court, alleging a tort violation. This avenue rarely proved successful, as employees were reluctant to testify about work conditions and thus risk the possible loss of their job. Without witnesses, an employee had little chance of recovery. In addition, employers were protected by legal defenses to negligence that usually allowed them to escape liability.

Dissatisfaction with this situation led the states to enact workers' compensation laws, which set up an administrative process for compensating employees for work-related injuries. These systems provide compensation while a worker is physically unable to work (i.e., temporary disability), provide retraining if the employee can no longer perform the same job, and provide compensation indefinitely if the worker has been severely injured (i.e., total disability). Medical benefits are paid for treatment of work-related injuries. Depending on the state, employers fund this system by making state-regulated contributions to a workers' compensation insurance fund, paying insurance premiums to a private insurance company, or assuming the risk through self-insurance.

Discrimination

Since the 1960s, employment law has changed most radically in the protection that it gives employees against discrimination in the workplace. Although the federal government banned racial discrimination in the making of contracts in the civil rights acts of 1870 and 1871 (42 U.S.C.A. §§ 1981, 1983), the federal courts narrowly construed the provisions to prevent their being used in the employment context. Not until the 1970s did federal courts allow those provisions to be applied to complaints of discrimination by individual employees (McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273, 96 S. Ct. 2574, 49 L. Ed. 2d 493 [1976]).

Federal legislation in the 1960s provided employees with more avenues to challenge alleged discrimination. The 1963 Equal Pay Act (29 U.S.C.A. § 216 (d)) requires employers to pay men and women equal wages for equal work. The civil rights act of 1964 (42 U.S.C.A. § 2000e et seq.) contains broad prohibitions against discrimination on the basis of race, color, religion, national origin, or sex. Discrimination against persons ages 40 and over was banned in 1967 by the Age Discrimination in Employment Act (29 U.S.C.A. § 621 et seq.).

Major amendments to the general civil rights acts were passed in 1972, extending coverage to federal and state employees; in 1978, clarifying the protection of pregnant women; and in 1991, overruling a series of decisions by the U.S. Supreme Court that had restricted the reach of antidiscrimination statutes.

In 1990, Congress passed the Americans with Disabilities Act (ADA) (42 U.S.C.A. § 12101 et seq.), forbidding discrimination against qualified individuals with disabilities and requiring reasonable efforts to accommodate persons with disabilities in some situations.

With the growth of federal antidiscrimination statutes, many states have passed laws banning employment discrimination. A number of cities have enacted their own programs, as well. Some states and cities address issues that are not covered by the federal statutes, such as discrimination on the basis of sexual orientation.

Termination of Employment

Historically, employment law has limited an employee's right to challenge an employer's unfair, adverse, or damaging practices. The law has generally denied any redress to an employee who is arbitrarily treated, unless the employee is represented by a union or has rights under a written employment contract. Absent these two conditions, or a statutory provision, the general rule has been that an employee or an employer can terminate the employment relationship at any time, for any or no reason, with or without notice. This rule forms the core of the "at-will" employment doctrine.

The at-will doctrine was articulated and refined by state courts in the 1800s. It provided employers with the flexibility to control the workplace by terminating employees as economic demand slackened. For employees, it provided a simple way of leaving a job if a better employment prospect became available or if working conditions were intolerable.

Courts and legislatures have modified the at-will employment doctrine. A public policy exception recognizes that an employee should not be terminated because he or she refused to act in an unlawful manner, attempted to perform a duty prescribed by statute, exercised a legal right, or reported unlawful or improper employer conduct ("whistle-blowing").

At-will employees may be protected even if no written contract exists. Many state courts now recognize employee rights that are contained in personnel policies or employee handbooks. As businesses grow larger, formal rules and procedures are needed in order to streamline administrative issues. A handbook or employment-policy manual usually contains rules of expected employee behavior, disciplinary or termination procedures that apply if the rules are violated, and compensation and benefit information. An employer must follow the rules for firing an employee that are set out in the handbook or manual, or risk a lawsuit for wrongful termination.

If an employer terminates an employee, the employer must be prepared to show "good cause" for the firing. With the many statutes that forbid discrimination in the workplace, the employer has the burden of showing a nondiscriminatory reason. Good cause can include inadequate job performance, job-related misconduct, certain types of off-the-job conduct, and business needs.

Privacy and Reputation

When an individual seeks employment, he or she surrenders some privacy rights. To become employed, the individual will be asked to disclose personal information and may be required to submit to continuing evaluation. Current or prospective employees may be asked to submit to a physical examination, a polygraph examination, a psychological evaluation, a test for use of illegal drugs, or a test for HIV. Employers have the right to search lockers or to frisk employees even if no reasonable suspicion of theft exists. The modern workplace can be checked by an employer through the monitoring of phone lines and personal computers.

Courts and legislatures have expressed increasing concern about the improper use of information that employers collect on employees. Employers who distribute information more widely than necessary, reveal confidential medical or personal information about an employee, or intrude on an employee's personal, off-work behavior risk lawsuits for invasion of privacy.

The issue of defamation also affects employment law. Defamation is subdivided into the torts of libel, which involves a writing, and slander, which involves speech. Liability for defamation may be imposed if an employer makes a statement about an employee that is false and hurts the reputation of the employee. Employers have been successfully sued for defamation for communicating unfavorable job recommendations about a former employee. As a result, employers are reluctant to give more than basic employment history when asked for a job reference. Twenty-five states have enacted "good faith" job-reference laws, which protect employers who divulge employee job-performance information to a prospective employer.

Wage and Hour Regulations

The fair labor standards act (FLSA) (29 U.S.C.A. § 201 et seq.) imposes minimum-wage standards and overtime standards on most employers. The minimum hourly wage is a means of ensuring that a full-time worker can maintain a minimum standard of living. Overtime standards mandate that an employer pay employees at least time and a half for working more than eight hours per day. The FLSA does not pre-empt states or localities from setting a higher minimum wage. An employer operating in a state or locality with a higher minimum wage than that set by the FLSA must abide by the higher standard.

Employee Retaliation

In Robinson v. Shell Oil Co., 519 U.S. 337, 117 S.Ct. 843, 136 L.Ed.2d 808 (U.S. Md., Feb 18,

1997) (NO. 95-1376), a former employee sued Shell Oil after he was fired. Robinson filed an employment-discrimination charge with the equal employment opportunity commission (EEOC) under Title VII of the Civil Rights Act of 1964. While that charge was pending, he applied for a job with another company, which contacted the respondent for an employment reference. Claiming that respondent gave him a negative reference in retaliation for his having filed the EEOC charge, Robinson filed suit under §704(a) of Title VII, which makes it unlawful for an employer to discriminate against any of his employees or applicants for employment who have availed themselves of Title VII's protections. The U.S. Supreme Court held that the term "employees," as used in §704(a) of Title VII, does include former employees, and so Robinson could sue for the allegedly retaliatory post employment actions.

In Haddle v Garrison, 525 U.S. 121, 119 S.Ct. 489, 142 L.Ed.2d 502 (U.S.Ga., Dec 14, 1998) (NO. 97-1472), Petitioner Michael Haddle cooperated with federal agents in an investigation that lead to the indictment of his employer, Healthmaster, Inc. and respondents Jeanette Garrison and Dennis Kelly for medicare fraud. Haddle was subpoenaed to testify before the grand jury, and although he did appear, he did not testify, due to time constraints. Additionally, Haddle was expected to appear as a witness in the criminal trial resulting from the indictment. Garrison and Kelly subsequently conspired with a remaining Healthmaster officer to have Haddle fired, both in retaliation for assisting with the federal proceedings, and also to intimidate him. Haddle then sued for damages under 42 U.S.C. §1985(2) (which prohibits conspiracies to deter, by force, intimidation, or threat, any party or witness in any court of the United States from attending such court, or from testifying to any matter pending therein, freely, fully, and truthfully, or to injure such party or witness in his person or property on account of his having so attended or testified), alleging a conspiracy to intimidate him from testifying in the upcoming criminal trial, and a conspiracy to retaliate against him for appearing before the grand jury. Garrison and Kelly moved to dismiss for failure to state a claim upon which relief can be granted because §1985 requires that complainants allege an injury in their person or property in order to recover damages. Under the authority of an earlier case, the U.S. Court of Appeals for the Eleventh Circuit accepted the respondents' argument that because Haddle was an at-will employee, he had no constitutionally protected interest in continued employment, and therefore could not allege an injury. The U.S. Supreme Court rejected the Eleventh Circuit's position that there must be injury to a "constitutionally protected property interest" to state a claim for damages under §1985. Section 1985 is intended to redress intimidation or retaliation against witnesses in federal court proceedings. Limiting causes of action under the statute to restoration of property misses the point and improperly limits the statute's effect. Instead, the Court analyzed "injured in his person or property" in the context of tort-law, which recognizes third-party interference with at-will employment as a breed of the traditional tort of intentional interference with contractual relations and intentional interference with prospective contractual relations.

The U.S. Equal Employment Opportunity Commission (EEOC) has issued comprehensive guidance on the prohibition against retaliation aimed at individuals who file charges of employment discrimination or who participate in the investigation of an EEOC charge.

Pensions and Other Employee Benefits

The federal government regulates employee benefit plans under the employee retirement income security act (ERISA), 29 U.S.C.A. § 1001 et seq., passed in 1974. Title I of the act (29 U.S.C.A. § 1011 et seq.) provides rules with respect to participation, vesting and funding of benefits plans, fiduciary responsibility, reporting and disclosure, and administration and enforcement. Title II contains tax law provisions as amendments to the internal revenue code of 1954 (26 U.S.C.A. § 401 et seq.). Title III concerns jurisdiction, administration, and enforcement (29 U.S.C.A. § 1201 et seq.). Title IV creates the pension Benefit Guaranty Corporation and establishes a system of employee-plan-termination insurance (29 U.S.C.A. § 1301 et seq.).

ERISA does not require an employer to provide employee-benefit plans. However, if an employer sets up a qualified plan (i.e., one that meets ERISA's standards), the employer may take a tax deduction for the employer's contribution. The employer also may deduct the full amount of an employee group-health plan that meets tax code standards.

The Family and Medical Leave Act of 1993 (FAMLA) (29 U.S.C.A. § 2601 et seq.) establishes the right of employees to take unpaid leave for family reasons. FAMLA applies to employers of 50 persons or more. It entitles an employee to take up to 12 weeks of leave during a 12-month period because of the birth of a child to the employee, the placement of a child with the employee for adoption or foster care, the serious health condition of a family member of the employee, or the employee's own serious health condition.