Employment Law
Business Law: Chapter 22 + 23
Chapter Overview
Did you know an employer is able to discharge an employee at any time, for any or no reason, and with or without notice? This doctrine is known as employment-at-will. As a result, the courts have established five standards it will consider regarding unjust termination. These five standards include promissory estoppel, implied contract, public policy tort, intentional infliction of emotional distress, and implied covenant.
Unions often negotiate employment contracts. This process is called collective bargaining. By studying this chapter, you will have a better understanding of employment-at-will and the laws that protect union activities.
How Are Employment Contracts Made?
- Employer - The party who pays someone in order to direct and control that person’s activities
- Employee - The party who is paid by the employer to serve under the employer’s direction and controL
2.) INDEPENDENT CONTRACTOR - agrees to produce a specific work product without being supervised or controlled by the other contracting party
Rights and Duties of Employers and Employees
Three things employers can expect from their employees:
have the experience, education, and skills that they claim they have;
perform a reasonable amt of work in a reasonable amt of time;
be loyal, honest, and dependable; to abide by employer’s rules
Three things employees can expect from their employers:
to provide regular pay; a safe work environment;
appropriate job training; opportunities to earn raises and promotions;
and safe tools; also expect to make reasonable complaints
3.) EMPLOYMENT-AT-WILL(Implied Agreements)
An employer is permitted to discharge an employee at any time, for any or no reason, with or without notice.
Even if you are an at-will employee, you still can be fired for reasons that are illegal under state and federal law.
Exceptions to Employment at will
4.) Wrongful Discharge
Also called unjust dismissal, provides employees with grounds for legal action against employers who have treated them unfairly.
Many courts challenge the employment-at-will doctrine by ruling against unjustified firings using FIVE standards:
(1) Promissory Estoppel
The principle that bars a party from taking back certain types of promises on which another person relies
4 elements of promissory estoppel:
employer makes a promise to employee that they can expect the employee to rely upon
employee relies on that promise and does or doesn’t do something
employee normally wouldn’t have acted or not acted had it not been for the employers promise
employee is harmed in some way by the employer’s failure to keep the promise
(2) Implied Contract
When an employer has said, written, or done something to lead the employee to reasonably believe that he/she is not an at-will employee.
An employer may have created an implied contract if they have an employee handbook stating their policies and procedures and it contains promises of lifelong employment, fair and just treatment, discipline or discharge only for certain offenses, or progressive discipline.
Most employers maintain an employment-at-will arrangement by adding a disclaimer (statement that says regardless of provisions, policies, or oral promises, an employment-at-will situation exists).
(3) Public Policy Tort
A policy that states that no one should be allowed to do anything that tends to hurt the public at large...if this occurs and can be proven, a fired employee may be permitted to recover compensatory and punitive damages.
Public-policy exemption
In 42 US states, including the District of Columbia, the public-policy exception to at-will employment protects employees from getting fired in the following cases:
- Whistleblowing (revealing harmful or illegal wrongdoing),
- Practicing a statutory right (filing a workers’ compensation claim for injuries incurred at work or organizing a union),
- Refusing to act against the law (not complying with an employer’s request to commit perjury at a trial), or
- Acting in the public interest (joining the National Guard, serving on jury duty, or voting).
Since the public-policy is an exception to the general rule of at-will employment, employees cannot lose their job for disobeying their employer (i.e., refusing to do something illegal). If they lose their job, they have the right to sue their employer for wrongful employment termination.
(4) Intentional Infliction of Emotional Distress
An employer’s conduct must be extremely outrageous to qualify as intentional infliction of emotional distress.
Under Ohio law, the elements of intentional infliction of emotional distress are:
Extreme and outrageous conduct
Of intentional or reckless character
That causes severe emotional distress
(5) Implied Covenant
Any employment relationship is based on an implied promise that the employer and employee will be fair and honest with one another...exists simply because an employment relationship exists.
The court will look at things such as:
Duration of your employment
Regularity of promotions
History of positive performance reviews
Assurances that you would have continued employment
Whether the employer violated its usual employment practices in firing you
Whether promises of long-term employment were made when you were hired
How Are Employment Contracts Terminated?
By Performance or Termination at Will
- Completion of the job or the period of employment defined in the contract terms
2. By Termination at Will
Many employment contracts are legally terminable at the will of either the employer or the employee:
- If no specified length of time for the employment relationship, the law assumes either party may terminate employment at any time without liability.
3. Wrongful Discharge
Your employment has been terminated for an illegal reason (also called wrongful dismissal or wrongful termination)
Examples: fired due to discrimination; because you reported or refused to participate in harassment or other violations of law; breach of employment contract (not following the proper procedures outlined in the agreement)
Most states now deny the power to terminate at will when it is used to retaliate against those who
refuse to commit perjury at the request of the company
insist on filing a workers’ compensation claim
report violations of law by the company
urge the company to comply with the law
Violation of Contract Terms
- When such terms are part of the employment contract, the employer cannot fire an employee without a fair reason.
Government Employees and Due Process
- Entitled to advance notice of the reasons for the discharge and a hearing
- Employee can present their evidence and challenge their discharge at a hearing
UNEMPLOYMENT COMPENSATION
5. Workers who have been fired despite properly completing the work they were hired to do, have been DISCHARGED WITHOUT CAUSE. This means the cause of the discharge was not the employee’s conduct.
- An employee who is discharged without cause could be entitled to UNEMPLOYMENT COMPENSATION BENEFITS - money paid by the government or a private insurance fund to workers who have lost their jobs through no fault of their own.
- To be eligible for unemployment benefits in Ohio, you must have worked at least 20 weeks in covered employment and earned at least $328 (in 2024) a week in the base period of your claim
Possible reasons for being discharged for cause:
Felonious conduct, participation in an unlawful strike (example, it would be unlawful to hold a strike to persuade your employer to halt its business with another company),
starting a prison sentence of longer than 30 days, disqualification under federal or state mandatory drug testing, and engaging in willful misconduct in disregard of the employer’s interest are all considered appropriate bases for being discharged for cause by the U.S. Department of Labor.
7. Unemployment compensation is not made available to those who VOLUNTARILY QUIT their jobs, those participating in a work stoppage/strike resulting from a labor dispute, and those who are already receiving workers’ compensation or retirement pensions.
CHP. 23: UNIONS AND THE EMPLOYMENT RELATIONSHIP
How Is a Union Established?
1. A LABOR UNION is an organization of employees that is formed to PROMOTE THE WELFARE of its members. They can advise on and resolve workplace issues by being a voice for employees and act as a bargaining representative during bargaining negotiations
Early Labor Law
In the 1800s, unions took permanent form and strikes, slowdowns, and other forms of organized efforts were utilized to achieve gains for the laborer. Employers and other vested interests then tried to use the law to curtail union activities.
Union activities were considered criminal
Early labor organizations were portrayed as criminal conspiracy that was trying to extort higher wages at the expense of the consumer.
2. Yellow Dog Contract
Courts reasoned that, as employment contracts already existed between employers and workers, strikes were attempts to pressure employers into accepting terms they otherwise would reject. YELLOW DOG contracts were employment contracts in which new employees promise not to join a union. These are now outlawed by federal and state laws.
3. Ex-parte Injunction
Judges would issue an EX-PARTE INJUNCTION an order to stop the strike, after only hearing the employers side of the argument. If employees continued to strike they could be arrested and place in custody for contempt of court.
4.) SHERMAN ANTI-TRUST ACT (1890) prohibited restraints of trade and made business monopolies illegal.
- Federal judges interpreted this act as making unions illegal as they monopolized the supply of labor.
- a portion of this act exempted unions from the Sherman Antitrust Act
The Depression Era led to more favorable views of unions and the federal government began to assume regulatory responsibility for labor relations.
Legal Status of Unions Today
Congress has passed many laws to protect unions and to promote stable labor-management relations.
5.) In 1935, Congress passed the NATIONAL LABOR RELATIONS ACT (1935), also known as the Wagner Act -- The purpose of this act is to encourage collective bargaining, discourage certain unfair labor practices, and provide federal assistance in obtaining fair bargaining.
- 6.) Provides employees at private-sector workplaces the fundamental right TO SEEK BETTER WORKING CONDITIONS (including wages and hours) and designation of representation WITHOUT FEAR OF RETALIATION.
7.) TAFT-HARTLEY ACT (1947) - (also known as Labor Management Relations Act) - made major changes to NLRA/Wagner Act
- banned closed shops (where all employees had to be a union member)
- protect employees' rights from unfair practices by unions
- gave employers the right to sue unions for breaking contracts and prohibited unions from making union membership a condition for hiring
- allows the President to block a strike for 80 DAY “cooling off period” to delay a strike in case of national emergency (involves national defense and/or major industries) by appointing a board of inquiry after requesting a federal court injunction
- Set up National Labor Relations Board (NLRB) -- Federal administrative agency that administers the rights and duties given to workers, employers, and unions.
- supervises and controls all aspects of labor relations
How Is a Union Established?
8.) Employees sign an AUTHORIZATION CARD stating that they want to be represented by a union.
If a sizable percentage of workers sign authorization cards for a particular union, it may approach management and ask to be recognized as the exclusive bargaining representative.
- If management denies voluntary recognition, NLRB will step in to determine appropriate BARGAINING UNIT (specific employees who hold the same community of interests that will allow effective bargaining by a single representative on their behalf)
- Employees will vote. If a union is selected, it becomes the negotiator for the bargaining unit -- NLRB will recognize that union (certification).
- If a union has been certified and later 30 percent of the employees decide they want different or no representation, they can petition the NLRB to conduct a decertification election. At this election, employees can reject union representation or select a different union.
23.2 - Employment Relations in a Unionized Workplace
A collective bargaining agreement is a contract negotiated by the employer and representatives of the labor union that covers issues related to employment.
There are six employment issues a collective bargaining agreement typically covers:
- Working conditions
- Wages
- Benefits
- Job Security
- Layoffs
- Firing policies
Grievance procedures are a series of steps that an employee must follow to appeal the decision of an employer who may have violated the collective bargaining agreement are also included in the collective bargaining agreement.
Layoffs and Plant Closings
A collective bargaining agreement can provide a negotiated procedure to protect workers who lose their job due to layoffs or plant closings. It can also provide for severance pay (a set amount of money to compensate employees for being discharged).
The Worker Adjustment and Retraining Notification Act (WARN) aids employees who lose their jobs or are laid off by making some companies with 100+ workers to give at least 60 days notice of factory shut down or massive layoffs.
Regulating Collective Bargaining
Over the years, U.S. labor laws have been created to protect the rights of both the employee and the employer. These laws pertain to the age of workers, working conditions, how collective bargaining is performed, and child labor regulations.
Taft-Hartley Act
Also known as the Labor Management Relations Act. Amended the National Labor Relations Act.
The Taft-Hartley Act:
- Equalizes the power of labor and management
- Allows the President of the United States to investigate union disputes when he believes a strike would endanger national health or safety, and obtain an 80-day injunction (cooling-off period) to stop the continuation of a strike.
- Permits unions to form after a majority of the employees vote for them.
- Ensures that employers cannot place pressure on those employees that join the union
- Prohibits the closed shop (a company that requires a person to be a union member before being hired) and featherbedding (assigning more employees to a job than are actually needed)
- Allows union shops (a business in which a worker must join the union within 30 days after being employed)
Landrum-Griffin Act
Also known as the Labor-Management Reporting and Disclosure Act.
The primary goal of the Landrum-Griffin Act was to stop corruption in the unions. It deals with the relationship between a union and its members. The Act establishes a Bill of Rights for union members; reporting requirements for labor organizations, union officers and employees, and employers; standards for the regular election of union officers; and safeguards for protecting labor organization funds and assets.
Regulating the Employment of Minors
During the Industrial Revolution, children were often exploited by employers. To prevent this abuse, laws were enacted to protect children who enter the labor force.
State Child Labor Laws
Child labor laws (laws that control the work that children are permitted to do)
- Minors need protection through child labor laws because of inexperience, they might not understand the dangers involved on a specific job.
Federal Child Labor Laws (provides minimum wage and maximum hours rules)
The Fair Labor Standards Act of 1938 prohibits the interstate or foreign trade shipment of goods produced in factories in which “oppressive child labor” had been used within 30 days of the removal of the goods...and, the employment of oppressive child labor in any enterprise engaged in commerce or in the production of goods for commerce.
Exceptions to the Act:
Minors under age 16 working in a business solely owned or operated by their parents or by persons standing in place of their parents, can work any time of day and for any number of hours. However, parents are prohibited from employing their child in manufacturing or mining or in any of the occupations declared hazardous by the Secretary of Labor.
Eight Hour Day Movement -- The National Labor Union was founded on August 20, 1866, in Baltimore, Maryland. It was the first attempt to create a national labor group in the United States and one of their first actions was the first national call for Congress to mandate an 8-hour work day, in attempt to regulate the working day and prevent excessive working time, without reducing wages.
Teacher Watkins Memorial High School