Employment & Labor Law

1. Employment & Labor Law

2. I. Employer – Employee Relations (Non-Union) • A. Governing Law • 1. State law, in general, controls employment relationship • a. Common Law contract law applies to employment contract • b. With some exceptions and special situations, no special • rules for employment contracts • c. In past 15 – 20 years, courts have been less neutral when • interpreting employment contracts • d. Unless there is a specific federal or state statute, the only • applicable rules are Common Law contract rules • 2. Federal Law governs if applicable

3. 3. Fair Labor Standards Act a. First adopted in 1938 (part of effort to overcome the Depression) b. Establishes minimum wage, maximum hours, etc. (1) Minimum wage now $5.75 ?? (2) Must pay “overtime” (1.5 x wage) for all hours over 40 per week (3) Some exceptions for “training wage” (4) Does not apply to all jobs (e.g. farm workers, family members) (5) Special rules for jobs where tips are routine (restaurant, etc.) c. Extensive rules concerning younger workers (1) “Hazardous” and “nonhazardous” jobs (2) Younger persons limited to non-school hours, different times on weekdays and weekends (3) Treats agriculture and entertainment work as not “oppressive labor” for children under 14 ????????

4. 4. Occupational Safety & Health Act (OSHA) a. Concerned with reducing job-related injuries and general safety (1) Initially adopted many rules that made it very difficult to work (2) After some experience, both employers and OSHA became a little more realistic (3) Record-keeping requirement for employers is burdensome (Report all injuries to OSHA, with details) b. More recently OSHA has given more attention to repetitive stress injuries (e.g. “carpal tunnel syndrome”) 5. Workers’ Compensation a. Worker may have very difficult time recovering in negligence case against employer or other worker (traditional tort rules) b. Workers’ Comp substitutes a guaranteed payment/recovery (1) Only question is “was injury on the job” (2) Amount paid according to schedule of benefits, may be much less than possible recovery in “normal” litigation

5. 6. Social Security and Medicare (1) All employees and self-employed are covered (2) Employer pays half of total contribution (3) Self-employed pay full amount, but can deduct half (or more for income tax purposes) 7. Family & Medical Leave Act (1) Requires employer give up to 12 weeks of unpaid leave for childbirth, adoption, medical emergency (employee or family member (2) Employer must allow return to essentially equivalent job (3) Applies to companies with 50 or more workers, but only for workers who have been employed full time for a year

6. III. “AT WILL” EMPLOYMENT CONTRACT A. Basic Rule = employment agreement for unspecified period of time is “at will” 1. Based on traditional contract law philosophy and rules of interpretation 2. When “at will” both employer and employee can terminate contract at any time, for any reason, or for no reason 3. Assumes essentially equal bargaining power and essentially equal consequences when one or the other terminates contract a. Not realistic in that employee will probably not have much negotiating, bargaining power before contract agreed b. Not realistic in that negative consequences to employee when employer terminates contract are much more significant than consequences to employer when worker quits Not a good idea to say that an “employee was terminated” when he/she was fired. The employee was not terminated, her/his job was. Maybe some criminal organizations actually terminate employees.

7. B. Courts have created a number of “exceptions” to at-will rule 1. Most exceptions recognize the inequalities and try to protect employee from “unfair” acts by employer 2. Most employers try to make it very clear that employment is at-will and that employee was made aware of that from the beginning C. “Contract law” exceptions 1. Statements and promises made before hiring a. Statements made during interviews or when employment offered indicate something more permanent than at-will (1) Procedures before terminating employment (notice, etc.) (2) Assurance of continued employment “as long as….” b. Changes in management personnel or policies can outdate the pre-employment promises c. Court will enforce pre-employment promises, especially if employee moved, quit old job, lost money, etc., to accept

8. 2. Employee Manuals a. Manuals frequently include a procedure normally followed before an employee’s job is terminated (Oral notice, written notice, 2nd written notice, counseling, etc.) b. Courts have construed that type of employee manual informa- tion as terms of the employee’s contract (1) Most reasonable when employee is given manual before accepting position (2) Not so reasonable (based on contract-law) when manual is added or amended after employee takes position (3) Employers try to make it very clear that nothing in a manual changes the contract to something other than “at will” Employers have a problem. With multiple supervisory layers, it is necessary to set standards for supervisors. But setting standards means that a court might say the employees are no longer “at-will,” which makes it difficult to deal with unusual employees.

9. When you see a court de- cision made on a “public policy basis, that usually means the court does not have a clear legal rule to base its decision on, but is doing what is “right” in the circumstances. Usually very vague. D. “Public Policy” Exceptions 1. Many court decisions have held that it would be a “violation of public policy” to allow an employer to fire an employee for: a. Refusing to violate a law (text examples: committing perjury, indecent exposure) b. Exercising a legal right (text example: filing workmen’s comp claim), responding to OSHA, EEOC, etc. c. Performing a legal duty (jury duty, report to police, etc.) 2. “Whistleblowing” is a special category a. Reporting illegal or irregular activities of fellow employees or the company to authorities b. Is in the best interest of the public, but usually not the employer c. Probably not realistic for the employee to keep working with the employer he/she reported to authorities

10. I. “LABOR LAW” – BACKGROUND • A. History • 1. General US labor law history reflects economic and social changes • a. Much more violent before 1935 • (1) Courts routinely granted injunctions against any strike • (2) Not much for employer to lose if there was strike • (3) Some very violent exchanges between labor and security • b. After NLRA, violence much less • 2. Labor union membership/power cycle • a. After WWII, power very high (comparatively) • b. After 1970s, union membership decline • 3. Traditional power of unions is in factories, mines, construction • a. Previously, fewer workers in service occupations • b. Ratio of factory to service workers changed (now more service)

11. B. Sequence of acts reflects development of major concerns • 1. NLR Act (1930s) • a. Authorized union activities, prohibited employer action against • b. Created NLRB to regulate (political appointees) • c. Specified “unfair labor practices” by employers (not unions) • 2. Taft-Hartley Act (1947) • a. Specified “unfair labor practices” by unions • b. Limited union actions with respect to employers and employees • 3. Labor-Management Reporting & Disclosure (Landrum-Griffin) (1959) • a. Directed at internal union activities • b. Principal provisions • (1) Detailed reporting on trust and pension funds • (2) Freedom for internal political activities • C. Principal issues for contemporary business • 1. Certification elections (campaigns) • 2. Contract-negotiation process

12. II. CERTIFICATION PROCESS • A. Initial Activities • 1. Getting “union cards” signed by employees • a. Can be initiated from inside or by established union • b. Must target a particular group (“bargaining unit”) • c. If enough signed cards (30%), then “election” set by NLRB • 2. Fixing the bargaining unit • a. Try to find a group that has similar working conditions, • skills, etc • b. Can be a significant problem in the “team” production • facilities • 3. Election to vote for or against unionization • a. Very detailed rules and procedures on who can do what • b. Employer is precluded from giving new benefits, raises, • promotions, etc., unless it can show that they are routine • c. More than 50% must vote for union

13. III. CONTRACT NEGOTIATION • A. Subjects of bargaining (mandatory) • 1. “Wages, hours, and other terms and conditions of employment” • 2. Some things are obvious • 3. Some things in any particular setting are not obvious • a. “A company that subcontracts [some work] in order to • maintain its economic viability is probably not required to • bargain first; however, bargaining is mandatory if the sub- contracting is designed to replace union workers with • cheaper labor.” How does one draw that line? • b. Plant-closing • (1) Company not required to get approval of policy decisions • (2) May have to discuss “effect” of closing on workers • (3) A federal act requires employer to give 60-day advance • notice to workers when decision made to close plant or • other “mass layoffs” (29 USC § 2101 et seq. “Worker • adjustment and retraining notice”)

14. B. Bargaining Process • 1. Both sides present their initial positions • 2. Both sides are required to “seriously consider” and “respond • to” the other’s proposals • a. “Serious consideration” means cannot reject immediately • but must study, discuss • b. Response normally must be more than “NO” • 3. Parties are NOT required to reach an agreement • a. If “bargaining in good faith” reaches a point where • neither party is willing to make any further concessions, • an “impasse” is reached • b. Sometimes labor mediator called in to see if she/he can • produce some movement (not mandatory)

15. C. If talks fail to result in agreement • 1. Union strike • a. Distinguish between “economic” strike and “unfair labor • practice” strike • b. Employer can replace striking workers with temporary or • permanent workers • (1) “Right” of employee to go back to work depends on type • of strike • (a) Economic strike = no right to get old job back • (b) ULP strike = right to old job in most cases • (2) When there is a strike, re-hiring of striking workers always • an issue • (3) Replacing striking workers can be more difficult if: • (a) Higher skill level jobs • (b) Higher levels of unionization in industry • (c) Higher general level of unionization in area • (d) Frequently difficult to get new workers who will • confront picket line every day

16. 2. Employer “lock out” • a. Employer anticipates strike (for whatever reason) and impasse • b. Employer not in a position to hire replacement workers • 3. If the problems affect “national interest” President can order • employer and union to go back to work for “cooling off period” • a. Indicates a strong government interest in the problems • b. Federal government essentially becomes part of the bargaining • c. Still not forced to agree, but . . .