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Agency RelationshipsAn agency is created when a person/company (the agent) agrees to act for or in place of another person/company (the principal)PRINCIPAL creates authorityAGENT carries out the principal’s instructionsTHIRD PARTIES make a contract or are involved in a tort with the AGENTTherefor, the PRINCIPAL is BOUND by the AGENT’S acts with the third partyClassification of AgentsAgents are classified on the basis of the authority providedUniversal agents: does all acts that can be legally given to themThey have the general power to do all business transactions on behalf of the principalEx) General power of attorneyGeneral agents: can do all transactions that are associated with a specific businessThe principal may limit the extent of their authority to a portion of the businessEx) ManagersSpecial agents: represent the principal for only specific transactions, usually for a limited timeEx) real estate agentsAgency coupled with an interest: the agents has paid for the right to have authority for a businessEx) I lend you money to buy a house to rent, you collect the rent and give it to me to pay off the loan. You become the agent for the purpose of collecting rentGratuitous agent: A person volunteers with no expectation of getting paidDoesn’t change the legal consequences of the agency relationshipEx) a volunteerSubagents: someone who assists the agentWorks for the agentHas duties to both the agent and the principalCreating an agencyDon’t need a formal procedure, the principal just must show a desire to have the agent act for them and the agent must show a consent to do soAgency by agreement of the partiesOral/writtenPower of attorney: a written document that established an agencyCreates an attorney-in fact (the agent) (not an actual attorney)Implied or express ratification by the principalRatification: acceptance of responsibilityWhen a principal accepts responsibility for acts of an agent that go beyond the agents authorityExpress ratification: a principal’s clear signal to be bound by the agents unauthorized actionsImplied ratification: the principal’s behavior acts as though they intend to ratify the unauthorized agreementAgency by estoppelWhen the actions of a principal lead people to believe that there is an agency so the principal cannot deny the agency’s existenceAgency by operation of the lawWhen the agent acts beyond the principal’s authority because of necessity or emergencyAgents may do the acts and bind the principal by operation of lawActs for the principalActual authority: when the principal sends signals to the agent to do something with a third party Express authority: oral/written instructions create authorityImplied authority: principal’s conduct/trade customs create authorityAn agent also gets this when they receive express authorityApparent authority: when the principal sends signals to the third party that what the agent does binds the principalThere is an appearance of authority (or implied authority) that a third party can reasonable concludeCASE- Cove Management v. AFLACGalgano signed with AFLAC, who authorized him to solicit applications for AFLAC insurance policiesAgreement said he was an independent contractor without authority to bind AFLAC for his “debts, faults, or actions”Agreement said he couldn’t enter contracts or incur debts on behalf of AFLACAgreement said Galgano didn’t have authority to rent any office space or obligate AFLAC without specific written authorizationGalgano leased office space from Cove ManagementListed the tenant as AFLACListed the guarantor as GalganoSaid the office would be used for “insurance services”Galgano signed as the lessee and the guarantorHe later defaulted on lease payment (broke the rules in his lease)Cove sued AFLAC for lossesThe office was listed as an AFLAC office and engaged in business as AFLACCove said they had the right to presume Galgano had authority as an agent to bind AFLAC to leaseThe district court dismissed the suitCove appealedDetermining whether Galgano’s authority was actual or apparent says whether he was an independent contractor or an agentCove said AFLAC made Galgano out to look like he had apparent authority“the principal knowingly permits the agent to assume that the other party has relied on the agent’s authority”Most evidence came into existence AFTER the lease was signed, thoughSo the court cannot consider:When the office was set up, the parking had the AFLAC symbolThere was AFLAC materials in and out of the officeAFLAC was listed on the director of the buildingCove didn’t make any effort to determine if Galgano was an independent contractor or an agent of AFLACCove relied on the statements and representations of Galgano that he had the authority to bind AFLAC to the leaseHELD AFFIRMEDGalgano was not acting under apparent authorityPrincipal’s duties to an agentDuty to cooperate: the principal needs to cooperate with the agent to fulfill the agent’s purposeDuty to compensate: the principal needs to pay the reasonable value of the services providedUnless the agent agreed to work for freeDuty to reimburse: the principal has a duty to reimburse the agent for all reasonable expensesThere is no reimbursement for misconduct thoughEx) while going to meet with the third party they were driving drunk and got arrestedDuty to indemnify: the principal must pay back the agent from legal liabilities they encounterEx) a third party sues the agent for something that was an accidentAgent’s duties to the principalDuty of loyalty: an agent needs to put the principal’s interests above their ownThey cannot compete without permissionThe agent is a fiduciary of the principalCASE-In MA a CEO had to forfeit all of the compensation he was given during his disloyalty to the companyDuty of obedience and performance: an agent must perform according to the principal’s instructionsReasonable care: an agent must perform their duties to the degree of care that a reasonable person would exercise under the circumstancesDuty to account: an agent needs to keep tract of all the funds and property of a principalThey need to show where the money/property came from and went toThey need to avoid mixing personal funds with the principal’sDuty to inform: they need to keep the principal informed of all facts related to the agencySUMMARY: Duties in an agency relationshipPrincipal’s duties to an agentsCooperateCompensateReimburseIndemnifyAgent’s duties to a principalLoyaltyObedience and performanceReasonable careAccountingNotificationCASE- Bearden v. Wardley CorporationBearden listed property for sale with Gritton, a real estate agent who worked for Wardley Corporation (a real estate firm)Gritton told Bearden he wanted to buy the property for $89,000Beardon agreedThe contract said Gritton would pay Bearden $400 per month followed by a balloon payment after 5 years. Bearden would keep the title until the balloon payment was madeUNKNOWN to Bearden, Gritton gave warranty deed with other documents for Bearden to signThe signature was improperly notarized and the deed and title were actually transferred to GrittonGritton didn’t keep up with the paymentsBearden hired a lawyer who discovered the fraud and that Gritton had also borrowed money against the property and it was in foreclosure for lack of payments to lenderBearden paid $60,000 to keep it from getting lostBearden sued Gritton & Wardley for breach of contract, fraud, and breach of fiduciary dutyJury awarded Berden $75,000, $25,000, $50,000Gritton & Wardley appealedHELD AFFIRMEDLeasing contract was with Wardley with a “fiduciary duties to seller” clause in itWardley’s internal policies prohibit agents to purchase properties they listedGritton was employed by WardleyWardley knew of this agreementWardley knew Gritton had purchased the property and never questioned Gritton about violating internal policy regarding purchasing listed propertyWardley never asked Gritton to stop representing BeardenWardley never informed Bearden of Gritton’s internal policy violationsWARDLEY breached its DUTY OF CARE to Bearden and is liableLiability for ContractsDisclosed Principals: the identity of a principal is known by the third party when the contract is being made between them and the agentThe principal is liable to a third party for the contract if the agent has actual authorityThe principal is contractually liable to a third party if the agent has apparent authorityHowever, the principal may sue the agent for losses if the agent has breached a dutyUndisclosed Principals: the identity of the principal is unknown to the third partyTherefor the third party doesn’t know that the agent is acting for the principal and that there’s an agency relationshipThe agent is liable to the third partyThe agent may be indemnified by the principal if they were acting within their scope of dutyCASE- Yim v. J’s Fashion Accessories, IncYim did business under the trade name Ho TaeYim ordered goods from FashionInvoices were sent to Ho TaeThe account wasn’t paidFashion sued YimYim denied liabilitySaid he was an agent for Hosung Enterprise, IncHosung Enterprise, Inc did business under the name Ho TaeFashion said that at no time did Yim disclose the existence of a corporation entity that they were dealing withFashion always thought they were dealing with Yim under the trade name Ho TaeSUMMARY JUDGEMENT FOR FASHIONYim appealedSaid he was only an agent for HosungHELD AFFIRMEDAn agent who makes a contract without giving identity of the principal becomes personally liable (undisclosed principal)There’s a duty to disclose the principal’s identityThe agent must be specific in the disclosureUsing a trade name is not necessarily a disclosure of the principal’s identityAt no point di Yim say he was acting other than an individual doing business as Ho TaeTerminating an AgencyUnilateral terminationEither party may terminate“I quit”“You’re fired”A specific date could be set for the agency to endThe purpose of the agency may be fulfilledA notice of termination must be made to third parties to end an agent’s apparent authorityTermination by the operation of the lawA principal or agent diesThe subject matter is lost or destroyedThe Essential Employment RelationshipPrincipal-AgentThe agent acts for the principalThe agent has a degree or personal discretionThe principal is usually liableMaster-Servant (old term) or Employer-Employee (new term)The servant is an employee who’s conduct is controlled by the employerThe servant can also be an agentThe discretion is sometimes blurredThe employee is usually liableEmployer-Independent Contractor (I/C)An independent contractor is not an employeeThe employer has no control over the details of the Independent contractor’s performanceSome independent contractor’s aren’t agents, some are.Ex) attorneys, auctioneers areUsually the employer isn’t liable for the independent contractor’s tortsCASE- France v. Southern Equipment Co.Hensley did business as Royalty BuildersHe hired 16 year old France to do roofingSouthern equipment needed a new roof and accepted a bid from Quality Metal RoofQuality Metal Roof hired RoyaltyQuality supplied materialsWhile working, France fell and suffered head injuriesHe sued Southern Equipment for exposing him to an inherently dangerous job or roofingCourt granted for SouthernFrance appealedCourt AffirmedRoyalty was an independent contractor, Southern had no control over the work that Royalty did. Therefor, Southern couldn’t be held vicariously liable as Royalty’s employer.Employment-at-willEmployers can hire and fire whoever they want at any reason for any timeEmployees can work at will or quit for any reason at any timeEmployees can sue for wrongful discharge under their employment contract, but they need to establish that the contract had limits to an employer’s right to dischargeThere can be contractual limits to at-willThere may be a general public policy against dismissalExceptions to employment-at-will:Refusing to violate a lawImportant public dutyEx) Jury dutyPublic rightFiling for workers compensation“whistle blowing”Breach of employment contract through express contract, implied contract, or implied covenant of good faith and fair dealingCASE- Guz v. Bechtel National, IncGuz worked for Bechtel National Inc (BNI) from 1971-1993 with a good employment record under employment at willTermination would be for unsatisfactory performance or due to a layoffThe Budget for Guz’s devision was cutHe and others were terminatingGuz’s duties were transferred to other employeesGuz applied for other positions at BNIBut he was rejectedGuz sued BNI for alleged breach of implied contract to be terminated only for good cause and breach of implied covenant of good faith & fair dealingTrial court DISMISSEDSaid he was an at will employeeAppeals court REVERSEDSaid his longevity, raises, etc should give him a retrialREVERSED in favor of BNIEmployment relationship is contractual and parties may define for themselves the causes for terminationThere is no evidence that BNI had additional terms to employment securityBNI had the right to reorganize and terminate employees as they wishedSuccessful service alone doesn’t create a contractual guarantee for employment securityEmployment Handbooks: manuals that explain company policies, benefits, and proceduresDiscuss grounds for discipline and dismissalMay limit the rights of employers to dismiss employees under employment-at-will doctrineMay be interpreted as creating an express or implied contract between an employer and an employeeSome employers will put a bold disclaimer in front of the handbook saying it’s not a contractThey will have employees sign thisSocial MediaCompanies need to adjust to take advantage of new technologies/innovationsImproper social media actions can bring law suits or a bad imageSection 230 of Communications Decency Act (CDA) Immunity for company’s of content that is posted or submitted by a third party, if the company is merely a publishedThis will not help content that is published by company employeesEven if they are not posting it in an official capacity, if the online activity is within the scope of employment or a reasonable reader would expect the writer was authorized to speak on behalf of the company To minimize liability, companies may restrict unofficial company social media endeavorsThey may limit who can post to official social mediaThey provide means for addressing infringement and other claimsThey may restrict links to sites outside of the official oneEx) YouTubeThey may have a policy on editing potentially offensive contentCDA doesn’t protect employers against sexual harassment based on e-mailsProblems with sending emails may create sexual harassmentCompanies may want to restrict employees’ non-work blogsUnder employment-at-will, firms can impose these restrictions and they are free to fire people who break the rulesTort Liability for Employers and PrincipalsPrincipal’s liabilityIf the principal tells the agent to do a tortious act, then the principal is liableA principal can give actual authority (tell the agent to do something)A principal ratifies (approves of) the agents conductVicarious liability: a principal can be liable for unauthorized acts of the agentWas the agent acting within the scope of employment?Respondeat superior: the rule of law that imposes vicarious liability upon an innocent principalIt’s rare for an employer to be liable for acts committed by an independent contractorEmployers may be liable for torts of employees are in that can be attributed to either negligent hiring or supervisionCASE- Armstrong v. Food LionArmstrong went to the Food Lion with his mother, Tillie3 men in Food Lion uniforms approached ArmstrongOne of them, Brown, had been in a fight with Armstrong 2 years earlierHe attacked Armstrong with a box cutterCameron also attacked ArmstrongWhen Tillie came to help, Cameron punched her and knocked her downArmstrong sued Food LionHELD for Food LionAppeals court AFFIRMEDArmstrong appealedAFFIRMEDRespondeat superior doesn’t apply hereVicarious liability does not apply to an innocent principal (Food Lion)Acts of the employees were for an independent purpose than service to their employer at the storeBrown and Cameron were not furthering Food Lion’s business in any manner when they attacked the Armstrong’sNegligent Hiring: intentional torts that are committed by an employee who is not acting within the scope of employmentObligation to check the background of an employeeSince they are no longer costly, the duty arises for employers to perform background checksObligation to check an independent contractor for history that would make hiring doubtfulEx) a child molester should not be in contact with childrenEx) someone with a bad driving record shouldn’t be permitted to drive a company truckAt-Will EmploymentEmployers can hire or fire who they want when they wantEmployees can quit when they wantContracts can put limits to an at-will presumptionExceptions to at-will employment:Refusing to commit an illegal actPerforming a public dutyEx) Jury dutyExercising a public rightEx) Filing for workers compWhistle blowing: when an employee reports an employer’s illegal actContracts in violation of public policyEx) Exculpatory agreementsWrongful discharge (Retaliatory Discharge): When a firm dismisses an employee in violation of public policyCASE- Ballalatak v. All Iowa Agriculture AssnBallalatak was a security supervisor2 of his employees were injured in a work-related accidentThey called Ballalatak and reported the injuryBallalatak drove to the scene, helped the men get to the hospital, and filled out an accident reportLater, the general manager, Nowers, told all 3 men to meet with him before going to workTold the men their medical expenses would be taken care of without filing for workers’ compensationsLater, the 2 injured men told Ballalatak that they were concerned they wouldn’t receive any workers’ compensation benefitsBallalatak told Nower’s that the workers had the rights to benefitsNowers fired himBallalatak suedSaid he was fired for asking about workers compensation duties to the injured workersNower’s said he fired him for insubordination (defying authority and being disobedient)District court dismissed the caseBallalatak appealedHELD AFFIRMEDAn employer can fire an at-will employee at any timeExceptions are if discharge is contrary to public policyBallalatak claimed he was fired for raising concerns about worker’s compensation claim rightsBallalatak said public policy interests should extend to supervisors (like himself) who advocate benefits for other employeesThe courts only protect employees who are advocating their OWN rightsBallalatak wasn’t fired for trying to advocate for his own rights or for refusing to violate worker’s compensations lawHe was fired for his attempt to ensure that his employer did not violate the statutory right of other employeesIowa law doesn’t protect internal advocates for other employeesIowa law also doesn’t protect an employee who asserts other employees may contact an attorney about workers’ compensation rightsBallalatak loosesNoncompete agreements: an employee cannot leave and go into competition against the employer or go to work for a competitor in a certain amount of timeStates differ on this law:Some allow them ABSOLUTELYSome allow the court to imply reasonable terms in order to save the covenant (agreement) in partSome will eliminate these agreements completelySome will say that common law governs, allowing non compete agreements if the restraints are reasonable in regards to time and the extent of coverageSome (like CA) will say that almost every contract that restrains someone from lawful business is voidEmployers need to pay attention to the individual state law in this areaCASE- Zambelli Fireworks Manufacturing Co v. WoodZambelli hired Wood in 2001 to work as a pyro technician and choreographer to produce firework displays with musicOn the job, Wood learned the technical trade secrets, client lists, pricings, costs, and contract termsZambelli paid for Wood to become a certified trainer for the Pyrotechnic Guild InternationalWood signed a noncompete in 2005 saying that if he left Zambelli, he:Wouldn’t work for a competitor in the US for 2 yearsWouldn’t solicit former clientsWouldn’t disclose or use trade secretsWould pay all legal fees & costs if there was litigation and Zambelli prevailedWood was hired by Pyrotecnico, a major competitorPyrotecnico agreed to pay his salary for 2 years, if needed, because of the covenant (agreement) (noncompete agreement) with Zambelli and cover legal expensesWood resigned from Zambelli and went to work for PyrotecnicoZambelli sued to enforce their covenant (agreement) not to competeDistrict court HELD that the agreement was enforceable under PA lawWood & Pyrotecnico appealedHELD AFFIRMEDZambelli had a legitimate business interest in its good will and Wood’s specialized training/skillsAgreements are upheld when restrictions are reasonable to protect employer’s interestsAnti-Raiding covenants: employees sign an agreement that they will not recruit fellow employees for another company when they leave their current place of employmentStates differ on this law:Some say this violates public policyIt’s an illegal restraint on competitionSome say it is enforceableEx) NY once said that once an employee leaves a place of employment, continued restraints aren’t favored except to protect trade secretsEx) CA & TX say that covenants that have limits in time and coverage are enforceableMissouri says these covenants are legalSubstance AbuseAlcohol is the most commonly abused drug8% of workers are serious alcohol abusers3%-8% of adults abuse or are addicted to illegally/improperly dispensed drugs1/8 workers have substance abuse problemsIt’s illegal to take someone else’s prescription drugsA costly issue for businessesTotal economic cost of substance abuse is over $250 billion per yearTotal cost of substance abuse to employers is about $100 billion per yearSafety problemsWorkers under the influence of alcohol or other drugs are 3.6 times more likely to be injured or injure someone elseThose who abuse alcohol (even if they’re not under the influence in the moment) have a 70% greater change of on-the-job injuryThe National Transportation Safety Board found that alcohol or other drug impaired workers caused many railroad accidentsAlso found that alcohol or other drugs are a factor in 1/3 of all accidents involving truck drivers killed in highway accidentsInsurance costs are about double for a family with an alcoholicLegal Issues in Drug TestingDrug-free workplace ActRequires that all companies with more than $25,000 worth of business with the federal government must certify that they provide a drug-free workplaceThey must:Publish a policy statementEstablish a drug awareness programMake the availability of the drug awareness program knownRequire employees to notify employers of any drug-related convictionsThe Omnibus Transportation Employee Testing ActEmployers who operate aircraft, public transportation, or commercial motor vehicles must be tested for the use of alcohol or illegal drugsThis includes:Pre-employment testingRandom testing during employmentTesting after the accidentEmployee Substance abuse policies: work place rules that are adopted by an employer with regards to any tests and the abuse of substances. Pre-employment screening is usually legalMany states say testing after the job offer has been extendedTesting on an annual basis or as part of an occasional physical exam is usually legalExam must be voluntary of specifically related to their ability to perform their jobDrug tests are upheld if your job is safety-sensitive or if the policy is announced and applied constantlyA random drug test is ok when it has been announced as a condition of employmentA drug test after accidents is okWhen there is “reasonable suspicion” you can be drug tested if this has been carefully documented in the employee fileThis should be an announced policy and when safety is an issueUse certified labsGive all employees a copy of the company policy and keep a signed receipt from the employeeMake the policy clearCheck with an attorneyWorker Health and SafetyOccupational Safety and Health Act of 1970 (OSHAct)Created:Occupational Safety and Health Administration (OSHA)The Occupational Safety and Health Review Commission (OSHRC)Reviews the administrative cases brought by OSHAThe National Institute for Occupation Safety and Health Council (NIOSH)Does studies to help set safety standardsSafety InspectionsOSHA inspectors visit work places and respond to workers’ reports of problemsMarshall v. Barlow’s IncOSHA inspectors routinely obtain administrative warrants that don’t require show of probable causeThe warrant requirement isn’t difficultPenaltiesPenalties run from small fines to millions for multiple violationsCASE- Caterpillar Logistics Services, Inc v. SolisCaterpillar logistics handles parts orders for caterpillar productsEmployees locate the parts, put them on the conveyor belt, and pack parts in boxes to shipEach employee handles about 650 parts per dayWork requires repetitive hand, wrist, elbow, and shoulder movementsA month after MK began working she had elbow painDiagnosis said swelling around her jointCompany MD put her on leave for 3 monthsShe had the same problem after she returned to workShe was transferred to a position that required less movementThat took care of the problemCaterpillar logistics had a review panel of 5 specialists is musculoskeletal disorders determine if MK’s injury was work relatedConcluded the problem was prior to MK going to workNot work relatedDepartment of Labor disagreedAssessed a $900 fine for failing to report a work related injuryAdministrative law judge upheld the penaltyOSHRC upheld the decisionThis became the final decision of the secretary of laborCaterpillar filed to review the orderThere was competing evidence about the reason for the injuryThere is no need for “tedious opinions” or “an avalance of detail” but there is a need to require and agency to test its hypothesis against competing hypothesisHere, it ignored strong indications that it favored witness got things wrongRecord doesn’t show an elevated incidence of epicondylitis among the workers in MK’s department (the packing department)Statistical significance and the frequency to imply a casual role of workplace conditions were not performed and ALJ disregarded the experience of Caterpillar and did not find one way or the other about the statistical significanceThe agency failed to consider what Caterpillar’s actual experience wasThe commission never discussed the subjectThe secretary’s decision is vacatedCaterpillar winsWorkers and Toxic SubstancesOSHA standards concern safetyHealth standards have also been issuedProtection from asbestos, vinyl chloride, coke-oven emissions, and other industrial carcinogensOSHA issues standards that “must adequately insure to the extent feasible that no Employee will suffer material impairment of health or functional capacity even if they have regular exposure to the hazard”10 most common work place safety violations:no written hazard communication programno information or training on hazardous chemicalselectrical conductors not protected when entering boxes or fittingselectrical covers missingguards missing on gridline wheels or spinning machineryhard hats not work on construction sitesno fall protection for workers on elevated work surfacesno portable fire extinguishersimproper use of electrical cordsnot maintaining OSHA injury and illness logHazard Communication Standard (HazCom)Issues exposure limits for specific toxic substancesChemical producers and users conduct a “hazard determination” of chemicals they use/produceWhere these chemicals are used, employers must have:1. A written plan that includesA list of hazardous chemicals in the workplaceThe manner in which safety data sheets, chemical labels, and worker training about chemical safety is handledA description of how employees will be trained for non-routine tasksEx) chemical spills of emplosions2. Labels for chemical containers3. Material safety data sheets (MSDS)4. Employee training programsWorkers CompensationWorkers compensation law: requires employers to pay for insurance to cover injury and death benefits for employees (work related accidents)For employers, it reduced payments from tort damages to a schedule set by state lawSometimes employees prefer to sue for more moneyThe objectives of Worker’s Comp:Provide sure, prompt, and reasonable income and medical benefits to work-accident victims regardless of faultProvide a certain remedy and reduce the hassles of tort litigationsProtect public and private charities from undue burdensReduce fees to lawyers and expert witnessesEncourage employer interest in safety with an accident rating-based premiumProvide open communication of accident for future safetyBenefits and IncentivesObligations of worker’s compensations is to employees, not Independent contractorsCompanies pay premiums that are based on their injury claim recordsThese vary among states and occupationsDifferent states have different systems, rules, and payout historyUsually a worker receives 2/3 of their gross wages as disability incomeAs low as $500 to as high as $1,500Benefit categories:DeathTotal disabilityPermanent partial disabilityTemporary partial disabilityMedical expensesCASE- Long v. Superior Senior Care, IncLong was an in-home certified nursing assistant (CNA) who was working for Superior Senior CareThey had 5 employees in their officeThey had 100 Independent ContractorsClients would contact superior and they would match CNA’s with clientsLong was paid $10 per hour and her duties were based on client needsShe didn’t have to take any specific assignment, she could chose.While she was assisting a client move from a wheelchair to bed, the client “went limp” and became dead weight.Her back popped as she struggles to help her clientShe received a back brace at the hospital, but eventually she couldn’t work anymoreLong filed for workers compSuperior said she was an independent contractor, not an employeeTherefor she couldn’t receive workers comp benefitsAdministrative law held that Long was an employeeThe Commission REVERSEDSaid she was an independent contractorNot eligible for workers compLong appealedWhether a person is an employee or an independent contractor depends on the facts of each caseHere, Long was acting as an independent contractorAFFIRMEDFamily and Medical LeaveThe family medical leave act (FMLA) applies to private employers with 50 or more employees and all government jobsEmployers need to give employees up to 12 weeks of unpaid leave per year:After childbirth/adoptionTo care for a seriously ill child, spouse, or parentIn case of an employees own serious illnessPertains to “serious health condition”More than 3 consecutive days of incapacity and treatment for a condition that involves 2 or more treatments, including exams; or one treatment with continuing prescription medicine or special equiptmentIncapacity due to pregnancyIncapacity or treatment for a chronic, serious health conditionAbsence from multiple treatments and recovery for surgery or condition that results in more than 3-day period of incapacity left untreatedExempts “key” employees (top 10% of highest paid employees” because their leave would cause economic harm to the employerCASE- Callison v. City of PhiladelphiaCallison worked for cityHe was diagnosed with anxiety caused by stressHe used a lot of sick leaveHe was placed on the sick abuse listHe was required to get medical certification for all sick daysHe was subject to penalties for violationsAn employee who is on sick leave has to call a hotline if he leaves homeA sick leave investigator calls home to see if employees are thereCallison took 3 months FMLA leave (12 weeks)City checked on himHe often wasn’t homeHe was suspended for failure to follow the policyCallison suedSaid he was not subject to discipline while on FMLA leaveSaid discipline by the city was retaliatoryTrial court HELD for cityCallison appealedAFFIRMEDCity didn’t engage in prohibited acts by their policiesThere is no right in the FMLA that employee is “left alone” when under the actAn employer may check to ensure that the employee on leave is not abusing their leaveEspecially is they are on the employer’s sick abuse listInternal policy does not diminish the protections of the FMLAGeneral regulation of Labor Markets Family and medical leaveHiring legallyFederal minimum wage requirementOccupational licensure and regulationWarning employees of plant closingsEmployee retirement plansHiring legallyFor every person hired, an employer must have an I-9 form on fileDocuments must be presented to be used as proof of identity and employment eligibilityUS passportPermanent resident cardForeign passport with employment authorizationGeneral new employment procedureEmployer needs to balance the need to get enough documentation to verify employment while avoiding discriminationThis deals with the I-9 System and documents specified on the I-9 formThe US Citizenship and Immigration Services Electronic Verification System (USCIS) uses an Electronic Verification (E-Verify) SystemThis program has had accuracy issuesMany federal contracts require E-Verify useSome states (AZ, Mississippi) also require E-VerifyIllegal immigrants cannot be hiredCostly penaltiesFines and criminal penalties can be large for sloppy record keepersFederal Minimum wage and tax requirementsFederal minimum wage requirements were initiated in 1938 as part of the Fair Labor Standards ActThe minimum wage averages about 50% of the average manufacturing wageThe minimum wage was raised to $7.25 per hour as of 2009Some states (CA) have high minimum wagesSome state laws also cover employers who are exempt from the federal lawOccupational Licensure and RegulationOccupational licensure: permission from the regulating agency to set up and begin to operate a businessThere are few controls at the federal level, most restrictions are set at the state levelUsually a state commission determines entry criteria for a person to be licensed to practiceAbility through certificate to practice as a lawyer, doctor, nurse, dentist, veterinarian, barber, architect, psychologist, dog groomer, beekeeper, massage parlor operator, etc.Employees in contact with children/other vulnerable people usually undergo a criminal background checkState laws that affect businesses range from how businesses provide references to how employees must be paid their final pay checkMany states require time off to employees to vote and to attend parent teacher conferencesThese state laws are importantMany small to medium size firms are unaware of the details of these laws and can find themselves inadvertently violating themWarning Employees of Plant ClosingsThe Worker adjustment and retraining notification act (WARN): employers with 100 or more full-time employees must give advance notice of a plant closing or a mass layoff if 50 or more employees will be affectedNotice must be given to each affected employees and local governments 60 days in advance of the closing or layoffNotices must be given for permanent terminations and reductions in work time of 50% or more for 6 months or longerEmployees who do not receive proper notice can sue for up to 60 days worth of pay, benefits, interest, and attorney’s feesIf the local government has not been properly notified, they can sue to company for up to $500 per day for each day there was no noticeSome states have plant closing requirements that go beyond federal requirementsEmployee Retirement PlansEmployee Retirement Income Security Act (ERISA): guarantees the expectations of retirement plan participantsProtects their benefits after a reasonable length of employmentVesting requirementsGuarantees that participants receive benefits after a certain length of employmentMandatory Vesting: 3 different options that are established by ERISA on vestingProtects workers in case of closingThis way they will still get their benefitsStatues are complex and involve lengthy regulator filings for pension and benefit plans so employers need reliable expert guidance to structure their benefit plansMajor Labor Relations ActsNorris-La Guardia Act of 1932Only major law that was passed before the NLRA (Wagner Act)It ended court intervention when employers pleaded to stop strikes and other union activities as a violation of antitrust lawsNo court injunctions in nonviolent labor disputes such as strikes, belonging to a union, publicizing a labor dispute, picketing, etcDeclared that every workers has “full freedom of association, self-organization, and designation of representatives of his choosing to negotiate terms and conditions of his employment”Prohibits employers requiring employees to sign yellow dog contracts (:contracts that employees sign prohibiting them from joining a union or risk being fired if they do)Wagner Act of 1935 (Wagner Act) (NLRA)The right of workers to unionizeCreated the National Labor Relations Board (NLRB)Monitors unfair labor practicesIssues few rulesThey prefer to develop the law through a dispute resolution processDecisions are made in a common law like processThe board’s decisions can vary with the political makeup of the NLRBSo the outcomes of board proceedings vary more over time than most agencies doTaft-Hardley Act of 1947 (Labor Management Relations Act)Amended to NLRAEmployers have the right to go to the NLRBUnions are prohibited from:Coercing (persuading) employees to support the unionRefusing to bargain in good faith with employers about wages and working conditionsCarrying out certain kinds of strikes (like secondary boycotts), charging “excessive” union initiation fees/dues, or engaging in “featherbedding” (making employers pay for work that is not performed)Going on strike duing a 30-day “cooling off” period or during a 60 day period that is ordered by the presidentLandrum Griffith Act of 1959 (Labor management reporting and disclosure act)Increased reporting, regulation of internal union affairsProtects union members from improper actions by leaders through:Monitoring leadershipUnion member bill of rightsThe National Labor Relations BoardAn administrative agency that was created to monitor unfair labor practices and assure that union representation elections are fairThe NLRB has jurisdiction over all employers and employees in labor disputes that affect interstate commerceThere are about 30,000 cases each yearMost are charges of unfair labor practicesUnfair labor practices: actions by employers or unions that impair the goals of the NLRAHearings are held before an administrative law judge (ALJ)The administrative law judge is an employee of the NLRBAfter, the ALJ issues an order which either sets out a remedy or recommends the complaint be dismissedThe order is final unless one of the parties orders an exceptionIf an exception is filed, the appeal is heard in Washington DC by a panel of 3 NLRB membersIf the case is important the entire board may hear an appealIf one party refuses to accept the board’s decision, the case is referred to the US court of appeals for enforcement or review of the orderIn rare cases, the case may go to the US Supreme Court for final reviewPresidents are generally more “pro labor” or “pro management”The presidential appointment to the board can be politically sensitiveUnfair Labor practice complaintsExamples of EMPLOYER conduct that violates the NLRAThreatening employees that they will loose their jobs of benefits if they join or support a unionThreatening to close a plant if employees vote for unionizationQuestioning employees about union activitiesPromising employees benefits if they do not support a unionGiving employees who participate in protecting activities worse assignmentsExamples of UNION conduct that violates the NLRAThreatening employees with the loss of their job if they don’t support the unionRefusing to help employees with grievances who have criticized union leadersEngaging in picket line misconduct, such as threatening non-strikersStriking over issues that are unrelated to employment terms and conditionsNLRB RemediesPosting a notice in the workplaceIssuing a cease and desist orderProviding pay back for lost wagesReinstating dismissed workersIssuing an order to bargain with the unionUnionizationUnionization ProcessRepresentation ElectionsEmployees sign authorization cards to determine whether the union should represent themNeed to be signed by 30% or more to go to the NLRB for an electionBefore the election a campaign is heldThe union tells the workers about the benefits of unionizationThe management tells the workers about the benefits the company provides without a unionUnion certificationAn NLRB agent supervises the electionIf more than 50% vote yes, union certification is grantedThe union is then declared the exclusive bargaining agent for all employeesIf not, the union fails30% can also call for an election to decertify the unionThe NLRB does not permit access to company property by outside organizersAgency ShopsPlaces where the majority of employees vote to be represented by the unionMembers pay union duesNon-members pay agency feesThese are a little bit lowerUnions give this money to support union political activities, including candidates They may do this under strict requirementsRight to work laws: prohibit agency shopsStates pass thesesEmployees have the right to work without joining a union, even if the majority of workers voted for a unionUse of agency fees to support union political activities must be explained, and escrow account for amounts when a dispute is pending about the use of fees for political activitiesCollective BargainingOnce the employees chose a union, it becomes the exclusive bargaining agent for themThe employer must bargain with the unionCollective bargaining: the whole process between the employer and the union from negotiating a contract to administering a contractThey have to set form the terms of the contract for the given time periodmost of these agreements contain dispute resolution clauses (grievance arbitration clauses)keeps the general court system from getting a lot of dispute claimsNLRA requires good faith bargainingThere are certain mandatory subjectsEx) wages, hours, other terms and conditions of employment, etcThey can back up positions with a strike by the union or a lockout by the employerCASE- Teamsters Local Union No. 523 v. NLRBInterstate Brands makes and distributes bakery productsDifferent distribution systems handle different productsThe employer consolidated distributionSales distributors and reps now handled all product linesMeant the union would now represent all distribution workers rather than just some workersRammage had been a Dolly Madison sales rep for 15 years She was not represented by the unionWhen they consolidated, Rammage was not represented by the union, but placed at the bottom of the seniority listThis gave preference to workers that the union had represented beforeRammage was “endtailed” to the bottom of the distribution systemHe lost his regular route and was demotedRammage complained to the NLRB that the union and the employer engaged in “unfair labor practice”The board held in Rammage’s favorThe union appealedHELD AFFIRMEDWhen there isn’t a unit merger, the union and employer aren’t permitted to “dovetail the seniority of employees while endtailing” previously unrepresented employeesThe fact Rammage was endtailed and demoted (because he was not in the union) suggests that the union caused the employer to discriminate against himRammage wonConcerted ActivitiesTo promote productive collective bargaining, congress provided certain activities to be protected:Concerted activities: employer and the union must be able to back up positionsThe union can strikeThe employer can lock out workersEach side can do whatever they want to put pressure on the other side to settleProtected activities: the right to engage in concerted activities for mutual aid or protectionEx) most union organizing effortsEx) refusal to work due to unreasonable hazards or concerns about working conditions that endanger health or safetyUnprotected Activities: threats or acts of violence that are not protectedEmployers can fire for insubordination, disobedience, or disloyalty, unless the reason for the activity is part of a protected concerted activityPrimary boycott: a strike by a union against an employer whose collective bargaining agreement is in questionLegalSecondary boycott: when a union uses economic pressure to force others to stop doing business with an employer who is not directly involved in a primary labor disputeIllegalEmployer Economic responsesEmployers may not retaliate against employees for engaging in protected activitiesBut they do have the right to use some economic pressureThey may lock out employees until the dispute with the union is settledA lockout is usually a defensive moveThis is ok as long as it is an effort to promote settlement of protect the plant or its materialsReplacing employees by non-union workers can be okayIf the collective bargaining agreement expires with no agreement to a new contract and the union calls for a strike, the employer can hire new workers and keep using the existing union workers who crossed the picket line ................
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