I. Introduction - HLS Orgs – Online Community For ...
Employment Law Spring 2012 – Sachs TOC \o "1-3" \h \z \u I. Introduction PAGEREF _Toc196905975 \h 1A.What is Employment? PAGEREF _Toc196905976 \h 1B.Who is an Employee? PAGEREF _Toc196905977 \h 3II. Employment At Will PAGEREF _Toc196905978 \h 4A.Default Rules PAGEREF _Toc196905979 \h 4B.Contract Exceptions PAGEREF _Toc196905980 \h 5C.Tort Exceptions (public policy violations) PAGEREF _Toc196905981 \h 9D.Statutory Exceptions PAGEREF _Toc196905982 \h 11E.Good Faith Limitations PAGEREF _Toc196905983 \h 12III. Employee Speech and Privacy PAGEREF _Toc196905984 \h 13A.Employee Free Speech and Political Participation PAGEREF _Toc196905985 \h 13B.Employee Privacy Rights On and Off the Job PAGEREF _Toc196905986 \h 15IV. Employee Duties & Promises PAGEREF _Toc196905987 \h 19A.Duty of Loyalty and Trade Secrets PAGEREF _Toc196905988 \h 19B.Enforcement and Non-Competition Clause PAGEREF _Toc196905989 \h 20C.Employee Inventions PAGEREF _Toc196905990 \h 22V. Prohibitions on Status Discrimination PAGEREF _Toc196905991 \h 22A.Disparate Treatment PAGEREF _Toc196905992 \h 22B.The Bona Fide Occupational Qualification (BFOQ) Defense PAGEREF _Toc196905993 \h 23C.Disparate Impact PAGEREF _Toc196905994 \h 24D.Reasonable Accommodation PAGEREF _Toc196905995 \h 26E.Sexual Harassment PAGEREF _Toc196905996 \h 28VI. Regulation of Compensation PAGEREF _Toc196905997 \h 30VII. Unemployment PAGEREF _Toc196905998 \h 33A. Unemployment and Unemployment Insurance PAGEREF _Toc196905999 \h 33B. Federal Regulation of Plant Closings PAGEREF _Toc196906000 \h 37VIII. Workplace Injuries & Diseases PAGEREF _Toc196906001 \h 38A. Worker’s Compensation PAGEREF _Toc196906002 \h 39B.Occupational Safety and Health Act PAGEREF _Toc196906003 \h 43IX. Employee Leave PAGEREF _Toc196906004 \h 46A. FMLA PAGEREF _Toc196906005 \h 46B. FMLA V. ADA PAGEREF _Toc196906006 \h 48C. Uniform Services Employment and Reemployment Rights Act of 1994 (USERRA) PAGEREF _Toc196906007 \h 49X. Enforcement of Employment Rights PAGEREF _Toc196906008 \h 50A. Common Enforcement Issues PAGEREF _Toc196906009 \h 50B. Arbitration of Employment Disputes PAGEREF _Toc196906010 \h 52I. Introduction What is Employment?Answer will dictate the degree to which one thinks government intervention is appropriate.Private contract [Hands Off]: Employment is a mutually beneficial private contract between two competent, free contracting parties. We should be skeptical of legal interventions preventing the parties from arriving at their preferred decisionAdkins v. Children’s Hospital: Employment is a contract, and constitution protects freedom of K. Act included wage board to hold hearings and investigate the wages of women and children in various jobs, to examine living standards and determine the wages necessary to maintain women and children in good health and morals, and then to establish minimum wages and made it unlawful for any employer to pay a lower wage in DC, was unconstitutional interference with the freedom of contract of the 5th/14th Amendment’s due process clause. Two sets of policy arguments: Right to enter employment K is essential to laborer/employer, rich or poor. Legal restriction results not in an increase of min. wage, but a loss in employment for the worker. In everyone’s interest to agree to contractual terms they wantEthical right to a living wage plausible, but that doesn’t justify a min. wage because worker’s right doesn’t impose a burden to pay more $. Ethical duty is to pay wages equivalent to the value of the services provided. Selling labor is like selling goods – when purchasing goods, you get what you pay for and not what you need. What’s the difference between employment and the grocer? Relationship of Unequal Bargaining Power [Intervention is Appropriate]: Employment is a contract, but it is animated by unequal bargaining power, so the legislature should intervene to equalize the bargaining positions. Otherwise the worker will be subject to unacceptable conditions.West Coast Hotel Co. v. Parrish: Upholds an act stipulating a minimum wage for women and children in Washington state as constitutional—Adkins is overruled. No freedom of K in the constitution, there are many types of restrictions. Policy considerations: Unequal footing/bargaining power: parties have different interests. Departure from Adkins; given the asymmetry of bargaining power, government intervention is appropriate.Public effect of low wages: public can be negatively impacted by employment contracts. If workers weren’t paid enough, taxpayers would have to support them. In light of the depression: the community is not bound to provide what is in effect a subsidy for unconscionable employers. The community may direct its law-making power to correct the abuse which springs from their selfish disregard of the public interest. See also US v. DarbyThird Party Public: the public is a third party that’s impacted by employment contracts, low wages burden the public, legislature has a legitimate right to interveneWest Coast Hotel Co. v. ParrishPublic Institution [State/public is an involved third party]: The employment relationship should not be construed in private contractual terms; in ways, it is a public institution (the public is a third party so deeply impacted by employment contracts that the contract takes on a public aspect). Government decides as a matter of public policy that people should have certain level of income. One (important) way of getting this income is employment. Views employees as the “fingers of the federal government” enlisted to enforce public policy goalsEgbuna v. Time-Life Libraries, Inc.: It is appropriate for Congress to partner with employers to effectuate public policy, including immigration policy which determines that an employee is “qualified” not based on his ability to work, but rather on his eligibility to workNees v. Hooks: In some cases, like termination for compliance with jury duty, “the will of the community” will override managerial discretion and termination will not be allowed.Novosel v. Nationwide: “The special status of corporations has placed them in a position to control vast amounts of economic power which may, if not regulated, dominate not only the economy but also the very heart of our democracy.” (That is – the form of authority shaping lives in practice is just as often private, so we will take a constitutional claim and make it into a tort claim.)Wilson v. Southwest Airlines: Profit motive is not a sufficient essence of business for the purposes of the BFOQ analysis, thus employers may be required to forego profit in order to advance a social goodAmericans with Disabilities Act: Requires employers to take affirmative and sometimes costly steps to advance the employment opportunities of disabled individuals in accordance with Congressional/public policy. Unlike Title VII, for example, which allows employers to determine whether an individual is “qualified” as they come, the ADA requires the employer to consider what steps can be taken to enhance the ability of applicants and employees to be productive/meeting the justifiable job requirements.Dunlop v. Gray-Goto, Inc.: NO WAIVER for FLSA rights – these are private rights granted in the public interest to effectuate a legislative policy!Compare Gilmer v. Interstate/Johnson – judicial forum can be waived. Procedural waivers are fine, substance cannot be waived.Who is an Employee?The economic reality of employee dependency gives rise to the obligation on the part of the employer articulated in West Coast HotelSecretary of Labor v. Lauritzen: Migrant pickle farmers are “employees,” subject to the protections of the Fair Labor Standards Act (and thus eligible to bring suit to enforce minimum wage, record-keeping and child labor provisions), not “independent contractors” outside of the FLSA’s protections. FLSA distinction between “employee” and “independent contractor” turns on “economic reality” – that is, whether “employees are those who as a matter of economic reality are dependent upon the business to which they render service.” Ignores fact that application of FLSA would put this farm out of business, or the price of pickles go up. If Lauritzen can’t find a business model that meets the standards, it can’t exist An individual may or may not be viewed as an employee depending on public policy considerations/models of employment, regardless of the circumstances of his work Egbuna v. Time-Life Libraries, Inc: An individual with an expired visa is not “qualified to work” as an employee and thus ineligible for the anti-retaliation protections of Title VII for assisting a coworker in a sexual discrimination suitPrivate contracting: the immigration status would be agnostic in the employment bargain Third party public: Congress concerned about the effects that unauthorized immigration has on wage levels for American citizens; if we allow undocumented workers to take jobs and we protect them, will not protect authorized workersPublic: supports this kind of move by Congress. Congress decides who can be employed, who is protected by employment lawsPoint: views of employment might appear to have a particular political valence, but they don’t. Private view might appear to be a conservative view of employment and public/progressive, but w/ this restrictive immigration model, it’s the public model of employment that would allow it and private model that would restrict it II. Employment At WillDefault RulesKey Question: What does employment at will mean in different contexts, does it work and does it make sense? Default rules are the background—consider whether these rules make substantive sense and the implications in terms of incentives for the parties in selecting a particular ruleAt will means can be fired for any reasons, except 1) if you can show contract that says otherwise or 2) public policy/community’s interestsBackground rule (Wood): at-will employment is the background rule unless explicitly stated otherwise. Absent a contrary understanding, employment is terminable without cause and notice. Reasons for termination are irrelevant. Ex. Chicago car dealer employee fired for wearing a GB Packers tie. Perfectly fine. Default rules. General problem: when employer/employee don’t explicitly state what they want a rule to be, when there’s no clear K terms covering the relevant question, the issue is what should a court assume a rule to be? Approaches: Traditional hypothetical bargain approach: court should set the default rule according to what they think the parties would have bargained for. Problem: asks us to assume what we don’t knowEpstein: we know what people want because there are so many at-will contracts out there. Employment at will is expression of free contract. Fairness argument: freedom of K is an aspect of individual liberty; it’s an end in itself, like freedom of selection of marriage partners or religionGiven its prevalence in the business world, those who would abolish the contract at will bear a heavy burden of justifying the infringement on the liberty of both employers and employees who prefer such arrangements. Also benefits both employers and employees by providing a low-cost mechanism for insuring against abuses on both sides. Just as the threat of firing maintains employee discipline, the employee's power to quit is an effective means of limiting employer abuses. Is also informal and self-enforcing; either party can exercise its ultimate power to terminate a relationship which is no longer beneficial without having to resort to expensive litigation.Penalty default approach: pick a default rule that will force the parties to bargain a definite term. Defaults should be designed to give at least one party to the K an incentive to contract around the default rule and to choose affirmatively the K provision they prefer, knowing that the default will be undesirable. Intentionally set the rule as the opposite of what the parties would want – so that the party best positioned to insist on a particular term does so, requiring bargaining and leading to better informed contracts. Under this theory, the default rule should be just cause, so that the employer (party with more info) would need to bargain for at-willOften information-forcing, constructed to force the parties with better information to reveal that information when bargaining for a different definite term. Ex. Employer knows what the rules of discharge are going to be. If employer wants at-will, will have to reveal the information to the employee and negotiate that with the employee, and will get a more specified contract in place How to evaluate a default-ruleSubstantively, do we like the rule itself? Ex. Chiodo – court is concerned about substantive rule. Allow work for 10 years no matter what, or give employer discretion to discharge? Decides that just cause is better for moral hazard reasons Bargaining incentivesDoes it force parties to give up information, bargain for specific terms, avoid problems about courts making up standards? In Chiodo, using a penalty-default rule might be weird substantively, but would encourage parties to bargain for clearer K, so we might actually prefer odder construction Problems with at-will default rule/why parties don’t contract around itLack of information: employees don’t know that employment at-will is the default so they don’t actually bargain around it at all. Employees incorrectly believe that they can only be fired for causeSignaling/Market for lemons: signaling problemEmployee side: don’t bargain around at will because it looks like they’re signaling that they are not actually good at the job (and thus that they reasonably anticipate being terminated under the at-will defaultEmployer side/adverse protection: don’t want to offer job security for risk of attracting employees who need this sort of protection (attracting the lemons above)Deep judicial commitment to at-will rule, despite what the parties decideSkagerberg v. Blandin Paper (MN 1936, pg. 59): “Permanent” employment means “at-will.” The parties couldn’t have actually meant “forever.” Since the term is still vague and indefinite in its actual meaning, it’s unenforceable. So the court still has to come in and re-write the term. Penalty default: if you say permanent, we say at will, force you to bargain more specificallySkagerberg shows commitment to at-will as substantive rule – not necessarily about representing parties’ contractual wishes, because parties seemed to have contracted around at-will Contract ExceptionsFor all exceptions, ask: Do we have an exception, and how do we know when there is an exception? Is there some reason (contractual, tort claim, statute) that default rule doesn’t apply? If we’ve got something other than at-will, what does that mean? What does good cause mean?Valuable consideration: If employee purchases something other than at-will for valuable consideration, then it lasts as long as the employer is in business/has work for employee to do, and as long as employee shall perform the work satisfactorily. Consideration has to be something other than the services s/he provides every day Problems: The court would have to define this ex-post – jury would have to make this factual finding. Fact-finding might be inconsistent and may not specify future guidelines for employers Skagerberg v. Blandin Paper (MN 1936, pg. 59): Court says that exception doesn’t apply to Skagerberg b/c there is no consideration (no extra consideration). Work that Skagerberg performed wasn’t consideration because it was already a promise on the contract – otherwise, there will always be consideration. Giving up an academic position at the Purdue job doesn’t count – will always give up other opportunities to take any job. Buying the house – Skagerberg also needed a house, and it was to his benefitCf. Pugh v. See’s Candies: no longer a requirement, but serves evidentiary function. Something that looked like independent consideration would tell us that parties intended a continuing relationshipExpress agreement Just cause requirement in a K for set terms: in K for set term, court implies a term that allows discharge if the employee doesn’t conform to the usual standards of honest, loyal serviceChiodo v. General Waterworks Corp (UT 1966, pg. 68): Negotiations showed an understanding that Chiodo could not be fired at all for 10 years, even for cause. However, the court reads a just cause requirement into the K for stated term. Assumes the default rule for a K with a stated term – party would conform to usual standards expected of him, and expected to render honest, faithful, loyal service. Court defines minimal standards of behavior, and reads this into a K without this language. Why? Concerned about moral hazard – employee has no incentive to work well if he has a set 10 year employment w/ no just cause. From default-rule perspective, is there a desirable incentive effect? Penalty default/contrary rule: if court reads 10 years as 10 years, it might incentivize employer not to cut such a deal if that’s not what it wants, and also will spell out the actual standards for discharge that it wants and avoid the situation here – court has to make up the standards which a jury has to somehow interpret Court adopts default rule (hypothetical bargains): Substantively good default rule? Yes. But the penalty default probably incentivizes better See also Ohanian v. Avis Rent-a-Car (below): court reads in a just-cause requirement even though employer’s original promise was that he would not be fired unless he screwed up badly. Implied agreement, oral or writtenQuasi-probationary period during which there’s no at-will employment Grouse v. Group Health Plan (MN 1981, pg. 85): Group Health tells Grouse he’s hired, Grouse quits his job, but Group Health later calls and says no job. Court implies a contract in law where none in fact exists. The contract here is presumed to be at will, but Court uses promissory estoppel: Group Health knew that Grouse would have to resign and Court says it would be unjust not to hold Group Health to its promise. This safety period lasts for a period when employee starts. Problem: what standards govern discharges during this period when Grouse has to be employed? What does “good faith opportunity to perform his duties to the satisfaction of respondent once he was on the job” mean? What’s the practical effect?Whatever the standard is, even if it’s satisfaction of the employer – there may be an on the ground difference where employee never shows up and where employee does show up (sociological/psychological matter: more difficult to fire someone once they’re at work)Does Grouse produce real legally enforceable standards for probationary standards? Perhaps Grouse produces illusory standards, but sociological/psychological effects still important From a labor-market perspective: policy wise, we want people to switch jobs. Otherwise, the rule would encourage people to stay at their jobs b/c the employer could terminate your position even when you have received an offer Increases the cost of hiring by the employer – can’t just hire and keep employees on reserve Makes employer relationship at the beginning more stable at the beginning Result of employee’s legitimate expectations as part of employer’s policy statementsHetes v. Schefman & Miller Law Office (MI 1986, pg. 74): At will employment is the default expectation, but an enforceable contract for cause can arise from employers’ policy statements and oral representations, even assurances like plaintiff’s understanding: “I had a job as long as I did a good job. Cf. Veno v. Meredith (PA 1986, pg. 87): employers’ statement that have aspirational qualities have no binding significance. Employer makes vague statements indicating long term employment and co-signs on the loan for his house. Expressing hope, not a promise that the employee can stay or should stay. Comments here are different from the comments in Hetes, in Hetes it’s more specific and enforceable Implied-in-fact (agreement by non-verbal conduct rather than explicit words) good-cause contracts for long-tenured employees Pugh v. See’s Candies (CA Ct. App. 1981, pg. 92): leading case establishing implied-in-fact good-cause contracts for long-tenured employees. The court looks to the totality of the relationship to determine whether there’s at-will presumption is defeated. (No longer requires independent consideration.) Include personnel policies or practices of the employer, longevity of service, actions or communications by employer reflecting assurances of continued employment, industry practices. Evidence to show that D intended continued employment: duration of P’s employment, commendations and promotions he received, assurances he was given, employer’s acknowledged practices, and totality of parties’ relationship Potential problems: historical policies would burden the managers of the future that someone couldn’t be fired except for cause. Would also worry that company would start firing for no cause to establish that precedent, or change its official company policy. Court’s catch-22. Upshot: if employer’s have a trend of no firing except for cause and they’re stuck with it, that’s ok. Burden shifting regime: P bears burden that he was fired w/o good cause. Then employer has to provide a good cause determination. P has the opportunity to show that the reason offered by the employer is actually pre-textual Personnel ManualsTermination section of a manual describing just cause can be exclusiveWolley v. Hoffman La-Roche (NJ 1985, pg. 100): Employees cannot be fired w/o just cause if it’s not listed in the manual as one of the reasons you can be fired, absent a clear and prominent disclaimer. Given the background rule of at-will discharge, this list is meaningless unless it constrains the employer in some way. Reliance argument- context of the manual distribution shows that it should be binding. Employee w/o individual contracts are given a document that purports the company’s policies, and the manuals are widely distributed. The fact that the company can change the manual at any time—this just shows that company wants to keep the manual up to date and relevant. Court attempts to do a contractual analysis and says that there was acceptance (manual forms a unilateral contract, employees make it binding by continuing to work); indefiniteness concerning other terms of employment (wages, duration, hours of work) doesn’t prevent enforcement of the job security/termination clauses. Context of the distribution of the manual created reliance: presume reliance, don’t actually have to show. If we do a strict contractual analysis, some employees will be protected by employment manual and others will not be protected Policy: manuals not requiring that individual employees rely, but rather trusting that all employees have paid sufficient consideration in the way of lower wages, etc. in exchange for the manual’s guaranteesNote 1, pg. 109: if an employer offers job security in manual, cautious types would be willing to accept a lower wage. If the employer must pay all workers similarly, this low-wage, job-security package may be the market price Once a contract is formed, party can’t modify unilaterally. Employees must accept the offer before it’s bindingDemasse v. ITT Corp (AZ 1999, pg. 110): as with other contracts, an implied-in-fact contract term can’t be modified unilaterally. Once a contract is formed, need 1) an offer to modify the contract, 2) assent to or acceptance of that offer, and 3) consideration in order to modify the contract. Otherwise, employment contract is illusory promise (besides reputational concerns, other soft concerns that may prevent employer from changing the manual at any time) Substantive concern is that the K is of no benefit to the employee, instead of saying “you’re fired,” can say “I’m changing the rule, and now you’re fired”Court says that continuing to work is not acceptance – that would require an employee to preserving existing rights by quitting As opposed to something concrete, Court says that employee has to affirmatively assent – that the terms need to have been bargained forManuals as binding agreementsImportant because they set the rules for the workforce. Is there an inherent problem with a rule that calls on the employer to bargain with individual employees rules for the workforce as a whole? Theoretically incompatible? Tension between K that applies to a group as a whole – but the premise that K is an individual agreement? Possibility: trying to buy off people when employer wants to make a change to the personnel manual, but this may not be a good idea Or democratic process like representative body or vote Administrative law procedures – ex. notice & comment. Maybe dresses up the illusory nature of the contract, but doesn’t actually change the rules? Because there’s no enforcement mechanism? Problem: how do we know what good job/just cause means? Written employment manual could provide some insight Even if we don’t know for sure what it means to do a good job, we do know that it’s not up to the employer – objective “good job” means that another decision-maker will evaluate the reasons for the discharge and decide whether or not they were good reasons Problem with making the employer prove (Pugh – burden shifting) is that it’s a big burden, and an objective fact-finder has to get involved Defining good cause shifts from employer to court Pugh: court says it depends on the relationship, no standard as to all contracts, definition of good/just cause will vary depending on the relationship and on the contract A fair and honest cause or reason, regulated by good faith on the part of the party exercising the power, while respecting managerial discretion. Can’t mean something so strong that it interferes with managerial discretion Look to relationship between the two parties to fill out the definition of good cause Does it depend on what the employee actually did, or what the employer thinks is true? Ex. if employer thought employee was stealing money, but employee did not in fact steal? Just cause includes business necessityOhanian v. Avis (2nd Cir. 1985, pg. 76): Original promise was that Ohanian would not be fired unless he “messed up badly.” D fired P, P sued for damages in lost wages and pension benefits from D’s breach of lifetime employment contract. Court determines it’s possible to terminate with just cause (although this is not the promise that Ohanian received originally) while not breaching the contract because of business necessity. Problem: what should be the standard for measuring “business necessity”? Employer will almost always have a reason to justify business necessity. Ex. we found someone with better training, found someone younger, re-structuring company, etc. This would get us back to: business can do anything it wants – watering down of just cause to at will Perhaps could limit to: only if somebody’s job has been obsolete, only if they’re going out of business Look at role of negotiations: more likely that Ohanian gave up something for this promise, shows evidence of consideration and that we would really want to enforce the oral contract See pgs. 197-201. Definition from Montana statute (pg. 197): “good cause” means reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer’s operation, or other legitimate business reason. See also Model Act, pg. 197Tort Exceptions (public policy violations)If employer sets up a choice that we find unacceptable, then the employer is liable in tortAsserting legal right (filing worker’s comp claim)Refusing to do what the law requires (serving on jury)Nees v. Hocks (OR 1975, pg. 119): At will means can be fired for any reasons, except 1) if you can show contract that says otherwise or 2) public policy/community’s interests. Community interest of serving on juries is sufficiently important that employer has to compensate for discharge. Jury duty high on scale of American institutions and public obligations Can’t be a private contractual view of the employment system. In third party public viewWhich community interests are we talking about? Some community interests are so important that an employment relationship shouldn’t be able to interfere with them Ex. West coast hotels – community burdened when people don’t get sufficient income because government would have to subsidizeIs there an appropriate way for tort to intervene here? It can’t be that discharges that affect ANY kind of interests because any discharge could be a tort. What about not receiving healthcare benefits? Which interests should give rise to tort liability? Who – lots of private actors that could make it difficult for you to perform jury duty. Prof can schedule exam during jury duty, or spouse who can’t take a day off from work to take care of the kids. Why not allow tort claims on this type of relationship that allows you a tort to sue your employer, even though you have no contract?Refusing to do what the law forbids (perjury)Retaliatory discharge for employee’s cooperation with law enforcement investigation against her employer enforcement investigation against her employer. Purpose is to make sure that society’s interest in seeing its public policies are carried outBalla v. Gambro (IL 1991, pg. 135): A cause of action for retaliatory discharge requires that employer discharged the employee in retaliation for the employee’s activities, and that the discharge is in contravention of a clearly mandated public policy. However, no retaliatory discharge for lawyers for two reasons: 1) public safety—purpose of this tort is to make sure that society’s interest in seeing its public policies are carried out. Here, public policy is already protected because Balla has no choice but to report under his ethical obligations; 2) attorney-client privilege – allowing to sue for discharge would make employers less willing to turn to their counselCost-shifting argument: attorneys would shift costs of public policy on employer, rather than on the lawyer? Why is the burden here on the lawyer – why lawyer has to suck it up and get fired? Why shouldn’t tort shift this kind of tort to the employer? Two competing public policy: 1) patient safety, and 2) attorney-client relationship. Why is court choosing attorney-client relationship? CA: everyone has the tort of retaliatory discharge; MA: no tort of retaliatory discharge; IL: tort of retaliatory discharge, except for lawyers; NY: no tort of retaliatory discharge, except for lawyersPublic interest is not public policy – Wright v. Shriners Hospital (MA 1992, pg. 128): fired for reporting hospital staffing problems. Other states make it actionable if it relates to reporting to state agencies, not internal reporting. No public policy in the nursing ethical code b/c court has never held that a regulation governing a profession is a source of public policy that should modify at-will. Relinquished to legislature the role of defining public policy—there is no statute that clearly expresses a legislative policy to encourage nurses to make an internal report. Dissent says that given the public interest in good medical care, it has to be good public policy for employees to report bad care. Categories of public interest and public policy are the same. “The court must determine the boundaries of public policy by looking not only to statutory law, but also to administrative law, judicial opinions, and even professional codes of conduct (where these codes serve a public interest, not merely the interests of the profession).” But this rule is not very administrable, and it’s too vague (majority sets out clearer rule) Move the court could have made in this case: legislature didn’t give a cause of action or whistleblower protection, can read from the legislature this protection. The legislature can always correct if that’s not something it wants Severe emotional distress: two types (most cases thrown out to a burdensome standard)Intentional or reckless infliction of severe emotional distress w/o bodily injury, the plaintiff must prove four elementsAgis v. Howard Johnson (MA 1976, pg. 159) fired alphabetically b/c employer wanted to weed out thief; P sued for intentional/reckless infliction of severe emotional distress without resulting bodily injury (tort). Test: 1) D intended to inflict emotional distress or that he knew or should have known emotional distress was likely result of conduct; 2) Conduct is extreme and outrageous beyond all possible bounds of decency, utterly intolerable in civilized community; 3) Causation; 4) Emotional distress was severe and of a nature that no reasonable man What is outrageous? That the firing was arbitrary, firing was in public, use of threat to find out who was stealing? Infliction of emotional distress was not intentionally targeted at Aegis, it was targeted towards the thief These reasons are inconsistent with at-will rule (employer wants to ferret out crime, can fire for any reason). If the at-will rule means that reasons don’t matter, but the manner does matter, that line becomes very blurry and problematic Intentional conduct, the very purpose of which is to inflict psychological and emotional distressNon-intentional conduct resulting of the breach of an obligation that attaches to the relationship between the partiesBodewig v. K-Mart (OR 1981, pg. 162): P sued D for IIED. Employer made P do a series of humiliating acts, including disrobing to prove that she didn’t steal customer’s money. No wrongful purpose, but rather the breach of obligation is due to a special relationship—employer has authority over employee. Affects tort liability b/c idea that an employee or a tenant can’t simply end an abusive relationship or is much less able to end the relationship than as between strangers – more protective, won’t require intentionality b/c the employee can’t just walk away from the relationship. Liability can be imposed if it was beyond limitations of social toleration and recklessness based on the predictable reactions of P If hold that quitting is enough, would be asking between keeping their jobs and submitting to the bad conduct. Essence of the tort is that this is not a choice we want employees to have to make. Court is saying: if the employer sets up a choice that we find unacceptable, then the employer is liable in tortHigh bar: employer’s conducts must be beyond the bounds of social toleration, so extreme, utterly intolerable, would have to exclaim “outrageous” under this set of facts. This case is clearly outrageous, but most are borderline and are thrown out Interests that we’re trying to balance: have to allow broad range of managerial style, afraid of over-regulating. Throwing chairs, cursing, yelling, fires people in order to intimidate other people Statutory ExceptionsCourt will consider broad purposes of statutory enactments in determining who is eligible for protections The most intrusive exceptions to the at-will rule FLSA anti-retaliation clauseValerio v. Putnam Associates (1st Cir. 1999, *pg. 20): sued under FLSA anti-retaliation clause and MA law, claiming that she was fired for requesting overtime pay. No luck on state tort claim b/c MA doesn’t recognize common-law cause of action when a statute has already vindicated public policy. Private tort remedy rationale – unless we recognize the tort, there’s no other way to vindicate public policy. FLSA’s anti-retaliation provision protect workers who have filed complaints with the employer, not just a formal administrative or judicial complaint. Not all abstract grumblings count as filing a complaint – ex. group of garment workers who hold a protest and street theater. If protest activity is not protected by the statute, then would this be available under MA law? Should state have to cover what’s left out of a federal or state statute? One principle: pre-emption, federal statute in the field and chooses not to protect certain conduct. State law that does allow a claim might be barred under pre-emption claim. If there’s a statute, remedy is through the statute. If there’s a statute but it’s not protected, then no protection under state law. But if the legislature is silent on the question, perhaps the Court would allow it? (Or not?) Can’t be fired for union activity under 29 USC 158Schaeff v. NLRB (DC Cir 1997, *pg. 26): NLRA makes it illegal to fire employees because they’re trying to organize. In absence of statutory protection for those who tried to organize, many employers would try to fire their workers – b/c it makes good economic sense to discharge employees in order to prevent unionization. Major statutory exception to the employment at-will doctrineIncursion into managers’ ability to fire workers when it wants to, not for arbitrary reasons, but b/c employer believes that unionization is not in the interest of the company or that it’s economically unfeasible If a state has a drug testing statute that prescribes mandatory guidelines for testing, the statute gives at-will employees protection from discharge when they employers fail to comply with the mandatory requirements See Sanchez v. Georgia Gulf Corp. (1st Cir. 2003, pg. 275) in the privacy section Can’t be discriminated against (demoted, transferred, harassed, etc.) or fired for exercising a right under OSHA OSHAct, 29 U.S.C. §660(c) Discharge or discrimination against employee for exercise of rights under this chapter; prohibition; procedure for relief. (1) No person shall discharge or in any manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter or has testified or is about to testify in any such proceeding or because of the exercise by such employee on behalf of himself or others of any right afforded by this chapter.Whirlpool Corp v. Marshall (US 1980, pg. 1065): 11(c) protects employees who file complaints, institute proceedings, or testify in proceedings under ore related to the act. Rights include participating in enforcement proceedings, requesting information from OSHA, being interviewed by the Sec’y in the course of inspections, requesting an inspection by filing a complaint. Good Faith Limitations Implied contractual covenant of good faith Fortune v. National Cash Register (MA 1977, PG. 171): D terminated before receiving his full commission. NCR did not breach the express terms of the K and NCR had the right to fire Fortune at any time, yet Fortune is suing on K theory, and judge submits to the jury. Two things: 1) court making sweeping statements about implied covenant of good faith as a general K principle; 2) yet doesn’t want opinion to speak broadly – could just be about firing before employee gets bonus payments. Fact that he worked for NCR for 25 years and was fired after obtaining a $5m order persuades court that it was in bad faith. If there’s an implied covenant of good faith, at-will rule is at least substantially limited. Does this lead us with good cause and no cause (whatever no cause means)? Also, how to define bad faith? Is bad faith coterminous with good cause? Court is unwilling to address this question. Court is “balancing the employer’s interest in running his business and the interest of employee in maintaining his employment.” At odds w/ at-will rule, which has no inherent concern about the interest of the employee in maintaining his employment Epstein: Court did not try to understand the structure that it wanted to condemn. In this case, turned out that the firm didn’t keep any of the commission, so the only question was whether it had to pay this twice. However, Epstein does indicate that there’s a possible breach of good faith where a strategically timed firing allowed the company to deprive a dismissed employee of the benefits due him upon completion of performance. Scalia also says that where a contract allows the employer to change a commission structure or sales quota at the employer’s sole discretion (and subsequent fires employee), duty of good faith may be violated. III. Employee Speech and PrivacyEmployee Free Speech and Political ParticipationEmployment decisions cannot be based on party affiliation for government employees, except when showing that party affiliation is an appropriate requirement in order to do the job (ex. policymaking) Rutan v. Republican Party (US 1990, pg. 206): IL gov created a special agency to support the Republican party – looking at whether applicant voted in republican primaries, donated money, etc. Since the employer is the government, the constitution provides another restriction on what the employer might do. Court says promotions, transfers, and recalls after layoffs based on political affiliation are an impermissible infringement on first amendment rights of public employees, except when party affiliation is an “appropriate requirement” (policymaking and confidential positions). Amounts to coerced belief - means that state is interfering with employee’s livelihood. Don’t want the state to impose certain choices on to you. If the government as an employer can say – you must choose between this job or political freedoms, that’s an unacceptable choice. Is the court right to reject the difference between discharge and hiring? How do you analyze whether these choices are acceptable? Based on subjective belief?Scalia says that it’s a hypocritical opinion. Judges are always chosen by their own party. Substantive problem – another vision of what government should be like. “Government depends on party strength, which depends on loyalty, which depends on giving jobs to party affiliates.” Just because these judges believe in this merit-based civil service structure (rather than patronage system) doesn’t mean that it should be constitutionalized Middle ground: Perhaps the exception to the rule allows us to get some patronage while preserving 1st amendment speech A government employer’s interest in managing must be balanced against employee’s interest in citizen/unofficial speech – since a government employer controls job-related speech, employment claims cannot be constitutionalized Garcetii v. Ceballos (US 2006, pg. 213): P a deputy for DA office and expressed concerns about the legitimacy of a search warrant. Was reassigned and transferred and filed suit that retaliation is violation of his 1st amendment rights. Balance of employee is a citizen commenting on matters of public concern v. government’s interest as an employer in promoting efficiency of the workplace. 1) Question is whether the employee is speaking as a citizen on matters of public concern. If no, then no 1st amendment right. 2) If yes, then did the government have an adequate justification for treating the employee differently? When public employees make statements pursuant to their official duties, not speaking as 1st amendment, constitution doesn’t protect them. Court did not need to go to second question Policy rationale – employer made the job and gave you the chance to exercise official capacity, so restriction on this is just a restriction on your job duties, not your duties as a citizen. 1st amendment gives you rights as a public employee, but it doesn’t allow constitutionalizing the grievance. Kennedy says that we’re not going to say that anytime a government employee has a problem with a policy, that you therefore have constitutionalize rights. These are run of the mill employer decisionsCourts may imply that employee speech is protected in the private sector (via tort of wrongful discharge) Novosel v. Nationwide Insurance Co. (3rd Cir. 1983, pg. 225): Nationwide asked employees to participate lobby. P fired for refusal to participate, files for tort of wrongful discharge. PA says it is a cause of action when it abridges a significant and recognized public policy. A “clearly mandated public policy” is one that “strikes at the heart of a citizen’s social right, duties, and responsibilities.” Freedom of expression is the public policy involved, can be derived from federal or state constitution – legislatures, judges, and constitutions can be source of public policy. (Not just statute.) 4-part inquiry: 1) Whether b/c of the speech, employer is prevented from carrying out his responsibilities; 2) Whether speech impairs employee’s ability to carry out his own responsibilities; 3) Whether the speech interferes with essential and close working relationships; 4) Whether the manner, time and place in which the speech occurs interferes with business operationsUse balancing test factors: (a) the nature of the actor’s conduct; (b) the actor’s motive; (c) the interests of the other with which the actor’s conduct interferes; (d) the interests sought to be advanced by the actor; (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other; (f) the proximity or remoteness of the actor’s conduct to the interference and (g) the relations between the parties.Problem: Breadth/vagueness. Know what filing a worker’s comp claim means, vs. freedom of political expression – harder to determine what this meansHow court justifies: public employee cases not confined to abuse of state authority, but also with the “distortion of the political process” that occurs when economic power is brought to coerce citizens to political action. Public policy is implicated whenever power to hire and fire is used to dictate employment terms. Economic power, which takes the form of ability to discharge, should not be employed with the employee’s freedom to participate in public discourse, whether or not employer is public/private. Does Citizens United overrule Novosel? Maybe could argue that the corporation as an entity has the ability to spend all the money they want in political process, but not have the ability to coerce their employees to participate in the political process in a certain way Employee Privacy Rights On and Off the JobPrivacy is very broad – encompasses office searches (O’Connor, Kmart), Brunner/Rulon-Miller, drug and personality testing, defamation 4th amendment: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.Employee has a limited privacy right in workplace (where government is employer) and thus employees may be subject to search of personal belongs/space under circumstances O’Connor v. Ortega (US 1987, pg. 239): hospital officials entered P’s office to investigate charges against him. P alleged a violation of 4th amend right to privacy; court rejects the argument that there’s no reasonable right of privacy in the workplace. 2 part inquiry: 1) does employee have reasonable expectation of privacy in the workplace? Have to distinguish between who it is that’s doing the searching. WRT police – employees have this right of privacy. By a supervisor –individual case-by-case, depends on the circumstances. In this case, has a reasonable expectation of privacy b/c of sociological factors: he has worked there for a 17 years, doesn’t share his desk and file cabinets, puts his personal effects there; if yes, then 2) balance invasion of employees’ legitimate expectations of privacy against government’s need for supervision, control, and efficient operation of the workplaceProblem: Is it realistic to expect that employees should leave things at home? Theme=is it possible to separate the spheres of lives into public workplace/private? Should the 4th amendment apply when the government is acting strictly as an employer? Ex. when you’re working at a public hospitalMaybe government is different b/c it’s symbolic, leader, sets an example for other employers, creates some type of standard (but Wal-Mart is too) Government is different b/c it’s public and it’s taxpayer financed Government is different b/c it never just acts as an employer. It always is acting as the government writ large – are there practical examples of this? Private employersKmart v. Trotti (Ct. App. TX 1984, pg. 245): Employer searched through locked locker to find stolen goods. Sues under tort– invasion of privacy. TX defines intentional intrusion as one that’s highly offensive to a reasonable person (Novacel – PA court looked to public sector cases and statutes to find this. Instead, TX looks to the common law instead). Possible that a jury could find violated right to privacy. Fact that this was her own lock, not the employer’s lock, and employer didn’t have nor ask for the combination or a spare key, created a reasonable expectation of privacy that was violated when she came back and saw her belongings scattered Policy: Is there a difference between the invasion of privacy tort standard and the 4th amendment constitutional standard? Should the invasion of privacy tort track the 4th amendment? Employers may invade outside sphere of outside activity/relationshipsDischarges predicated on conduct taking outside of work (Brunner, Rulon-Miller) Concern: whether power of discharge can be used to control what the employee does in her personal/political life. Boils down to whether employee’s conduct in non-work sphere impacts performance in the work sphere. If relationship with Blum actually harms Rulon-Miller’s ability to do her job, then the discharge is OK Tension w/ at-will: employer will have to show something that looks like just cause. If you don’t require employer to make this kind of showing, then employer can fire for what employee does after work. If you do require, then creating another exception to the at-will ruleIn litigation, P will sue in tort claiming that the discharge is against public policy. Whatever reasons for the discharge, employer’s best/only defense: prove that P was fired for her at work activity, or that it impacted workPolicy: ultimately, is it more important to offer protection for off work activity, or to protect the employer’s prerogatives under the at-will rule? How to decide? By legislature? Leaving it up to the courts in deciding tort claims to make the rule? Brunner v. Al Attar (Ct. App. TX 1990, pg. 257): Suing for wrongful discharge – termination based on her decision to volunteer at AIDS clinic, based on the public policy exception. TX recognizes only 2 exceptions to at-will exception: termination for failing to perform an illegal act, and fired b/c employer doesn’t want to pay for pension fund. Court refuses to make another exception Policy: idea of work sphere and private/life sphere – where does this idea come from? Does it constitute an appropriate legal rule for regulating the employment relationship? What’s the legal basis for this sphere of separation? Again setting up a choice, exercising economic power in a way that interferes with her decisions in the life sphere and the private sphere. Can’t condition employment on private life. Like Novacel. Areas of an employee’s life where employer has no legitimate interestHow does this affect the at-will rule? (Just cause v. public policy exception to at-will?) Is it like Fortune and good faith rule? Are we talking a reason off the table? Cf. Rulon-Miller v. IBM (Ct App. CA 1984, 261): Employee terminated after telling manager she was dating someone working at competitor. Wrongful discharge claim resolved on contract claims—employee could reasonably rely on policies for job protection (Watson memo, handbook). Court reads into this a right to privacy and right to do what you want off the job, unless there’s some significant on the job repercussions. No conflict of interest in her case. IIED tort claim: conduct was extreme and outrageous. Problem is that Callahan says “I’m making this decision for you.” Conduct was intended to emphasize powerlessness to assert her rights as an IBM employee. Debilitating, human oppression. A different type of powerlessness than normal at-will relationship. Perhaps it’s a gender dynamic issue, male superior telling female employee about her romantic lifeEmployees may be subject to drug testingSkinner v. Railway Labor Executive’s Association (US 1989, *pg. 31): Upheld reg that RR would do blood and urine testing following a train accident. 4th amendment challenge: unreasonable searches and seizures. While this is a search, reasonableness depends on balancing b/w individual v. government interest. No individual suspicion needed b/c protections of independent medical facility, non-intrusive, commonplace tests, administered by professional. Less privacy b/c heavily regulated industry. Court downplays each individual element. Government interest: deterrence effect. Cf. Sanchez v. Georgia Gulf Corp. (1st Cir. 2003, pg. 275): State drug testing statute prescribes mandatory guidelines for testing, which requires review by medical officer– failure to comply defeats the statutory purpose and thus the standards are mandatory. If arguing that employer must have a good faith reasonable suspicion for firing you for doing drugs – what legal rule does this come from? Don’t even have this in the 4th amendment (reasonable/good faith suspicion). How does constitution get us into the private sector? Novasel gets us there, but pretty tenuous. Good faith requirement from Fortune, but this is a narrow holding. Also, note that this means LA’s drug-testing statute gives at-will employees protection from discharge when employers do not comply with the statute’s mandatory requirements (see statutory exception to at-will doctrine) Compare with the common law approach (pg. 279): if an employee refuses to take a drug test (and statute doesn’t permit employer to take disciplinary action), the employee must make a choice: take the drug test and litigate its invasiveness later or refuse to take the test, retain privacy, but lose the job Negligent hiring/personally tests for potentially dangerous employeesThatcher v. Brennan (SDMS 1986, pg. 297): P sues employer for negligent hiring. To succeed on a claim, P has to prove that 1) employee had propensity for violence, 2) company knew or should have known and 3) in disregard of this information, negligently hired or with callous disregard hired him. Employer did not know/shouldn’t have known that Brennan had a propensity for violence. Personality results don’t put D on notice of violence tendencies – aggression is not the same as violence, stress that Brennan didn’t engage in any violence during 2 yearsIf we allow for negligent hiring, what’s the impact? Employers might be more reluctant to hire those who have personality issues on the test. Worry that if employers are on the hook, may not hire those who are disabled—picking up too large a swath of peopleShould employers give tests to employees who have to enter people’s homes? Southern Bell (pg. 302): Court says this requirement would be infringement on first amendment, right to privacy. Is there a constitutional issue here with regard to private employers? If not, should there be a common law tort? Defamation/conditionally privileged information. Answers the questions: what can employers say? Defamation: communication that harms the reputation to lower him in the community’s estimation, unprotected by 1st amendment. Not all defamation is actionable it is privilegedPrivileged: defendant is acting in furtherance of some interest of societal importance, which is entitled to protection even at the expense of uncompensated harm Absolute privilege: gives complete protection without any inquiry into D’s motives (judicial officers, legislative proceedings, executive officers) Conditional privilege: communication of legitimate common interest. Common interest: policy that one is entitled to learn from his associates what is being done in a matter in which she has an interest in common. Zinda v. Louisiana Pacific Co. (WI 1989, pg. 309) Employer published a notice that P was fired for falsification of employment forms. Notice reached his wife’s hospital and co-workers read about it. P brought defamation and invasion of privacy. Employees have a legitimate interest in knowing why an employee was fired, employer has an interest in maintaining morale and quieting rumors that can disrupt business. Privilege can be abused if any one of the following causes a loss of privilege: 1) D’s knowledge or reckless disregard as to the falsity of the defamation matter, 2) defamatory matter is published for some purpose other than the purpose the privilege is given, 3) publication is made to some person not necessary for the purpose of this privilege, 4) publication includes defamatory matter not reasonably believed to be necessary for the purpose, 5) includes unprivileged matter as well as privileged matter. Zinda challenged #3. Court: employer can use a method of publication that results in incidental communication to those who don’t have the privilege; it’s often impossible to communicate those within the privilege w/o incidental outside communication. Any incidental publication not sufficient to constitute abuseSachs: Why shouldn’t Louisiana Pacific be required to label something as confidential? Why weren’t they held liable for not attempting to restrict the information? Maybe workers need to know why others are fired – put on notice of certain actions. For transparency What if the employer was wrong, and Zinda had not falsified his health records? How sure does the employer need to be before publishing this information to others? Does an employer have an obligation to tell employees why someone is fired? Cf. Sigal Construction v. Stanbury (DC Cir. 1991, pg. 314): Littman gave a reference for Stanbury but had never worked with him. D argued that Littman’s statements were subject under the same conditional/qualified privilege. P’s claims that Littman acted in reckless disregard, need to show 1) no facts regarding Stanbury’s work, can’t trace to anyone w/ personal knowledge; 2) didn’t tell the source of statements; 3) told Janes that he in fact had worked for Stanbury. Court says scuttlebutt/gossip is an illegitimate source of information. P sued for defamation. Court says reckless disregard is limited to an office gossip situation where the recommender 1) has conveyed information which cannot be traced to anyone with personal knowledge of the employee whose reputation is at stake; 2) has not qualified his statements by disclosing the nebulous source of his information, and 3) has led the prospective employer to believe he has worked on a project with the employee and thus has first-hand information. Why protect this type of privilege? Employers want to be able to get honest feedback and evaluations about employees. Employees who do a good job also want to protect – expedites the hiring processBut Court thinks scuttlebutt/gossip is an illegitimate source of information. Gossip may reflect stereotypes about a particular employee. Less problematic: I’ve never worked with him, but I’ve heard throughout the office… (more qualified) But should we allow this less problematic construction? Problem is that some rumors are based on stereotype, some rumors are valid. But allowing this rule would let in the bad with the goodCounterrule: Gossip may reflect stereotypes. Recommendation would have to be based on something objective, if we think that nobody has an interest in rumorsA former employee can bring suit against an employer for retaliating (providing bad references) against employee for filing Title VII claimRobinson v. Shell-Oil (US 1997, *pg. 40): Shell fired Robinson, who filed a charge with the EEOC alleging that he was fired for his race. While pending, P applied for a job with another company. That company contacted D for an employment reference. P claims that received a negative reference in retaliation for his having filed the EEOC charge. P sued under 704(a), alleging retaliatory discrimination. Question: does the term “employees” in Section 704(a) of Title VII of Civil Rights Act include former employees, so that P can bring suit against former employer for postemployment actions allegedly taken in retaliation for filing a charge with the EEOC? Court says yes—no blacklisting. Anti-retaliation reaches conduct where employee asserts rights and then can’t get a job anywhere else because of bad recommendations from prior employer Policy: excluding former employees from 704(a) would allow threat of postemployment retaliation to deter victims of discrimination from complaining to the EEOC, and would provide a perverse incentive for employers to fire employees who might bring Title VII claims. Purpose is to maintain unfettered access to statutory remedial mechanisms IV. Employee Duties & PromisesDuty of Loyalty and Trade Secrets Background: who should bear the costs of training and productivity? 2 categories of employee training1) Specific training: only valuable to the particular job. Because these expenses will be recouped, employers should be willing to pay for these expense in exchange for slightly lower wages VERSUS 2) General training: valuable to many employers, which employers will not be willing to pay for because if it did an employee would be able to leave immediately to an employer willing to pay the full market wage.Key distinction for courts: (1) employment restrictions that protect employers when they disclose valuable information to employees or make expensive investments in training and (2) restrictions that prevent employees from using general on-the-job training that they have already paid for, so employees pay for this training in the form of lower wages than would be received otherwise.At will employees are subject to the duty of loyalty Common law of the agent not to complete with the principal concerning the subject matter of his agency, limited by society’s interest in fostering free and vigorous economic competition. To accommodate tension b/w honesty and fair dealing and economic competition, employees may prepare or make arrangements to compete with their employers prior to the termination of the employment relationship without breaching their fiduciary duty of loyalty, but Pre-termination solicitation of customers is not preparation and violates the duty Pre-termination solicitation of co-workers (even where unsuccessful) may violate the duty depending on the overall nature of the employment relationship, the impact or potential impact of the employee’s actions on the employer’s operations, and the extent of any benefits promised or inducements made to co-workers to obtain their services for the new competing enterpriseProfitability is irrelevant – the question is whether employee acted solely for the benefit of employer or competed w/ employer, giving due regard to right to make preparationsCompensation: employee not entitled to any compensation or bonus `during breach, even though services may have been properly performed Jet Courier v. Mulei (CO 1989, pg. 332): Competing interest – duty of loyalty vs. the value of free and vigorous competition. So active competition is not ok, but preparing to leave is ok. Duty of loyalty in the agency relationship (agent must act solely for the benefit of the principal in all matters connected with his agency) greater than the duty imposed on persons by tort law to refrain from wrongful interference w/ contractual relations. If Jet’s failure to pay Mulei bonus was a breach, Mulei could have left. But he didn’t renounce his agency/employment relation, so he had to continue relationship w/ duty of loyalty. 1) Pre-termination meetings w/ customers: you can tell current customers that you’re going to leave, but soliciting customers is not ok; 2) Pre-termination meeting w/ Jet employees: soliciting co-employees to join him is breach of duty. Policy Considerations: Is the duty of loyalty consistent with at-will employment? Could say yes, because at-will rules have to do with discharge, and duty of loyalty has to do with what happens before discharge. Before you’re terminated, can have substantive duties. Could also say no, because the duty of loyalty is asymmetric. Employers demanding a lot from an employee In confidentiality agreements including non-disclosure of trade agreements, court may enjoin the “actual or threatened misappropriation of a trade secret”Balancing protection of trade secrets and commercial innovation (employer’s interest), the public interest in free and open competition (societal interests), employee interest in making a living (employee interests) Pepsi v. Redmond (7th Cir. 1995, pg. 345): based on IL trade secrets law. Pepsi not alleging that Redmond already disclosed secrets, but that if he takes the job at Quaker, he will inevitably disclose trade secrets. Redmond can’t help but to rely on what he did at Pepsi – it’s not that Quaker will copy Pepsi’s move, but it’s going to adjust their moves accordingly. Having a new job is not dispositive, but plaintiff must demonstrate that a defendant’s new employment will inevitably lead him to rely on plaintiff’s trade secrets. Court grants a temporary injunction. Court balancing employer’s interest (protection of trade secrets) and society’s broader interests in free and open competition, along with Redmond’s ability to make a livingPolicy: Should Redmond be entitled to a job during this time period? Does Pepsi owe him a job? If not, what effect would the injunction have on future Redmonds? What’s society’s interest in competition/effect on high ranking employees more generally? Redmonds would be out of work in the meantime Middle ground – the hiring firm (Quaker) can pay for this period – signing bonus, wages and salary to go up, etc.These cases turn on statutory law and common law, but many are contractual – covenants not to competeEnforcement and Non-Competition ClauseAlternative to the common law of trade secrets or duty of loyalty to protect companies investment in workersGeneral knowledge, skill, or facility acquired through training or experience belong to the employee. The fact that these skills were acquired during the employment does not, by itself, give the employer a sufficient interest to support a restraining covenant Rem v. Logan (OR 1977, pg. 355): P signed provision in K that for period of one year after termination he wouldn’t compete with Rem. D was one of two or three certified welders and was P’s best welder. P went to work at competitor. Only information pertaining specifically to employer’s business is sufficient to justify a non-compete clause. If it’s general knowledge acquired through training or experience, this doesn’t give rise to an employer interest sufficient to enforce a non-compete clause. Burden on the employer to establish the existence of trade secrets information, otherwise covenant not to compete will not be enforced. Logan breached contract, but had no firm-specific skills. Court takes a contract case and turns it into a trade secrets case – the actual contract provision is irrelevant. Difficulty in these cases is drawing the line b/w general training and specific training w/ imparts information pertaining especially to the employer’s business If this were treated as fully enforceable, Logan can 1) take the job with REM, where he knows that he can’t work for a year afterwards or 2) not take the job with REM. Is this a legitimate choice? Maybe not if there’s no other job available to him, and he has to accept this contract. But if that’s right, why would we enforce any of the terms of his employment contract?Breach of non-compete does not impose liability automatically. Covenants subject to an overall reasonableness test in light of public policy considerations which militate against sanctioning the loss of a man’s livelihood. Fact dependent inquiry concerning the territorial extent, the temporal reach and the substantive restrictionsKarpinski v. Ingrasci (Ct. App. NY 1971, pg. 359): Oral surgeon breached non-compete covenant. A professional can bind himself in a non-compete within a reasonable territorial extent, as such an agreement is not in restraint of trade or against public policy. 5-county geographic limitation reasonable b/c it includes the area of potential competition (coincides with the territory over which the practice extends). No time limit, which is also reasonable (doesn’t discuss why). Substantive restrictions: troublesome that he can’t practice “dentistry and/or oral surgery,” which is too broad b/c dentists aren’t in competition with oral surgeons. Permissible to sever the unreasonable portions. Can’t get liquidated damages, only actual damages. Policy: When an employment K contains this non-compete clause, we subject it to reasonableness inquiry. Why don’t we subject other terms to similar reasonableness standards? When we leave other terms of the K untouched? Outsource v. Barton (7th Cir. 1999, pg. 365): D signed non-compete that for 1 year after employment, D should not carry on the same business within 25 miles of employee’s home office or within radius equivalent to employee’s defined territory, whichever is greater. Test for enforceability: whether the terms of the agreement are reasonable and necessary to protect a legitimate business interest of the employer. Courts recognize two situations where employer has a legitimate business interest1) Near permanent relationship test: where customer relationships are near-permanent and but-for the employee’s association with the employer, he wouldn’t have contact with the customers 2) Confidential information test: where the former employee acquired trade secrets during employment and subsequently tried to use for his own benefitWhen an employment K contains this non-compete clause, subject it to reasonableness inquiry. Why don’t we subject other terms to similar reasonableness standards? When we leave other terms of the K untouched? Ex. we don’t say that wage requirements have to be reasonable, at-will, just cause, etc. Posner’s dissent in Outsource International: Competent adults should be held to their bargains in the absence of fraud, duress and unconscionability – Posner believes that reasonableness is a proxy for all of these. IL’s hostility to non-competes is outdated. The original rationale had nothing to do with restraint of trade in its modern, antitrust sense. It was paternalism in a culture of poverty, restricted employment, and an exiguous social safety net. The fear behind it was that workers would be tricked into agreeing to covenants that would, if enforced, propel them into destitution. This fear has no basis in current American conditions. Later, the focus of concern shifted to anticompetitive consequences, since the covenant would eliminate the covenantor as a potential competitor of the covanetee within the area covered by, and during the term of, the covenant. But it’s unlikely for the vitality of competition to depend on the ability of a former employee to compete with his former employer. It would make little sense to place a cloud of suspicion over such covenants. Recognition of covenants’ social value has grown. The clearest case for such a covenant is where the employee’s work gives him access to the employer’s trade secrets. … A covenant not to compete is much easier to enforce, and to the extent enforced prevents the employee, during the time and within the geographical scope of the covenant, from using his former employer’s trade secrets. A related function of such a covenant is to protect the employer’s investment in the employee’s ‘human capital,’ or earning capacity. … The employer may give the employee training that the employee could use to compete against the employer. If covenants not to compete are forbidden, the employer will pay a lower wage, in effect charging the employee for the training. There is no reason why the law should prefer this method of protecting the employer’s investment to a covenant not to compete. In effect, IL requires the employer to prove that the covenant not to compete serves a social purpose. This is inconsistent with freedom of contract, and courts do not limit the enforcement of contracts to those the social point of which the court can see. They enforce a contract unless there is some reason to think it imposes heavy costs on third parities, offends the moral code, fails to comply with formal requirements (such as those imposed on some contracts by the statute of frauds), or doesn’t embody an actual deal between competent consenting adultsBut can judges look out and assess the state of the job market, social conditions? Legitimate judicial enterprise? Maybe it’s the historical backdrop of the tech bubble of the early 2000sEmployee InventionsBackground rule (applied in the absence of a contract): inventions are the property of the inventor, merely working for doesn’t make the invention the property of the employer. Exceptions1) where an employer hires an employee to design a specific invention and 2) if you’re hired not specifically to design or invent but conceives of an idea during working hours with employer’s ideas and equipment, then employer gets a shop rightInvention assignment contracts in the employment context are valid except where they unreasonably obligate an employee in each and every instance to transfer the ownership of the employee’s invention to the employerHold over clauses pertain to inventions following the termination of the employment agreement and are enforceable when reasonable based on all of the circumstances in a 3-prong test: (1) Does not extend beyond any apparent protection that the employer reasonably requires – narrowly construed with the burden on the employer (protects employees’ legitimate interests); (2) Does not prevent the inventor from seeking other employment, and (3) Does not adversely impact the publicIngersoll-Rand v. Ciavatta (NJ 1988, pg. 379): P signs holdover agreement to assign title to inventions to IR during employment and for one year after. Protects legitimate interests (#1) b/c employer provides creative think-tank research environment—idea that the employment context/environment is a protectable interest, rather than some specific idea or tangible information. Another side of the argument: Ciavatta signed the contract, should enforce it – the contract should be sufficient to resolve the problem rather than use a reasonableness test Perhaps we think inventions are ultimately good for society, want to incentivize people to invent – public policy decision in favor of free competition. Prof Sachs: this explains why courts choose to act a certain way, but it doesn’t justify the behavior V. Prohibitions on Status Discrimination Disparate TreatmentTitle VII § 703 (a) Employer practices. It shall be an unlawful employment practice for an employer (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or (2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.Disparate treatment requires a showing by the plaintiff that employer had a discriminatory intent or motive for taking a job-related action Title VII has burden shifting regime McDonell Douglass Corp v. Green (US 1973): P is aerospace and aircraft manufacturer. D is black citizen who was laid off. D protested that hiring and discharge were racially motivated. As part of protest, illegally stalled their cars on the main roads leading to P’s plant to block access during a shift change. There was also a lock in. P publically advertised for qualified mechanics, and D applied for re-employment and was denied. Filed a formal complaint with EEOC that he was not rehired because of his race. P contends that he wasn’t re-hired for D’s unlawful conduct. Issue at trial was the competing factual contentions. Step 1: P has the initial burden to establish prima facie case: 1) he belongs to racial minority; 2) applied and was qualified for a job that employer was seeking; 3) despite his qualifications, was rejected; 4) after his rejection, position remained open and employer continued to seek applications of D’s qualificationsStep 2: employer has to come forward with a legitimate, non-race based explanation for its decision Step 3: P retains the burden of persuasion. Must demonstrate that the proffered reason wasn’t the true reason, was pre-textual. Can show directly (persuading the court that a discriminatory reason more motivated the employer) or indirectly (employer’s proffered explanation is unworthy of credence) For ex., show that white employees involved in illegal acts were rehired, P’s general policy and practice w/r/t minority employment, statistics to P’s employment policies, whether this case conformed to a general pattern of discrimination. Note that Title VII affects the at-will rule. Potentially turns into a just cause rule. Is this ok? Does this mean that we have extra protections for those protected under Title VII, and others are still within an at-will rule? P cannot prevail under step 3 by simply convincing the trier of fact that the reasons the employer gave were not true. Plaintiff has to prove the ultimate fact of intentional discrimination St Mary’s Honor Center v. Hicks (US 1993, pg. 400) – DC found that the termination were not made b/c of P’s rule violations, but held for employer despite the weakness of its reasons for its decisions. P had not convinced the court that race was the real reason. Proof of prima facie case and disproof of the employer’s proffered reasons permit a trier of fact to make a finding of illegal discrimination, but it does not require a finding. If a pattern of practice case is made out, an individual job applicant and was turned down would be presumptively titled to individual relief (Teamsters). Serves broader purposes of Title VII Statistics can be an important source of proof – absent some sort of explanation, we should expect that non-discriminatory practices will in time represent the community’s demographics (although Title VII doesn’t require mirroring the community’s composition – but gross statistical disparities still can constitute prima facie proof of pattern and practice). Hazlewood School District v. United States (SC 1977, pg. 416) school districted hired 3.7% black teachers. Which statistics/what relevant labor market to use to determine the ideal treatment group? (Treatment one would expect in the absence of discrimination.) City+county (15.4% black), county only (5.7%), or applicant pool. Difference is dispositive, but remands to district court to determine what stats to use, according to 5 factors: 1) Whether the racially based hiring policies went back to the 1970 census, 2) to what extent these policies changed the racial composition of that district’s teaching staff from what it otherwise would have been, 3) to what extent St. Louis’s recruitment policies have diverted to the city; 4) to what extent black teachers employed by the city would prefer employment in other districts; 5) what the experience in other school districts in St. Louis county indicates about including/excluding it from the relevant marketThe Bona Fide Occupational Qualification (BFOQ) Defense Title VII, 24 USC §703(e): Notwithstanding any other provision of this subchapter, (1) it shall not be an unlawful employment practice for an employer to hire and employ employees . . . on the basis of his religion, sex, or national origin in those certain instances where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterpriseTo rely on BFOQ defense, employer must prove that all or substantially all women [or other class of people in question] would be unable to perform safely and efficiently the duties of the job involved. Applies when the essence of the business makes it necessary. Exception is very narrowly construed (Dothard) Dothard v. Rawlinson (US 1977, *pg. 44): Regarding height and weight requirements: purpose of these requirements must measure the person for the job and not the person in the abstract (Griggs). Arbitrary requirements that cut out women not ok; instead, you can give a test that directly measures strength. Regarding no women rule in max security prisons: general rule is that must prove that all or substantially all women cannot do the job. Impermissible to refuse to hire an individual woman or man on the basis of stereotyped characteristics of the sexes. Court does not say that no woman can physically do perform the duties of the prison guard. But despite that, Court allows BFOQ defense for Alabama’s prohibition of women in all-male prisons due to the context of Alabama prisons where there is violence, understaffing, many are sex offenders – more is at stake than paternalism – employee’s very womanhood would directly undermine her capacity to provide security essential to stability of running the jail. Dissent: BFOQ refers to the normal operations of business. Status of Alabama’s prisons is not normal. In a normal prison, absolute disqualification of women is not necessary. Broader critique – attitude of the majority towards women. Primary threat of violence applies equally to men and women with one exception, sex offenders. As to sex offenders, the argument that women will general assaults perpetuates a myth that women are objectified sexual objects. Even faced with strong evidence that sex offenders in the current setup will attack women more, might say we have two choices: 1) restrict the applicants to these positions; 2) could change the job in some way such that it would be open to women just as to men. Hopes that lower courts will narrowly construe the opinion Policy: if all that were at stake were the safety of the women guards, we’d let individual women make their own decision whether they think they can do the job or not. But the problem is that they would undermine the whole stability and security of the prisonInquiry: (1) Does the particular job under consideration require that the worker be of one sex only – is sex so essential that a member of the opposite sex could not do the same job? (2) If so, is that requirement reasonably necessary to the ‘essence of the employer’s business – is the qualification scrutinized important to the operation of the business such that it would be undermined if a member of the opposite sex were hired? Wilson v. Southwest Airlines (NDTX 1981, *pg. 51): When there are multiple parts of the job, BFOQ only applies if the sex-linked tasks predominate. Southwest’s primary function is transporting people safely from one place to another. Any other job functions are secondary. But difficult to calculate what “predominates.” And who should decide what the essential business is? The exception is narrow and captures qualifications that are necessary for authenticity, like an actress. The essence of a business is NOT to make a profit. Means that employers are giving up profits for a purported greater social good. Customer preferences should not be relevant (cf. Fernandez – not hiring women as marketing managers.) Policy Consideration: Why should customer preferences be irrelevant? The public/private distinction is implicated – this is about changing the preferences not just the employment environment, otherwise the exceptions would swallow the ruleHow far should Title VII go? The court notes: “This case has serious underpinnings, but it also has disquieting strains. These strains, and they were only that, warn that in our quest for non-racist, non-sexist goals, the demand for equal rights can be pushed to silly extremes. The rule of law in this country is so firmly embedded in our ethical regimen that little can stand up to its force except literalistic insistence upon one’s rights. And such inability to absorb the minor indignities suffered daily by us all without running to court may stop it dead in its tracks. We do not have such a case here only warning signs rumbling from the facts.”Cf. Why would Hooters be allowed a BFOQ defense? If Hooters defends that their business is vicarious sex entertainment, it would win. However, it would lose if its business is food. Who gets to decide what the essence of Hooters’ business is? Why does the court get to decide, and how? Looking as surveys of why customers go would be problematic because it’s based on customer preferences. Perhaps the only way to decide this is to force them to hire men—if they went bankrupt, it would demonstrate that it’s the essence of the business. Disparate ImpactTitle VII proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation – consequences matter. Facially neutral standard may violate Title VII because Title VII requires the removal of artificial, arbitrary and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classificationCodified into 1991 Civil Rights Act Burden of Proof (Griggs): 1) Plaintiff makes prima facie showing that employer is using a practice that causes a disparate impact based on race, etc. 2) Employer can show that this practice is job-related and consistent with business necessity and 3) P then can show that this is true, but there are available alternatives that have less of a disparate impact but still serves your legitimate needs. For business necessity, employment tests must be related to job performance. Doesn’t ban all tests, not even ones that may have a discriminatory impact on race or gender. Seeking to ban those tests that impose artificial, arbitrary, or unnecessary barriers to employment. Griggs v. Duke Power (US 1971, pg. 435): attributes disparity in employer’s test scores for promotion and transfer to be directly traceable to race because they received inferior education in segregated schools. Duke Power couldn’t show that the tests were related to job performance. Violation of Title VII doesn’t require discriminatory intent/motive, just discriminatory consequences to a protected classIs this the type of discrimination that Title VII is meant to eradicate? Dictates that employment decisions that give effect to other non-overt discrimination are covered? Court says yesCourt is NOT saying that less qualified black workers should be eligible for the job. Just that if you’re going to use tests, it needs to be related to job performanceEmployers may violate the disparate treatment violation in the name of compliance with the disparate impact provisions only with a strong basis in evidence of disparate impact liability [imported from the equal protection context] (on all three steps of the disparate impact burden shifting regime)Ricci v. DeStefano (US 2009, *pg. 59): New Haven FD’s throwing out of promotion tests constituted explicit race-based decision making. Court uses con law – when you remedy past racial discrimination through actions themselves based on race, this is constitutional if and only if there is a strong basis in evidence test that these remedial actions are necessary. Applying the disparate impact burden of proof: 1) Prima facie case – yes. Pass rates that are clearly skewed; 2) Job related and business necessity – these tests are developed after painstaking analysis of the positions; 3) Alternatives – no. City says there were other approaches that were available that produced less impact, such as weighting the oral/written tests different. But court says that no evidence that the 60/40 decision was arbitrary – this was decided with collective bargaining. Court concludes: no strong basis in evidence [Scalia Concurrence]: Court decided today that Title VII not only permits remedial race-based action, but affirmatively requires such actions when a disparate-impact violation would otherwise result. Courts will have to address whether disparate impact is consistent with equal protection. How to save the statute? Disparate impact could be a proxy for disparate treatment. Disparate impact is sometimes, though not always, a signal of something illicit, so a regulator might allow statistical disparities to play some role in the evidentiary process. But the disparate-impact provisions sweep too broadly, since they fail to provide an affirmative defense for good-faith (i.e., nonracially motivated) conduct, or perhaps even for good faith plus hiring standards that are entirely reasonable. [Ginsburg Dissent]: Decision is not loyal to Congressional intent. In 1991, made it very clear that disparate impact is not OK unless employment criteria are related to job performance/business necessary. Test: employers must have good cause to believe that the tests wouldn’t withstand business necessity. Oral and tests are not good tests for fire captains. Ricci rightly or wrongly decided? Wrongly decided if the purpose of the statute is to correct for past discriminationCourt’s analysis waters down disparate impact? Policy Considerations: What is the difference between a racially conscious decision and a racially motivated decision? What CAN be done to correct the sort of institutional discrimination that Title VII has still not been remedied (as evidenced by the performance differential on the test given)?Reasonable AccommodationThe ADA requires employers to make reasonable accommodations to individuals with disabilities if the individuals can perform the essential functions of the job with the accommodations ADA § 2 (Stat. 97-98): No covered entity shall discriminate against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. Qualified individual with a disability: “an individual with a disability who, with or without reasonable accommodation, can perform the essential functions of the employment position that an individual holds or desires.” A disability: “a) a physical or mental impairment that substantially limits one or more of the major life activities of such individual; b) a record of such impairment; or 3) being regarded as having such an impairment.” EEOC interpretation of disability (a) has three elements (29 CFR §1630.2(h)(1)): 1) Physical or mental impairment: any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: neurological, musculoskeletal, special sense organs, respiratory/speech, cardiovascular, reproductive, digestive, genito-urinary, hemic and lymphatic, skin and endocrine 2) Substantially limits: unable to perform a major life activity that the average person in the general population can perform, or significantly restricted as to the condition, manner, or duration under which an individual can perform a particular major life activity as compared to the condition, manner, or duration under which the average person in the general population can perform that major life activity 3) Major life activities: functions such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working Whether an individual is disabled is an individualized inquiry, which is to be determined based with reference to mitigating measures. EEOC, 29 CFR 1630A particular job is not a major life activitySutton v. United Airlines (US 1999, pg. 442): Twin sisters not hired by United as pilots b/c it required uncorrected vision of 20/100 or better. Must look at corrected b/c it’s an individual inquiry, not on the basis of a generalized diagnosis. For a major life activity, must show that you can’t work in a broad class of jobs. If United thinks that they couldn’t do this single job, that’s not a broad class of jobs. Policy: Why distinguish between physical attributes and impairments that limit ability to engage in a major life activity? Statute designed to prohibit discrimination, not designed to make jobs equally available to all people irrespective of their physical attributes. If the goal of employment law is to make jobs available to people b/c of things they can’t control, maybe only include physical (as opposed to mental) attributes. Maybe the employer can adjust for physical attributes, but law firm shouldn’t reasonably accommodate for people who didn’t graduate from college. Perhaps the law should move us in that direction – if we think that height/appearance discrimination are legitimate concerns, then we should create a policy against thatAfter Sutton, Congress passed 2008 Amendments explicitly targeted at the Supreme Court b/c Congress thought Scotus narrowed the act too much. Mitigating measures are not to be considered in determining whether an individual is disabled, but explicitly excludes glasses and contact lens wearers. When determining whether someone is regarded as disabled for (c) of the definition, an individual meets the definition if she establishes that she has been subjected to an action prohibited under the Act because of an actual or perceived physical or mental impairment, whether or not the impairment limits or is perceived to limit a major life activity.Does this seem like the right rule? Should glasses wears be exempt from protection? Does it matter that 50% of people (or a lot of people) have this attribute? But what about discrimination against obesity, where there is a large % too? Does this mean we want to get at discrimination against all types of physical attributes, if we want to make jobs available to as many people as possible? Sisters in this case are NOT being discriminated against in the way that that we care about – court says we don’t care about this kind of discrimination By discrimination, do we just mean the employer’s decision not to give you a job, or based on some class based animusOrdinarily the ADA does not require trumping a seniority system (presumption)– the plaintiff must show more, i.e. special circumstances, typical exemptions, etc. to demonstrate that the assignment is a reasonable accommodation despite the conflict with the seniority rulesUS Airways v. Barnett (US 2002, pg. 454): Barnett wanted the reasonable accommodation of keeping his position in the mail room. Wants an exception to the seniority rule so that he can stay. ADA requires preferences in the form of reasonable accommodations. By definition, an accommodation requires that the employer treat an employee with a disability differently (preferential). Neutral rules aren’t an automatic exception. Lots of neutral rules, that if an employer was forbidden from departing from those rules, the reasonable accommodation provision would be useless (ex. neutral office selection). Problem w/ trumping seniority is that burden of the preferential treatment falls on other employees rather than on the employer. But court says no, Barnett hasn’t shown the “more” requirement Barnett is attempting to define the boundaries of the duty of reasonable accommodation. Deals with one type of cost: accommodations that impose costs on other workers in the form of lost opportunities Ordinarily, it will be unreasonable for accommodation to trump the seniority system. Typical seniority system provides a lot of benefits, including predictability, fair treatment, opportunity for promotion, etc. To require employer to show something other than mere existence of seniority system will undermine consistent treatmentBut this is a presumption. P can still show circumstances that warrant a contrary holding: must show that this accommodation is actually reasonable, ex. company is always making exceptions to the seniority rule, the employer retains the right to change policy unilaterally, reduces employee expectations/reliance. (Implicit idea: if the ADA is the only one forcing exceptions, then that’s unreasonable)[Scalia Dissent] – concern that this power of showing “special circumstances” can be a power to undermine bona fide employment systems, not just sham seniority programs. The point of the ADA is to remove the barriers that exist because of the disability, not the general employment barriers. Criticism: seniority system is not facially neutral, it will affect Barnett more. Seniority will disproportionally affect the disabled, b/c they can’t choose out of any positions[Scalia’s response]: then any employment decision will be subject to ADA scrutiny. Ex. the reason you have a lower salary is b/c you’re disabled, so you should get paid more? Looking at the statute, mentions “essential functions of the employment position” – is it plausible to say that the employer has to provide longer vacation or higher salary? Maybe yes. Employer has to make all these accommodations, subject to an “unreasonable” or “undue burden” test. Nothing in the statute limits the scope of the accommodations. Ex. if disabled were getting longer vacation time, this is fine if it’s not unreasonable/undue burdenNote (pg. 468): Most commonly, the issue of costs is more direct. How much must an employer spend before an accommodation becomes unreasonable? Does a reasonable accommodation ever require employers to grant a leave of absence? (Yes—see examples in Byrne. Factors to consider whether granting leave is undue hardship: cost of the accommodation, the effect on expenses and resources, the impact of the accommodation on the operation of the facility including on other employees' ability to do their jobs and the impact on the facility's ability to conduct business.) Does reasonable accommodation ever require an employer to permit an employee to work from home? (Work at home may be required for medical transcriptionist with OCD. Cf. not when the jobs require team work and supervision.) Sexual Harassment Sexual harassment in violation of Title VII includes unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature, and can be either (1) directly linked to the grant or denial of an economic quid pro quo (discharge, demotion, transfer), or (2) have the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile or offensive working environment What types of workplace conduct constitute actionable behavior? Meritor Savings Bank v. Vinson (US 1986, *pg. 77): VP of bank and manager of branch offices abusing Vinson. Hostile environment cases allowed, based on statutory language: phrase "terms, conditions, or privileges of employment" evinces a congressional intent "'to strike at the entire spectrum of disparate treatment of men and women'" in employment. Sexual harassment is actionable if the harassment is sufficiently severe or pervasive to alter the conditions of [the victim's] employment and create an abusive working environment. That the action was “voluntary” doesn’t matter – what matters is that it was unwelcome (it was clearly against her will, even though she wasn’t physically forced). Vinson’s claim clearly meets the sufficiently severe requirement, so Court doesn’t expound on what this definition means. What does it mean to be sufficiently severe or pervasive? Clarifying the Meritor rule: so long as the environment would reasonably be perceived (objective) and is perceived as hostile or abusive (subjective), there is no need for it to also be psychologically injurious Harris v. Forklift Systems (US 1993, pg. 473): Abusive behavior by president, Hardy. Hostile and abusive must be determined by looking at all the circumstances, including frequency of discriminatory conduct, severity, whether it’s physically threatening or humiliating vs. mere offensive utterance, whether it unreasonably interferes with an employee’s work performance, effect on psychological well being. No single factor is required. Court says that this standard takes a middle path between making actionable any conduct that is merely offensive and requiring the conduct to cause a tangible psychological injury (spectrum)[Ginsberg’s concurrence]: Critical issue of Title VII is whether members of one sex are exposed to disadvantageous terms or conditions. Inquiry should center on whether the discriminatory conduct reasonably interfered with P’s work performance. Sufficient to show that a reasonable person subjected to discriminatory conduct would find that the harassment altered the working conditions to “make it more difficult to do the job” Hostile environment can be waged against individual of the same sexOnacle v. Sundowner Offshore Services, Inc. (US 1998, pg. 478): Critical issue is whether members of one sex are exposed to disadvantageous terms or conditions to which members of the other sex are not exposed. (Ginsberg concurrence in Harris.) When there are explicit or implicit proposals of sexual activity, Court looks at evidence such as whether defendant is gay. But if it’s not motivated by sexual desire, can also show evidence about how the alleged harasser treated members of both sexes in a mixed-sex workplace. Problem: Court doesn’t tell is what facts show that he was discriminated because of sex. Seems more like it’s targeted b/c of his perceived sexual orientation, which is different than b/c of sex. Would want to know why these harassers chose Oncale as opposed to the rest of them. Otherwise, opinion insinuates that sex stereotyping is actionable under Title VII. Another problem: changes sexual harassment. Before Onacle, discrimination would exist if both men and women are exposed to sexually suggestive nude pictures of women, or if men and women are exposed to very rough and sexually suggestive language. After Onacle, maybe not. But since harassment is to be judged by a reasonable person in the plaintiff’s position and assuming men and women have different reactions to this behavior, maybe statute still covers this discrimination Price Waterhouse v. Hopkins (US 1989): not in casebook but mentioned in Schultz article. In the specific context of sex stereotyping, an employer who acted on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender. Thus, imposing pressure to conform to preconceived notions of gender is differential treatment is actionable w/n Title VII. Schultz - paradigm problem and states that it is both over-inclusive (too much sexual conduct is prohibited) and under-inclusive (misses actions that have nothing to do with sexual desire).Alternative competence paradigm (the function of harassment is to undermine the competence of women in order to maintain masculinity of jobs). Men want to keep jobs masculine by keeping women out, and also keep non-masculine male out. Harassment is just a tool to complete this project Anti-gay harassment serves that purpose with homosexuality standing in as a proxy for the failure to conform to this image suitable to masculinity. But is this turning sexual harassment into sexual orientation claim? Employer can be responsible for hostile environments created by supervisor (this issue did not come up in Meritor/Harris b/c harasser was president or organizational proxy)Scope of employment doctrine: master is subject to torts of his servants committed while acting in scope of employment, but not while the employee is on a frolic and detour. This doctrine only catches illegitimate behavior that furthers the employer’s interests. Ex. race-based discrimination to placate prejudice in the labor force. But no liability if supervisor is exercising his sexual interests in ways that don’t serve the employer, that’s frolic and detour. So no liability in this case under scope of employment Aided by agency relationship doctrine: if acts are outside scope of employment, can still be liable if employee acts to speak on behalf of principal, and there’s reliance. Why? 1) supervisors can use their relationship to their employer to keep subordinates in their presence and 2) to deter any resistance or complaint. But need to square this with Meritor because an employer is not automatically liable for all harassment by a supervisor. Gives employer an affirmative defense with two necessary elementsEmployer exercised reasonable care to prevent and correct any harassing behavior, and Plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities (Note: Court doesn’t like affirmative invoking the authority as a limitation – supervisors don’t make threatening sanctions often, more frequently it’s implicit and the line is hard to draw) Farragher v. City of Boca Raton (US 1998, pg. 492): City failed to distribute sexual harassment policy to employer and is liable for employer’s harassment. Court thinks that this is consistent with the principles of Title VII. Primary goal of Title VII is to avoid harm in the first place, not necessarily redress. If you allow employer to defend on this ground that it took reasonable steps, it will push the system towards one in which avoiding harm in the first place rather than compensating after the fact is the major goal. Policy: Is the right rule? Second prong– employers have formal system, but intimidation in the work environment make it difficult for employees to report problems. Should allow circumvention of chain of command, so employee doesn’t have to report to the supervisor who is causing the problem. One view: it’s never reasonable to require employees to use the complaint system b/c there’s always fear of retaliation. But SC has said the opposite – it rests this rule on the assumption that such a system can always be enacted. Important from an institutional design viewpoint – shapes how firms design their policies VI. Regulation of CompensationFLSA. 29 USC § 206(a) (Stat. 135, 136-137, 138-40, 141): Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at [minimum wage] § 207(a)(1)[Overtime]: Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. § 207(e): [Regular rate defined]§ 207(h): [Credit toward minimum wage or overtime compensation of amounts excluded from regular rate] FLSA has three major provisionsMin wage law – least controversial form of employment policy todayOvertime: >40 hours, must be paid 1.5x standard rate of pay Restricts child laborCongress can regulate wages via the Commerce Clause United States v. Darby (US 1941, *pg. 103): Follows West Coast Hotel, which overruled Adkins. Congress has constitutional power to prohibit the shipment in interstate commerce of lumber manufactured by employees whose wages are less than a prescribed minimum or whose weekly hours of labor at that wage are greater than a prescribed maximum, AND has power to prohibit the employment of workmen in the production of goods "for interstate commerce" at other than prescribed wages and hours. Public policy reason: interstate commerce should not be made the instrument of competition in the distribution of goods produced under substandard labor conditionsCard and Krueger, Myth and Measurement Contrary to the standard economic model, minimum wage might actually have a positive impact on employment. (1) Increase in the minimum wage does not adversely impact employment. (2) Increase in the federal minimum wage did not adversely impact teenage employment. (3) Statistical evidence regarding teenage employment impacts are no more compelling that evidence point in the opposite direction. (4) Increases in the minimum wage generate a ripple effect leading to pay raises for workers who previously earned wages above the new minimum. Increases in the minimum wage are not offset by reduced fringe benefits. (5) Increases in the minimum wage have reduced wage dispersion.To determine whether on-call time qualifies as work time under the FLSA, the critical issue is whether the employee can use the time effectively for his or her own purposes Bright v. Houston Northwest (5th Cir. 1991, pg. 587): Employee doesn’t have to have the same flexibility or freedom as he would if not on call. Was not restricted to any one or few fixed locations, could go virtually anywhere w/n 20 minutes of the hospital, and could do anything except for excessive alcohol consumption. The critical issue is whether the employee can use the on-call time effectively for his or her own purposes. This does not imply that the employee must have substantially the same flexibility or freedom as he would if not on call, else all or almost all on-call time would be working time.[Dissent]: In Alaska, it’s not the employer that’s causing the lack of options. It’s the frozen tundra. Here, it’s the employer that’s causing the lack of options, and that’s what the FLSA intends to attack. Policy: is this the right rule? Employer has required something very real of Bright. Shouldn’t the employer have to pay Bright something for this time? Can use overtime to make it expensive for employers to use on-call, to encourage spreading work employees. Or, you could say should be paid ? time. Or, make a salaried position. But we don’t want to do this and allow hospital to pay him $20,000 without worrying about this. When Bright took the job, he presumably should have known about the requirements. Could be that his payment of $9/hour reflected his on call time? If Bright had come out the other way, it wouldn’t have prohibited the company from doing this, would have just made them pay for it. Is this OK, or do we want to prohibit on-call time that’s all the time? Concerned about the employer’s ability to control non-work sphere?The FLSA requires that employees receive the minimum wage EACH WEEKMarshall v. Sam Dell’s Dodge Corp (NDNY 1978, pg. 595): Car dealership violated FLSA by not paying min wage each week, even though bonuses and commissions would have paid min wage over longer time period (ex. month). Regardless of total pay received by an employee, act requires each employee receive, each week, an amount equal to min wage times hour worked. Bonuses count only against the minimum wage in the week they are paid. Policy rationale: failure to pay by week may be detrimental for maintenance of min standard of living necessary for health, efficiency, and general well-being of workers. Employees w/ less than statutory min are not likely to have sufficient resources to maintain their well-being until their next paycheck (public/3rd party view of employment). Applies here even to better paid salesmen with a family, who would be hard pressed if he had to suffer a few weeks w/o min wageFringe benefits are treated as wages unless they are provided primarily for the benefit or convenience of the employer. However, not all fringe benefits may be offset against overtime pay due. Dunlop v. Gray-Goto, Inc. (3rd Cir. 1976, pg. 601): as a matter of statutory interpretation, fringe benefits don’t count for overtime because: 207(a): stipulates that you get 1.5x regular rate of pay. 207(e): 7 kinds of compensation that don’t get included in the regular rate of pay. 207(h): 5-7 of that list ARE creditable towards overtime. Court says that items 1-4 are therefore implicitly NOT creditable towards overtime pay. Statute draws distinction between 1-4 (gifts and bonuses made in recognition of services performed, not tied to hours worked. Vacations, holidays, and sick pay) and 5-7 (extra compensation paid at a premium for days worked longer than 8 hours, off-schedule work, weekend work). Court wants to say that the things here are more like 1-4 and less like 5-7. If you look at it carefully, there is ambiguity about which of these classes of things the benefits at issue in this case (paid vacations and holidays, biannual bonuses) look like. Policy: Issue of consent – employees agreed to this exact substitution of these benefits for overtime pay. Means that private agreement cannot circumvent the act’s requirements – can’t K around the obligations of the FLSA, even when you’re not waiving your overtime rights, just the form in which they’re paid. Why? Would this thwart legislative intent? What about a case where employer pays the overtime but then takes it back and credits it to healthcare? If this is not FLSA violation, then should the distinction really turn on whether the employer pays in cash? Is this something that we don’t like? Do we want FLSA to take away this choice away from employees? Comes down to paternalism? Maybe we think that most of the time, employees don’t have the bargaining power to make these decisions appropriately. Or, is it an institutional actor question? If we want to change this law, it should be Congress and not the court? This case stands for the proposition that FLSA takes that choice away from employees – parties cannot agree by contract to waive their FLSA rights. These are rights in the public interest, and a waiver is impermissible b/c it would thwart the legislative purpose.Who is covered under FLSA? Employees performing management functions are exempt from overtime coverage. Not covered by FLSA provisions 29 USC §213(a)(1): the Act exempts “any employee in a bona fide…executive…capacity.” 29 CFR §541.100: an executive employed in a bona fide executive capacity shall mean an employee: Compensated on a salary basis at a rate of > $455/week exclusive of board, lodging, or other facilitiesWhose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; Who customarily and regularly directs the work of two or more other employees; and Who has the authority to hire and fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight “An employer has the burden of establishing that the exemption applies to the employees, and such exemptions are narrowly construed against the employer.” Sansoucie v. Reproductive Associates Executives are covered by the equal pay and child-labor provisionsEmployees performing management functions exempt from overtime coverage of FLSADavis v. Mountaire Farms, Inc. (DC Del. *pg. 602, *pg. 115): Case turns on the second and fourth factors. 1) Primary duty is management – P’s argument is that all the crew leaders did was to follow company guidelines. Can’t just be given a checklist. Court says that ensuring that company policies are carried out is the essence of supervisory work – not looking for discretion, looking for supervision; 2) Authority to hire and fire: P says that their role is minimal but Court relies on testimony of the farm where they listened to the recommendations of the crew leaders. 3rd circuit says applied the test wrong – really rare that their recommendations were given weight. Testimony shows that in 30+ years, crew leaders collectively recommended only 10 members for hire. “Maintaining a full crew at all times” meant finding subs when they were short handed on a given day Policy: According to FLSA, why is there an executive exemption? Maybe they have a different skill set and can find jobs elsewhere, can better bargain. If you manage and if you have authority to hire and fire, then you’re not exploited? It’s a proxy for having greater options, having more discretion, making more money – we’re less worried that they will be stuck in abusive working conditions, will allow you to stand on your own feet in the labor market in some way. Thus, chicken catcher crew leaders should not fall under the executive exemption. So is the problem with the specifics of the test or the way that the court applies it? Problem is the test – maybe it could be the amount of discretion that the employee has? The amount of mobility (up, laterally), ability to be hired – signals that the choice of the job (working 80 hrs/week w/o overtime) is a choice we want to respect. But it’s not clear if this applies to the chicken crew leader – maybe they can always move to other chicken catcher jobsVII. UnemploymentA. Unemployment and Unemployment Insurance Concept: unemployment is not paid because you lost one job, but rather because you cannot find another!UI typically state-managed systems, funded by a payroll taxIn every state, eligibility depends on earning a certain amount, working a certain number of weeks, or some combination, during a preceding base period. These eligibility requirements are intended to measure the worker’s prior attachment to the work force. In most states, claimants must wait a week before collecting benefits. Full-time workers are typically eligible for 26 weeks of benefits. Benefits typically are 50% of weekly wages up to a statutory maximum. Most states set their cap as one-half to two-thirds of the average weekly wages in the state. Because of the cap on benefits, average UI benefits replace only one-third of prior wages. Some states give additional, nominal benefits for dependentsGeneral policy has been for unemployment insurance to be a limited response to the problem of unemployment. In the main, unemployment insurance is designed to provide temporary, partial wage replacement to experienced workers who become unemployed through no fault of their own. Goal of UI to tie the employee over until she can find another job All states require recipients to actively search for work and accept suitable employment when found. BUT unemployed workers with a definite recall date general are eligible for UI benefits without actively searching for another job.UI recipients must accept and be available for a new job when foundKnox v. Unemployment Compensation Board of Review (PA 1974, pg. 630): Statute provides that “An employee shall be ineligible for compensation for any week … in which his unemployment is due to failure, without good cause, either to apply for … or to accept suitable work.” Knox wants the standard to be irresponsible, lacksidasical – he was just honest. Court rejects this reading – an employee may not attach conditions to his acceptance of work as to render himself unavailable for suitable work and willingness to be employed conditionally does not necessarily meet the test of availability. UI benefits terminated b/c he admitted that he would go back to work if he were re-hired by his original employer. Plaintiff’s desire to protect his seniority and indication that if/when given the opportunity is an unacceptable condition rendering him ineligible for benefits. Can’t condition your employment during a job interview, so you’re ineligiblePolicy: But we Know that if Knox have accepted the new job, he could have quit for no reason – could have started the new job and left as soon as he was recalled. What should UI encourage employees to say? Maybe shouldn’t have to take the new job b/c it’s not suitable, even though it’s the same kind of work – b/c he has 17 years of seniority at the prior company and it’s more worth it to him. Problem: it would apply to anyone who had seniority at a prior jobWhy shouldn’t the rule be that you have to find the best job available? Ex. laid off at factory, should you be required to take $8/hour job at McDonalds? Want to preserve this employee’s skills, which might be more valuable to society to give him UI for a few months and return back to factory where he’s more useful How else can you change UI to avoid this tension? Could make the old employer bear the burden of the layoff (other options include new employer, Knox himself). If you got a definite recall date (which is different than Knox), then you can collect UI w/o conducting a job search. Or if you’re on layoff, you can continue getting UI w/o having a job search.What’s the reason for the job search policy at all? If benefits are available just b/c you lost the job, there might be an incentive to not go back to work Is this even necessary? Largest benefit is ~500/week – isn’t that small enough to deter people from living off UI and encouraging them to go back to work and earn more? Workers who quit their jobs w/o good cause are generally disqualified from benefitsIn many states, disqualification lasts for the duration of the unemployment experienced despite urgings from the Department of Labor that disqualification should last only for the average length of time necessary to find suitable work (6 weeks) since longer periods are likely subject to market forces beyond the worker’s control, not the disqualifying actDisqualification raises many of the same issues in wrongful termination and discrimination – how do you define good cause? State statute provides for disqualification where the worker leaves work voluntarily without good cause attributable to his work or employer. The Federal statute provides discretion to states to stipulate the administrative rules, but there is some uniformity. Supreme Court (Wimberly) says that all states must satisfy 3-part test: First, all States require claimants to earn a specified amount of wages or to work a specified number of weeks in covered employment during a 1-year base period in order to be entitled to receive benefits. Second, all States require claimants be “eligible” for benefits, that is, they must be able to work and available for work. Third, claimants who satisfy these requirements may be disqualified for reasons set force in state law. The most common reasons for disqualification under state unemployment compensation laws are voluntarily leaving the job without good cause, being discharged for misconduct, and refusing suitable work.”A state can make pregnancy a disqualificationWimberly v. Labor & Industrial Relations Commission (US 1987, pg. 636): Pregnancy is treated in various ways by the states – states may adopt a neutral rule that incidentally disqualifies pregnant or formerly pregnant claimants as part of a larger group and this is allowable provided the rule does not discriminate against pregnancy exclusively. Most states say that pregnancy is voluntarily leaving w/ good cause and are entitled to UI. But Missouri takes a narrower rule: if not directly attributable to the work or to the employer, not good cause. Pregnancy not related to work or employer; it doesn’t constitute the kind of cause required to avoid disqualification. There is a federal rule in the Federal Unemployment Tax Act, 26 USC § 3304(a)(12): no person shall be denied compensation under such State law solely on the basis of pregnancy or termination of pregnancy. Plain reading: if a state adopts a neutral rule, something like what we have here, that disqualifies a big group of claimants including pregnant women, that’s the neutral application of the rule, and it can’t be said to be solely on the basis of pregnancy. It’s because Wimberly’s leaving was not directly attributable to work. Thus, this Missouri rule is OKWimberly admits that there’s no pregnancy discrimination here. But this mandates preferential treatment for women who leave work for pregnancy – affirmatively requires states to provide UI to these groups, regardless of how these states treat similarly situated claimants – Court rejects this position Policy rationale for this rule: want to limit the reasons that people can quit. They deserve to get UI if something at work caused you to leave (ex. harassment, discrimination). But is there a good reason to treat pregnant women more favorably than other similarly situated claimants in the UI system? Ex. father who falls on the job, has to quit work. Under MO rule, he’s prohibitedIs UI the appropriate place to handle anti-discrimination of this kind? Any place that we can do discrimination policy, we can do it, and UI is just another place? Or maybe the solution is to mandate pregnancy leave (rather than treating her as similarly situated from other claimants) Importing a set of concerns about pregnancy or gender discrimination FMLA now gives workers like Wimberly the right to take 12 weeks unpaid leave b/c of pregnancy and childbirth Preservation of a family unit can constitute good cause to prevent disqualification in some states MacGregor v. Unemployment Insurance Appeals Board (CA 1984, pg. 640): P moved from CA to NY to be with the father of her child and keep family intact. CA statute – good cause justifies voluntarily leaving, such a cause would reasonably motivate the average able-bodied and qualified worker to give up his/her employment w/ its certain wage rewards in order to enter the ranks of the unemployed. To be good cause, a personal reason for leaving that is unrelated to work must be imperative and compelling in nature. Leaving job to be with your spouse – established good cause. Generally, leaving for a non-marital partner is generally not enough. But leaving for non-marital partner with whom that you have a child – close enough to policy reason why we want to support marriages, maintaining a stable and strong family unit Seems that the court is making family policy rather than interpreting the UI statute. Is that OK? Institutional actor problem – court v. legislature? As soon as you depart from the MO rule and allow some personal decisions that justify leaving a job, we have to then define what legitimate personal reasons are. Wouldn’t just stop at the family. Does this mean that MO rule is better than CA rule? Misconduct is grounds for UI disqualification. But must be willful McCourtney v. Imprimis (Ct. App. MN 1991, pg. 648): P gave birth to an infant who suffered from numerous illnesses, so she was frequently absent from work. Definition of misconduct: limited to conduct evincing such willful or wanton disregard of an employer’s interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or show an intentional and substantial disregard of the employer’s interests or of the employee’s duties and obligations to his employer. On the other hand, mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good-faith errors in judgment or discretion are not to be deemed misconduct.” Plaintiffs actions were motivated by a willful regard for her child, not a willful disregard for her employer, thus she is entitled to benefitsPolicy: “The economic burden this conclusion places on the employer is a necessary cost of the legislature’s humanitarian concern for the welfare of persons unemployed through no fault of their own.”Issue is not whether the employer was justified in discharging the employee, but whether it’s misconduct. In an at-will rule, employer is almost always justified in discharging. UI beneficiaries would be a very small group. State wants a different rule than the at-will rule, wants to protect a greater class of people. Why? Protect people who are fired through no fault of their own. In MN, you’re still eligible for UI even though you’ve been fired for good cause Court says UI is to be construed liberally, broadly. Unlike the discharge system, UI is not about rewarding or penalizing – we think that these employees should have a buffer so that they can move to different jobs. Maybe their skills are more suitable for a different job, want to encourage thisDissent views this as an unfair catch 22 for the employer – put up with the absenteeism or pay for the resulting unemployment – other social welfare programs should address childcare issues, not the unemployment statuteIs this really about employment law or is this about family law and the childcare system? Should the unemployment system support childcare? Two problems with basing social welfare childcare protections in employment – (1) incentivizing employers to not hire women who disproportionately bear the burden of care and (2) exclude people who don’t have a job Does this decision mean that all women who give birth would be eligible for UI? What about an inability to afford childcare? Should UI be read as a replacement to the lack of other social welfare programs? More traditional move – legislature has decided not to provide for childcare through social service legislation, so not in our realm to read it into the UI provisionOne view: not right to say that childcare is a different social policy outside of work-related policy. Childcare responsibilities are inseparable from the work environment, essential issue of women in the labor market. UI’s emphasis on giving benefits to those fully committed to the labor force – men are the model for the UI system. This can lessen the immediacy of a choice between work and family, UI benefits can give her a financial cushion to sort out her situation What about an employee who goes to take care of a sick friend? Weaker case, b/c choose to draw the line at parenting and familyAnother view: we absolutely want to impose costs on employers – to incentivize them to change their policies regarding childcare. Employers should offer unpaid leave, flex time, etc. But this may be too expensive for the employer, and the employer may not change their policies. Do we want to use UI to incentivize the way employers deal with childcare? B. Federal Regulation of Plant ClosingsBluestone & Harrison, The Deindustrialization of America: Plant closing costs extend beyond the loss of employment to a decline in health and welfare, which can exacerbate the problem since “feelings of lost self-esteem, grief, depression, and ill health can lessen the chances of finding reemployment; this failure, in turn, can exacerbate the emotion distress, generating a cycle of destruction.” There is also a ripple effect in the community. “The primary effects are, of course, visited on those closet to the production unit that ceases operations. The unit’s own employees lose salaries and wages, pensions, and other fringe benefits; supplier firms lose contracts; and the various levels of government lose corporate income and commercial property tax revenue. These in turn result in a series of secondary effects including decreased retail purchases in the community, a reduction in earnings at supplier plants, and increased unemployment in other sectors. Finally, these events produce tertiary effects in the form of increased demand for public assistance and social services, reduced personal tax receipts, and eventually, layoffs in other industries, including the public sector. What begins as a behind-closed-doors company decision to shut down a particular production facility ends up affecting literally everyone in tow” The more we root in employment, the more severe the effects of unemployment. Loss of job = loss of identityIf this is a problem of finances and uncertainty, hypothetically, UI could address these issues – anxiety of living paycheck to paycheckBut if the problem has to deal w/ self and identity, is there anything that the law could do to solve the problem? Government could help find other gainful employment through training, re-education, public works program. But if the shock to the identity has to do with the loss of a particular type of job, then it’s harder for the law to fix Who should bear the costs of this may depend on vision of employment WARN Act (1988) – 29 USC §2101-2109: Requires employers of more than 100 employees to give their workers and local government officials 60 days’ advance notice of plant closings or mass layoffs, with two major exceptions: (1) a faltering company can give less than 60 days’ notice if it had been actively seeking new financing to keep the plant open and in good faith believed that notice would jeopardize negotiations and (2) where there are unforeseeable business circumstances (such as a client’s sudden and unexpected termination of a major contract, and natural disastersWARN Act violations are liable for up to 60 days’ back pay and benefits, attorneys’ fees and civil penaltiesUnforseeable circumstances exceptionRoquet v. Arthur Andersen (7th Cir. 2005, pg. 658): A business circumstance may be reasonably unforeseeable if it was caused by some sudden, dramatic, and unexpected action, or by conditions outside the employer’s control. 20 CFR § 639.9(b)(1). When determining whether a mass layoff was caused by unforeseeable business circumstances, courts evaluate whether a similarly situated employer exercising reasonable judgment could have foreseen the circumstance that caused the layoff. Id. Thus, a company will not be liable if, when confronted with devastating occurrences, it reacts the same way that other reasonable employers within its own market would react, Foreseeability turns on probability, not possibility, because the WARN act was not intended to force financially fragile, but economically viable employers to provide notice and close its doors on the mere possibility – since this would force premature layoffs and harm the individuals the act intends to protect. Shouldn’t have to warn employees when there is a possibility of survivalDissent notes that this should not be all or nothing, but the notice period should be reduced from 60 days to provide as much notice as is practicable under the circumstances, with the trigger date occurring on the date that the mass layoff is reasonably foreseeable. Rather than looking at the day of layoff and counting back 60 days (and determining whether it’s foreseeable at that point); should ask – when does a mass layoff become reasonably foresseable? And require notice then. So at March 1 – when finds out that DOJ is seeking an indictment, should trigger warning then. Or even at March 14. Shouldn’t have waited until April 8Policy Consideration: Even when working well, all this provides is notice, is that enough? In the end, the statute simply requires notice. Employer can do whatever it wants, as long as they give 60-days noticeAs an employee, would prefer that the employer violate the clause so that you would get 60 days backpay rather than having to work those 60 days. Original bill required 180 days notice, also required to give notice to unions and city officials financial data to justify plant closingTransparency – should we require financial disclosure? That would be a very different conception of the actCT has a plant closing law that requires group health insurance to continue for 180 days MA has a law that applies in narrower circumstances – covered employees get a 1-time lump sum, will get severance pay mandated by statute (2 weeks pay*number of years of service)VIII. Workplace Injuries & DiseasesBLS monitors workplace deaths (range from 6,632 and 5,534 annually) and accidents (irregular decline). However, accuracy of the data is questioned and there is evidence of an undercounting problemCosts of workers’ compensation programs have increased, to 1.76% of payroll of $87.4B in 2004The goals of government health and safety programs are (1) the prevention of workplace injuries and illnesses, and (2) the compensation of workers. Four methods to achieve: (1) labor market, (2) tort suits, (3) workers’ compensation and (4) safety and health lawsTraditional tort recovery was difficult, Roosevelt said because work out of which accident arose was “done for the employer, and therefore ultimately for the public, it is a bitter injustice that it should be the wage worker himself and his wife and children who bear the whole penalty.”Policy Consideration: If you take for granted that the employees should not bear the whole burden, does that mean the employers should instead?A. Worker’s CompensationAbout 96% of workers are covered by workers’ compensation, though some states allow for exemption for employers with a limited number of employees, certain industries and certain occupations and in Texas the whole program is elective. Workers who are independent contractors or not engaged in the normal trade or business may not be protectedMost states require employers to provide full medical benefits, this has become extraordinarily expensive. Fee schedules imposed in an attempt to limit expenses are controversial. Cash benefits vary.Temporary total disability benefits are paid to a worker is entirely unable to work for the healing period and in most jurisdictions are 2/3 of the worker’s pre-injury wage, subject to maximum and minimum amountsTemporary partial disability benefits are paid to those who are able to return to work but with limitations on the amount or intensity of work that can be performed during the healing period and are generally 2/3 of the difference between the worker’s pre-injury wage and the current earnings, subject to a maximum Permanent partial disability benefits are controversial and take two forms: (1) Scheduled PPD benefits are paid for specified injuries on the statute (i.e. loss of arm = 312 weeks benefits) and (2) Nonscheduled PPD benefits are paid for unlisted permanent injuries.Permanent total disability benefits are assigned for particular injuries (i.e. loss of two arms) – relatively uncommonDeath benefits are paid to the survivor of a worker killed on the jobWorker’s comp is based on a tradeoff – employees get a no fault system (they don’t have to prove that employer was at fault, no contributory negligence). Employers required to pay predictable, low compensation – awards are limited. It is also the exclusive remedyTo qualify for compensation, there must be:Personal injury that Results from an accidentThat arises out of employment, andMust occur during the course of employment In the course of employment (#4): may include work-related social activitiesEzzy v. Workers’ Compensation Appeals Board (CA Ct. of Appeals 1983, pg. 894): P injured her finger while playing in a law firm softball game. CA statute: Generally, no recovery may be had where the injury arises from voluntary participation in athletic activities, but where activities are a reasonable expectancy of, or are expressly or impliedly required by the employment related injuries are compensable. Test for whether an activity is a reasonably expectancy of employment depends on (1) whether the employee subjectively believes that his or her participation in an activity is expected by the employer and (2) whether that believe is objectively reasonable. Court says yes, reasonable expectancy – she’s unusually vulnerable to pressure. When she’s urged to play by a partner, it was reasonable to feel that she had to play Two ways of phrasing statute: 1) reasonable expectancy and 2) impliedly required. Are these two different? Where to draw the line? What if a partner asks you to go on a run with him on Saturday morning and then you get injured? Different b/c not work-sponsored? Sachs says not really a distinction. Work sphere is extended whenever there’s social interaction outside of work hours. The fact that the firm sponsors the softball game – can’t really tell us whether it’s a reasonable expectation or not. Ex. a partner calls and says – really want you to come to dinner tonight to meet some other partners. No sponsorship, no firm name, but it’s also somewhere you wouldn’t normally be One possibility: these things are all work. We’re just catching the legal regime up. But if that means every time the supervisor takes you out to dinner he’s responsible for your injuries, we will discourage this genuine social interaction that we might otherwise like Arising out of employment (#3): When the employment exposes the worker to injury, it arises out of employment (actual risk test) Three types of risks on the job: Occupational – always compensable (machine breaks, slices your finger – clearly compensable) Personal risks – heart attack caused by drug overdose (not compensable) Neutral risks – cause is not clearly occupational nor clearly personal. Depends on state by stateHanson v. Reichelt (IA 1990, pg. 920): P died of heatstroke while baling hay. Court rejects older public increased risk rule (old, rejected by majority), which permits recovery only in cases where the employee is exposed to conditions of temperature unusual or more intense than those experienced by employees of the community in general Larson’s criticism: you don’t compare Hanson to someone else in a similar employment out in the heat – you make a cross section with someone in the general public, who wouldn’t choose to be outside when it’s 100 degrees outside. Wouldn’t bale hay and dig ditches. So employment DOES in fact increase the risk from this otherwise neutral, natural risk (the sun). Court adopts actual risk rule: although the risk may be common to all who are exposed to the sun’s rays on a hot day, the question is whether the employment exposes the employee to that risk. It makes no difference that the risk was common to the general public on the day of the injury. Court remands on this issue, would seem that Hanson would definitely win under this ruleWorkers’ compensation act is to be construed liberally in favor of the employeeWhat if Hanson is walking out to bale hay and he’s struck by lighting – same result? Arising out of employment requires a causal connection Chicago Board of Education v. Industrial Commission (IL Ct App. 1988, pg. 943): “Occupational disease” under Occupational Diseases Act means a disease arising out of and in the course of the employment or which has become aggravated and rendered disabling as a result of the exposure of the employment. Such aggravation shall arise out of a risk peculiar to or increased by the employment and not common to the general public. A disease shall be deemed to arise out of the employment if there is apparent to the rational mind, upon consideration of all the circumstances, a causal connection between the conditions under which the work is performed and the occupational disease. The disease need not to have had its origin or aggravation in a risk connected with the employment and to have flowed from that source as a rational consequence.Whether mental illness qualifies as an occupational disease depends upon whether the employee can establish the risk to which he was exposed arose out of and in the course of his employment and has a clear causal relationship to the disability suffered. The disease must flow from the risk as a rational consequence. A causal connection between the employment and the disability must be established by showing that the employment exposed the employee to an identifiable condition of the employment that is not common and necessary to all or to a great many occupations. Stated differently, mental disorders not resulting from trauma must arise from a situation of greater dimensions than the day to day emotional strain and tension which all employees must experience.Policy: The statute just says “general public.” The court says that the stress has to be greater than that “which all its employees experience.” Why does the court think this? Why shouldn’t the test be – if the employee experienced greater stress than she otherwise would have experienced if she didn’t take the job? Court concerned b/c: 1) issue of fabrication. It’s easy to establish the link b/w exposure to asbestos and asbestosis. But link between workplace stress and mental disability is far less clear. Difficulty of showing causation, so fabrication problem. 2) opening the floodgates – the pressures of everyday life can’t be legitimate reasons for worker’s comp claims Shows inherent skepticism w/ mental illnesses, sees as a problem w/ the individual character of the personCourt requires that the stresses be extraordinary. Would the baseline be determined by each individual industry?Worker’s comp does not compensate mental injuries caused by loss of work. Should it? Courts tend to say that these aren’t compensable b/c it’s just too common – lots of people lose jobs, which is not the kind of extraordinary stressor. But on the other hand, shouldn’t the point of compensation be to ensure people against those that are going to happen to a large group of people?If we know that layoffs will cause psychological harm, who should pay for the medical treatment? If you don’t allow worker’s comp coverage, the worker plays for it, but that might be fine Same question as asked with childcare – in the absence of a broad social welfare program, does it make sense to tie this to employment?ExclusivityOne of the founding principles of workers’ compensation. In exchange for a no-fault system (which benefited workers), workers’ compensation became the exclusive remedy against the employer for a worker injured on the job (which benefited employers). Several exceptions that allow an injured employee to bring a tort suit against the employer or another partyExclusive remedy provision doesn’t bar tort suits against third parties (who are liable for full damages and cannot require that the employer pay a portion) Note that an OSHA violation does not by itself create an exception to the exclusive remedy doctrine (pg. 1090)Where worker can show an intentional wrong, workers’ comp is not the exclusive remedyMillison v. Du Pont (NJ 1985, pg. 869): Workers made 2 allegations: 1) employer knew or should have known dangers to asbestos exposure, had a duty to inform Ps and to protect them, but concealed all information regarding the health hazards; 2) company medical staff fraudulent concealed exam results which revealed asbestos-related diseases and sent them back into hazardous workplace. Were not told until 8 years later. Court: when workers qualify for worker’s comp under the conditions of the Act, the employee shall ordinarily be barred from pursuit of other remedies. However, an exception to the exclusivity provision is available when plaintiffs can prove an intentional wrong. To show an intentional wrong, there must be a deliberate intention to injure. Intentional harm exists where 1) there is substantial certainty (virtual certainty) that consequences of the harm will result in such harm. The court must 2) examine the context in which the conduct takes place Intent = substantial/virtual certainty of the harm, reviewed based on the context.Mere knowledge and appreciation of a risk is NOT enough to establish intent, even if an employer knowingly orders a hazardous work condition to exist, even if employer asks employee to perform an extraordinarily dangerous jobWhat is the court concerned about here? Adopting a very high bar. Whenever there’s a workplace risk, there’s always some sort of intent – virtually all accidents are the risk of an employer intentionally acting. It’s a fact of industrial life that employers will expose their workers to intentional conditions. If intent is construed too broadly, exception will swallow the whole ruleContext – whether the circumstances which the injury is inflicted are part of the normal course of employment life or not. The normal risks would be covered by worker’s comp, but if the risks can’t be said to be part and parcel of their work, then worker’s comp doesn’t stand as a bar to other forms of recoveryDifference b/w tolerating risky conditions in the workplace that results in some number of illnesses, and actively misleading employeesConduct in knowingly exposing plaintiffs to asbestos clearly amounts to deliberately taking risks with employees’ health, the mere knowledge and appreciation of risk, even with a strong probability, is not substantial certainty and thus will not be found to be an intentional wrong in order to overcome the exclusive remedy barHowever, tolerating in the workplace conditions that will result in a certain number of injuries or illnesses is different than actively misleading the employees who have already fallen victim to those risks of the work place and such intentionally-deceitful action goes beyond the bargain struck by the Compensation Act.Dissent: Agrees with the test, but not the outcome. First count of asbestos – seems like it’s substantially certain that bad health effects would happen because of asbestos. Agree with the dissent on the substantial certainty test. But also there’s something problematic w/ this substantial certainty testAlternative: actual intent test – deliberate infliction of harm. Find that the employer actually meant to harm the workers in the way that someone would mean to harm someone else by punching them in the face. But this is not necessarily best – would have to find subjective intent. This is NOT the standard that’s implied, but at least has the virtue of being clear Occupational Safety and Health ActOSHAct covers virtually all private sector employees (exceptions: federal employees, state and local employees and small employers/farms) – written with the intention of imposing safety standardsOSHAct standards are not specific: §5(a) subjects employers to a general duty to “furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm” and requires further that each employer comply with the standards promulgated under the Act.There are four elements to a general duty claimThe employer failed to keep the workplace free of a hazard to which employees of that employer were exposedThe hazard was recognized; The hazard was causing or was likely to cause death or serious physical harm; and There was a feasible method to correct the hazard.Recurring issue: what criteria should be used in creating standards – the most prominent proposals are (1) technological feasibility, (2) economic feasibility, (3) benefits to workers’ health or safety, and (4) cost-benefit analysisConsideration of technological feasibility AFL-CIO v. Brennan (3rd Cir. 1975, pg. 993): “no hands in dies” regulation is found to be untenable, and doesn’t fall into one of the exceptions.OSHAct is meant to upgrade working conditions, not to completely eliminate hazardous occupations (though this would be the most certain way of eliminating hazards)Sec’y may consider technological feasibility, but won’t implement those that are technologically infeasible unless it falls into one of two exceptions: Technology is looming on the horizon – insist upon it in that case, since OSHA is a “technologically forcing” legislation In a sector where the hazards are great and also of little social utility. In these industries that involve such great hazards, total elimination may be appropriateCourt derives this interpretation fromCongressional statement of purpose: OSHA meant to upgrade working conditions, not eliminate hazardous occupations6b5: sub-category of all the hazards that OSHA will regulate – Secy of labor will set standards to the extent feasible w/r/t toxic materials. This section explicitly confines the Secy’s rule-making authority within technologically feasible boundaries. Thus, he must be permitted to do so w/r/t other hazards under the more general language of 6aIs this a policy issue – needs a clearer statement from Congress to decide? Has Congress been ambiguous about this? Statutory interpretation – does the current statute impute a feasibility standard? Is it reasonable for the court to read the statute this way and reject the AFL-CIO’s reading? Rule will create a market for technological development – is this a reasonable standard? How will OSHA determine what technologies are looming, and what technologies are too far? What’s the difference b/w this and Southwest? If Southwest argued that it wasn’t economically feasible, would the Court have left it off the hook? We’re also asking the DOL to distinguish between the social utility of different industries. Is that appropriate? Now doing a balancing test between human safety and social utility? How to measure social utility? Contribution to GDP? Consideration of economic feasibilityBecause Congress did not intend to protect employees by putting their employers out of business with either requirements for non-existent protective devices or by making financial viability generally impossible, so economic feasibility should be considered too – financially burdensome is fine but prohibitively expensive is not. Standards whose cost alter the competitive structure of the industry or be unenforceable due to widespread noncompliance maybe economically infeasiblePolicy Consideration: Is it appropriate to allow for the operation of the economy to trump the functioning of the statute?And how to tell the difference b/w financially burdensome and prohibitively expensive? Act imagines that some businesses will go out of business. But if the standard requires changes that only a few leading firms could quickly achieve, delay might be necessary to avoid increasing the concentration of that industry. Or if the competitive structure of the industry would be negatively affected, ex. no ability to produce substitute products, the secretary could properly consider the factor. Court says should delay the imposition of the standard in these cases. Why should this be allowed? Sachs: had more resolve in the Title VII context (i.e. can’t use customer preferences), versus less resolve to change existing structures in OSHA by allowing economic leeway. Point: Do we use the law to change some of these norms? Benefit to workers’ health or safety (pg. 997): must use scientific evidence to prove benefits of a proposed standard Cost-benefit analysis (pg. 1000): have to place a $ value on the advantages and disadvantages of a proposed activity Enforcement with the OSHAct is done through compliance inspections, but these are done infrequently (a company gets inspected once every 117 years). Advance notice can be a serious problem – may be possible to temporarily mask or hide or change some safety and health hazards. But raises 4th amendment questions Two types of inspections: (1) programmed inspections at high-hazard industries and workplaces and (2) unprogrammed inspections triggered by accident reports.OSHAct § 8a (29 USC § 657): In order to carry out the purposes of this Act, the Secretary, upon presenting appropriate credentials to the owner, operator, or agent in charge, is authorized –To enter without delay and at reasonable times any factory, plant, establishment, construction site, or other area, workplace or environment where work is performed by an employee of an employer; andTo inspect and investigate during regular working hours and at other reasonable times, and within reasonable limits and in a reasonable manner, any such place of employment and all pertinent conditions, structures, machines, apparatus, devices, equipment, and materials therein, and to question privately any such employer, owner, operator, agent or employee.OSHA must have a warrant to inspect workplaces (no need for probable cause – can show that a random inspection is based on a general administrative plan for the enforcement of Act) Marshall v. Barlow’s Inc. (US 1978, pg. 1040): Barlow, who owned an electrical and plumbing installation business, refused to allow an OSHA inspector to enter. Ex parte warrants do not impose an undue burden on the inspection process – they just need to show reasonable need for conducting the investigation. Provides assurances from a neutral officer that inspection is constitutionally reasonable, authorized by statute, pursuant to an administrative plan, notifies owner of the scope and objects of the search. Warrants can be issued ex parte and without delay or prior notice, preserving the surprise element. Based on history of 4th amendment: Concern with warrantless searches of businesses. Generally unreasonable, even when a business and not a home, for civil and criminal purposes. The only exception is for historically regulated businesses, such as alcohol and firearms, because there’s an expectation that the government will be involved in these businesses That an employee is free to report, and the Government is free to use any evidence of noncompliance with OSHA that the employee observes furnishes no justification for federal agencies to enter a place of business from which the public is restricted to conduct their own warrantless searchSec’y says should balance goals/needs of the act and privacy interests. Sec’y says there’s already a measure of reasonableness in the statuteCourt buys need for surprise, but doesn’t think that getting a warrant will impose severe administrative strain On the other hand, privacy interests are significantly weighty. Concern about governmental entrance into the private sphereShould we care that it’s the government, or should the 4th amendment care when there’s a criminal case?If assume you couldn’t use the evidence you gathered during OSHA inspection in a criminal investigation, would this feel like less of an imposition? Or is the fact that it’s a governmental intrusion significant in and of itself? Policy Consideration: Does it really make sense to provide the protections applicable in the criminal context to regulatory safety arena or is there a false equivalence? Haven’t you lost your reasonable expectation of privacy when you have a business that is subject to regulation? OSHAct includes a right to refuse to work in narrow circumstances, and a related right against retaliation General rule – there’s no right to walk off the job b/c of unsafe working conditions. In general, supposed to go through a process (tell employer, seek OSHA intervention). The statutory scheme is intended to provide a swift remedy. Exception is for only very special circumstances, coupled with lack of alternatives. An employee who is confronted w/ the choice b/w not doing the job or subjecting self to serious injury or death, and there’s no reasonable alternative – only then is the employee is entitled to refuse to expose to work Whirlpool Corp v. Marshall (US 1980, pg. 1065): Two employees refused to work for six hours b/c of the unsafe guard screen. The statutory scheme is intended to provide swift remedy, but in the event it is not sufficient to protect workers, when (1) the employee is ordered by his employer to work under conditions that the employee REASONABLY believes pose an imminent risk of death or serious bodily injury, and (2) the employee has reason to believe that there is INSUFFICIENT TIME or opportunity to either seek effective redress from his employer or apprise OSHA of the danger, then the employee may refuse to expose himself to the dangerous condition without being subject to ‘subsequent discrimination’ by the employer. This right is extremely constrained, you must pursue the statutory channels first – this is not a broad walk-off right.This standard comports with the preventative function. Fundamental objective is to prevent deaths and injuries, and it’s consistent with its remedial purpose. It would seem anomalous to construe the Act from prohibiting an employee, with no other reasonable alternative, the freedom to withdraw from a workplace environment that he reasonably believes is highly dangerousEmployees who refuse to work forego their pay, but cannot be discriminated against (ex. cannot have negative evaluations placed in their file b/c of walking off the job. Can’t be treated differently from other employers)Policy: Why a general rule that disallows an employee from stopping work in the face of hazards and only when there’s a risk of serious injury or death? If the employee stopped working, couldn’t we have an ex-post review? This would favor the employee safety vs. ex ante approach here – more control by the ownerEmployees are enforcing OSHA v. inspectors are enforcing once every 117 years. Would change the nature of the enforcement – spontaneous employee action. Could also ramp up the penalties Why did W care so much about this case? Worker died, W got $600 ticket. On remand, has to pay 6 hours of backpay. What’s at stake? Issue is not the backpay or the reprimand – something about what the employees’ opposition would mean to the future of work/life at W, concerned about future strikes w/ pay. Waters down managerial authority. Employers aren’t certain what the standards are – how do you know what will pose dangers to employees, what disciplinary steps can you take, how much do you have to pay for. Something is making W angry, but hard to know whether it’s OSHA or broader power dynamics – to the extent that this is something about OSHA enforcement problem, may want to correct them via statute. To the extent that this is a visceral rejection of employee power on the shop floor, maybe this isn’t something that we can correct through OSHAOSHAct does contain provisions establishing criminal penalties if employer’s act is willful and causes death29 USC §666(17) (e) Willful violation causing death to employee: Any employer who willfully violates any standard, rule, or order promulgated pursuant to section 655 of this title, or of any regulations prescribed pursuant to this chapter, and that violation caused death to any employee, shall, upon conviction, be punished by a fine of not more than $10,000 or by imprisonment for not more than six months, or by both; except that if the conviction is for a violation committed after a first conviction of such person, punishment shall be by a fine of not more than $20,000 or by imprisonment for not more than one year, or by both.Employer who repeatedly violates standard w/o meeting the willful test or that results in bodily injury is not subject to criminal prosecutionCriminal prosecutions will never be a common method of encouraging workplace safety. So what is its role? Deterrence: criminal prosecutions focus attention on workplace safety and make high level execs who don’t care about menial fines but may care about personal consequences. Perhaps raise public consciousness and corporate responsibility Expressive function: societal statement of its strong disapproval of conduct OSHA violation does not create private right of actionIX. Employee LeaveRegulated by many state and federal laws – Family Medical Leave Act, ADA (as a reasonable accommodation), Pregnancy Discrimination Act, Uniformed Services Employment and Reemployment Rights Act, etc.A. FMLA Family Medical Leave Act (FMLA): Most important federal leave-time law; requires employers with 50+ employees to grant up to 12 weeks of unpaid leave each year to eligible employees who have serious health conditions themselves, who need to care for a newly born or adopted child, or who need to care for a spouse, child, or parent with a serious health condition. Can return to your job or an equivalent position 28 USC § 2612: (a) In general (1) An eligible employee shall be entitled to a total of 12 workweeks of leave during any 12-month period for one or more of the following:(A) Because of the birth of a son or daughter of the employee and in order to care for such son or daughter.(B) Because of the placement of a son or daughter with the employee for adoption or foster care.(C) In order to care for the spouse, or a son, daughter, or parent, of the employee, if such spouse, son, daughter, or parent has a serious health condition.(D) Because of a serious health condition that makes the employee unable to perform the functions of the position of such employee.(E) Because of any qualifying exigency (as the Secretary shall, by regulation, determine) arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on covered active duty (or has been notified of an impending call or order to covered active duty) in the Armed Forces.Leave time is important in that it plays a role across broader workplace issues like gender disparities. Purpose of FMLA: To enable employees to maintain employment even in the face of serious medical conditions, to promote equal employment conditions for women, and to allow employees to balance workplace demands and homes, to promote economic security for families, preserve family integrity Working parents were forced to choose between job security and parenting. FMLA enacted to “help men and women balance the conflicting demands of work and personal life” B/c of the small business exception: only 11% of private sector employees are covered28 USC §2611(b)(ii): The term "eligible employee" does not include - (ii) any employee of an employer who is employed at a worksite at which such employer employs less than 50 employees if the total number of employees employed by that employer within 75 miles of that worksite is less than 50.75% of employees covered overall Given the purposes of the act, what kind of sense does this small business exception make? Theory: easier for larger employees to spread the work. Higher burden on smaller employersFrom the perspective of the employee, doesn’t make any sense – one needs leave just the same whether working for a larger or smaller firm Should we have a small business exception? Inadequate law is better than no law at all – has something to do with politics. Otherwise, bill would never get passed. If we could get this bill passed without a small business exception, should we? Is there a way that we could pass this bill w/o opposition from small businesses? Provide government subsidy? (ex. paying for temp workers) But the leave is unpaid, so it’s not nec about the wages you’d have to pay. It might be more about the disruption, re-training, etc. Perhaps this is hard to monetize, employer would rather have the worker than the lost timeWhat to do with these employees who have these problems that Congress envisioned b/c they can’t get the leave? Have this exception in most employment law statutes, but we’re left with this unavoidable fact – the purposes that Congress have in mind apply irrespective of where employees workWhat is a serious health condition? 29 USC § 2611(11): Eligibility for FMLA leave requires (1) a serious health condition (or other qualifying circumstance); (2) that prevents the employee from performing her job duties; and (3) provision of reasonable notice to the employer.Serious health condition means “an illness, injury, impairment, or physical or mental condition that involves (A) inpatient care in a hospital, hospice, or residential medical care facility; or (B) continuing treatment by a health care provider.” Continuing treatment may include “any period of incapacity due to pregnancy, or for prenatal care.” A period of incapacity includes “inability to work, attend school or perform other regular daily activities due to the serious health condition, treatment therefore, or recovery therefrom.” Pregnancy is not a per se serious health condition, but in certain contexts, it can be one and entitles an employee to FMLA leave Whitaker v. Bosh Braking Systems Division (DC Michigan 2001, pg. 676): P contends that pregnancy itself is a serious health condition. D argues that pregnancy only serious health condition if it leaves her incapacitated or otherwise unable to perform her job. To prevail on an FMLA claim, P must show that 1) she had a serious health condition, 2) that prevented her from performing her job duties, and 3) she gave D reasonable notice of her need to take leave Serious health condition? Key is a period of incapacity. P may prove incapacity only through evidence that a health care provider determined that the P was unable to work b/co f the injury or illness. Court holds that two normal pregnancies may be exposed to different risks because of different jobs. The question of serious health condition turns upon the nature of the job, not just the nature of the condition. Is consistent with the statute and the purpose of the act, because health conditions don’t exist in a vacuum but rather depends on other social conditions and the context surrounding the condition Prevented her from performing her job duties? Key is whether the function was an essential function of the position. Working overtime was an essential part of P’s job. Her choice essentially: take short term disability or be disciplined for working overtime. Notice? Doctor’s note clearly said she shouldn’t work more than 8 hours/day.Policy Consideration: In the ADA context, we examine disability based on a broad class of jobs, here the examination is with the pregnancy and the job at hand. Why? Policy: is it right for a federal employer to provide a specific kind of leave? The employer was prepared to offer Whitaker a leave that would accommodate her pregnancy-related needs. But the FMLA comes in to say that type of leave is insufficient – you must provide this other type of leave. Should FMLA make this type of specific provision? Should FMLA be a minimum? If you’re trying to adhere to the purposes of the FMLA, maybe this helps her maintain equality in the workforce. If it’s true that intermittent leave advances those interests (women are more likely to remain at work, she can maintain seniority rights while working 40 hours/week v. losing this if she takes a full leave), this policy is explicitly better than the one that Bosh had B. FMLA V. ADA Courts may interpret the FMLA v. ADA to allow for employee leave under different circumstances Byrne v. Avon Products (7th Cir. 2003, pg. 683): Byrne was a stationary engineer and consistently reading, falling asleep, and going into the carpenter’s shop during work. Left work one day and failed to show up to meeting with employer. Sister said Byrne was very sick. Was out for 2 months. Can he take leave under ADA or FMLA? ADA – forbids employers to discriminate against any qualified individual w/ a disability b/c of the disability – but applies to those who CAN do the jobByrne says he was incapable of working, argued that employer should have accommodated by being granted leave time to deal with his mental disability. Court rejects this claim – not what the ADA says. ADA says that the accommodation will allow the person to perform the essential functions of the employment position. Not working is not a means to performing the job’s essential functionsAcknowledges that time off may be an accommodation (for lupus, arthritis). But he’s not asking for a few days off – it’s for an extended period of time, which is too longIs the court right that this wouldn’t constitute a reasonable accommodation? Should we distinguish b/w a short-term leave and what Byrne required? It’s not an undue hardship on the employer, because employees are generally required to grant more leave FMLA - Although the ADA applies to those who can do the job, FMLA applies to those who can’t work, but depends on employer noticeArgues that when his sister told Avon he was very sick, plus the fact that Avon learned of his hospitalization, that provided sufficient noticeCritical issue: was someone in Byrne’s state able to give notice? Notice of a serious mental health condition could take the form of 1) a noticeable change in behavior that is enough to notify an employer that P suffers from a serious health condition, or 2) can be excused from providing notice where the condition is unforeseeable and thus the employee is incapable of working or providing notice/notice is infeasible. A person unable to give notice is excused from doing so. Enough that the employer knows the reason for the leave – employee doesn’t have to mention FMLA by nameWhat’s the basis for this rule: employees are equally deserving of leave under FMLA but can’t actually notify employerPolicy: is this inconsistent with the at-will rule? District court says that the FMLA does not protect employees whose discharge would have occurred despite FMLA leave – he neglected his work duties entirelyPolicy Consideration: Is it appropriate for the court to take into consideration the protections offered by one statute in construing another?C. Uniform Services Employment and Reemployment Rights Act of 1994 (USERRA) Governs leave for members of the uniformed services in connection with their service dutyUSERRA leave entitles employees to non-discrimination, but only in the same non-seniority rights and benefits as offered to employees on other types of leave Rogers v. City of San Antonio (5th Cir. 2004, pg. 688): Members of the reserves or the national guard have to take leaves of absence for military training – Ps claim that the city violated USERRA by not paying several sets of benefits b/c they took these military leaves. Argues that they were denied: 1) regular pay for the time they were absent 2) unscheduled overtime and training; 3) bonus pay/perfect attendance; 4) cap on lost overtime. Point to 4311a: member of the uniformed services should not be denied initial employment or any benefit of employment on basis of membership in uniformed services. Employer argues that 1) person reemployed under USERRA entitled to seniority and 2) person absent should be entitled to other rights and benefits generally provided to those taking other types of leave USERRA was enacted to encourage noncareer service in the uniformed services by eliminating or minimizing disadvantages to civilian employment, to provide prompt reemployment upon return from service, and to prohibit discrimination. Employers with a seniority system must restore returning service members to their place on the “escalator” (i.e. where they would be had they not left to serve).Vietnam Era Veteran’s Readjustment Assistance Act (VRA): precedent could allow for two readings of the antidiscrimination provision: (1) Broad: anything missed as a result of absence is a denial of a benefit, thus service members on leave should be treated as if they were constructively present or (2) Narrow: benefits must be facially neutral so that benefits accrued for maternity leave are similarly accrued for military leave. Equal treatment – reservists have to be treated the same as others who take leave Service members will NOT be considered constructively present for non-seniority workplace benefits and need only be treated in the same way as other leave programs – preferential treatment is not necessary.USERRA only allowing firing when servicemember has returned for one year for cause Cause for discharge under USERRA: conduct or b/c of application of other non-discriminatory reasons. Conduct: employer bears burden and that employee had notice, which was express that the conduct would constitute cause for discharge. Other legitimate reasons: placed on layoff status or getting rid of the position but the employer bears the burden of proving that the employee’s job would have been eliminated. An extraordinary rule in employment law At will-rule and reinstatement rights – employer could just reinstate you and fire you. The act’s protections would be compromised unless there’s a cause requirement On this reason, where else should we have this? FMLA – of any other kind of policy that has reinstatement clauses should have just cause. Why USERRA and not elsewhere? Politically, easier to legislate protections for servicemembers? Policy: is Congress making employment policy in a way that just so happens to impact the family/military, or is Congress making family and military policy and using employment relationship as a tool to deploy these other policies? Sachs: doesn’t seem that there’s an employment law policy for the difference in treatment b/w all these people who return from leave. Maybe it’s that we’re doing all of these other types of social policies that then affect employment differentlyUsing employment as a tool to a change in the social structure b/c employment is so important and pervasive? Employment law not about employer and employee coming together in a vacuum – seems to be a more public notion of employment. Congress treating employment as a public institution, but not implementing it equally across the board X. Enforcement of Employment RightsA. Common Enforcement IssuesEmployment law – enforcement gap b/w what’s on the books and what employees actually enjoy One way that Congress has attempted to deal with the problem is through attorney’s fees: provision of attorney’s fees to the prevailing party are awarded on a differential basis depending on whether the party is a plaintiff or a defendantTitle VII 706(k) Attorney’s fee; liability of Commission and United States for costs: In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney’s fee (including expert fees) as part of the costs, and the Commission and the United States shall be liable for costs the same as a private person.Christianburg Garment Co. v. EEOC (US 1978, pg. 1117): Helm filed a Title VII charge of racial discrimination but did not sue. EEOC sued Christianburg Garmet. SJ granted for company b/c the Helm charge had not been “pending” before the Commission when the 1972 amendments took effect. Company then petitioned for attorney’s fees under 706(k). District Court said no, company appealed. Under what circumstances should a winning D recover attorney’s fees? Rule: Court may grant attorney’s fees to a prevailing D upon a finding that the P’s action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faithUnder Title VII, presumption in favor of recovery b/c 1) P is chosen instrument of congress to vindicate an important public policy; 2) when court awards fees to prevailing plaintiff, awarding them against a violator of federal law. Want to make sure that cases are brought even if legal fees would swallow all or most of the recovery Congress did not intended to distort the adversarial process by giving the private P substantial incentives to sue, while foreclosing to the D the possibility of recovering his expenses in resisting even a groundless action unless he can show that it was brought in bad faithA rule in which a prevailing plaintiff ordinarily is to be awarded attorney’s fees in all but special circumstances seems to support the policy But if P brings a case and loses, there’s no determination that D did anything wrong. Why is it fair for D to pay its own legal fees when D wins? Should the public have to pay instead of D? Spread this across taxpayers? Maybe the EEOC should pay (something like a tax credit for those businesses who are sued but then win). If the costs were spread on taxpayers, maybe there’d be less hostility or opposition to these cases. This might have an over-incentive for Ds, knowing that as long as they win, they can recover the fees Seems like we’re making a decision and judgment that employment is a public institutionAnalogy to workers comp/unemployment – feels that the kinds of costs can be very substantial, particularly for small employersHas an incentive effect for them not to violate the law – so that they will do a little more than necessary Sachs: problem is that there’s still a gap of actions that can’t be anticipated but also aren’t frivolous Perhaps we think that even when Ds win, they haven’t been perfect employers. It’s hard for Ps to prove their cases all the time, maybe we think that P is still wronged in some way. We want those cases to settle. But this rests on the assumption that we should assume that the P has been harmed even when D wins, and that would be a strong assumption for the court to make Federalism question – what’s the appropriate role for state governments when fed government makes employment laws? State laws may amplify the rights provided by federal lawBahramipour v. Citigroup Global Markets (NDCA 2006, pg. 1123): P was a former securities broker for D and filed a class action alleging that D engaged in illegal pay practices. Alleged that D misclassified securities brokers as exempt employees under FLSA. Sues under state law. UCL prohibits any “unlawful, unfair, of fraudulent business act or practice.” Incorporates other laws and treats violations as unlawful business practices independently actionable under state law. The violation of any federal law becomes a state cause of actionBrings under state law because 1) wants to get wages and backpay for 4 years, which is the SOL. Federal SOL is 2 years; 2) wants to certify a standard opt-out class. But FLSA only allows for opt-in class actions. P is trying to improve upon the FLSA enforcement regime—more powerful class action mechanisms and longer SOL But she gives up FLSA’s liquidated damages for unpaid overtime, also punitive damages Conflict preemption? UHL has 4-year SOL and allows class to be certified as an opt out class. FLSA has 2-year SOL and only opt-in class. Court doesn’t buy this argument because past cases were concerned about this when P filed both a state action and a federal action. Not the case hereCongress enacted opt-in to prevent enormous liability which would flow from windfall payments, liquidated damages. Since the UCL doesn’t have liquidated damages, this is not a conflict. Court also says that the conflict b/w UCL and FLSA SOLs doesn’t matterState’s more favorable provisions is supporting the congressional purpose of the FLSA, helping to enforce FLSA Is this an appropriate role for state and local law? If there’s a shortcoming in federal employment law, should states and localities have the ability to step up enforcement? What if the state allows a measure of damages that the federal government doesn’t allow? Or the other way around? When a federal government provides a remedy and the state doesn’t? This may make sense if we think of employment law as a series of rights to employees. However, it’s not necessary true – employment law is a balance of rights between employers and employeesMaybe this is OK because we think that congressional intent is not clear as to whether FLSA is a floor or ceiling Underenforcement may result from a collective goods problem: David Weil, Individual Rights and Collective AgentsThere is an enforcement gap between the law on the books and the employment reality. There will be under-enforcement when it was left to the workers due to (1) a public goods problem [benefit to the collective is greater than to the individual] and (2) the cost of exercising rights [workers use a CBA to assess and the cost to the individual may be higher than their benefit]. Could be resolved by collective agent which would solve the public goods problem by aggregating preferences and spreading the costs. An effective collective agent would have (1) aligned interests, (2) method for efficient information collection, and (3) method for protecting against retaliation.B. Arbitration of Employment Disputes There are two types of arbitration: (1) interest arbitration (unusual in the US employment sector) where a neutral body establishes the rights or terms between parties who cannot agree by themselves and (2) grievance/rights arbitration (long history in unionized labor) where a statute or contract has set out the rights and terms, but the parties cannot agree on how they apply in a particular context. Arbitration involves informal hearings and loose rules of evidenceResolution of federal statutory claims can be subject to compulsory arbitration under certain circumstancesFAA General Coverage Provision: §2 A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.§1 Savings Clause: But nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce. Gilmer v. Interstate/Johnson Lane Corp (US 1991, pg. 1138): P hired as a securities representative with several stock exchanges. Signed an arbitration agreement when he started. Fired him in 1987 when he was 62. Filed an age discrimination charge with EEOC and brought suit in district court in NC. D filed a motion to compel arbitration of the ADEA claim. Court punts the question of FAA’s applicability to employment contracts. Having made the bargain to arbitrate, the parties should be held to the bargain unless Congress has evinced an intention to preclude a waiver of judicial remedies If Congress said – we don’t want these claims to be arbitrated – then we wouldn’t force arbitration. Gilmer must show Congress specifically intended that Congress wanted to bar ADA claims in arbitration Arbitration consistent with the ADEA. Arbitration serves the same purpose as a judicial forum. Thinks it’s the same deterrent functionDo you buy this argument? Judicial proceedings are public vs. private arbitration. If you’re concerned about reputation, which might be a strong deterrent, can we change this by making arbitration awards more public? OR, the fact that we think that a judge’s outcome has a different social resonance than the same decision by an independent arbitratorProcedural inadequacies about a tradeoff. Less extensive procedures, but quicker outcomes-speed, informality. Thus, waiver to a judicial forum is ok Court rejects bargaining power argument: “mere inequality in bargaining power is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context. Remain enforceable unless there’s a showing of force, fraud, overwhelming economic power Problem is—how do you define bargaining power? Gilmer might define it as a take it or leave it term. Is there something such that a take it or leave it clause doesn’t indicate consent (not a real choice)? Why aren’t ALL provisions in contracts not truly consented to? So is there a reason we should distinguish arbitration clauses from all other types of clauses? Some sort of constitutional, foundational reason why we care about arbitration. This is not about an individual term—it’s about how ALL other terms in the contract will get enforced Maybe the lack of information? When we’re signing the agreement, we don’t know the consequences of waiving a judicial forum, thinking (cognitive bias—we don’t know the consequences of signing the rights awayFAA applies to employment contracts Circuit City Stores, Inc. v. Adams (US 2011, pg. 174): The exception to non-applicability is narrow for seamen, railroad employees and other classes of workers engaged in foreign or interstate commerce. 1) General coverage provision of §2 applies broadly – extends anywhere Congress’s commerce powers goes. Court has already construed this clause to extend to the full effect of the commerce clause 2) Exception provision §1 is narrow. Because of ejusdem generis: where words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words. General words are employees engaged in interstate commerce, but they come after seamen and railroad employees, meaning that “any other workers” refers to transportation of goods – movement of goods across state lines. An extremely narrow conception of what interstate commerce is, as opposed to the extremely broad one that we read in section 2. Additionally, “involving commerce” in § 2 signals an intent to exercise Congress’ commerce power to the full – but on the other hand “engaged in commerce” has a more limited reachArbitration must meet minimum procedural safeguardsArmendariz v. Foundation Health Psychcare Services, Inc. (CA 2000, *pg. 177): Gilmer/Cole recognizes five minimum requirements for lawful arbitration of such rights: 1) provides for neutral arbitrators; 2) provides for more than minimal discovery; 3) requires written award; 4) provides for all of the types of relief that would otherwise be available in court; 5) doesn’t require employees to pay unreasonable costs or ANY arbitrators’ fees or expenses as a condition of accessIn Gilmer we said that you can have limited discovery for a faster process—why wouldn’t this also be the case with remedies? Does this mean that there’s something different b/w the remedy and discovery? Maybe Congress thinks that vindicating Title VII rights means not just compensation but also punitive damages – maybe it means that this would foreclose the actual vindication if they can’t allow one typePaying fees – here, paying a pro rata share. Employees argue that requiring share the substantial costs effectively prohibits them from vindicating their rights. Under Gilmer, arbitration is supposed to be a reasonable substitute for a judicial court. When you bring a claim to federal court, you don’t pay for the services of the judge that are assigned to hear your case, so it would undermine Congress’s intent to gain access to a forum. But parties to civil litigation have to pay filing fees, etc. When an employer imposes mandatory arbitration as a condition of employment, arbitration agreement cannot generally require the employee to bear ANY type of expense that the employee would not be required to bear if she were free to bring the action in court (must pay all costs that are unique to arbitration). Especially can’t pay any arbitrator’s feesA state may not determine that class action waivers in arbitrations are unconscionable. Companies have a federally protected right to arbitration clauses. Class actions are inconsistent with arbitration, and are inconsistent with FAAAT&T Mobility v. Concepcion (US 2011, *pg. 182): Contested provision is §2 of the FAA, which permits arbitration to be unenforceable “upon such grounds as exist at law or in equity for the revocation of any contract” (including fraud, duress, unconscionablility) renders the class-action waiver in consumer contracts unconscionable (CA Supreme Court’s Discover Bank rule) Does Discover Bank rule fits within the savings clause of §2? Discover bank applies if: 1) class action waiver; 2) consumer contract of adhesion 3) in a setting where disputes will involve small amounts of damages; 4) allegation that the party w/ superior bargaining power (company) has carried out a scheme to cheat large numbers of consumers out of small sums SC says that a rule that formally applies to all contracts may nonetheless have a disproportionate effect on arbitration agreements and won’t fall within the savings clause. Requiring the availability of class-wide arbitration interferes w/ fundamental attributes of arbitration and creates a scheme inconsistent with the FAA and preempted Classwide arbitration sacrifices the principal advantage of arbitration, which is informality, low cost and high speedCompares classwide arbitration to bilateral arbitration. Bilateral arbitration happens pretty quickly, but classwide arbitration don’t get resolved Classwide action requires a procedural formality that we don’t useIncreases risk to defendants – devastating effects to Ds because you increase the costs to defendants (instead of losing $30, it loses $30x the number of customers) in a system that’s not designed for class actions. Risk of error high, no judicial review. Find it hard that Ds would bet the company with no source of reviewA state may not determine that class action waivers are unconscionable. Companies have a federally protected right to include these clauses. Class actions are inconsistent with arbitration, so inconsistent with FAADissent: class action proceedings are actually CONSISTENT with arbitration. This is a well-known form of arbitration in CA and elsewhere. We have class actions arbitrations everywhere. Is it enough to point to the existence of functioning class action arbitrations? Does the FAA actually answer this question about what arbitration has to look like? Not really. Not necessarily the case that just b/c class arbitrations are slower mean they’re inconsistent with the FAA Majority makes the wrong comparison: should compare class arbitration with judicial class actions If we’re viewing this from the perspective of the FAA, the question is whether a typical defendant would prefer arbitration/class action. Businesses will prefer class arbitrations b/c it’s faster and cheaper, so the discover bank rule will actually reinforce that objective (this is not necessarily true – do class arbitrations have the same preclusive effects?)But if an employer precludes class claims in any forum (judicial and arbitral), violates NLRB §7 rights to engage in activity for mutual aid or protection NLRB v. DR Horton (2012): NLRB act – grants employees to engage in activities in mutual aid or activity, bargain collectively through unions. SCOTUS has held that the statutory phrase “mutual aid or protection” extends beyond unionization and reaches channels outside employer/employee relationship, protects employees when they seek to improve their working conditions through administrative and judicial forumsFAA only prohibits courts from treating arbitration agreements less favorably from other contracts. Any contract that interferes with §7 rights is unlawful, arbitration agreement that interferes with section 7 rights is just like other contracts and is also unlawful No arbitration agreement may require employees to forego substantive rights of federal statute. Class action wavier is asking employees to forego substantive rights, right to engage in class actions is to ask them to waive their right for mutual aid and protection under NLRBDistinguishes AT&T: AT&T Mobility involved the claim that a class-action waiver in an arbitration clause of any con- tract of adhesion in the State of California was uncon- scionable. Here, in contrast, only agreements between employers and their own employees are at stake. Much narrower than the broad rule that AT&T lays outAT&T involved a potential class of thousands, much smaller in employment contracts. Involves a much smaller subset of contracts because 1) limited to employment context; 2) §2 transportation workers are exempt; and 3) employment contracts that don’t have judicial class action waiver won’t be an issue Samuel Estreicher, Predispute Agreements to Arbitrate Statutory Employment Claims (*pg. 210)Suggestion that arbitration is a kind of second-class justice system – not trueArgument that employers are repeat players: An employer may be a repeat player in the sense that it likely will be arbitrating disputes with more than one employee (or former employee), but arbitrators chosen on prior occasions are unlikely to be deemed acceptable by claimant representatives. Moreover, the real repeat players will be the lawyers for both defense and plaintiff bars in the area - such as the members of the National Employment Lawyers Association, a plaintiff group - who can be counted on to share information within their group about the track records of proposed arbitratorsProcedural obstacles are not insurmountable Doesn’t buy the voluntariness argument (arbitration clauses only enforceable when truly voluntary)A "voluntariness" test injects an additional element of uncertainty - on top of the doubts under existing law over whether these agreements are binding. This additional layer of uncertainty will have the effect of discouraging such agreementsVoluntariness standard also detracts from the desired uniformity of internal dispute resolution programs if pre-dispute agreements will be upheld for some employees but not others who are similarly situated in a particular workforceArbitration is a collective good—it’s worth the costs in the aggregate. If there’s collective arbitration over a whole workforce, the costs still outweigh the benefits to individual employeesPiecemeal application of a dispute resolution program could threaten to unravel the program for all other similarly situated employeesRichard Bales, Compulsory Arbitration: The Grand Experiment in Employment (pg. 1163)Arbitration has dramatically changed the company’s legal budget –legal costs are about 47% of what it used to beCompany’s settlement rate, settlement budget, and award budget have remained constant, indicates that the program as least as fair to employees as litigation More employees are receiving awards, though the awards are smaller than litigation – departure from the jackpot litigation system. Awards are distributed more equitably among a larger number of aggrieved employees May mean that employees with meritorious claims who could not obtain redress b/c they were unable to hire a lawyer or b/c of other procedural problems, are now obtaining redressPolicy: What would you tell Congress to do about the FAA? Change it, or leave its determination to the kind of judicial acrobatics that we see in cases like Circuit City and Concepcion? One option: amend to define the fundamental substantive characteristics of arbitration that are necessaryAmend the savings clause of §2: does society today have a compelling reason to exclude transportation workers from mandatory arbitration clauses—is this still relevant today? This would also resolve the potential discrepancy b/w AT&T and DR Horton ................
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