
Chapter 10 Introduction to Contracts
A contract is a legally enforceable agreement.
Elements of a Contract: For a contract to be enforceable, seven key characteristics must be present.
 Offer: All contracts begin when a person or a company proposes a deal (offeror). It might involve buying
something, selling something, doing a job, or anything else. But only proposals made in certain ways amount to a
legally recognized offer.
 Acceptance: Once a party receives an offer, he must respond to it in a certain way (offeree).
 Consideration: There has to be bargaining that leads to an exchange between the parties. Contracts cannot be a
one-way street; both sides must receive some measurable benefit.
 Legality: The contract must be for a lawful purpose and comply with the requirements of the law. Courts will not
enforce agreements to sell cocaine, for example.
 Capacity: The legal ability to enter into a contract. The parties must be adults of sound mind.
 Consent: Certain kinds of trickery and force can prevent the formation of a contract. Fraud and Mistake may
render a contract unenforceable because of a lack of true consent.
 Writing: While verbal agreements often amount to contracts, some types of contracts must be in writing to be
enforceable.
Offer
 Offer defined: An offer is an act or statement that proposes definite terms and permits another person to accept
the terms and enter into an agreement.
o Definite terms: price, quantity, date, duration
 What is not an offer?
o Invitations to bargain
 Example: Suppose Soo telephones Joe and leaves a message on his voice mail, asking if Joe
would consider selling his vacation condo on Lake Michigan. Joe emails a signed letter to Soo
saying, “There is no way I could sell the condo for less than $350,000.” Soo promptly sends Joe a
cashier’s check for that amount. Does she own the condo? No. Joe’s email was not an offer. It is
merely an invitation to negotiate. Joe is indicating that he might well be happy to receive an offer
from Soo, but he is not promising to sell the condo for $350,000 or for any amount.
o Price quotes (报价)
o Advertisements
 An advertisement is generally not an offer. An advertisement is merely a request for offers. The
consumer makes the offer, whether by mail, like Mesaros, or by arriving at a retail store ready to
buy. The seller is free to reject the offer.
o Letter of intent
 A letter of intent is a document outlining the general plans of an agreement between two or more
parties before a legal agreement is finalized.
 A letter that summarizes the main points of negotiation or proposed contract.
Case*: Gabriel v. Albany College of Pharmacy and Health Services
Fact: Matthew Gabriel was a student in Professor Pumo’s immunology class. Professor Pumo’s syllabus outlined course
requirements and stated that “plagiarism will not be tolerated.” After grading the first assignment, Professor Pumo
realized that many papers had sentences copied from other sources without citations. Instead of reporting everyone for
plagiarism, Professor Pumo said she would give students a “free pass” on one copied sentence. But Gabriel’s paper
contained many plagiarized sentences, so he received a failing grade for the assignment. Gabriel sued the professor for
breach of contract. He argued that the syllabus was a contract and that the “free pass” policy broke it—because that term
was not part of their original agreement. According to Gabriel, since the professor breached the contract, he was no longer
obligated to refrain from plagiarizing, and so should not be punished.
Issue: Was the professor’s syllabus an offer whose acceptance formed an enforceable contract?
Decision:
Argument for Gabriel: A syllabus is a contract. On the first day of class, the professor presents the syllabus as an offer
and students agree by staying in the course. The terms in the syllabus are promises upon which students rely. Professor
Pumo unilaterally changed the written “rules of the game.” Once she broke her promise, there was no longer a “deal.”
Students should not be held to her arbitrary rules.
Argument for Professor: The syllabus is merely an announcement that provides general information about course
requirements, grading policies, and behavior guidelines. Reasonable people do not expect a syllabus to be enforceable in
court. It was not a contract—Professor Pumo had the right to change the class rules, make additional assignments, or even
kick Gabriel out at any time. Even if the syllabus were a contract, the phrase “plagiarism will not be tolerated” is too
indefinite to be a valid offer. Gabriel is not immune from the plagiarism rules.

Termination of Offers
o Termination by revocation: An offer is revoked (取消的) when the offeror “takes it back” before the
offeree accepts.
o Termination by rejection: If an offeree clearly indicates that he does not want to take the offer, then he
has terminated the offer.
o Counteroffer: A party makes a counteroffer when it responds to an offer with a new and different
proposal. This equates to terminating the original offer.
o Termination by expiration: When an offer specifies a time limit for acceptance, that period is binding.
o Termination by operation of law: If an offeror dies or becomes mentally incapacitated, the offer
terminates automatically and immediately, or destruction of the subject matter terminates the offer.
Acceptance
 Acceptance Defined: Acceptance is when the offeree says or does something to indicate the intent to be bound
by an offer. Silence does not count.
 Acceptance Online
o Clickwraps: Agreement displays the proposed terms online and requires users to open. Accept by
clicking “I AGREE.”
o Browsewraps: Online contract that seeks consent by placing a hyperlink on the web page. Users are not
required to click the link. Courts have held that browsewrap agreements are not enforceable unless the
website can prove that users at least knew the agreement existed, whether or not they read it.
o Hybridwrap: Combines elements of clickwrap and browsewrap (includes hyperlinks) and are
enforceable only if the notice is reasonably conspicuous and adjacent to “PLACE ORDER.”
 (1) The terms of the agreement are not visible, but rather accessible through a hyperlink. (2)
Adjacent to the hyperlinked terms is a click-to-consent button, usually labeled “CONTINUE” or
“PLACE YOUR ORDER.” (3) Hybridwraps include a notice informing the user that, by clicking
the button, the user is agreeing to the terms of the hyperlinked agreement.
 Communication of Acceptance
o Mirror image rule: If offeror demands acceptance in a certain way, then offeree must follow those
requirements.
 The common law mirror image rule requires that acceptance be on precisely the same terms as the
offer. If the acceptance contains terms that add or contradict the offer, even in minor ways, courts
generally consider it a counteroffer.
o If the offeror does not mention the method/procedure for acceptance, then the offeree may accept in any
reasonable manner.
Case*: Nicosia v. Amazon.com, Inc.
Fact: Dean Nicosia bought 1 Day Diet, a weight-loss supplement, on Amazon.com. When he later learned that 1 Day Diet
contained a known dangerous chemical, Nicosia brought a class action against Amazon, asserting that its sale of 1 Day
Diet was illegal. Amazon’s Conditions of Use (COU) contained an arbitration clause providing that all disputes had to be
resolved by binding, individual arbitration (no class actions allowed). Nicosia claimed that he did not know about the
COU—and these terms did not apply to him—because Amazon did not clearly and conspicuously post them on the
checkout page. The district court dismissed Nicosia’s complaint, but he appealed. Analyzing Amazon’s Web page design,
it noted that the page was cluttered, and that the hybridwrap notice was not prominent, nor was it adjacent to the “Place
your Order” button. The appeals court concluded that a reasonable consumer may not have known about the existence of
terms. However, it remanded the case back to the district court to decide whether Nicosia himself had reasonable notice of
the COU.
Issue: Did Nicosia have reasonable notice of the existence of Amazon’s COU? Was he bound to Amazon’s arbitration
provision?
Decision: The hyperlink is there for consumers to click on. COU is there in a hyperlink and it’s near (adjacent) the area
where consumers place their orders. Therefore, it’s Nicosia’s fault of not reading it. And since Nicosia has used Amazon
before, he should have known that the COU is there. The motion to compel arbitration was granted (the parties have to go
to arbitration). Amazon wins.
Consideration
 The central idea of consideration is simple: Contracts must be a two-way street. If one side gets all the benefit and
the other side gets nothing, then an agreement lacks consideration and is not an enforceable contract.
 Consideration is the inducement, price or promise that causes a person to enter into a contract and forms the basis
for the parties’ exchange. There must be a bargained-for exchange.
 Consideration is something of measurable value.
 In commercial agreements, consideration is almost always the exchange of money for goods or services.
 Consideration in promises made by family members is sometimes harder to find. Is it consideration or a condition
of a gift? Gift/donation is not consideration.
 The rules of consideration
o Value
 Both parties must get something of measurable value from the contract.
 A promise to give something of value counts.
 Forbearance: A promise not to do something of value counts.
 Value is in the eye of the beholder—generally courts do not engage in measuring value.
 Gifts or donations do not count as consideration.
o Bargained-for exchange
 Consideration involves reciprocity. The parties must have bargained for whatever was exchanged
and struck a deal: “If you do this, I’ll do that.”
Case*: Hamer v. Sidway
Fact: William Story wanted his nephew to grow up healthy and prosperous. In 1869, he promised the 15-year-old boy
(who was also named William Story) $5,000 if the lad would refrain from drinking liquor, using tobacco, swearing, and
playing cards or billiards for money until his twenty-first birthday. The nephew agreed and, what is more, he kept his
word. When he reached his twenty-first birthday, the nephew notified his uncle that he had honored the agreement. The
uncle congratulated the young man and promised to give him the money, but said he would wait a few more years before
handing over the cash, until the nephew was mature enough to handle such a large sum. The uncle died in 1887 without
having paid, and his estate refused to honor the promise.
Issue: Did the nephew give consideration for the uncle’s promise?
Decision: The promisee used tobacco, occasionally drank liquor, and he had a legal right to do so. That right he
abandoned for a period of years upon the strength of the promise of the testator [that is, the uncle] that for such
forbearance he would give him $5,000. It is sufficient that he restricted his lawful freedom of action within certain
prescribed limits upon the faith of his uncle’s agreement, and now, having fully performed the conditions imposed, it is of
no moment whether such performance actually proved a benefit to the promisor, and the court will not inquire into it.
Enforcing Non-Contractual Bargains
 Now we turn away from “true” contracts and consider two unusual circumstances. Sometimes, courts will enforce
agreements even if they fail to meet the usual requirement of a contract.
 Promissory Estoppel
o Even when there is no contract, a plaintiff may use promissory estoppel to enforce the defendant’s
promise if he can show that:
 The defendant made a promise knowing that the plaintiff would likely rely on it,
 The plaintiff did rely on the promise, and
 The only way to avoid injustice is to enforce the promise.
 E.g. The Andreason’s house in Utah
 Quasi-Contract
o
Even when there is no contract, a court may use quasi-contract to compensate a plaintiff who can show
that:
 The plaintiff gave some benefit to the defendant,
 The plaintiff reasonably expected to be paid for the benefit and the defendant knew this, and
 The defendant would be unjustly enriched if he did not pay.
 E.g. Don Easterwood’s lease
Chapter11 Legality, Consent, and Writing
Legality (合法性)
 Unenforceable agreements: There are instances where a contract cannot be enforced as a matter of law because
the contract is made for an illegal purpose or because one of the parties in the transaction is not capable of
entering into a contract.
o You cannot contract to do something that violates the law, i.e., contract to kill someone, contract to
commit a felony. A contract is also not enforceable if one of the parties deceives the other into an
agreement. E.g., One party induces another to buy a security based on fraud.
o A contract made by a minor (under 18) is also not enforceable because minors lack capacity under the law
to enter into agreements.
o A contract that is unconscionable is not enforceable because it violates fundamental fairness or “shocks
the conscience.” The elements that the courts look to in determining if a contract is unconscionable are (1)
oppression, meaning that one party used its superior power to force a contract on the weaker party, and
(2) surprise, meaning that the weaker party did not fully understand the consequences of its agreement.
Case*: Metsch v. Heinowitz
Fact: In 2017, California legalized the possession and use of marijuana for recreational use. Prior to that date, the state
allowed limited distribution of the drug for medicinal purposes. The Metsches sued Heinowitz and King for breach of
their respective contracts. The defendants moved for summary judgment, arguing that their contracts were unenforceable
because the sale and use of marijuana was illegal in California when the contract was formed. The trial court agreed. The
Metsches appealed, arguing that the contracts were enforceable because marijuana subsequently became legal.
Issue: Were the contracts involving marijuana edibles void for illegality?
Decision: For purposes of determining whether the transactions, and thus the contracts, were legal, the court is required to
apply the law in effect at the time the parties entered into the contracts at issue. Laws enacted subsequent to the execution
of an agreement are not ordinarily deemed to become part of the agreement unless its language clearly indicates this to
have been the intention of the parties. A contract must be lawful when made; and because there is no indication that the
parties intended later legislation to be incorporated into the contracts, illegality must be determined at the time of the
formation of the alleged contracts in January 2014. In January 2014, California law prohibited its possession, its planting,
harvesting, drying, and processing, its possession for sale, and its transportation, importation, sale, or gift. The judgment is
affirmed.
Consent
 Unconscionable contract: a contract that a court refuses to enforce because of fundamental fairness. There are
two factors:
o Oppression: One party has superior power.
o Surprise: The weaker party did not understand the consequences of the agreement.
 Fraud
o The defendant made a false statement.
o The false statement was material.
o The injured party justifiably relied on the statement.
Capacity
 Capacity is the legal ability to enter into a contract.
 Applies to minors and those with mental impairment. In contract law, a minor is someone under the age of 18.
 Minors can create voidable agreements: A voidable contract may be canceled by the party who lacks capacity.
Notice that only the party lacking capacity may cancel the agreement. So a minor who enters into a contract

generally may choose between enforcing the agreement or negating it. The other party—an adult, or perhaps a
store—has no such right.
o Voidable contracts are very different from those that are void. A void contract is illegal from the
beginning and may not be enforced by either party. A voidable contract is legal but permits one party to
escape, if she so wishes.
A minor who wishes to escape from a contract generally may disaffirm it, that is, he may notify the other party
that he refuses to be bound by the agreement. A minor who disaffirms a contract must return the consideration he
has received. If the minor cannot return the consideration, then most states hold that the minor is still entitled to
her money back.
Case*: Johnny Doe v. Epic Games
Fact: Epic Games is the creator of Fortnite, a survival video game. Fortnite is free but allows players to make nonrefundable in-app purchases, which include weapons, character enhancements, and virtual currency. When Johnny Doe, a
minor, downloaded Fortnite, he accepted the terms of Fortnite’s End User License Agreement (EULA), which provided
that its terms could change at any time, and the user’s continued game play constituted acceptance of the new terms.
About a year later, Johnny logged on to Fortnite and accepted an amended EULA, which now included an arbitration
provision. The new EULA also made clear that if the users were minors, a parent or legal guardian had to consent on their
behalf. Johnny did not show the amended EULA to his parents, but instead continued playing Fortnite. On several
occasions, Johnny made in-app purchases using his own money and gift cards. Not until he later tried to cancel the
purchases did Johnny realize they were non-refundable. Johnny sent a letter to Epic Games, stating that as a minor, he
could legally disaffirm the in-app purchases. In its motion to compel arbitration, Epic Games made two arguments. First,
because Johnny’s letter only mentioned the in-app purchases, he had not disaffirmed the EULAs and was therefore bound
to arbitration. Second, Johnny could not disaffirm the contracts because he had continued playing Fortnite.
Issue: Did Johnny validly disaffirm the in-app purchases and the EULAs?
Decision: As to the defendant’s first argument, both the letter and the complaint convey plaintiff’s intent to repudiate the
in-app purchases. Neither, however, conveys disaffirmance of the EULAs more generally. Indeed, the letter asserts that
plaintiff can legally disaffirm contracts for in-app purchases and purchases plaintiff made using his own money from gift
cards. Given that the minor’s power to disaffirm a contract is broad and can be invoked through any act or declaration that
conveys his intent to repudiate a contract, the Court finds this statement sufficient to disclose plaintiff’s unequivocal intent
to repudiate both EULAs. As to defendant’s second argument that plaintiff cannot disaffirm the contract because he
continues to play Fortnite, this contention is directly contradicted by a notice filed by plaintiff’s counsel, which stated that
plaintiff “has not played the Fortnite game after filing of the lawsuit” and “has no intention of playing Fortnite in the
future.” Thus, this is not a case in which a minor seeks to adopt that part of an entire transaction which is beneficial, and
reject its burdens. Instead, plaintiff has disaffirmed the EULAs in their entirety, including by not playing Fortnite.
Because plaintiff validly disaffirmed the EULAs, plaintiff cannot be compelled to arbitrate this dispute. Defendant’s
motion to compel arbitration is therefore DENIED.
Contract That Must Be in Writing
 A contract that is not in writing when the law (statute of frauds) requires it to be in writing is unenforceable.
These include:
o For the transfer of an interest in land.
 This means any legal right regarding land. A house on a lot is an interest in land. A mortgage, an
easement, and a leased apartment are all interests in land.
o Agreements that cannot be performed within one Year.
o Agreements to pay the debt of another.
 When one person agrees to pay the debt of another as a favor to that debtor.
o Agreements made by an executor of an estate to pay a debt of the estate.
 An executor is the person who is in charge of an estate after someone dies. The executor’s job is
to pay debts of the deceased, obtain money owed to him, and disburse the assets according to the
will. In most cases, the executor will use only the estate’s assets to pay those debts. The Statute of
Frauds comes into play when an executor promises to pay an estate’s debts with her own funds.
An executor’s promise to use her own funds to pay a debt of the deceased must be in writing to be
enforceable.
o Agreements made in consideration of Marriage.
o
Agreements for the sale of goods of $500 or more.
Contract Provisions: Exculpatory Clauses
 An exculpatory clause is a contract provision that attempts to release one party from liability in the event the
other is injured. It commonly used in businesses that involve some risk such as skiing, sky diving, but also used in
parking lots, sporting events.
o “I agree to hold Mountain Peak and its employees entirely harmless in the event that I am injured in any
way or for any reason.”
o It is commonly used in bailment cases. A bailment means giving possession and control of personal
property to another person. Example: leaving your car with a valet in a garage.
 They are generally not enforceable when they attempt to exclude conduct that is intentional or grossly
negligent.
o When Cody pushes Toby over a cliff, that is the intentional tort of battery. A court will not enforce the
exculpatory clause. Cody is clearly liable. As to the snowmobile at the bottom of the run, if a court
determines that was gross negligence (carelessness far greater than ordinary negligence), then the
exculpatory clause will again be ignored. If, however, it was ordinary negligence, then we must continue
the analysis.
 An exculpatory clause is usually unenforceable when the affected activity is in the public interest, such as
medical care, public transportation, or some essential service.
o Suppose Rocco goes to a doctor for surgery on his damaged knee and the doctor requires him to sign an
exculpatory clause. The doctor negligently performs the surgery, accidentally leaving his cuff links in
Rocco’s left knee. The exculpatory clause will not protect the doctor. Medical care is an essential service,
and the public cannot give up its right to demand reasonable work.
 They are not enforceable unless the clause is clearly written and readily visible.
o If Pike’s Pique gave all ski and snowboarding students an eight-page contract, and the exculpatory clause
was at the bottom of page 7 in small print, the average customer would never notice it. The clause would
be void.
Non-Compete Agreements
 A non-compete agreement is a contract in which one party agrees not to compete with another in a stated type of
business. For example, a chef in Miami might agree that she will not work at a competing restaurant in South
Florida for one year after she leaves her present employer.
 Non-competes limit an individual’s right to make a living and choose work. For this reason, 1/3 of states have
restrictions on non-competes and California prohibits them unless they are tied to the sale of business or a
verifiable trade secret.
o Sale of a business: Kory has operated a real estate office, Hearth Attack, in a small city for 35 years,
building an excellent reputation and many ties with the community. She offers to sell you the business
and its goodwill for $300,000. But you need assurance that Kory will not take your money and promptly
open a competing office across the street. With her reputation and connections, she would ruin your
chances of success. You insist on a non-compete clause in the sale contract. In this clause, Kory promises
that for one year, she will not open a new real estate office or go to work for a competing company within
a 10-mile radius of Hearth Attack.
 Judges usually enforce non-competes to protect trade secrets, customer lists or other confidential information.
 Non-Competes in MA
o Any employer wishing to enforce a non-compete in MA must provide compensation to the employee.
The compensation must be at least 50 percent of the employee’s salary or a mutually agreed upon amount.
o Reasonableness
 Cannot exceed 1 year
 Must be reasonable in geographic scope-only the geographic “areas” in which the employee
provided services or had a material presence or influence.
 Cannot be enforced against student workers, interns, employees terminated without cause or laid
off, or anyone under the age of 18.
*Case: King v. Head Start Family Hair Salons, Inc.
Fact: Kathy King was a single mother supporting a college-age daughter. For 25 years, she had worked as a hairstylist.
For the most recent 16 years, she had worked at Head Start, which provided haircuts, coloring, and styling for men and
women. King quit Head Start and began working as manager of a Sport Clips shop, located in the same mall as the store
she just left. Sport Clips offered only haircuts and primarily served men and boys. Head Start filed suit, claiming that King
was violating the non-compete agreement that she had signed. The agreement prohibited King from working at a
competing business within a two-mile radius of any Head Start facility for 12 months after leaving the company. The trial
court issued an injunction enforcing the non-compete. King appealed.
Issue: Was the non-compete agreement valid?
Decision: King’s most persuasive argument is that the geographic restriction contained in the non-competition agreement
imposes an undue hardship on her. King has been in the hair-care industry for 25 years, and it is the only industry in
which she is skilled and the only industry in which she can find employment. Head Start has 30 locations throughout the
Jefferson County and Shelby County area, making it virtually impossible for her to find employment in the hair-care
industry at a facility that does not violate the terms of the non-competition agreement. Head Start is nevertheless entitled
to some of the protection it sought in the non-compete agreement. Head Start has a valid concern that King would be able
to attract many of her former Head Start customers if she is allowed to provide hair-care services unencumbered by any
limitations. To prevent an undue burden on King and to afford some protection to Head Start, the trial court should
enforce a more reasonable geographic restriction—such as one prohibiting King from providing hair-care services within
a two-mile radius of the location of the Head Start facility at which she was formerly employed. Reverse and remand
(Nullify 使无效 the lower court’s decision and return the case to the lower court for a new trial).
Chapter 18 Employment and Labor Law
Employment at Will
 Employee at will: A worker without an employment contract
 Traditional rule: An employee at will could be fired for a good reason, bad reason, or no reason at all.
 Current law: An employee at will can be fired for a good reason or no reason but not a bad reason.
 An employer may not fire a worker for refusing to violate the law, exercising a legal right or supporting societal
values.
 How to properly fire employees?
o Document problems
o Performance Improvement Plans (PIPS)
o Be respectful to employees upfront and behind their backs
o If performing a lay-off, make sure to have a plan and execute the same plan for everyone. Make sure to
look out for members of protected categories and how they are being treated.
Family and Medical Leave Act (FMLA)
 Guarantees both men and women up to 12 weeks of unpaid leave each year for:
o Childbirth/Adoption
o A serious health condition or that of an immediate family member
 The FMLA only applies to companies that have 50 or more employees.
 An employee is only eligible for FMLA leave if he has worked for the employer continuously for 1 year.
 Massachusetts Law: MGL c.175M as added by St. 2018, c.121 Paid family medical leave. Establishes a system
for paid family leave of up to 12 weeks to care for a family member, and up to 20 weeks for your own illness. The
tax that pays for it begins in 2019, and leave will be available beginning in 2021.
Case*: Peterson v. Exide Technologies
Fact: Over time, Exide Technologies had issued repeated warnings to Robert Peterson for driving forklifts too fast and
violating other safety rules. After he was injured in a forklift crash, Peterson took FMLA leave for ten days.
During the leave period, Exide fired him for “flagrant violations of safety rules.” Peterson sued, claiming that the
company had terminated him in retaliation for taking FMLA leave. The lower court granted summary judgment to Exide,
and Peterson appealed.
Issue: Was Peterson fired in retaliation for claiming FMLA leave?
Decision: If Plaintiff makes out a prima facie retaliation case, the burden shifts to Defendant to demonstrate a legitimate,
nonretaliatory reason for its termination decision. If Defendant meets this burden, the burden shifts back to Plaintiff to
show that there is a genuine dispute of material fact as to whether Defendant’s explanations are pretextual. Defendant
asserts it dismissed Plaintiff for the legitimate reason that he violated company safety policies. The Plant Manager also
based his decision to fire Plaintiff on the “history of careless and unsafe conduct” reflected in Plaintiff’s personnel file.
Plaintiff argues Defendant’s asserted justification is pretextual because the forklift accident was a “minor incident.”
Whether the accident was “minor” is questionable. But even if it was, we see nothing that prevents Defendant from firing
employees for minor safety violations. The summary judgment to Exide is affirmed.
Financial Protection: Fair Labor Standards Act (FLSA)
 The Fair Labor Standards Act (FLSA) regulates minimum wage, child labor and overtime.
o This statute provides that hourly workers must be paid a minimum wage of $7.25 per hour.
o Employees must receive overtime pay for hours worked in excess of 40 in a workweek of at least one and
one-half times their regular rates of pay.
o Exceptions: These wage provisions do not apply to salaried workers, such as managerial, administrative,
or professional staff.
 A salaried employee is someone who receives a fixed amount of pay (salary) regardless of how
many hours they work each week.
o The FLSA also prohibits “oppressive child labor,” which means that children under age 14 may work
only in agriculture, entertainment, a family business, babysitting, or newspaper delivery. Fourteen and
fifteen-year-olds are permitted to work limited hours after school in nonhazardous jobs, such as retail.
Sixteen and seventeen-year-olds may work unlimited hours in nonhazardous jobs.
Promises Made in Consideration of Employment
 An employee handbook creates a contract.
 Oral promises made during the hiring process can be enforceable even if not approved by the company’s top
executives.
Defamation and References
 Employers may be liable for defamation if they act out of malice and provide false references about a former
employee.
 Many states recognize a qualified privilege for employers who give references about former employees.
o A qualified privilege means that employers are liable only for false statements that they know to be false
or that are primarily motivated by ill will.
 Employers are generally not required to give any information about former employees, but:
o Sometimes can be held liable if potentially dangerous information is withheld.
Whistleblowers
 Whistleblowers are employees who disclose illegal behavior on the part of their employer.
 Dodd-Frank Wall Street Reform and Consumer Protection Act: Anyone who provides information to the
government about violations of securities or commodities laws is entitled to a financial reward.
 Sarbanes-Oxley Act of 2002: this act protects employees of publicly traded companies who provide evidence of
fraud to investigators.
Employee Privacy/Off Duty Conduct
 Employers have the right to not hire or fire workers for off-duty conduct such as:
o Engaging in domestic abuse or committing crimes
o Posting things on social media
Free Speech in the Workplace
 The National Labor Relations Act (NLRA) protects all employees (1) who engage in collection activity (2)
relating to work conditions (3) as long as they are not supervisors
 This right translates to all non-supervisory employees being able to discuss their working conditions, whether the
discussion takes place in a lunchroom or chat room online.
 Even non-unionized workers cannot be fired for complaining about their jobs, so long as these complaints are
shared with other employees and are not inappropriately hostile or violent.
o Unionized employee means an employee whose employment is governed by a collective bargaining
agreement and who is represented by the Union.

Guarantees employees the right to: Organize and join unions, bargain collectively through representatives of their
own choosing, and engage in other concerted activities
*Case: Dalton School, Inc. and David Brune
Fact: David Brune taught theater and drama at the Dalton School. Like other Dalton faculty, he worked on a renewable
one-year contract. The school chose Thoroughly Modern Millie as the middle school’s annual play and made Brune the
production manager. However, a month before the premiere, the school halted the production because some parents were
offended by the play’s stereotypical depiction of Asians. But then students were upset about not being able to perform.
The school ultimately opted to allow a rewritten, sanitized version of the play to go forward. All these changes required
significant time and effort from Brune and other members of the theater department, who had to produce the new version
in only three days. To communicate their distress, Robert Sloan, the chair of the theater department, circulated to his
faculty a draft letter that he proposed sending to Ellen Stein, the Head of School. Brune replied, “We have been grievously
wronged and we would like an apology. You lied. Apologize for lying, for not being honest, forthright, upstanding, moral,
considerate, much less intelligent or wise.” Without Brune’s knowledge, Sloan gave a copy of this email to Stein, who
then summoned Brune to a meeting. He denied having called her dishonest or immoral. Five weeks later, Stein met with
Brune again. This time, she showed him a copy of his email and he admitted he had written it. She then fired him,
effective at the end of the school year. A month later, she told him he had been fired for lying.
Issue: Did Stein violate the NLRA by firing Brune?
Decision: Brune’s discharge would not be rendered lawful even if he lied to Stein. The “lie” was elicited by Stein during
an investigation that was motivated by Stein’s animus towards Brune’s protected email. Brune was under no obligation to
respond truthfully. The discussion amongst employees in the theater department as to how to address their concerns
regarding the manner in which Thoroughly Modern Millie was handled was clearly protected concerted activity. Brune’s
email was clearly intended to induce group action. His protected activity was not a face-to-face outburst to management.
Moreover, his email was accessible only to fellow employees, not students, parents or the general public. In fact, the email
was not intended to be seen by management and was not directly accessible to management. Otherwise protected activity
remains protected unless found to be so violent or of such serious character as to render the employee unfit for further
service. Brune did not forfeit the protection of the Act. He did not make any malicious and/or untrue statements of fact.
Brune did not use any obscenities. He did not threaten management; he merely demanded an apology. [Dalton], having
discriminatorily discharged an employee, must offer him reinstatement and make him whole for any loss of earnings and
other benefits.
Workplace Safety
 Occupational Safety and Health Act (OSHA)
o General duty: Employers are under a general duty to keep their workplace "free from recognized hazards
that are causing or are likely to cause death or serious physical harm" to employees.
o Specific health and safety standards: Employers must comply with specific health and safety standards
such as those that protect workers from respiratory hazards at work.
o Records: Employers must keep records of all workplace injuries and accidents.
Labor Unions
 Teachers, nurses, pilots, flight attendants, professional sports players, plumbers; electricians, most government
workers, autoworkers/oil and gas workers, some college faculty (categories of jobs that are heavily union)
 National Labor Relations Act (NLRA)
o Guarantees employees the right to:
 Organize and join unions
 Bargain collectively through representatives of their own choosing
 Engage in other concerted (共同筹划的) activities
Prohibits employers from engaging in the following unfair labor practices (ULPs)
 Interfering with union organizing efforts
 Dominating or interfering with any union
 Discriminating against a union member
 Refusing to bargain with a union
Organizing a Union (4 Stages)
o Campaign: Union organizers talk with employees and try to persuade them to form a union.
o
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o
o
o
o
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
Authorization cards: Union organizers ask workers to sign authorization cards, which state that the
particular worker requests the specified union to act as her sole bargaining representative. If organizers
get enough cards, they seek recognition as the official representative for the bargaining unit-need 30%
cards signed.
Petition: Assuming that the employer does not voluntarily recognize a union, the union generally
petitions the NLRB (National Labor Relations Board) for an election. If the regional office determines
that the union has identified an appropriate bargaining unit (group of employees with a clear and
identifiable community of interests) and has enough valid cards, it orders an election.
Election: If more than 50% of the workers vote for the union, the NLRB designates that union as the
exclusive representative of all members of the bargaining unit.
What workers can do to organize: NLRA guarantees employees the right to
 Talk amongst themselves about organizing
 Hand out literature (宣传品)
 Ultimately join a union
o What an employer may do: Employer may present anti-union views to its employees but may not use
either threats or promises of benefits to defeat a union drive.
Collective Bargaining
o Once a union is formed, a company must then bargain with it toward the goal of creating a new contract,
which is called a collective bargaining agreement (CBA).
o Collective bargaining agreement: Contract between a union and a company which covers:
 Wages, hours, and other terms and conditions of employment
 Both the union and the employer must bargain in good faith. In other words, the two sides must
meet with open minds and make a reasonable effort to reach a contract.
 The union and the employer are not obligated to reach an agreement but if no agreement is
reached-must go to binding mediation/arbitration.
Concerted Action: Tactics taken by union members to gain bargaining advantage.
o NLRA guarantees the right of employees to engage in concerted action for mutual aid or protection.
o Strike: NLRA guarantees employees the right to strike, but with limitations.
o Picketing the employer’s workplace in support of a strike is generally lawful.
o Although Striking is a permissible form of concerted action taken by employees, there are some
restrictions:
 Many states have outlawed strikes by public employees (example: police officers, teachers)
 Violent strikes are prohibited.
 Sit-down strikes are prohibited: Members stop working but remain at their job posts, physically
blocking replacement workers from taking their places.
 Partial strikes are prohibited: A partial strike occurs when employees strike intermittently,
stopping and starting repeatedly. This tactic is particularly disruptive because management cannot
bring in replacement workers. A union may either walk off the job or stay on it, but it may not
alternate.
Management’s Response to Bargaining
o Lockouts: Management prohibits workers from entering the premises (营业场所) and earning their
paychecks.
o MLB lockout: Owners make proposal six weeks after starting work stoppage(罢工), players reportedly
unimpressed
Case*: Caesar’s Entertainment and Local 159, AFL-CIO
Fact: The International Union of Painters and Allied Trades was trying to unionize 3,000 workers at the Rio All-Suites
Hotel and Casino in Las Vegas. The NLRA prohibits employers from interfering with union organizing efforts and
requires that workers have adequate means of communicating among themselves. In the past, this provision had meant
that employees could discuss union issues with, and distribute union literature to, fellow workers during nonworking
times and in nonworking areas on an employer’s premises. But union organizers did not have the right to use the owner’s
equipment, such as bulletin boards, photocopy machines, telephones, televisions, or public-address systems. The Rio
Hotel allowed union organizing activities to take place in the employee cafeteria, break rooms, and other nonwork areas.
However, the hotel forbade its employees from using the company email system for union discussions. Violating this rule
could lead to discipline or discharge. The union alleged that this prohibition against email use was an unfair labor
practice.
Issue: Do employees have the right to use a company email system to conduct union discussions with their fellow
workers?
Decision:
Arguments for Caesars:
 Although email is a convenient and effective method for discussions, the NLRA does not require that labor
organizations be permitted the use of every, or even the most convenient, means of reaching individual workers.
Under well-established precedent, union organizers do not have the right to use an employer’s equipment. That is
what an email system is—the employer’s equipment.
 Moreover, if organizers used the email system, employers would have no means of enforcing the prohibition
against union communication during work time because there would be no way to tell what workers were doing
on email.
 The union argues that face-to-face communication is inadequate for a workforce of 3,000 people. But other large
companies have successfully organized in the past, including one that was comprised of the crews of 58
transoceanic steamships based out of two different ports.
Arguments for the Union:
 Email is a central part of modern office life and a natural gathering place, like a breakroom or an employee
cafeteria. Workers should be allowed to use an email system (on nonworking time) to communicate with each
other for union purposes, unless the employer can prove that the expense of that usage justifies restrictions.
 In fact, the cost of workers using email for personal reasons is negligible, which is why most employers permit at
least some personal communications over employer-provided email. The only reason to prohibit workers from
using company email for the union organizing effort is to impede that process.
 There are 3000 employees. For this large number, no other means of communication is anywhere near as easy or
efficient as email. Without email, it is virtually impossible for those who work different hours in different places
to meet and talk. And it seems unlikely there would be any space large enough to hold thousands of people.
 Personal email, text, or social media are not useful for contacting coworkers whose phone number or email
address the organizers do not know and with whom they have no contact at work—but who would be a member
of an appropriate bargaining unit.
Chapter 19 Employment Discrimination
Equal Pay Act
 Under the Equal Pay Act (EPA), a worker may not be paid at a lesser rate than employees of the opposite sex for
equal work.
o “Equal work” means tasks that require the same skill, effort, and responsibility under similar working
conditions.
 However, unequal pay is legal if it is the result of seniority, merit, quantity or quality of work, and any other
factor other than sex.
Case*: Rizo v. Yovino
Fact: When the Fresno County Office of Education hired Aileen Rizo as a math consultant, she had two master’s degrees
and nine years of experience. The County agreed to pay her $62,133, which was 5 percent more than what she had earned
in her prior job. (The County used that formula for all new hires.) However, in the lunchroom three years later, Rizo
discovered that a new male math consultant had been hired at $79,088, significantly more than she was then earning. It
turned out that Rizo was the only female math consultant at Fresno County, and she was earning less than any of the men,
although she had the most education and experience. The Human Resources department confirmed this disparity, but
asserted that the difference was legal because it had nothing to do with her gender. Rizo sued the County for violating the
EPA. The district court denied the County’s motion for summary judgment. The County appealed.
Issue: Are prior earnings a legitimate reason to pay women less than men?
Decision: Prior pay itself is not a factor related to the work an employee is currently performing. Here, the County has not
explained why or how prior pay is indicative of Rizo’s ability to perform the job she was hired to do. Our holding
prevents employers from relying on prior pay to defeat EPA claims, but the EPA does not prevent employers from
considering prior pay for other purposes. But whatever factors an employer considers, if called upon to defend against a
prima facie showing of sex-based wage discrimination, the employer must demonstrate that any wage differential was in
fact justified by job-related factors other than sex. Prior pay, alone or in combination with other factors, cannot serve as a
defense. We affirm the district court’s order denying Fresno County’s motion for summary judgment.
Title VII of the Civil Rights Act
 Title VII of the Civil Rights Act states that it is illegal for employers with 15 or more employees to discriminate
on the basis of race, color, religion, sex, or national origin.
Disparate Treatment
 To prove a disparate treatment case, the plaintiff must show that she was treated less favorably than others
because of membership in a protected category (sex, race, color, religion, or national origin).
 The required steps in a disparate treatment case are:
o Step 1: The plaintiff presents evidence that:
 She belongs to a protected category under Title VII,
 She suffered adverse employment action, and
 This action occurred under conditions giving rise to an inference of discrimination.
If the plaintiff can show these facts, she has made a prima facie case, that is, a case that appears to be true upon first look.
The plaintiff is not required to prove discrimination; she need only create a presumption that discrimination occurred.
o Step 2: The defendant (employer) must present evidence that its decision was based on legitimate,
non-discriminatory reasons.
o Step 3: To win, plaintiff must prove that the employer intentionally discriminated by showing that
the reasons offered were false (pretext) or that the real reason was motivated by discriminatory
intent/motive.
Disparate Impact
o Disparate impact applies if the employer has a rule that, on its face, is not discriminatory, but in practice
excludes too many people in a protected category.
o The required steps in a disparate impact case are:
o Step 1: Plaintiff must present a prima facie case that she is a member of a protected class and
suffered an adverse employment practice. The plaintiff is not required to prove discrimination; he need
only show a disparate impact that the employment practice in question excludes a disproportionate
number of people in a protected group.
o Step 2: The defendant must offer some evidence that the employment practice was a job-related
business necessity.
o Step 3: To win, plaintiff must prove either that the employer’s reason is a pretext or that other, less
discriminatory, rules would achieve the same results (For example, in the Grigg’s case, the company
can evaluate him on the job that his is preforming to achieve the same goal of evaluating employees for
their eligibility of promotion; less discriminatory rule means doing something less harsh)
Case*: Gulino v. Ed. Bd. of Educ. of New York
Fact: A New York State task force on teacher qualifications decided that all teachers needed a basic understanding of
liberal arts and sciences. National Evaluation Systems (NES), a professional test development company, was hired to
develop the Liberal Arts and Sciences Test (LAST) to measure this knowledge. NES began by establishing two
committees of teachers and professors (Committees) to ensure that the LAST was both relevant to the job of a New York
public school teacher and free from bias. Teachers could not be licensed to teach in New York City unless they passed the
LAST. Whites succeeded at a higher rate than African Americans and Latinos. A group of minority teachers filed suit
against the Board of Education for the City of New York (Board) alleging that the LAST violated Title VII.
Issue: Did the LAST violate Title VII?
Decision: Under Title VII, an exam is job related if it has been properly validated. The essence of validation is in the
requirement that the content of the test be related to the content of the job. The fact that the LAST is related generally to
the liberal arts and sciences does not prove that the exam is job related. To be job related, the LAST must test for the
minimum level of knowledge about the liberal arts and sciences that is necessary to ensure that all teachers are competent
to teach. There is no evidence in the record establishing the minimum level of knowledge about the liberal arts and
sciences needed by all teachers. Consequently, the Court finds that the Board has failed to establish that the LAST is
directly related to teachers’ jobs. In conclusion, the Court finds that the LAST is not job related, and the Board violated
Title VII by requiring plaintiffs to pass the exam in order to receive a teaching license.
Defenses to Discrimination
 Merit: A defendant is not liable if he shows that the person he favored was the most qualified.
 Poor work performance
 Legitimate Business Decision
 Seniority: While such systems offer many advantages—they encourage a commitment to the company, an
incentive to learn job-specific skills, and a willingness to train other workers without fear of losing one’s job—
they also tend to perpetrate prior discriminatory practices. If historic trends result in Black employees having less
seniority, they will also be paid less and laid off more. However, a legitimate seniority system is legal even if it
perpetuates past discrimination.
 Bona Fide Occupational Qualification (BFOQ)
o BFOQ: An employer is permitted to establish discriminatory job requirements if they are essential to the
position in question (Note that only religion, sex, or national origin can be a BFOQ—never race or color;
however, entertainment industry may allow).
o Example: Catholic schools may, if they choose, refuse to hire non-Catholic teachers; clothing companies
may refuse to hire men to model women’s attire.
o Generally, however, courts are not sympathetic to claims of BFOQ. They have almost always rejected
BFOQ claims that are based on customer preference. However, the courts recognize three situations in
which employers may consider customer preference.
 Safety: The Supreme Court ruled that a maximum-security men’s prison could refuse to hire
women correctional officers. If a woman wanted to risk her life, that was her choice, but the court
feared that an attack on her would threaten the safety of both male guards and inmates (被收容
者).
 Privacy: An employer may refuse to hire women to work in a men’s bathroom, and vice versa.
 Authenticity: An employer may refuse to hire a man for a woman’s role in a movie. In addition,
a court ruled that Disney could fire an Asian man from the Norwegian exhibit at its Epcot
international theme park, not because he was Asian, but because he was not culturally authentic.
He did not have firsthand knowledge of Norwegian culture and did not speak Norwegian.
Affirmative Action
 Affirmative action programs are those that remedy the effects of past discrimination. An employer who has
refused to hire people of color in the past might be required to hire a certain percentage for a limited period in the
future.
o Courts have the power to order affirmative action to remedy the effects of past discrimination.
o Employers can voluntarily introduce affirmative action plans to achieve equitable representation.
o The government may use affirmative action programs when awarding contracts (签订合同).
Sextual Harassment
 There are two categories of sextual harassment.
o Hostile Work Environment
 Unwelcome sexual advances, requests for sexual favors and any other verbal or physical conduct
of sexual nature that interferes with an employee’s ability to work; an employee has a valid claim
of sexual harassment if sexual talk and activity are so pervasive that they interfere with her (or
his) ability to work.
o Quid Pro Quo
 From a Latin phrase that means “one thing in return for another”. Conditioning the terms and
conditions of employment based on acceptance or rejection of sexual advances.
 Examples of Sextual Harassment
o Sexual jokes, written or verbal conduct of a sexual nature, pictures, music, etc.
o Leering, whistling, brushing against someone or other offensive touching.
o Making inquiries into someone’s sexual life/activities.
o Electronic/social media harassment is on the rise. Offensive emails, texts, and social media postings.

A plaintiff can establish sexual harassment based on one severe event or a series of events that are unwelcome and
overtime present an uncomfortable work environment.
Case*: Gatter v. IKA-Works, Inc. (不考)
Fact: Plaintiff Courtney Gatter filed an employment discrimination claim against her former employer, defendant IKAWorks, Inc., alleging that the atmosphere created during a company-sponsored sailing trip constituted a hostile work
environment, and that her termination following the trip constituted gender-based discrimination. During a Mediterranean
sailing trip sponsored by the company that included the Stiegelmanns and defendant’s sales representatives, including
plaintiff, plaintiff was propositioned for sex by Marcel (The president’s son). Although plaintiff initially rejected the
proposition, she later consented and the two began an intimate relationship during the trip. However, the Family Council
ultimately decided to terminate plaintiff’s employment, with Bilgic explaining to plaintiff that she could no longer be
trusted and citing a lack of communication from plaintiff along with plaintiff having engaged in a sexual relationship
during the company trip. Plaintiff’s discrimination claims advanced two theories–that her termination constituted
disparate treatment based on her gender, and that the events of the sailing trip created a hostile work environment
motivated by sex.
Decision: Finally, the court ruled that plaintiff had sufficiently pled allegations of a hostile work environment.
Accordingly, the court denied defendant’s motion for summary judgment on plaintiff’s discrimination claims.
Hostile Work Environment
 Employers violate Title VII if they permit a work environment that is so hostile toward people in a protected
category that affects their ability to work.
 Hostility based on race, color, religion, sex or national origin.
Age Discrimination
 Under the Age Discrimination in Employment Act (ADEA), an employer with 20 or more workers may not fire,
refuse to hire, fail to promote, or otherwise reduce a person’s employment opportunities because he is 40 or older.
Case*: Reid v. Google, Inc.
Fact: Google’s vice-president of engineering, Wayne Rosing (age 55), hired Brian Reid (52) as director of operations and
director of engineering. Reid’s only written performance review stated that he had consistently met expectations.
However, the review also commented that “Adapting to Google culture is the primary task. Right or wrong, Google is
simply different: younger contributors, inexperienced first-line managers, and the super-fast pace are just a few examples
of the environment.” Nineteen months after Reid joined Google, he was fired. Google says it was because of his poor
performance. Reid alleges he was told it was based on a lack of “cultural fit.” Reid sued Google for age discrimination.
The trial court granted Google’s motion for summary judgment on the grounds that Reid did not have enough evidence of
discrimination. The Court of Appeal overruled the trial court. The Supreme Court of California agreed to hear the case.
Issue: Did Reid have enough evidence of age discrimination to warrant a trial?
Decision: [T]he United States Supreme Court indicates that even if age-related comments can be considered stray remarks
because they were not made in the direct context of the decisional process, a court should not categorically discount the
evidence if relevant; it should be left to the factfinder to assess its probative value. [T]he stray remarks cases merely
demonstrate the common-sense proposition that a slur, in and of itself, does not prove actionable discrimination. A stray
remark alone may not create a triable issue of age discrimination. But when combined with other evidence, an otherwise
stray remark may create an ensemble [that] is sufficient to defeat summary judgment. For the reasons stated above, we
affirm the judgment of the Court of Appeal.
American with Disabilities Act (ADA)
 A disabled person is someone with a physical or mental impairment that substantially limits a major life activity
or the operation of a major bodily function or someone who is regarded as having such impairment.
 An employer may not fire, refuse to hire or promote a disabled person so long as she can, with reasonable
accommodation, perform the essential functions of the job.


An accommodation is unreasonable if it would create an undue hardship for the employer.
Reasonable Accommodation. To meet this standard, employers are expected to:
o Make facilities accessible,
o Permit part-time schedules,
o Acquire or modify equipment, and
o Assign a disabled person to an open position that he can perform (Note that the employer is not required
to create a new job or find a perfect position, just a reasonable one).
Case*: Willoughby v. Conn. Container Corp.
Fact: Anthony Willoughby worked for Connecticut Container Corp. (CCC). When Willoughby was diagnosed with
diabetes, he submitted a doctor’s form to CCC’s Human Resources department. Despite treatment, Willoughby
experienced side effects that included swelling, dizziness, blurred vision, and frequent bathroom use. Heat caused the
symptoms to worsen. For two weeks, Willoughby was assigned to particularly strenuous activity in the heat. One night,
his ankles swelled and his vision deteriorated. When he told his supervisor, Darlene Bailey, she said “do the work or go
home.” Willoughby also informed the shift supervisor, who ignored him. Later that night, after Willoughby did not
respond to pages, Bailey found him in a chair. Willoughby says he had passed out; Bailey states that he was sleeping.
Willoughby presented HR with a note from a physician verifying that he had passed out due to low blood sugar. He was
fired for sleeping on the job. Willoughby filed suit, alleging that CCC had violated the ADA because it had failed to
provide reasonable accommodation for his disability. CCC filed a motion for summary judgment.
Issue: Was Willoughby disabled? If so, did CCC provide reasonable accommodation?
Decision: As EEOC regulations themselves note, diabetes substantially limits endocrine function, and therefore it should
easily be concluded that diabetes will, at a minimum, substantially limit what amounts to a major life activity. CCC avers
that Willoughby’s claim under the ADA that CCC failed to provide [him] with an accommodation is baseless in view of
the fact that Willoughby himself testified he never asked for an accommodation. [T]he ADA contemplates that employers
will engage in “an interactive process” with their employees and in that way work together to assess whether an
employee’s disability can be reasonably accommodated. Given that CCC did in fact have notice of Willoughby’s
disability, and given that CCC did not, prior to Willoughby’s termination, engage with Willoughby in any sort of
interactive process by which the parties worked together to assess whether Willoughby’s disability could be reasonably
accommodated, the Court finds that a jury could permissibly find that Willoughby is able to meet this claim that CCC
failed to provide reasonable accommodation under the ADA.