Chapter 1: Legal Ethics
1
Learning Objectives
1. Under the Family and Medical Leave
Act of 1993, in what circumstances
may an employee take family or
medical leave?
2. Generally, what kind of conduct is
prohibited by Title VII of the Civil
Rights Act of 1964? 
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2
Learning Objectives
3. What federal acts prohibit
discrimination based on age and
disability?
4. What are the two most important
federal statutes governing
immigration and employment today?
5. What federal statute gave employees
the right to organize unions and
engage in collective bargaining?
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3
Introduction
 Historically, employment law was
governed by the common law doctrine
of “employment at will.”
 Today employment law is heavily
regulated by state and federal statutes.
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4
Employment at Will
 Employment relationships have been
by common law doctrine of
“employment at will.”
–Either party may terminate at any time
for any reason, unless contract provides
to the contrary. 
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5
Employment at Will
 Exceptions to the Employment At Will
Doctrine:
–Based on Contract Theory: is there an
implied employment agreement? What
about oral promises from employer? 
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6
Employment at Will
 Exceptions to At-Will (cont’d):
–Based on Tort Theory: termination may
give rise to wrongful discharge claims.
–Based on Public Policy:
• Requirements: Must be clearly stated in
statutes governing that jurisdiction.
• Whistleblowing and Public Policy.
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7
Employment at Will
 Wrongful Discharge.
–Even if employer’s actions do not violate
any express employment contract or
statute, liability may still attach based
on tort theory or agency.
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8
Wage and Hour Laws
 Introduction.
–Davis-Bacon Act -- the prevailing wage
act.
–Walsh-Healey Act -- the beginning of
minimum wages.
–Fair Labor Standards Act (FLSA) -- an
extension of wage and hour regulation
to workers in interstate commerce. 
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9
Wage and Hour Laws
 Child Labor.
– FLSA prohibits oppressive child labor
practices.
 Minimum Wage Requirements.
– In 2010, FLSA minimum wage is
$7.25/hour in covered industries.
Employers in food or lodging industries
can deduct reasonable cost of those
services from wages.
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10
Wage and Hour Laws
 Overtime Provisions and Exemptions.
–Rule: Under FLSA, employees who work
over 40 hours/week are entitled to 1.5
times her hourly wage for those hours
worked.
–Exemptions: certain employees, e.g.,
executive or professional, are exempt
from FLSA overtime requirements.
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11
Wage and Hour Laws
 Overtime Provisions and Exemptions.
– Exemptions: FLSA overtime exemptions do
not apply to manual laborers, nurses,
police, firefighters, and other public safety
workers. ‘blue collar’ workers.
• CASE 22.1 SMITH V. JOHNSON AND JOHNSON
(2010). What factors did the court use to
determine Smith’s status?
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12
Layoffs
 Worker Adjustment and Retraining
Notification Act: 60 day notice before a
‘mass layoff’ during 30 day period, which
results in workforce loss of:
–At least 33% of fifty (50) full-time
employees at a single job site, or
–At least 500 full-time employees.
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13
Layoffs
 Worker Adjustment and Retraining
Notification Act (continued).
–Notification Requirements.
–Remedies for Violations.
 State Laws May Also Require Layoff
Notices.
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14
Family and Medical Leave
 Coverage and Application: FMLA
requires employers with over 50
employees to provide twelve (12) weeks
unpaid leave to employees who need to
care for a spouse, child, or parent
suffering with a serious medical condition.
–Serious injuries or military duty can take
up to 26 weeks. 
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15
Family and Medical Leave
 Benefits and Protections:
– Employer must continue worker’s health
care on same terms. Worker must be
restored to position upon return to work
(unless it’s a “key” employee).
 Violations.
– Damages.
– Job reinstatement, and
– Promotion (if lost).
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16
Worker Health and Safety
 The Occupational Safety and Health
Act. (OSHA).
–The fundamental federal law aimed
toward safety in the workplace.
–Enforcement is by OSHA, NIOSH, and
the OSHRC.
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17
Worker Health and Safety
 State Workers’ Compensation Laws:
establish an administrative procedure for
compensating workers injured on the job.
Instead of suing for injuries, a worker is
compensated.
– Requirements.
– Workers’ Compensation versus Litigation.
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18
Income Security
 Social Security: portion of income
(whether paycheck or self-employed)
goes to FICA (Federal Insurance
Contributions Act).
 Medicare: federal government healthinsurance program for people 65 years
of age, and for those under 65 who are
disabled.
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19
Income Security
 Private Pension Plans.
–ERISA does not require employers to
setup pension plans, but provides rules
on management and investment.
–Vesting.
 Unemployment Compensation.
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20
Income Security
 COBRA provides a federal right to
continued health insurance.
–Procedures: worker has 60 days to
decide.
–Payment: COBRA is not free, payments
depending on conditions and worker
status.
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21
Employee Privacy Rights
 Electronic Monitoring in Workplace.
–Employee Privacy Protection: is there an
employee expectation of privacy?
–ECPA: “business-extension exception”
allows employer to monitor.
–Stored Communications.
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22
Employee Privacy Rights
 Other Types of Monitoring.
–Lie-Detector Tests: Employee Polygraph
Protection Act exempts government,
security, and controlled substance firms.
• CASE 22.2 NASA V. NELSON (2011). What
privacy law did Nelson claim NASA was
violating?
–Drug Testing.
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23
Employment Discrimination
 The most important federal antidiscrimination laws are:
–Title VII of the Civil Rights Act of 1964.
–The Age Discrimination in Employment
Act.
–The Equal Pay Act.
–The Americans with Disabilities Act.
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24
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Prohibits discrimination in employment
on the basis of race, sex, color, religion,
and national origin. “Sex” now includes
pregnancy.
–Applies to employers involved with
interstate commerce with 15 or more
employees.
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25
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–In addition to prohibiting religious
discrimination, employers must
reasonably accommodate an employee’s
religious practices.
–EEOC: monitors compliance with Title VII.
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26
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Intentional Discrimination.
• “Disparate-Treatment” Discrimination.
Applicant must prove:
–Is a member of a protected class;
–Applied, qualified , rejected for job;
–Employer continued to seek applicants.
–Burden then shifts to employer who must
articulate a legal reason for not hiring. 
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27
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Unintentional Discrimination.
• “Disparate Impact” Discrimination:
–Occurs when a protected group of people is
adversely affected by an employer’s
practices, procedures, or tests, even though
they do not appear to be discriminatory. 
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28
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Unintentional Discrimination.
• Pool of Applicants Test: plaintiff shows
percentage of the protected class in
employer’s workforce does not reflect
percentage in local labor market.
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29
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Unintentional Discrimination.
• Rate of Hiring: plaintiff compares selection
rates of members of protected class with
nonmembers in employer’s workforce.
According to EEOC, less than 80% may
show disparate impact.
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30
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Discrimination Based on Race, Color,
and National Origin.
• Title VII prohibits employment policies or
intentional/ negligent discrimination on
basis of race, color or national origin. 
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31
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Discrimination Based on Race, Color,
and National Origin.
• Reverse” Discrimination: Title VII also
protects against discrimination against
majority group individuals, such as white
males. Ricci v. DeStefano (2009).
• Potential “Section 1981” Claims.
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32
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Discrimination Based on Religion.
• Employers must “reasonably
accommodate” the “sincerely held”
religious practices of its employees, unless
to do so would cause undue hardship to
employer’s business.
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33
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Discrimination Based on Gender.
• Employers are prohibited from classifying
jobs based on gender, unless employer can
prove gender is essential to the job.
–Pregnancy Discrimination Act.
–Equal Pay Act (1963).
–Lilly Ledbetter Fair Pay Act (2009).
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34
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Constructive Discharge.
• Occurs when an employer causes working
conditions to be so intolerable that a
reasonable person would feel compelled
to quit.
• An employee can be “constructively
discharged” but still leave voluntarily. 
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35
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Proving Constructive Discharge.
• Plaintiff must present objective proof of
intolerable working conditions, which
employer knew about and failed to correct.
• Employee’s resignation must be a
foreseeable result of working conditions.
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36
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment: Title VII protects
employees against sexual harassment in
the workplace.
• Two forms of sexual harassment:
–Quid Pro Quo. 
–Hostile Work Environment. 
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37
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment.
• Quid Pro Quo sexual harassment involves
demands for sexual favors are demanded
in return for job opportunities,
promotions, salary, increases or other
tangible benefits.
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38
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment.
• Hostile Work Environment. Occurs when
workplace is permeated with
discriminatory intimidation, ridicule, insult
so severe to alter the conditions of the
victim’s employment and create an
abusive working environment.
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39
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment.
• Harassment by Supervisors.
–Usually involves a quid pro quo.
–For employer to be liable for a supervisor’s
sexual harassment, a supervisor must have
taken a tangible employment action against
the employee. 
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40
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment.
• The Ellerth / Faragher Affirmative Defense
is based on two 1998 Supreme Court
decisions. Defense has two elements:
–(1) Employer must have taken reasonable
care to prevent and promptly correct any
sexually harassing behavior, and 
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41
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment.
• The Ellerth / Faragher Affirmative
Defense.
–(2) Plaintiff-employee must have
unreasonable failed to take advantage of
preventative or corrective opportunities to
avoid harm. 
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42
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment.
• The Ellerth / Faragher Affirmative
Defense.
–If an employer can prove both elements, he
will not be liable for supervisor’s harassment.
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43
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment.
• Harassment by Supervisors.
–Retaliation by Employers: action would have
dissuaded a reasonable worker from making
or supporting a discrimination claim.
–CASE 22.3 THOMPSON V. NORTH AMERICAN
STAINLESS, LP (2011). How could NAS have
protected themselves from this claim?
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44
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment.
• Harassment by Co-Workers and Others.
Employer generally liable only if employer knew
or should have known and failed to take action.
–Notice to supervisor is sufficient under
agency law. Employers may also be liable for
harassment by non-employees
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45
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Sexual Harassment.
• Same Gender Harassment.
–In 1998, Supreme Court held in Oncale v.
Sundowner Offshore Services that Title VII
prohibitions against sexual harassment
extended to same-sex harassment. Easier to
prove when harasser is homosexual.
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46
Employment Discrimination
 Title VII of the Civil Rights Act of 1964.
–Remedies under Title VII. Liability may
be extensive. Plaintiff may receive:
• Reinstatement.
• Back Pay.
• Retroactive Promotions; and
• Damages.
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47
Employment Discrimination
 Age Discrimination.
–The Age Discrimination in Employment
Act (ADEA) protects individuals over the
age of 40 from workplace
discrimination that favors younger
workers. 
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48
Employment Discrimination
 Age Discrimination.
–Procedures under the ADEA.
• Plaintiff must show discrimination was
THE reason for adverse employment
action.
–State Employees Not Covered.
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49
Employment Discrimination
 Americans with Disabilities Act of 1990.
–The Americans with Disability Act (ADA)
requires employers to offer “reasonable
accommodation” to employees or
applicants with a disability who are
otherwise qualified for the job they hold
or seek. 
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50
Employment Discrimination
 Americans with Disabilities Act of 1990.
–Procedures Under the ADA. To prevail,
plaintiff must show:
• She has a “disability.”
• She is otherwise qualified for the
employment in question; and
• She was excluded from employment solely
because of the disability. 
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51
Employment Discrimination
 Americans with Disabilities Act of 1990.
–What Is A “Disability”?
• ADA defines disability as:
–Physical or mental impairment that
“substantially limits one or more of major life
activities; or
–A record of such impairment; or
–Being regarded as having such an impairment.

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52
Employment Discrimination
 Americans with Disabilities Act of 1990.
–Reasonable Accommodation.
• Undue Hardship:
–If an employee can perform the job with
reasonable accommodation, without undue
hardship on the employer, the accommodation
must be made.
–Examples: wheelchair ramps. 
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53
Employment Discrimination
 Americans with Disabilities Act of 1990.
–Reasonable Accommodation.
• Job Applications and Physical Exams.
–Modifications to applications and selection
process so those with disabilities can compete.
–Employers are restricted on pre-hiring
questions and physical exams.
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54
Employment Discrimination
 Americans with Disabilities Act of 1990.
–Reasonable Accommodation.
• Job Applications and Physical Exams.
–Modifications to applications and selection
process so those with disabilities can compete.
–Employers are restricted on pre-hiring
questions and physical exams.
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55
Employment Discrimination
 Defenses to Employment
Discrimination.
–Business Necessity. 
–Bona Fide Occupational Qualification.
–Seniority Systems. 
–After-Acquired Evidence. 
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56
Employment Discrimination
 Defenses to Employment
Discrimination.
–Business Necessity.
• Requires employer to demonstrate a job
qualification is reasonably necessary to
the legitimate conduct of the employer’s
business.
• Business necessity is a defense to disparate
impact discrimination.
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57
Employment Discrimination
 Defenses to Employment
Discrimination.
–Bona Fide Occupational Qualification.
• BFOQ defense requires an employer to
show a particular skill is necessary for the
performance of a particular job.
• The BFOQ defense is used in cases of
disparate treatment discrimination.
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58
Employment Discrimination
 Defenses to Employment
Discrimination.
–Seniority Systems.
• Conditions the distribution of job benefits
on the length of time one has worked for
an employer.
• Can be a defense only if it is a bona fide
system, not designed to evade the effects
of the anti-discrimination laws.
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59
Employment Discrimination
 Defenses to Employment
Discrimination.
–After-Acquired Evidence.
• Evidence of misconduct, committed by an
employee who is suing an employer for
employment discrimination.
• Uncovered during the process of discovery
conducted in preparation for a defense against the
suit. Not an absolute defense for employer.
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Immigration Law
 Immigration Reform and Control Act.
–IRCA makes it illegal to hire, recruit, or
refer for a fee, someone not authorized
to work in the U.S.
–I-9 Verification: for new hires.
–Enforcement: by I.C.E.
–Penalties. 
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Immigration Law
 Immigration Reform and Control Act.
–Penalties.
• Criminal Actions: ICE can seek criminal
punishments.
• Penalties for employers.
• Mitigation or Aggravated penalties.
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Immigration Law
 The Immigration Act of 1990.
–Places caps on the number of visas that
can be issued to immigrants every year.
–I-551 Alien Registration Receipts.
–The H-1B Visa Program.
–Labor Certification.
–H-2, O, L, and E Visas.
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Labor Unions
 Federal Labor Laws.
–Norris-LaGuardia Act: protects peaceful
strikes by limiting the injunction powers
of federal courts.
–National Labor Relations Act:
established the right of workers to strike
and engage in collective bargaining.
• Established NLRB.
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Labor Unions
 Labor Management Relations Act:
prohibits certain unfair union practices
such as closed shops. Allowed individual
states to pass right-to-work laws.
 Labor-Management Reporting and
Disclosure Act: hot cargo-agreements,
secondary boycotts.
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Labor Unions
 Collective Bargaining.
–Terms and Conditions of Employment:
• Pay, Safety conditions, Insurance,
Pensions.
• Closing or Relocating a Plant: Severance
Pay.
• Management must bargain over the
economic consequences of moving.
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Labor Unions
 Strikes: two forms.
–Economic Strikes.
• These are strikes over wages.
• Workers can be replaced by permanent
replacements.
–Unfair Labor Practice Strikes.
• Alleging the employer has committed an
unfair labor practice.
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Labor Unions
 Strikes.
–Rights of Strikers After Strike Ends.
• Generally, an employer has the right to
permanent replacements (striking workers
are not guaranteed a job).
• But if the employer has not hired
replacements, then it must rehire the
strikers to replace open positions.
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Labor Unions
 Lockouts.
–Occurs when the employer shuts down to
prevent employees from working.
–When an employer believes a strike is
imminent.
–Lockouts may be a legal employer
response.
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