Employment Law Survey, Fall 2013
Professor Gallagher
The Penn State University, Dickinson School of Law
Text Book: Employment Law Cases and Materials Fifth Edition – Wilborn, Schwab, Burton, Lester
Employee, Joint Employee, Intern, or Independent Contractor
1. Is this an Employee/Employer relationship
if yes then employee is covered under FLSA, ERISA, Title VII, FMLA, OSHA etc
if no the worker may not be covered under certain statutes
2. Is this a Independent contractor relationship
if yes then the independent contractor is subject to tort liability and is not protected under employment statutes
3. Is this a joint employee relationship?
If yes, then the joint employee is covered and can bring claims against joint employer
4. Is this a justified unpaid internship?
If yes, then the employer is free to not pay – If no, then the employer must pay the intern for their services
What type of employment is this?
1. Employment at will?
– can be terminated for no cause, a good reason, or a bad reason
– if terminated for a bad reason– employer may be subject to IIED claim (rare but possible, high standard for π)
– if rightfully terminated but termination was performed in bad manner – may be subject to IIED
– employee can quit for no cause, a good reason, or a bad reason
– cannot be terminated if reason goes against public policy
– read in employment at will unless otherwise shown
– expressly stated not to be at-will contract
– implicitly stated not to be at-will contract
– employee provides sufficient consideration to employer = not an at-will contract
2. Definite-Term Contract
– requires just cause (objective test) to terminate
– unclear if requires just cause to quit job (just cause to quit is NOT another employment opportunity that is better than the one subject to definite term contract)
3. Satisfaction Contract
– requires good faith termination (subjective test), termination made when employer is no longer satisfied with the employees performance
4. Lifecycle Contract
FLSA
1. Is this an employee employer relationship?
2. Is the employee engaged in commerce or is the employer engaged in commerce and has at least a gross volume of business of $500K?
a. for individual employees see 29 CFR 776.19(b)(4)
b. for businesses engaged in commerce see 203(s)(1)
3. Is the employee exempt from coverage under FLSA?
a. executive exemption 213(a)(1)
1. employment issue prior to 2004 use 3 part test
2. employment issue post August 23, 2004 use 4 part test
b. learned professional exemption – advanced knowledge + prolonged studies 29 CFR 541.3
c. administrative exemption
Americans with Disabilities Act
1. Is the employer a covered entity?
a. 15 or more employees, industry affecting commerce & not the US govt or a private membership club that is a non-profit
2. Is the individual qualified? (employee’s burden)
a. qualified individual = can perform the essential functions of the employment position (what does the job description or advertisement say?)
b. qualified individual can include the requirement that the employee does not pose a direct threat to the health and safety of others in the workplace
3. Was the adverse action on the basis of disability
a. disability = physical or mental impairment that substantially limits one or more major life activities of the individual
i. do not need to show the disability substantially limits employee at the actual time of the adverse action – only need to show the disability would substantially limit employee when the disability is active
ii. cancer in remission = disability, evaluate as if employee had cancer at the time of adverse action
b. evidence that there is a limitation in terms of the employees own experience (subjective standard)
c. homosexuality, transvestism, current drug users, obesity and sleep apnea, and compulsive gambling ARE NOT disabilities under ADA 2008
d. a rehabilitated drug user is covered under the ADA (standard for what is rehabilitated is unclear – one month, significant period of time…etc)
e. side effects from medication can constitute a disability (Sulmina)
4. Was the decision/action discriminatory? See 102(b) (DISPARATE TREATMENT OR FAILURE TO ACCOMMODATE)
1. Was there a reasonable accommodation (employee bears burden) that would not cause undue hardship (employer burden) upon the employer?
a. higher standard than disparate treatment and impact standard (title VII)
b. accommodation that trumps seniority system is not a reasonable accommodation (can circumvent this issue if employee proves special circumstance)
c. if accommodation gives disable employee preferential treatment this does not automatically make the accommodation unreasonable
d. employer does not need to provide the preferred accommodation – any reasonable accommodation is sufficient
2. Was the adverse action disparate treatment?
a. does not require employee make a request for accomodations
Discrimination
Title VII
Age Discrimination in Employment Act/Older Workers Benefit Protection Act
Gross v. FBL – SCOTUS 2009
Majority: No mixed motive instructions for disparate treatment ADEA claims– plaintiff cannot win on a claim that age was one of many motivating factors, age has to be the but-for cause of the employer’s adverse decision (employee bears the burden of proving age discrimination)
Dissent:
1. Age requirement – 40 years of age
2. good cause discharge is okay as long as the discharge is not because of age
3. if age is a BFOQ then using it in a hiring decision/employment decision is okay
4. waiver for ADEA claims has to be knowing and voluntary
a. written in a manner to be understood
b. individual receives consideration in return for waiver
c. reasonable time to consider waiver
5. Forced retirement at age 65 is okay under ADEA if:
a. for 2 years prior to retirement the employee is employed in a bona fide executive or a high p
ess
(1) Is the work necessary and integral to the business? If yes – then employee/employer relationship
(G) Dependence of the Employees on the Employer
(1) Is the worker economically dependent upon this work?
a(a)If the employee is so dependent on the business that the courts see protecting them under FLSA – then they will be deemed employee
b(a) If the worker is sufficiently independent and does not need protection under FLSA – then it is justified to find them as independent contractor
3. Concurring opinion
a. Criticism – evaluating employee vs. contractor by a factor test allows all workers to be deemed employees
b. Independent contractor doctrine is based in tort liability
i. Trying to sever liability based on who is answerable for a wrong
ii. Establishes a chain of liability
c. Argues that coverage under FLSA should be determined by the reason for coverage
B. American Law Institute
1. Focus on whether the worker has entrepreneaurial control over the work
a. Employee Test:
i. Individual acts to serve the interest of the employer
ii. Employer consents to receive the individual’s services
iii. Employer’s relationship with the individual effectively prevents the individual from rendering the services as part of an independent business
b. Independent Contractor Test:
i. Individual has his or her own interest exercises entrepreneurial control over the manner and mean by which the services are performed
(A) Control over important business decisions
(1) Whether to hire and where to assign assistants
(B) Purchasing equipment
(C) Whether and when to service other customers
C. Policy concerns related to FLSA:
1. Unfair competition between employers who follow the rules and employers who do not
a. Employers who hire employees, instead of attempting to cloud them as independent contractors, have to pay additional costs and bear additional liability – employers who break the law do not bear these costs and therefore gain unfair market accessibility
2. No federal mechanism for checking if an employee has been wrongly classified as independent contractor
a. Subject to state laws that (if adopted….not all states have these laws) put penalties to those who willfully misclassify
3. FLSA does not protect independent contractors – likely does not prejudice independent contractors who tend to be college educated, white, men.
D. Volunteers and Prisoners are not covered by FLSA
