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Employment Law
Rutgers University, Newark School of Law
DiChiara, Michael R.

Employment Law Outline

General Theme for Regulating/Not Regulating:

Structure of Legal Responses to Problem
1. Economic Rational
a. Inefficient for government to intervene
b. People best at knowing what they want (rational beings)
2. In balance of information between employer/employee (safety)
3. Power inbalances
a. Employees may have no other options (captive)
b. Employers have more power in general
4. People are irrational, don’t know what is best for them
5. Social cost to society from “rational” choices (third-party effects)
Employees v. Independent Contractor
1. Employees are those who as a matter of economic reality are dependent upon the business to which they render service. (Secretary of Labor v. Lauritzen – FLSA Standard)
a. Control – Nature and degree of the employer’s control as to the manner the work is performed
i. Does employer exhibit pervasive control over operation as a whole
b. Profit and Loss – The alleged employee’s opportunity for profit depending upon his managerial skill
i. Concerned about whether could lose everything from investment, than earning less money b/c chose ot pick pickles in a bad spot
c. Investment – equipment or materials required for task or employment of workers
i. Gloves are not enough (but what about lawyers who are i.c.)
d. Skill – Does the service require a special skill
i. Like all skills, it increases by doing the work, and could be applied in any field (not just pickle field)
e. Permanency – Degree of permanency and duration of working relationship
i. Tend to not find this dispositive, because i.c. can return year after year or work for long time, and employee could work for 3 weeks at McDonalds
f. Integral Part – Service is an integral part of employer’s business (side project is ic)
i. Unless pick pickles, no pickles made (but does this not affect everything the employer hires to do; how distinguish?(E))
g. Dependence of Worker on “Employer” (Key consideration)
i. Ex Post view (maj) – depend on def’s land, crops, expertise, equipment, nad marketing
ii. Ex Ante view (Eastebrooke) – If they chose to not work there would other jobs be available.
h. Eastebrook – person statute was meant to cover (In FLSA cases, unskilled, low-paid employees are meant to be protected)
2. Covered v. Non-Covered Employees
a. Employees may be covered even if sign paperwork stating not covered i/o/i
i. Workers when signed the paperwork did not know themselves to be employees (Vicaino v. Micrsoft)
ii. Or, waiver in contract is held to be definition of office, not explicit waiver (Vicaino v. Microsoft)
iii. Reflects willingness to protect workers beyond contract rights
At will Doctrine
Employment at Will Doctrine
1. Default Condition
a. Overrode by mutual understanding between the parties that the employment was for a fixed and definite period (note: permanent or lifetime employment is not for a fixed period)
i. Sometimes can be inferred from the terms of the contract
1. Rate-of-Pay Rule – hiring at stated sum for week, month, or year, is definite employment for the period named – Jurisdictions are split over whether to enforce
ii. If not default, employment is a condition precedent to recover wages unless the contract is divisible or the condition is waived by the employer
2. Employer/Employee can terminate the employment at any time.
Tort Exceptions to the At-will Doctrine
1. Damages for Tort Violations of At-Will Doctrine
a. Standard Monetary
i. Lost Wages
ii. Salaries
iii. Commissions
iv. Benefits
v. Expected Reduction in Future Wages (unlike Title VII, not likely to reinstate)…
b. Mental Distress
c. Loss of Reputation and other compensatory
d. If conduct is sufficiently outrageous, punitive damages can also be recovered
2. Wrongful Discharge in Violation of Public Policy
a. 3d Party Effects – Prevented from firing if did not take on action that would hurt 3rd Parties
i. Not 3d party harms that have already occurred (if harmed third party and than report it; Devries (sic))
ii. If only policy affect is on private parties, not firing in violation of public policy
b. What is public policy?
i. Broadly – what is just and right
ii. Or Narrow – Specific Statutory/Constitutional Provision must be violated (Adler)
c. Four General Patterns of Protected Acts
i. Fired for refusal to commit unlawful acts
ii. Fired for exercising a statutory right
1. i.e. workers comp
iii. Fired for filling public obligation
1. I.e. Ness v. Hockes, participating in jury duty
2. Potential Exception is contractual duty to make reasonable efforts to avoid jury duty for certain parties such as nurses, teachers, doctors, etc, because harm of being on jury is greater than benefit to society at large
iv. Fired for whistle-blowing, recording wrongs against insiders or outsiders
1. Courts split over whether violates at-will doctrine if the disclosure is made internally (Adler)
a. Why? Duty to expose serves private interest employer, not public interest

External

Internal

3rd party Effects

Protected

Protection?? (Depends on court, or if statutorily protected) and is it warning or asserting public right (Warning if brought under FLSA)

No 3rd Party Effects

No Protection

No Protection (unless protected by statute

2. And remember that the disclosure needs to harm 3d parties
d. Punitives Awarded if employer acted grossly negligent towards plaintiff
i. So if discharge is not illegal at time, no punitives
3. Intentional Infliction of Emotional Distress (iied) backdoor to wrongful discharge claim)
a. In terminations, how plaintiff was treated when termination occurred, (Agis v. Howard Johnson) but can apply to general treatment by the employer. (Concern for party, not third party affects is goal); However, if general treatment, may be pre-empted by Worker’s Comp is arose out of and during the course of employment.
b. Punitives? If intended to harm the person;
c. Requirements
i. Intended or should have know would have caused emotional distress
1. If special relationship (i.e. employees), no need to show intent, just recklessness (or that a reasonable person would have known the conduct would have upset a reasonable person) (Bodewig v. K-Mart)
ii. Conduct was extreme or outrageous
1. Defined as “so outrageous in character, so extreme in degree as to go beyond all bounds of decency and to be regarded as atrocious and utterly intolerable must go beyond mere indignities, threats, or insults.” Rest. 2d Torts 46

starts work, and decreases worker protection
a. Employee must receive something in exchange
b. UNLESS Court requires them to have knowledge of the earlier and higher benefits (in which case, only need consideration if knew of the earlier benefits)
5. Note: Unions and handbook, stronger language decreases need for unions but abilitiy to fire gives nonunion a cost advantage (so may want)
ii. With Prominent Disclaimer (may be not in handbook, maybe in contract/application(See Reid v. Sears), no modification BUT disclaimer must be
1. Very explicit (found case by case looking to)
a. Strong language
b. Size
c. Placement
d. Font
2. Misunderstanding Disclaimer is not a defense (See Reid v. Sears); Employee Should ask
5. Reliance as Implied in Fact/Promise to Hire/
a. Beginning of Job
i. Even though promise to hire is illusory promise, courts will reward under promissory estoppel theory (b/c relied on promsie and gave up another job, moved to new city etc.) (Grouse)
1. Person reasonably relied on promise to detriment
2. Co. expected tehm do so, limited as justice requires
ii. Employees have good-faith opportunity to fulfill obligations of job to the best of ability before fired (under promissory estoppel)
1. Or reasonable expectation that would not be fired for reasonable amount of time after being hired (Dicta of Grouse)
iii. Probationary Period – Can fire for any reason for 90 days (explicitly at-will); But does that mean no longer at will after 90
b. At-will/Longevity of Service
i. Courts use “less stringent” good cause in indefinite term contract when employee has spent a long time with employer/general practice/promises etc. (Pugh – implied contract)
ii. Defendant’s Burden: Burden is on defendant to state reason to fire for good cause
iii. Plaintiff’s Burden (shifting): Show reason is pretextual or on its face unreasonable
6. Statutory Limitation on At-Will
a. Some states have passed statutes mandating good cause for employment terminations, normally in exchange for cap on remedies….
Privacy Protections for Employees/Employers
Free Speech and Privacy Protections for Public Employees
1. Political Association
a. Brennan – Violates first amendment to fire, hire, promote, transfer, or recall based on political support in a low-level position (Rutan) unless position involves policy drawing (or political related activity)
i. We have expectation that people will not be harmed for political belief (so justifies erosion of at-will doctrine)
b. Scalia – Only violate first amendment to fire based on political support (patronage as old as government, so if weakens patronage, weakens democracy)
i. Court often distinguishes, maybe because more outrageous/humiliating to be fired
2. Political Speech (Rankin v. McPherson)