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

Employment Law Outline:

Dichiara Spring 2012

I.        Overview: Legal Intervention in the Workplace
A.      Historical Foundations
1.       Industrial Revolution
a)       Lochner-early efforts to regulate employment (b/c some jobs were hazardous and there was unequal 
bargaining power) were struck down as infringing on freedom to contract.
b)       Freedom of contract approach; quickly abolished though; first protective statutes here;
c)       14th  Amendment – “equal protection of the laws” can be used by government employees as the basis
for discrimination suits, though it is inapplicable to private employees.
d)       Civil Rights Act of 1866 (42 U.S.C. Section 1981) – states may not enact legislation restricting any
racial group’s legal rights (i.e. right to contract, right to litigate, tax burden, employment benefits).  It
was aimed at protecting blacks from “Black Codes.”  No minimum number of employees to sue and
employer.  No administrative exhaustion.
e)       Civil Rights Act of 1871 (Ku Klux Klan Act)  prohibits discriminatory “state action” and conspiracies
that interfere with civil rights. If any state official deprives someone of a legal right, the person has a
private cause of action against the individual.  Municipalities may be sued (fed and state may not)

2.       Great Depression
a)       Supreme Court upheld the National Labor Relations Act of 1935 giving employees the right to
organize into unions and the government was given the right to regulate employment.
b)       Fair Labor Standards Act (1938): provides minimum wage protection and premium pay for overtime

3.       Modern Approach: “Yet what is efficient, expedient, or profitable for a business is not necessarily also
beneficial to its employees, and may even be harmful.”
a)       Equal Pay Act (1963): made it unlawful for Ers to discriminate between men and women with respect
to wages
b)       Title VII of the Civil Rights Act (1964): prohibited all discrimination in E’ment on the basis of race,
color, religion, sex, or national origin.
c)       Age Discrimination Employment Act (1967): prohibited discrimination on the basis of age
d)       Occupational Safety and Health Act (1970): established minimum health and safety standards for the
e)       Rehabilitation Act (1973): E’ment rights for individuals with disabilities
f)        Employee Retirement Income Security Act (1974): protects pension entitlements
g)       Equal Employment Opportunity Act of  1972- expanded the acts coverage and increased the EEOC’s
enforcement power.
h)       The Pregnancy Discrimination Act of 1978- expanded the definition of “on the basis of sex” to include
pregnancy, childbirth and other related medical conditions.
i)         The Civil Rights Act of 1991-right to a jury trial and added compensatory and punitive damages to the
available relief.  The prevailing party may also get attorney’s fees.
j)        Age Discrimination and Employment Act (ADEA)
k)       State Fair Employment Practice Laws- Most state laws do not exempt small employers.  They also
have added more protection such as marital status and sexual orientation.
l)         Executive Order 11246 and 11375 – Prohibits government contractors from discriminating and
requires affirmative action.  Applies to subcontractors and venors with whom they deal.  Race, Creed,
Color or National Origin; later sex was added.
m)     Mid 1980’s – : Worker Adjustment Retraining and Notification Act; Employee Polygraph Protection
Act; Americans with Disabilities Act; Civil Rights Act of 1991; Family and Medical Leave Act

B.      Functions of Work
1.       Economic and social functions of society, providing goods and services and a place for people to interact
2.       Psychological: “the individual person is dignified by work”; “Work helps us become more fully human” (see.
CB, p. 5 -7

C.      Development of Employment Law
1.       Ordinance of Labourers 1349 (p. 15).  After the bubonic plague there was a shortage of workers and thus
wages soared and crops went un-harvested; prescribed a duty to work and prohibited leaving a job or
discharging a servant before the end of a term and by the Poor Laws, which used a test or residence and E’ment
to determine which community was responsible for the support of a person (not restricted to agricultural and
domestic workers
2.       Master and Servant 1765: employment as a private contract matter between the Er and the Ee; originally
developed as an offshoot of the law of domestic relations, and master and servant alike were bound by
obligations to each other; man was master of his home and could impose whatever working conditions he
wanted on Ees; Ers were subject to no real sanctions; THIS IS STILLRELEVANT IN THE AREA OF TORTS;
“once it is determined that the man at work is a servant, the master becomes subject to vicarious liability for his
3.       Employer-Employee: (Industrial Revolution) the E’ment relationship was one which pertained between equals:
the Ee was free to quit to seek alternate E’ment whenever she/he wanted and the Er was free to fire the Ee at
any time; first protective statutes here; PROPERTY RIGHTS – – the Er’s ability to impose a wide range of
conditions on Ee’s is often justified because the work is performed on the Er’s property, with the Er’s materials 
and equipment, and even utilizing the Er’s intangible property such as good will and trademarks
4.       Employment at Will: Created by an Albany lawyer named Horace Gray Wood in the 1890’s(see p. 27);
endorsed by the Supreme Court in:

Adair v. U.S. (p. 27): (1908)the Court struck down as unconstitutional a federal statute making it
a crime for an Er engaged in interstate commerce to discharge an Ee solely because of
membership in a labor organization

Clarke v. Atlantic Stevedoring Co. (p. 28): an E’ment contract that is for an indeterminate lenth is terminable at the will of either party; letter to 200 black longshorement guaranteeing continuous work for those who “fulfilled their duties satisfactorily”; shortly after the black longshoremen were fired and replaced by white longshormen just based on race; letter here held as an advertisement not an offer

Note: taken together, illustrate 3 aspects of the common law at-will rule: the Er was free to impose any conditions of E’ment, to discharge an Ee at any time for any reason, and to effect the discharge in virtually any manner

5.       Now a combination of: individual contracts of E’ment, collective bargaining, and government regulation

II.      Conditions of Employment and Restrictions on Employment
A.      Employee Status: pros and cons of being an Ee –

Pro: protected via FLSA & Title 7; entitled to: unemployment compensation; workers compensation; collective bargaining rights; minimum wages and maximum hours; social security; pensions, occupational safety and health; anti-discrimination protection

Con: barred from suing Er in tort for injuries – limited to workman’s comp.; responsible for your own taxes, etc; need your own tools/investment; more freedom to contract/dispose of your labor

The Contingent Workforce:
Part-time Workers: no benefits packages; by far the largest segment of contingent workers (almost 1/5 of entire U.S. Workforce); most common in the clerical, sales, and service industries; typically offer low pay ad few or no benefits and require few skills and demonstrate high turnover rates; worse than full-time jobs on all fronts; only 22% of PT received health insurance from work; no pension; frequently exempted from statutory workplace protections

Contract Workers: those who may be employed by a primary Er but who provides serviced to a secondary Er on a contract basis (aka Ees of subcontractors); construction, janitorial, garment manufacturing, and many other industries; the secondary Er who pays the subcontractor disclaims all responsibility for social security, unemployment compensation, minimum wage or overtime violations, or tax withholdings of any kind. THE HUGE INDUSTRY OF STAFF LEASING WOULD FALL INTO THIS CATEGORY; Vizcaino does not apply to leased Ees (p. 115)

Temporary Workers: still predominantly female and clerical; in general temp agencies take care of tax withholdings, minimum wage requirements, etc. but are unable to monitor work conditions; the statues of temporary workers as non-Ees of the recipient firm may facilitate workplace abuses such as sexual and racial harassment and discrimination and unsafe working conditions; NO RIGHTS AT RECIPIENT FIRM; Vizcaino does not apply to leased Ees (p. 115)

Independent Contractors: no access to federally-mandated benefits and standards including unemployment compensation, workers’ comp, pension regulation through ERISA, health and safety standards, anti-discrimination laws, federal disability insurance, protection under the FLSA, tax withholdings; STATE CONTRACT LAW DETERMINES THEIR RIGHTS

Day Laborers: often these workers are paid by the day and their wages are sub-minimum after Ers deduct for the provision of tools, transportation, or a meager lunch; they are given the dirtiest and most dangerous jobs

1.       Employees and Subcontracting
a)       NLRB v. Hearst Publications, Inc. (supplemental case) – Newsboys were employees not independent contractors. What were the factors that the courts used to determine whether they were independent contractors or employees? “In this case the NLRB found that the designated newsboys work continuously and regularly, rely upon their earnings for the support of themselves and their families, and have their total wages influenced in large measure by the publishers, who dictate their buying and selling prices, fix their markets and control their supply of papers. Their hours of work and their efforts on the job are supervised and to some extent prescribed by the publishers or their agents. Much of their sales equipment and advertising materials is furnished by the publishers with the intention that it be used for the publisher's benefit. Stating that “the primary consideration in the determination of the applicability of the statutory definition is whether effectuation of the declared policy and purposes of the Act comprehend securing to the individual the rights guaranteed and protection afforded by the Act,” the Board concluded that the newsboys are employees. The record sustains the Board's findings and there is ample basis in the law for its conclusion.”  Congress overruled this decision by amending the NLRA to say that independent contractors are not employees.  This would not help the outcome in this case because it is precisely what the court was trying to figure out, were they independent contractors or employees?
b)       Donovan v. Sureway Cleaners (p. 97): aka The Sureway Cleaners Test aka Economic Realities Test
none of these factors is dispositive, you need to look to the circumstances of the whole activity: 
(1)     The degree of the employer’s right to control the manner in which work is done;
(2)     The workers opportunity for profit and loss depending on his managerial skill;
(3)     The worke

e VII. It is not improper to offer a position over the phone so long as you check credentials prior to “hiring”, which is defined as “the actual commencement of E’ment of an Ee for wages or other renumeration; “constructive knowledge” requires willful blindness
Cases where constructive knowledge was imputed: CB p. 141

b)       Title VII – inquiries concerning a job applicant’s race, color, religion, national origin, or citizenship status “may constitute evidence of discrimination prohibited by Title VII” but are not specifically barred by Title VII;  An employer who makes such inquiries will have the burden of proving that the answers to such inquiries “are not used in making hiring and placement decisions in a discriminatory manner prohibited by law.”
Still: Many states go beyond the Title VII prohibitions, especially in the area of pre-employement inquiries; see West Virginia example, CB p. 155 – 157; NEW JERSEY: prohibits an Er from asking about draft status and marital status; CALIFORNIA: prohibits asking about arrests not leading to conviction and about pot convictions more than 2 years old;

3.       Employer Information-Gathering
a)       Applications- Federal Agencies must obtain consent before contacting a job applicant’s previous
employer pursuant to The Privacy Act.  This does not apply to the private sector
(1)     Sullivan v. United States Postal Service, (p. 151) – A job applicant seeking employment with the Post Office sued because the post office contacted his current employer even though he said did not want them to on the application.  The current employer fired him and he did not get the Post Office job.  Postal Service violated the Privacy Act and constitutional right to privacy
b)       Interviews – Applicants who make false statements at an interview may be discharged if the
misstatement is discovered after the Ee begins work.  If the misstatement is discovered only after
an allegedly unlawful discharge, the courts will determine if the “after-acquired evidence” rule will
save the information or throw it out.
Lysak v. Seiler Corp (p. 157):Female employee, who during her job interview misled her employer about not being pregnant, filed a suit against her former employer when she was terminated after her employer discovered that she was not pregnant.  An employer can base a termination decision on an unsolicited misrepresentation at the interview, even if the subject of the misrepresentation was not one the employer could have possibly raised.  The woman told the interviewer that she had no plan to have any children.  She told them a month later she was pregnant (knowing she was pregnant at the interview); Er’s are barred from discharging an Ee because of false responses to Er’s unlawful inquiries per Kraft v. Police Comm’r of Boston (p. 159)
c)       Credit Checks: via inter-corporate computer banks, insurance companies, banks, and other public and
private institutions; Fair Credit Reporting Act of 1980 – most sweeping congressional attempt to limit
private sector information abuse; requires consumers to be informed if they are the subject of a
consumer credit report and if an adverse decision is reached, they may obtain disclosure of
information in their file; also prohibits dissemination of information more than seven years old and
requires reasonable recordkeeping and reporting procedures; violators of the Act are subject to
criminal penalties and civil liability; if an applicant is rejected because of credit history, the person has
no statutory right to know
d)       Background and Security Checks: many states require fingerprinting for jobs like: alcoholic beverage
workers, farm labor contractors, jockeys, pawnbrokers, private detectives, professional boxers, school
bus drivers, stock brokers, and taxi drivers; in NY & CA requiring fingerprints for bartenders held an
invasion of privacy
e)       References:
(1)     Options:  Giving no reference; give a false positive reference; giving no reference.
(2)     Defamation – An employer may be held liable for defamatory references given to a
prospective employer.  To prevail on this claim: (a conjunctive test)
(a)     Prima Facie Elements: Burden is on the P to prove by clear & convincing evidence
(i)       A defamatory statement (something false); which is
(ii)     published by a third party; which
(iii)    created the existence of special damages or action-ability absent
special damages; and was undertaken
(iv)   with actual malice