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Employment Law
Temple University School of Law
Hoffman, Jerome A.

Employment Law

Employment At-Will Doctrine-
worker hired for an indefinite period of time- can get fired for any or no reason, intended to maximize flexibility
parties can agree to modify the at-will doctrine
does not apply to Unionized or contract workers

Clarke v. Atlantic stevedoring D told P they needed 200 stevedores for continuous work Less the a month later they were all fired and replaced
No, EE contract for an indeterminate length is terminable at will of either party

Public employment
might need a hearing
might not be able to be fired for different political views

Mcauliffe v. Mayor of New Bedford Policemen was fired for violating city regulation that prohibited police from being a member of a political committee and fund raising
A city may impose reasonable restriction preventing its employees from engaging in political activities.  While people do have a constitutional right to engage in politics they don’t have any constitution right to work for the city To be protected by the constitution you need a protected interest and there is no protected interest here

Rutan v. Republican Party New Republican government in effort to control prohibited anyone from hiring new employees. Only governor could make exceptions which he used to hire only republicans.
A state cannot condition hiring based on party affiliation, this would be a violation of employees first amendment rights.

Are there any good reasons to distinguish rights in private employment and public employment
private employers are in competition with other private employers and are thus trying to secure the best employees and have less incentive to fire people over trivial thing like political party
public employment is a monopoly and thus have no incentive to keep good employees who have a different ideology and thus can fire people for reasons like political affiliation

Statutory Protection of Employees
Federal & State Whistleblower Laws
o    Whistleblower Protection Act of 1989 – Protects federal employees who expose employer violations
o    State Laws – Almost every state has enacted some form of statutory protection for whistleblowers
Different statutory schemes:
o    Employee must either 1) have reasonably believed that something the employer told him to do was illegal, 2) be right that it was illegal or 3) have acted in good faith

Bard v. Bath Iron Works – Employee thought there was problem in steel production and reported it – eventually fired for impeding production and causing a nuisance
There has to be an objective standard if a reasonable person would have believed if something was going wrong. P presented no evidence to show a belief on his part, as required by the Whistleblowers' Protection Act, that D was in any way acting illegally

Constitutional Protections (usually only apply to public employers)
14th A Due Process Clause – If a person has a protected liberty or property interest it cannot be taken away absent due process.
7 states recognize a constitutional Right of Privacy, which could be violated by public and private employers – but we don’t know whether this theory will be accepted in a wrongful discharge case.

Goetz v. Windsor – A janitor for the school was fired w/o an opportunity to be heard after being charged w/ burglary for stealing; D claims he has deprived of liberty and property interests w/o due process.
No property interest in a job from the Constitution – must be created by law or agreement (express or implied) with the employer
Liberty interest – right to engage in common occupations of life and to enjoy privileges as recognized as essential to the orderly pursuit of happiness (e.g. good reputation and freedom to work) – Liberty is violated when
·         employee is stigmatized as a  result of the discharge process where charges made against the individual seriously damage his standing and associations in his community or foreclosed his freedom to take advantage of other employment opportunities and were false
·         The charges were made public and
·         The individual was denied a meaningful name clearing hearing

Contractual Exceptions to At-Will Employment
Breach of Contract
Written Contracts – Very few employees have them
ER Promises not to terminate the employment relationship except for good cause
ER promises to hire the EE for a Specific / Definite period of time

Gordon v. Matthew Bender – P claimed that an employment letter created a K for continuous employment conditioned on acceptable sales performance
If an employment contract limits discharge to “good cause” or spells out a time period, this creates a limit on employment at will
Courts are looking for Objective Standards / Objective standards the court is willing to accept as conditions on employment.
If an employment contract conditions employment on “acceptable” or “satisfactory”   performance, the employment is still at will [these words are too subjective] A condition of satisfactory or acceptable performance theoretically could be implied in every employment contract – such a rule would be too hard to apply b/c  EE would have limitless attacks
o    Notes: “Good cause” = Fair and honest reason, regulated by good faith on the part of the party exercising the power
If K is for a definite term, EE can be discharged only for “good cause” 
EE proves discharge in violation of K, ER has burden of proving “good cause”
If K describes employment as employment at will, this overcomes the general presumption that salary employees have a 1 year contract.

Contracts Implied from Conduct
·         Employment K can arise from the Overall conduct of the parties.
Totality of circumstances factors to determine if implied-in-fact promise exists of some form of continued employment:
Personnel policies or practices of the ER, longevity of service, actions or communications of the ER reflecting assurances of continued employment, practices of industry, duration, commendations and promotions, lack of criticism, assurances
*Even if P makes a prima facie case, ER only needs minimal evidence to rebut case
Burden of Proof:
P makes a prima facie showing (persuasion)
D can rebut by showing another reason for termination (production)
P can attack the offered explanation as a pretext or insufficient to meet the employer’s K obligations; ultimate burden of proving wrongful termination

Pugh v. See's Candies -32 year employee was fired for not following company policy during union negotiations; thinks he has an implied contract b/c he was promised 32 years ago that “if you’re loyal to See’s and do a good job, your future is secure”
An employers right to terminate an employee is not absolute. The court found that while an employment contract is terminable at will, it does not give an employer the absolute right to terminate where the discharge violates public policy or where it is contrary to the express or implied terms of the agreement.
·         the longevity of appellant employee's service, and the express policy of respondent employer, operated as a form of estoppel, precluding discharge of appellant without good cause, and the involvement of respondent union in appellant's discharge might have constituted unfair labor practices, which created factual issues for trial.

Employee Handbooks –
Fairly common: Personnel manuals, app. forms, letters of hiring and advertising can all be contractually binding in some jurisdictions
Absent a clear and prominent disclaimer, an implied promise listed in a handbook that employee will only be fired for just cause may be enforceable against an employer even when the employment is for an indefinite period of time and would otherwise be terminable at-will.
Disclaimer – IF ER does not want the manual to be capable of being construed by the court as a binding K, The ER needs to put a disclaimer into the manual saying that they continue to have the absolute power to fire anyone with or without good cause
Disclaimer has to be Conspicuous, communicated to the EE in a definite, unequivocal and clar langues, and to be prominently displayed and placed in the manual.

Woolley v. Hoffmann-La Roche D hired p with no employment K. P received an employee manual that described all the different termination methods and w/o cause was not part of it. After 7 years D was asked to resign and when he refused he was fired. He sued for breach of K. P said the employee manual created a K and he could only be fired under the procedure listed there
Items in a EE manual can contractually bind the company, absent a clear and prominent disclaimer. Courts should construe manuals in accordance with the reasonable expectations of employees à Employee manual = offer contemplating a unilateral contract; working = consideration (makes the contract binding)- Contract Principle – we will construe against the drafter – if it’s unclear, it’s on you.

Handbook Modification –ER can modify as long as they provided the EE with reasonable notice (Actual notice)

Campbell v. General Dynamics – ER change policy saying ADA claims have to be submitted to arbitration. Sent out company email that EE would need to open and click on link to access new change. ER can show email was opened but not that link was clicked on.  
Enforcement of the arbitration policy was not appropriate because the e-mail did not provide minimally sufficient notice to a reasonably prudent employee of the contractual nature of the e-mailed policy and the concomitant waiver of the employee's right to access a judicial forum.

Covenant of Good Faith and Fair Dealing
Obligates each party to refrain from injuring in any way the other’s right to receive the benefits of the contract
One major approach used to redress a wrongful discharge is to find a covenant of good faith & fair dealing implicit in the employment contract

Fortune v. National Cash Register P was salesman for 25 years. D introduced new product and P helped sell it to his customers. After P sold product he was fired. P received only 75% of the commission he was owed.
D's written contract contains an implied covenant of good faith and fair dealing, and a termination not made in good faith constitutes a breach of the contract.. When commissions are to be paid for work performed by the employee, the employer's decision to terminate its at will employee should be made in good faith.

Foley v. Interactive Data Corp P was fired after telling his supervisor that his new boss was under investigation by the FBI for embezzlement; P tried to sue in tort to get compensatory damages
P had an implied-in-fact K that permitted discharge only for good cause and covenant of good faith only gives rise to K damages (i.e. no tort damages).Covenant is a K doctrine aimed at enforcing the intentions of the parties, not protecting public policy

Public Policy
Narrow Approach – Acknowledges that the legislative branch is the proper forum to decide public policy and helpts to guard against judges imposing their own notions about proper scope of public policy
Policy must have a basis in either the Constitution or a statute & the discharge must cause public harm
Burdens of Proof:
EE must prove that his termination violated the public policy
Burden shifts to ER to show just cause for termination
Public policy exceptions for which EEs cannot be fired:
Refusing to violate statute – *admin rules are NOT statutes
Performing statutory obligation– Such as serving on a jury
Exercising statutory right/privilege – Such as filing a WC claim
Reporting alleged violation of statute

Gantt v. Sentry Insurance  P supported a former EE’s sexual harassment claims against D, which led to his ultimate demise in the company, resulting in P’s resignation.  P filed claim of constructive discharge.
An at will EE may sue an ER in tort when the EE is discharged for performing an act that public policy would encourage or for refusing to do something that public policy would condemn

Statutory and Constitutional Rights
Public policy exception to at-will employment covers an employee’s right to be free from discharge for exercising federal and state statutory rights as well as constitutional rights
E.g. right to refuse to take a polygraph, to sue for worker’s comp, to vote
More than ½ the states have statues that say you can’t get fired for your political activities
If there is no statute, you can make a 1st A argument – even though it only applies to the government, its pretty broadly accepted that people have the right to freedom of speech
Some states prohibit discrimination against victims of domestic violence

Hanson v. American Online  EES caught w/ guns in company parking lot in violation of company policy; Fired, sued for discharge in violation of Public Policy (they were exercising their 2nd A rights); ER argued it has a due process right to regulate its own property.
Public policy did not implicate an employer's right to restrict firearms in a parking lot leased by the employer and to terminate an at-will employee for violating that prohibition.

Public Health and Safety
In general Damages are recoverable for wrongful discharge in violation of public policy only if
(1) the plaintiff proves
(a) the existence of a clear mandate of public policy,
(b) that the employer's termination of the plaintiff jeopardizes or contravenes the public policy, and
(c) that the plaintiff's public-policy-linked conduct was the cause of the termination and
(2) the employer is unable to offer a justification for the termination sufficient to override the clear mandate of public policy.
Each public policy alleged by the plaintiff as a basis for the tort action must be analyzed under this test, and all elements of the test must be satisfied in order for the plaintiff to prevail.

Gardner v. Loomis Armored P left his truc

ue à maybe struck down à minorities have less ability to influence legis.

EEOC v. Consolidated Janitorial company owned by Koreans hired based on word of mouth and as such had 83% Korean EEs. EEOC said this was inference of intentional discrimination under title VII
No direct evidence of discrimination so no inference of intentional discrimination under Title VII.  Discrimination is not preference BUT acting on that preference.  Hiring mostly Koreans was not discriminatory b/c it was not intentional.
The Labor Pool
·          Undocumented Aliens
Immigration Reform and Control Act (IRCA) – Prohibits employers from hiring undocumented workers – Employers are required to ask all job applicants for documents
Penalties for employers who hire them – expensive fines; criminal fines & imprisonment for a “pattern of practice”
Penalties for aliens who use false documents – $2,000 fine and up to 5 years imprisonment
Aliens who entered the US before January 1, 1982 have legal status

Hoffman Plastic v. NLRB P hired EE, who was an illegal alien (P ER did not know this b/c EE had lied on application).  ER fired EE for union organizing and NLRB gave EE backpay but ER argued that EE was never legal worker.
NLRB could not award backpay to a wrongfully terminated undocumented alien b/c it would violate the Immigration Reform and Control Act [IRCA]. Cannot award backpay for unlawfully work b/c it would encourage violation of immigration laws.  Awarding backpay in this case was beyond NLRB’s power b/c of IRCA.
Residency Requirements

Wardwell v. Board of Education – P filed a Constitutional  claim challenging D School District’s residency requirement for teachers.
Residency requirement does not violate equal protection clause.
Reasoning: Several rational bases for rule (e.g. teachers committed to urban education, more likely to be involved in community activities, etc.).  Two types of residency requirements:
o    Durational – EE must live in area to even apply for job – requires compelling state interest (strict scrutiny) b/c propensity for abuse by discriminating against groups if you know that you can exclude them w/ prerequisite
o    Continuing – EE has to live in area after certain time after getting hired – requires rational basis (type of restriction in this case)

ER’s Information Gathering Process


Sullivan v. USPS P filed suit against D for contacting his current ER when P explicitly told D not to contact the ER.  P claimed violations of Privacy Act and Con privacy rights.
Federal agencies are prohibited from disclosing without consent that a person has applied to the agency for employment. Court says that a federal agency must obtain consent before contacting an applicants former or current employer – private employers have virtually unfettered discretion in obtaining information from former employers

Important to train interviewers to avoid K and discrimination suits
Interviewer may make representations which will bind the employer
Interviewers tend to prefer individuals who are most like themselves
After acquired evidence = When you are fired for an illegal reason and sue and employer then finds out you lied on your application
This has cut down the number of lawsuits tremendously
Increases fishing expeditions – you sue them for something, and they search for something to sue you for

Lysak v. Seiler P told D (she wasn’t asked) that she had no plans to have any children. P already was knowingly pregnant at the time. A month after hiring she told D she was pregnant and was fired
ER can base termination decision on an unsolicited misrepresentation at the interview even if the subject of the misrepresentation was not one that the ER could have properly raised. No authority for discharge for giving false answers to questions that an interviewer has no right to ask under law

Should be considered very carefully from both sides
An incorrect statement, negligently made and justifiably relied on
D must have breached a duty to exercise reasonable care in communicating facts about P’s Em.

Singer v. Beach Trading – Former Er told present Er that P was a customer service representative, and not a VP; suit for neg-misrepresentation (to get tort damages)
employer may be held liable for negligent misrepresentation if
Inquiring party clearly identifies the nature of the inquiry
Employer voluntarily responds and unreasonably provides false or inaccurate information
Person providing information acting within the scope of his/her employment.
Recipient of the information relies on its accuracy to support an adverse employment action against P.
P suffers quantifiable damages proximately caused by the negligent misrepresentation.

Truth-Detecting Devices and Psychological and Personality Testing
1. The Polygraph
Interrogation + physiological measurements that are supposed to reveal deception 
Not very accurate, picks up false positives and negatives
Employee Polygraph Protection Act – Prohibits private employers from using polygraphs (penalties = fine, injunction)
o    Tons of Exceptions (government ER, EE reasonably suspected of involvement in workplace incident that results in economic injury to ER, pre-employment testing of security EE’s and EE’s of firms dealing w/ controlled substances)
Some more stringent state laws – but not that many
2. Honesty Questionnaires, Voice Analyzers, Personality & Psychology Tests & Handwriting Tests
Not proven to be accurate, overly intrusive