Select Page

Individual Employee Rights
University of Illinois School of Law
Finkin, Mathew W.


Instructor: Matthew W. Finkin

Term: Spring 2015

Chapter I: The Employment Relationship

§ Individual Employee Rights is concerned with wage labor

o The concept of wage labor is a relatively modern development

· Free wage labor was not dominant for much of history

§ Payne v. The Western & Atlantic Railroad Co.

o Facts: Payne, who owned a store near the railroad’s depot in Chattanooga, had developed a profitable business largely catering to employees of the railroad. The railroad’s general agent in Chattanooga issued an order that any employee trading with Payne be discharged.

o Procedural History: Payne sued the railroad for tortious interference with a current or prospective economic advantage. He wanted the railroad to be held liable for the tort of its agent, who acted within the scope of his employment when he issued the order.

o Elements: The elements of tortious interference with a current or prospective economic advantage are as follows:

· The plaintiff had a tangible economic relationship with the defendant’s employees

· The defendant truncated this relationship for no socially justifiable reason

· The truncation of this relationship resulted in demonstrable damage to the plaintiff that can be proven by the plaintiff

o Majority Opinion:

· “Don’t stop at Payne’s store” constitutes a presumably unreasonable order

Ø “If the employes are engaged for fixed terms, it may be assumed that a discharge by the employer for such a reason would be unwarranted, and would give the employe an action for breach of contract.”

· The At-Will Rule/At-Will Employment:

Ø “If the service is terminable at the option of either party, it is plain no action would lie even to the employe; for either party may terminate the service, for any cause, good or bad, or without cause, and the other cannot complain in law. Much less could a stranger complain. No action could accrue either to employe or stranger for breach of contract; for no contract is broken.”

Ø “Obviously the law can adopt and maintain no such standards for judging human conduct; and men must be left, without interference to buy and sell where they please, and to discharge or retain employes at will for good cause or for no cause, or even for bad cause without thereby being guilty of an unlawful act per se. It is a right which an employe may exercise in the same way, to the same extent, for the same cause or want of cause as the employer.”

· Holding:

Ø It was not unlawful for the railroad’s general agent in Chattanooga to issue an order that any employee trading with Payne be discharged because the employees of the railroad were at-will employees

· Rationale:

Ø “May I not refuse to trade with any one? May I not forbid my family to trade with any one? May I not dismiss my domestic servant for dealing, or even visiting, where I forbid? And if my domestic, why not my farm-hand, or my mechanic, or teamster? And, if one of them, then why not all four? And, if all four, why not a hundred or a thousand of them?”

v The relationships existing between a person and the individuals listed above (e.g., a person’s domestic servant), in addition to, according to the Payne majority, the relationship that exists between an employer and an employee, constitute relationships of domestic service

o Dissenting Opinion:

· “It is argued that a man ought to have the right to say where his employes shall trade. I do not recognize any such right. A father may well control his family in this, but an employer ought to have no such right conceded to him.”

Ø The relationship existing between an employer and an employee, according to the Payne dissenters, does not constitute a relationship of domestic service

· “The principle of the majority opinion will justify employers, at any rate allow them to require employes to trade where they may demand, to vote as they may require, or do anything not strictly criminal that employer may dictate, or feel the wrath of employer by dismissal from service. Employment is the means of sustaining life to himself and family to the employe, and so he is morally though not legally compelled to submit. Capital may thus not only find its own legitimate employment, but may control the employment of others to an extent that in time may sap the foundations of our free institutions. Perfect freedom in all legitimate uses is due to capital, and should be zealously enforced, but public policy and all the best interests of society demands it shall be restrained within legitimate boundaries, and any channel by which it may escape or overleap these boundaries, should be carefully but judiciously guarded. For its legitimate uses I have perfect respect, against its illegitimate use I feel bound, for the best interests both of capital and labor, to protest.”

o Additional Notes:

· Professor Finkin: “The law stays out and there is complete freedom of contract.”

· At-will employment has persisted as the default rule in the United States of America for more than one hundred years

§ The Thirteenth Amendment

o Text: “Neither slavery nor involuntary servitude except as a punishment for a crime whereof the party shall have been duly convicted, shall exist within the United States.”

o The Kozminski Court held that “involuntary servitude” requires more than mere psychological coercion; it also requires physical or legal coercion

§ Lochner v. New York

o Facts: New York passed a law that prohibited individuals from working in bakeries for more than ten hours per day.

o Holding: The law was unconstitutional

o Rationale: The law interfered with the right of employees to freely contract with employers

o Additional Not

ut the Robert Horne who had been born in 1973. That inquiry, with that identifier, was sitting in front of White when she interpreted and summarized the printout that showed a 1986 conviction and sentencing for theft. It should have been immediately apparent that the Robert Horne who was the subject of the inquiry was only twelve in 1986 and could not have been the person sentenced to jail for theft. When asked whether she had compared the date of disposition with her subject’s date of birth, her answer that “No one asked me to analyze it for them” betrayed a blithe indifference to the sensitive nature of the material she was processing. Blithe indifference to whether the subject had truly been convicted is tantamount to “reckless disregard” of whether the subject had truly been convicted.”

· Additional Notes:

Ø There are two types of privilege

v An Absolute Privilege

ª A statement for the common good about a matter of common concern that is in the public interest will be absolutely privileged if it is of paramount importance that people know about the information that it conveys

v A Qualified Privilege

ª A statement made by or to a credit reporting agency is subject to a qualified privilege under federal law

© A showing of actual malice defeats a qualified privilege

§ There are two types of malice

t Actual malice is actual ill will

è A person acts with actual malice when he or she says something with an intent to injure someone else

t Legal malice occurs when an individual either knows that certain information is false or recklessly disregards the truth

è A person recklessly disregards the truth when he or she has reason to believe that certain information is false and communicates it anyway

Ö The fact that White had reason to believe that the information in the report was erroneous and communicated it anyway defeated the qualified privilege that she enjoyed

Ø “Although as a general rule a plaintiff cannot sue based on defamatory statements of the defendant that the plaintiff publishes, in some jurisdictions courts have held that defendants can be held liable for ‘compelled self publication’ of defamatory statements by the plaintiff when it is reasonably foreseeable that the plaintiff will have to later publish them, for example in a future job interview”