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Employment Law
University of Iowa School of Law
Smith, Peggie R.

Introductory Material

Some Employment Discrimination Statutes – Federal Legislation
•Fair Labor Standards Act: provides minimum wage protection and premium pay for overtime
•Equal Pay Act: employers cannot discriminate between men & women with respect to wages
•Title VII of the Civil Rights Act: prohibits all discrimination in employment on the basis of race, color, religion, sex, or national origin
•Age Discrimination in Employment Act: prohibits discrimination on the basis of age
•Occupational Safety & Health Act: established minimum health & safety standards for the workplace; employers cannot dismiss employees who do not want to work in unsafe conditions
•Rehabilitation Act: provides employment rights for individuals with disabilities
•Employee Retirement Income Security Act: protects pension entitlements
•Family & Medical Leave Act: allows an employee to take job-protected unpaid leave due to a serious health condition that makes the employee unable to perform his or her job, to care for a sick family member, or to care for a new child

Some states pass their own versions of federal legislation, sometimes providing even greater protection than federal law.

Often, workplace statutes have exemptions for small businesses. Usually due to economic reasons, etc.

Fragmentation of Employment Law
•Federal: federal statutes/legislation; sometimes the statutes have different definitions of what an ‘employee’ is
•State: anti-employment legislation in the workplace; almost every state has its own law to protect employees from workplace discrimination
•Local ordinances
•Collective bargaining agreements; unions
•Common Law approach to provide protections
•Private sector employment
oPublic sector employees have an advantage because they have a relatively defined protection.
•Statutory complexity: procedural differences; coverage distinctions

Key Legal Frameworks to protect the interests of employees and to regulate the employment relationship
•Collective bargaining
•Government regulation
•Judicial regulation; common law – courts apply various principles (e.g. torts, contracts) to provide greater protection to employees
•Individual bargaining; contract terms/formation

Wagenseller v. Scottsdale Hospital
•Facts: at-will employee of hospital; history of good job performance; one incident where she would not participate in lewd activities with other co-workers on a camping trip…thereafter, her job reviews declined…eventually terminated
•Employee’s Interests Implicated in the Outcome of the Case:
oEconomic investment – spent 4 years working for this company
oPositive reputation – wants to maintain a good reputation as an employee
oSeniority level – wants to maintain her seniority level because she had been promoted
•Employee does not have a strong Reliance Interest in the job:
oThose who are new employees are treated differently from those who have been employees for a long time.
•Hospital’s Interests Implicated in the Outcome of the Case:
oTerminating employees who are not team-players: her lack of willingness to engage in the behavior shows that she has little/no sense of teamwork
oEliminating tension in the workplace: the employee and the supervisor who encouraged her to engage in the behavior now have tension
oDischarging least valuable employees rather than more valuable employees: the hospital would rather keep the supervisor who they have invested more in, and who brings in the most money
•Society’s Interests Implicated in the Outcome of the Case:
oArbitrary termination: society does not want a court to hold that a worker can be terminated for any arbitrary reason
oJust cause: society wants a court to hold that employees can only be fired for a just cause/good cause
§For cause/good cause/just case: cause exists when a reasonable person, taking into account all relevant circumstances, would find sufficient justification in the conduct of the employee to warrant discharge
•Holding: Even if Ð’s story is correct employer may dismiss her because she is EAW.


EAW Doctrine
•All employees have contracts, even if it’s not a written contract
•All you need is a legally enforceable promise to have a contract
•There is some term under which you are working
•The doctrine concerns the length or duration of the employment relationship and, as such, it implicates the issue of job security.
oThe longer the duration of an employment contract, the more job security an employee has.
•You can be let go, or quit for good cause/any cause.

Horace Mann: 1870s – EAW is a prima facie hiring at will, if servant seeks to make it

Payne v. Western & Atlantic
•Facts: Ð had developed strong business largely due to customers who were employed by Ä; Ä mandated to its employees that they could not shop at Ð’s store, otherwise they would be discharged; Ð brought tort action
oWhether Ð has a suit in tort law against the Ä.

ho report some kind of unlawful conduct on part of the employer; carves out a group of reasons why an employer might otherwise terminate an employee and makes it illegal to terminate based on those reasons
oFederal Whistle Blowing Protection Act; individual state acts too

Bard v. Bath Iron Works, Michigan
•Facts: employee reported to on-site Navy inspectors some alleged flaws in the company’s quality assurance process; the company terminates the employee claiming he had declining performance
•Statute: Whistleblowers’ Protection Act – prohibits an employer from, among other things, terminating an employee for reporting illegal activities
•Prime Facie Case of Retaliatory Discharge:
•1) Employee engages in protected activity under the statute
•2) Employee, subject of adverse employment action at the hands of the employer
•3) Causal connection between 1 & 2
•Ð’s Argument: Even if he did not establish a reasonable suspicion that the company violated a law, he reported and believed in good faith that the company violated a law.
•Court: Rejects Ð’s argument and states that Ð didn’t claim the company violated a law – – he only had a suspicion that they violated their contract with he Navy.
oYou must have both:
§Good faith belief
§Reasonable suspicion that the company violated a law
oThere’s a split of jurisdictions on this issue.

Common Law Protection Against Arbitrary Dismissals: Contract Law Principles
•A contract for a stated or fixed durational term – company cannot terminate without good cause; no arbitrary termination
•The EAW rule is a presumption – employee can try to rebut that presumption and establish that the contract of employment does place some condition that limits the ability of the employer when it comes to a decision to terminate
oApproaches to rebut EAW presumption:
§Language of a written contract; other written assurances
§Contracts implied from conduct
§Employee handbooks & manuals
§Covenant of good faith & fair dealing