The Law and the Employment Relationship — Ch. I
Master-Servant: hierarchical: unequal although both had responsibilities
– law of property intruded, a la slavery
– indentured servitude (still survives as employment for specific duration)
o [13th Amendment prohibits indentured servitude, but parties free to contract around and injured party may seek specific performance]
o pg 3 – 19th cent indentured servitude dying b/c more expensive than new immigrants
a. Common Law — Presumption of Employment-At-Will
I. Payne v. Western & Atlantic R.R. Co – RR mgr fired EE for buying from store he was told not avoid
1. Holding — An employer can fire an employee-at-will for whatever reason he desires. “The law cannot maintain standards for judging human conduct.”
a. Payne established the (rebuttable) presumption of employment-at-will. (Majority Rule)
i. Though the opinion in Payne is dictum — it was picked up on by treatises and many courts declared it to be the rule of law. It is now the majority rule.
ii. Payne merely creates a rebuttable presumption of an “at-will” employment. P can still introduce evidence otherwise. Therefore, this is arguably nothing more than an evidentiary rule — however many courts started looking at this as the black letter rule.
iii. Dissent — the majority’s opinion is a threat to our political system. If ER’s have the power to tell EE’s where they can and cannot trade they may also tell them how to vote.
2. English rule — distinguished.
a. English look at how often one gets paid – to determine employment type (at-will, for duration)
i. Ex. — farmers get paid once a year therefore their employment is deemed to be for duration
b. The Legislative Response
i. Abolition of Slavery and Involuntary Servitude
• 13th amend — “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.”
a. Unique in that it is the only U.S. Constitutional Amendment that imposes restrictions on the people. (All the others impose restrictions on Congress or the States.)
b. Statutes
1. 18 USC § 1581 – whoever holds another in peonage or obstructs enforcement is subj to fine &/or 10 yrs
2. 42 U.S.C. 1994 – abolished & prohibited peonage in all states and territories
a. “The holding of any person to service on labor under the system known as peonage is abolished and forever prohibited.”
i. Peonage — status of being held for a specific period of time in order to pay off one’s debts.
ii. Indentured Servitude — Peons would sign an agreement of indentured servitude. ER had power over peon’s way of life — where he lived, etc.
3. Exceptions:
a. Merchant Seamen
i. Mutiny — the crime of not going thru with your employment at se
Under a Tort claim — get compensatory + punitive damages
1. Very different Remedy
d. PR Rule 1.13 — Responsibilities of Lawyer as Corporate Counsel
i. Responsibilities —
1. Counsel must act in the best interests of the organization
2. The language of this Rule currently does not require that much of a lawyer.
ii. Problems
1. SHs should ideally be the ultimate client of the lawyer — however, many times lawyers end up looking after the officers — those that deal with the lawyer and hired the lawyer
2. The SHs interests are the ones that will usually be hurt when the officers are acting illegally. However, this rule tells the lawyer to go to the highest authority (bd of directors.) It does not tell the lawyer to go to the SHs.
a. Goldman thinks this rule is not good for SHs. Lawyers inherently work for the officers and will lean toward protecting them.
3. Before a lawyer may do anything — The lawyer has to have knowledge of illegal activity and the injury has to be substantial to the organization. Even then the lawyer still must stay w/in bounds of organization. Lawyer can’t break client confidences.
