THEMES IN EMPLOYMENT LAW
1) Economic incentives & regulatory policies
Productivity
Economically beneficial
2) Power/authority struggles
Imbalance between bargaining power
lack of information (safety concerns)
3) Doctrinal complexity/simplicity
What is the most efficient rule?
Tensions- Complex v. Simple Legal Rules
· Rules v. standards
o Simplicity of application v. fact accuracy
o Predictability v. flexibility
o Ex-ante planning v. ex-post considerations
o Procedural v. substantive justice
· Conflicting impulses- what do you give up to gain? (flexibility at the risk of bias, boundaries with the risk of walls, uniformity at the cost of conformity, etc.)
4) Institutional design alternatives
Should the government intervene (rational beings)
5) Macro-Micro goals of employment law
Macro- what is in the best interest of the workforce (economy)?
Spread the work amongst large group
Reduce externalities & 3rd party effects
Working conditions, competition concerns
Micro- what is in the best interest of the individual e’ee?
Protect workers from themselves & others (paternalistic)
ARGUMENTATIVE DIVIDE OF THE AT-WILL DEBATE
Freedom to Contract around default
Symmetry?
Unequal bargaining powers
Information disparities
Moral hazards (laziness, disincentive to work hard)
Externalities & 3rd party effects
Behavioral/psychological biases (predictions, optimism, distastefulness)
Transaction costs to change default
Signaling effects (adverse selectionà “market for lemons”)
Employment Life Cycle Analysis
Economic mobility but changing global economy
Just Cause as a world wide standard
Public EEs & unionized workplaces
Model Termination Act of 1991
EE works for over one yearà “good cause” termination (job security)
Unless both sides agree to wait the requirement in a contract that includes severance pay of at least one month per year of work (up to 30 months total) (compensation)
“Good cause”
Reasonable individual performance basis
Exercise of business jdmt in good faith (layoffs, etc.)
Remedies
Reinstatement + back pay or
Lump sum severance pay up to 3 years
NO TORT DAMAGES
Parallels workers compensation: predictable costs to
Mass layoff – firing either 500 or more workers or at least 33 percent of the employer’s workforce when the layoff affects over 50. The number of affected workers is the total number laid off during a 30-day period.
§ WARN does not apply to closure of temporary facilities, or the completion of an activity when the workers were hired only for the duration of that activity.
· Exception for faltering company, unforeseeable business circumstances or a natural disaster
o At-Will (lowest protection)
§ Default rule—terminate relationship for any reason at any time
§ Can contract around (freedom of K)
o Employee v. Independent Contractor
§ Benefits as EE
· Benefit plans (Healthcare, workers comp, unemployment, social security)
· Tax withholding
· Statutory protection (FLSA, Title VII)
· Employer vicariously liable for torts
