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Employment Law
Wayne State University Law School
Browne, Kingsley R.

Employment Law Kingsley Browne Winter 2012
 
Chapter 1: The Employment Relationship
–          Blend of status and contract (not an ordinary contract)
o   Was historically master and servant
o   View employers as providing for employees (health insurance, etc.)
–           3rd party can’t sue on contract (not privy)
–          Alternative to at-will is just cause, not okay to threaten in that case
 
A.     The Political Response
–          13th amendment abolish slavery
–          Arguments for not enforcing some empl K’s
o   Prevent us from making K we later regret
o   Prevent relationships offensive to most people
o   Generally rare that K is good for servant
–          FDR new deal à social security, Unemployment Ins.
 
B.     Economics of Employment Regulation
–          Market imperfections mean can’t use certain assumptions à justify regulating rather than using contracts
o   Transaction costs
o   Information available
o   “Public Goods” – free ride
 
C.     Who is an Employee?
–          FLSA – any indiv who is employed by an employer
–          NLRA – amended to exclude indep contractors
–          Courts only use label independent contractor as one thing they consider
–          Multifactor Test:
o   Employer’s right to control means and manner of perf
o   Supervised or not
o   Skill
o   Fixed hours
o   Who furnishes workplace and equipment ….
–          May use different factors for workers’ comp.
–          No respondeat superior if indep contractor
–          Right to Control Test – Court looks at factors like how integrated and how much control, skill, etc.
–          Economic Realities Test – Is employee economically dependent , degree of control over work, investment in equipment (broader than right to control)
o   Courts borrow from either or both Economic test is probably default under federal law if no direction is given, but right to control is applied if statute says so
 
D.    Emergence of Modern Employment Relationship
–          After WWII, US was only intact industrial power and stronger economically
o   Led to vertically integrated firms (i.e. Ford River Rouge, all under one roof)
–          Information Tech and International competition changed labor markets, no more lifetime employment
o   Could benchmark competitors and send work elsewhere
o   Cheaper int’l workforce
o   Subcontract work (i.e. build cars in modules), less permanent employees
 
E.     Implications of The New Age of Trade And Tech For Labor and Employment Law
–          Because of less lifetime employment, problems come back involving worker protection
–          Closely monitor employees and try to assess performance before hiring (privacy issues)
 
Chapter 2:  Job Screening
–          Asymmetry of information in the labor market – tougher for employees to get information
 
A.     Background Checks
–          With industrialization, urbanization, immigration and internal mobility came anonymity
–          However, today, employers frequently check backgrounds
–          Employers now more reluctant to give references for past employees
o   Some legislation is aimed at getting employers to provide references by giving immunity
§  If complete immunity, no recourse for false statements
o   If fired for sexual misconduct and no info given and happens again at next job, can’t sue, no duty (could be liab if said good employee since it would then be misrepresentation)
o   May be considered a red flag if no one will give a reference (even professors, they want students to get job)
–          Defamation – must be heard by others (requires publication, eg told to 3rd person)
o   May be okay to tell other employees under some circumstances (business reasons)
o   Probably can’t sue for employer asking reason for leaving old job in interview (qualified privilege)
–          Qualified privilege – can be overcome by showing of abuse or malice (jury question)
–          Actual malice – either know or recklesslessly disregarding truth
–          Other ways to get info – references, credit history, more questions on applications
 
B.     Interviews
–          Cannot ask certain questions about age, gender, religion, disability, etc.
1.       Ask only questions that are pertinent to determining suitability
2.       Ask same basic questions to everyone
 
C.     Medical Screening
–          Can only request screening after offer is made for employment
–          If medical condition disclosed isn’t protected, then offer can be withdrawn
 
D.    Genetic Screening
–          GINA = Genetic Information Nondiscrimination Act
–          Concerns:
1.       Individuals concern
2.       Fear of forced testing as condition of health ins or employment
3.       Erroneously disqualified base don misinterp
4.       Even if not misinterp, they they may be excluded
–          Genetic exceptionalism – treated diff than other types of info
1.       Hard to separate
2.       Difficult to define genetic since plays role in every health prob
3.       Cannot isolate genetic info in health records
4.       Sep law increases stigma of genetic disorders
5.       Cannot really argue it’s not ok to discrim for genetic, but ok for nongenetic disorders
 
E.     Drug Screening
–          Usually done preemployment or after accident
–          At odds with employee privacy
–          Employer  concerns:      
1.       Health plan – drive up costs
2.       Drug users less productive
3.       Don’t want Company assoc w/ drugs
4.       Specific occupations – pharmacists
 
F.      Drug Testing
–          Actually test for metabolites
–          Some other things create false positives (same metabolites)
–          Federal employee testing require secondary test if positive, but private employers don’t always do this.
–          Concerns about inaccuracy à cross-reactants
–          Two concerns:
1.       Test itself
2.       What employer does with the results (just cause for firing?)
 
G.     Courts on Drug Testing
–          Mixed results early
–          Skinner and Von Raab not representative – these const claims not available to private sector (rely on common law theories)
o   Especially tough if non-union and/or at-will
–          Possible 4th amendment, but not for private sector
–          Twigg doctrine:   only test if suspicion or safety concerns (balancing test)
–          Less expectation for privacy when preemployment
–          Consent and freedom to consent – consent must not be given under duress
o   Long time employee has more invested, consent may be more under duress
o   Privacy rights are waivable
 
H.    Psychological Screening
–          Personality Testing – what answers say about you
–          Honesty Testing
o   Issues w/ validity
–          Handwriting analysis
–          Polygraph tests – now laws against these
–          IQ tests – probably most valid
o   Subject to chall under discrim laws
–          If can’t do one of these tests, go with hunches (possibly even less accurate / less predictive)
o   Hunches are at least somewhat random, whereas tests probably aren’t
 
Chapter 3:  Establishing Terms and Conditions of Employment
–          Traditional bargained for exchange contract model isn’t adequate
–          Spot market = day laborers
–          Long-term employment is subject to internal labor market of admin rules designed by the employer
–          Reason courts need to be involved:
o   Employers usually have more bargaining power
o   Market imperfections
 
A.     Employee Handbooks
–          Constructive Discharge – If employee resign after given a choice, court may still allow a suit since it wasn’t voluntary
–          Historically didn’t give manuals much contractual force – bargaining power
–          Courts may now go beyond traditional notions of a contract to find one in that it says one can presume reliance on the manual (implied promise contained in an employment manual that an employee will be fired only for cause)
o   Manuals are used by employers to preve

  Legitimate expectation – Reasonable person would think there’s just cause protection (indiv employee doesn’t need to know)
2.       Contract theory – Must show implied contract because assurances made by employer
§  If implied K, just like regular K, require consideration , etc.
–          Court may hold that the handbook policy was too vague to constitute a promise and could not have created a legitimate expectation of just-cause employment. (Lytle)
o   Oral assurances may not create just-cause because if not clear and unequivocal
 
Chapter 4:  Termination of Employment
–          Presume at-will generally
–          Even with just-cause, can downsize as needed (it’s allowed)
A.     At-Will Rule
–          Must still follow procedures to defend against discrimination
–          Employers want at-will so their decisions aren’t second-guessed by jury
–          Employees may try to say bad reason for getting rid of, but if at-will, can terminate for any reason (Wisehart)
o   Ok as long as it’s not an illegal reason
–          Fraud – works for preemployment, but not after employed.  Elements:
1.       Misrepresentation
2.       Reliance on misrep
–          Express assurances (saying won’t be fired) are an at-will exception – implied isn’t enough
o   Can be a slippery slope with implied
–          Tortious Interference w/ Contract
o   If a manager dishonestly causes company to discharge employee (makes false claim the employee is stealing) à tortuous int. even if at-will, manager can be personally liable
o   If trying to harm employer it’s tortious
o   Would be okay to ask employee to quit
o   If falsely tell employee that employer is setting up to get you to quit, it’s ok, but cannot do to harm employer
o   Acting as agent or for selfish reasons determines if employer liable too
§  In most jurisdictions, a party to K isn’t liable to tortuous int, must be a 3rd party
§  So general answer is you cannot sue supervisor
 
B.     Contracts for a Stated Term
–          Reduction in force not ok for just-cause
–          Fixed term K à just cause is presumed (employee has to do something so bad it’s as if abd K)
o   One time tardiness may not be enough to be just-cause, especially if let go on before
o   May depend on finding bad mental attitude toward employer
o   Court would look at importance of rule being violated (objective reasonableness)
–          If contract itself has some rule and employee doesn’t follow, would be enforceable since both sides agreed to
 
C.     Tort:  Discharge in Violation of Public Policy
–          Tort of public policy theory doesn’t rely on just-cause (or contract)
o   Where public interests involved, will be never be adequately represented in contract
–          Example – public policy prohibiting an employer from discharging an at-will employee because she experienced domestic violence and took leave from work to take actions to protect herself
o   Court said there was a clear public policy here
§  Matter of law (is there a public policy):
1.       ID clear public policy (clarity)
§  Jury get remaining parts:
2.       Would this jeop. Pub policy (jeopardy)
3.       Conduct caused dismissal
4.       Must have an overriding justification