Employment Law

1. Employment Law Chapter 20.1 “Employment Relationships”

2. Employment-at-Will • The general rule governing employment in most states • An employer is permitted to discharge an employee at any time, for any or no reason, with or without notice • Doctrine is based on the notion that both parties in an employment relationship must be free to leave the arrangement at any time

3. Unionized Employees • The doctrine of employment-at-will does not apply to employees who belong to a union • A union is an organization of employees that is formed to promote the welfare of its members • Union members have hiring and firing procedures built in to their collective bargaining agreements • This agreement is negotiated by the employer and union representatives covering issues of employment

4. Collective Bargaining Agreements • Generally concerns issues with • Working conditions • Wages • Benefits • Job security • Layoffs • Firing policies • A grievance procedure establishes a series of steps that an employee must follow to appeal a decision made by an employer

5. Collective Bargaining Example • Edward worked on the assembly line for Stewart Motors. He was also a member of a union. Edward was discharged because he was late for work on one occasion. The collective bargaining agreement between Edward’s union and Stewart Motors did not permit the firing of a worker for a single incident of lateness. Also, according to the agreement, all violations for lateness were to be reported in writing, and the employees were to be given a second chance. After going through the grievance procedure, Edward was restored to his position.

6. Layoffs and Closings • CBA do not protect against company lay-offs • A CBA may provide for severance pay which is a set amount of money to compensate employees for being discharged • Its calculated by using a variety of factors, including position and salary of the person being laid off

7. Illegal Discrimination • Union or no union, a person cannot be discharged for a reason that is discriminatory in nature • Civil Rights Act of 1964 firing is discriminatory if its based on a persons: • Race • Color • Creed • National origin • Gender

8. Exceptions to Employment-at-Will • Wrongful Discharge – or ‘unjust dismissal’ • Provides grounds for legal action against employers • Courts have established 5 standards it will consider regarding an unjust termination • Promissory estoppel • Implied contract • Public policy tort • Intentional infliction of emotional distress • Implied covenant

9. Standard #1 • Promissory estoppel • 4 elements must be proven to be allowed • The employer makes a promise to employee which the employee depends upon • Employee actually relies upon that promise, which employee does or doesn’t do something • Employee ordinarily would not have acted or refrained had it not been for the employers promise • Employee is some way is harmed by the employers failure to honor the promise

10. ExamplePromissory Estoppel • Nigel Harrington worked as a bookkeeper for Federated Shipping. In June, he was arrested and charged with embezzlement. Harrington’s supervisor told him that he would be suspended pending the results of the case. The supervisor assured Harrington that he would have his job back with full seniority rights if the case were resolved in his favor. In reliance on the promise, Harold didn’t seek another job, and instead concentrated on clearing his name. When the charges were dropped, Harrington attempted to get his old job back only to find that Federated would not employ him.

11. Standard #2 • Implied Contract • This arise when an employer has said, written, or done something to lead the employee to reasonably believe that he or she is not an at-will employee • Employers policies and procedures are in an employee handbook • One exception to the implied contract ruling is if the employer provides a disclaimer • Statement that holds that regardless of any provisions or policies and EAW will still exist

12. Standard #3 & #4 • Public Policy Tort • A fired employee can recover compensatory and punitive damages • He or she must prove the firing violated public policy – anything that hurts the public at large • Intentional Infliction of Emotional Distress • Courts have allowed fired employees to bring a tort law suit against employer • Causing severe mental and emotional trauma • Employers conduct must be extremely outrageous

13. Standard #5 • Implied Covenant • Holds that any employment relationship is based on an implied promise that an employer will be fair and honest • Unlike implied contract, the existence of an implied covenant exists simply because the employment relationship exists

14. Discussion • Katherine tells her sister she has recently joined her local steelworker’s union because the union has promised to protect her from rumored layoffs. Can Katherine’s union deliver on this promise? Why or why not? • ANSWER • Unions cannot protect employees from layoffs, though their collective bargaining agreements may help employees with severance packages if layoffs do occur.