Employment laws are imposed on businesses that employ one or more people outside the owner’s
II. Historical Background
Before the Industrial Revolution, employment statutes were created to control and restrict workers.
III. Health and Safety Legislation
A. Workers' Compensation.
1. In the 19th century, an employee injured on the job was often barred from recovering damages
under the defenses of contributory negligence and assumption of the risk. Under the fellow-
servant rule, an employer avoided liability if the negligence of another worker caused the harm.
2. Most states today have adopted workers' compensation laws. These eliminate fault as a basis of
liability; in return, the amount the employer must pay is limited.
3. An employee can only recover if within the class of employees covered by the law; further, the
injury must be work-related.
The Occupational Safety and Health Act of 1970 applies to all businesses that affect interstate
commerce. OSHA imposes duty on employers to prevent workplace hazards and authorizes labor
department to issue health and safety standards.
C. Family and Medical Leave Act
The Family and Medical Leave Act, passed in 1993, provides job security, as well as reasonable
leave periods to employees with serious health conditions. Special provisions are made for military
Example: Lewis v. School District #70: The court found that the School District had awarded
Lewis leave under FMLA and then fired her for missing too much work.
D. Health Insurance
Certain terminated employees may continue health care insurance at the employer’s group act.
IV. Wages and Pensions
A. Fair Labor Standards Act
The FLSA mandates a minimum hourly wage and overtime wage, and prohibits oppressive child
B. State Wage Statutes
Most states have laws protecting workers by limiting the amount of wages that can be garnished.
C. Employment Retirement Income Security Act
ERISA adopted in 1974, regulates the management and vesting of established retirement plans.
V. Collective Bargaining and Union Activities
The Norris-LaGuardia Act was the first act prohibiting the enforcement of yellow-dog contracts.
A. The National Labor Relations Act
The Wagner Act of 1935 recognizes the right of workers to organize and bargain collectively.
Example: Media General Operations Inc. v National Labor Relations Board: The court found that
calling the supervisor racist was not protected by the NLRA because it was used to provoke his
supervisor and lacked meaning.
B. The Labor-Management Relations Act
LMRA was passed in 1947 to limit what was seen to be excessive power of unions. This act
declares certain union and employer practices to be unfair labor practices.
D. The Labor-Management Reporting and Disclosure Act
The Landrum-Griffin Act further checks unions by promoting honesty and democracy in running the
union's internal affairs.
VI. Employment Discrimination
A. The Equal Pay Act of 1963
As an amendment to the FLSA, the Equal Pay act prohibits sex discrimination in pay.
Example: Yant v. United States.: The court found that the pay difference was not due to gender and
therefore there is no sex discrimination.
B. Title VII of the Civil Rights Act of 1964
This act, amended in 1972, prohibits discrimination on the basis of race, color, religion, sex, or
national origin and applies to employers in interstate commerce with at least 15 employees.
1. Discrimination includes not only intentional discrimination but also acts that have a
discriminatory impact. It encompasses sexual harassment as a form of discrimination.
Example: Lewis v. Chicago: The court found that the city’s process of choosing qualified
candidates is discriminatory.
2. Discrimination is permitted if a characteristic is a bona fide occupational qualification, but no
BFOQ exception is permitted with respect to discrimination based on race or color.
C. The Civil Rights Act of 1991
The act overturned several Supreme Court decisions in discrimination cases and will likely increase
successful discrimination suits in the future.
D. Age Discrimination in Employment Act
The ADEA prohibits employers of 20 or more from discriminating against employees based on age.
Example: General Dynamics Land Systems, Inc. v. Cline: The Supreme Court found that the Age
Discrimination in Employment Act of 1967 did not prevent discrimination of younger employees in
favor of older employees.
E. The Americans with Disability Act
The ADA protects qualified individuals with a disability from discrimination. A qualified
individual is one who can perform the essential functions of a job with or without reasonable
accommodation of the disability.
F. Genetic Information Nondiscrimination Act
The GINA prohibits employers from gathering genetic information from employees.
VII. Employment at Will
A. This doctrine permits employers to fire an employee who was hired "at-will" (without a specific
B. Court-created exceptions include cases striking down the at-will doctrine on grounds of (1) public
policy (2) implied terms of the employment contract and (3) the implied covenant of good faith.
C. Employees who report employer wrongdoing to the appropriate agencies are protected under the
theory of wrongful discharge in violation of public policy.
Example: Akers v. Kindred Nursing Ctrs. Ltd. P’ship d/b/a Southwood Health: A LPN who refused
to violate state and federal patient care laws is allowed to bring a suit for wrongful discharge in
violation of public policy.
VIII. Employee Privacy
A. Lie Detector Tests
The Employee Polygraph Protection Act prohibits private employers from using such tests to screen
applicants and in other instances.
B. Drug Testing
Some courts have held that drug tests violate the employee's right to privacy, but there are
C. Other Privacy Concerns
Congress and state legislatures are considering and enacting legislation regulating an employer’s use
of phone, computer, or video and other electronic monitoring. There is also increasing litigation
regarding employer searches of areas such as desks, lockers, office, and briefcases.
1. You should understand how the changes in society have affected the court's and legislature's attitude
toward common law employment doctrines, such as the at-will doctrine, as well as, how contemporary
realities of the workplace have led to increased legislation with worker-protection as a goal.
2. You should note that anti-discrimination laws are a continuous source of litigation and that the opinions
of the courts clearly shape and define the boundaries of protections under these laws.
3. You should understand the application of the Occupational Safety and Health Act (OSHA). You should
know not only the general reach of the Act, but also the procedures that must be followed in the
enforcement of its provisions.
4. It is important to be aware of the impact that the workers' compensation laws have had on the legal
treatment of injuries in the employment setting. This requires an understanding of how the statutory
scheme has transformed the traditional tort recoveries in the workplace.
5. You should understand the Fair Labor Standards Act (FLSA) and its exemptions.
6. You should be able to identify and distinguish the various labor laws that grew out of the Depression.
Understand how each supplements the others, and be able to recognize their general theme of providing
a balance between labor and management.
7. In the context of the various labor laws, understand what constitutes unfair labor practices for labor and
management. Know why each practice is considered unfair.
8. Recognize the types of discrimination prohibited by the Civil Rights Act. You should understand the
BFOQ exception. You should also understand how the Act is administered.
9. Compare and contrast the Equal Pay Act with the Civil Rights Act. You should also understand the Age
Discrimination Act and be able to see how these three acts complement each other.
10. You should be familiar with the Employment Retirement and Income Security Act, and understand its
general purpose. Be aware of the standards that ERISA imposes on new and existing pension plans.
11. You should be familiar with the employment-at-will doctrine, the judicially created exceptions to the
doctrine, and the reasons these exceptions have been created.
12. You should be familiar with recent legislation, such as the Americans with Disabilities Act, protecting
disabled workers, and with legislation, such as the Age Discrimination in Employment Act protecting
workers from age discrimination.
1. Common law doctrine, like the employment-at-will doctrine, may be limited by court decision or by
legislative action. For example, some courts have prohibited firing an employee-at-will for "whistle
blowing," because permitting such firing violates public policy.
2. Most states today have adopted workers' compensation laws protecting workers injured on the job. The
structure of these laws is generally to establish an administrative framework within which determination
of injury and payment is made. While abolishing contributory negligence and other employer defenses
to protect workers, the legislatures also have limited, in some cases substantially, the awards available to
3. Note how OSHA differs in its approach from the approach that underlies tort law. In tort law, the courts
generally allow private employers great discretion in how the workplace is maintained. However, if
injuries occur, the employer will usually be liable to the injured party. OSHA, on the other hand,
represents a more centralized approach to job safety. Under its coverage, health and safety standards
take on the force of law.
4. Under OSHA the states are able to enforce their own health and safety programs as long as they are as
stringent as the federal program. Labor leaders have complained that the states are not enforcing the law
and that the Reagan Administration does not decertify the states that fail to live up to federal standards.
5. Workers' compensation is a continuation of recent trends in tort laws, which are making property owners
more and more responsible for injuries which occur on their property and which they may be in the best
position to avoid or minimize. Without access to the common law tort defenses, the employer will
almost always have to pay for job related injuries, notwithstanding the negligence of the injured
employee. The recoveries under workers' compensation, however, are generally quite low. This
influences plaintiffs with strong cases to sue in tort for which jury awards can be quite large. However,
in such a tort action, the defendant will have available to him the traditional defenses of contributory
negligence and strict liability.
6. You might notice that most of the laws discussed in this chapter only affect businesses that are engaged
in interstate commerce. This is because these laws are federal laws that draw their authority from the
Commerce Clause. However, the courts have construed the concept of "interstate commerce" quite
broadly, allowing laws enacted pursuant to the Commerce Clause to reach almost all commercial
7. Note that the labor laws are premised on the notion that competition will not function in the labor
market. They assume that workers will almost always be unable to individually bargain with employers.
Therefore, these laws give labor a limited exemption from the antitrust laws to the extent that the union
is bargaining for legitimate benefits. The labor laws represent the government replacing its bias toward a
market approach with a notion of countervailing power as a means of protecting private interests.
8. The other laws in this chapter represent other methods of protecting private interests. Rather than
pursuing the market or countervailing power (as in labor relations), they illustrate the third approach to
restraining private power--strict government regulation.
9. The anti-discrimination laws raise a number of problems. The debate ranges from the legality of reverse
discrimination to the definition of substantially equal work. Throughout this debate, one common
question arises: Is the purpose of the anti-discrimination laws to achieve equal opportunity or equal
10. Recent legislative acts have protected workers from discrimination based on age or disability. The scope
and effect of these recent laws, such as the ADA and ADEA, will likely continue to be defined by court
decisions well into the future.
In the blank provided, put "T" if the statement is True or "F" if the statement is False.
_____ 1. The Employee Retirement Income Security Act (ERISA) requires employers to establish and
fund pension benefit plans.
_____ 2. All employees are covered by worker’s compensation.
_____ 3. The Equal Pay Act forbids racial discrimination regarding pay.
_____ 4. The Age Discrimination in Employment Act protects employees over 40 years of age against
_____ 5. The Fourth Amendment prevents private employers from unreasonably searching their
employee's desks, files, etc
_____ 6. Most states have statutes limiting the amount of a debtor’s wages that can be garnished.
_____ 7. ERISA requires that employers establish pension plans.
_____ 8. A business can never discriminate based on religion, sex, or national origin.
_____ 9. While a BFOQ exception exists for race discrimination, it is not available for religious
_____ 10. Discrimination has been interpreted over the years to include not only intentional
discrimination, but also acts that have discriminatory impact.
Circle the best answer.
1. Which of the following laws is not administered by the EEOC?
a. Americans with Disabilities Act
b. Age Discrimination in Employment Act
c. Equal Pay Act
d. National Labor Relations Act
2. Which of the following does not forbid sex discrimination in employment?
a. Section 1981.
b. The Equal Pay Act.
c. Title VII.
d. Executive Order 11246.
3. Which of the following federal laws prohibits oppressive child labor?
b. Workman's compensation laws
c. Fair Labor Standards Act
d. None of the above
4. Natalie is a teacher. She pays into a state retirement fund through her school. She will be considered
vested after 10 years of membership in the pension plan. Which of the following laws regulate pensions
a. Employment Retirement Income Security Act
b. Fair Labor Standards Act
c. Family and Medical Leave Act
5. Inga works on the assembly line for a small manufacturing firm. Inga has had some credit problems. Her
creditors want to garnish her wages. Which of the following would generally regulate wage
a. Fair Labor Standards Act
b. State wage statutes
c. National Labor Relations Act
d. Labor-Management Relations Act
6. Which of the following is not true of the Civil Rights Act?
a. Sexual Harassment is covered under this act.
b. Affirmative action has been used in enforcing the act.
c. Bona fide occupational qualifications exceptions are allowed with respect to discrimination based on
d. The EEOC feels that mandatory arbitration agreements deny employee rights to bring independent
7. Which of the following statements is true?
a. The employment at will doctrine enables either the employer or employee to terminate the
employment relationship at any time.
b. Whistle-blowing is a valid reason for an employer to fire an employee.
c. Companies can fire employees any time even if there is a contract implied through company policy
handbooks, manuals, etc.
d. Companies can terminate an employee at any time even if the company does so in bad faith.
8. Exemptions from the workers' compensation statutes frequently include:
a. Employers with three or fewer employees.
c. Household services employees.
d. All of the above
9. Which of the following statements regarding the Americans with Disabilities Act is not true?
a. A person is considered disabled if she has a physical or mental impairment that substantially limits
one or more of her major life activities.
b. A qualified person can do the functions of the job with reasonable accommodation.
c. What is a reasonable accommodation may depend upon the size of the employer and the employer’s
d. A disabled person who is discriminated against may sue for damages, but he is not entitled to
10. Which of the following laws pertains to possible union corruption?
a. Labor-Management Relations Act
b. National Labor Relations Act
c. Labor-Management Reporting and Disclosure Act
d. Norris-LaGuardia Act
1. Briefly discuss three recent exceptions to the employment at will doctrine developed by the courts.
2. Roy is a 69-year-old who plans on retiring to Arizona in one more year. Roy decides to buy a house in
Arizona. He chooses a home and then goes to Desert Bank for a loan. The loan officer tells Roy that his
bank cannot offer him a 30-year mortgage because Roy will not be around to pay it off. What law
protects Roy in this situation?
3. Prior to passage of worker’s compensation laws by the states, what were some defenses that employers
would use to avoid liability for injuries to employees?
4. Vicki teaches accounting courses at a community college. The college administration suspects that at
least a few employees are improperly using their computers. Hidden cameras are installed around
campus, including in faculty offices. Ted, a faculty member, is caught using the internet for purposes
other than those dealing with his teaching. The college fires Ted. Discuss the privacy issues in this case.
5. Bob teaches at a college. Bob is diagnosed with multiple sclerosis. Bob’s muscular functions decline
over the years. What would be some reasonable accommodations for the college to make for Bob to
allow him to continue teaching as long as possible?
6. Marlo is employed as an accountant for a large company. Marlo’s father is seriously ill and Marlo wants
to take time off to take care of him. What are Marlo's rights under the Family and Medical Leave Act?
7. Joe Shoehorn works in the shoe department of a large department store. He is paid on commission and
gets 10 percent of every sale he makes. These commissions are applied against the minimum wage that
is required by both federal and local laws. The store has instituted a practice where Joe loses his
commission if he fails to mark the bottom of each sold shoe with a transaction number (the number is
used to track refunds, etc.). A number of customers object to having their shoes marked up in this
manner, and Joe loses commissions on those sales. Joe files a complaint under the Fair Labor Standards
Act. Who wins?