This page contains Lessons #01 to #10 | Main

Claims against employees #10
by Ross Runkel at LawMemo

Lawsuits by an employer against an employee or ex-employee typically (but not always) come up when the employee is in a sales position or is high up in the employer's organization. However, the same general rules can apply to all employees.

Duty not to compete.

For a current employee, there is a duty not to compete against the employer. The employee has a duty of loyalty to the employer, is hired to advance the employer's interests, and should not "moonlight" for a competitor and should not drain away the employer's business by going into direct competition.

Non-competition agreements.

Many employees sign an agreement ("non-compete," "non-competition," "restrictive covenant") in which the employee agrees not to compete against the employer after the employee quits, retires, or is fired. Courts usually will enforce these agreements if they are properly drafted and comply with certain rules the courts have laid down. I'll discuss non-competition agreements in more detail next time.

Duty regarding trade secrets and confidential information.

A trade secret is a plan, process, tool, or customer list of some unique nature. It does not include the ordinary knowledge and skills an employee learns while working for the employer. I'll discuss trade secrets in more detail later.

Coming next: Non-competition agreements #11: Employment Law 101

LawMemo publishes Employment Law Memo.

Constructive discharge #9
by Ross Runkel at LawMemo

"Constructive discharge" occurs when an employer makes the conditions of work so intolerable that the employee "quits." For example, the employer might want the employee to leave, without actually saying "you're fired."

• Constructive discharge is not an independent claim all by itself. It is used to convert what might look like a "quit" by the employee into a discharge by the employer.
• Example: The employer sexually harasses Jane. The harassment is severe enough or pervasive enough (or both) that it alters Jane's conditions of employment and violates Title VII. Then Jane "quits" because of the harassment.
• Is that a constructive discharge? In order for Jane's "quit" to be a constructive discharge, the harassment must be so severe or pervasive (or both) that a reasonable employee in her situation would quit work rather than stay. In other words, the harassment has to be worse than the minimum required for a Title VII violation.
• Effect: If this was a constructive discharge, then Jane has a claim for discriminatory discharge in violation of Title VII in addition to her claim for sexual harassment. Therefore, she will be eligible for greater remedies such as back pay.
• If the court decides this was not a constructive discharge, Jane has a remedy for the harassment but not for being illegally fired.

The constructive discharge idea is not limited to sexual harassment cases. It can be used in cases involving

• harassment because of religion, race, disability, etc.
• retaliation.
• discharge in violation of public policy.
• discharge because the employee engaged in union activity.
• and the list goes on.

Suggestion to employees: Talk to a lawyer as soon as you can, and that means before you quit.

Coming next: Claims against employees: Employment Law 101 : #10

LawMemo publishes Employment Law Memo.

Discharge in violation of public policy #8
by Ross Runkel at LawMemo

One gigantic exception to the at-will employment doctrine is the idea of a discharge that violates public policy.

The at-will doctrine is a principle of contract law - the law of agreements. The public policy exception is a principle of tort law - the law of civil wrongs. Therefore, most courts apply the principle of wrongful discharge in violation of public policy whether the contract is at-will or some other kind of contract.

Courts recognize four types of public policy situations. Caution: Not every court recognizes every one of these. These are cases where the employer fires the employee because the employee:

1 - refused to do something that was unlawful. Examples: (a) Refusing the employer's demand to commit perjury. (b) Refusing to submit false reports to the government. (c) A nurse refusing to perform a procedure he or she is not licensed to perform.

2 - performed a duty required by the law. Examples: (a) Serving on a jury, which required being absent from work. (b) Providing court testimony in response to a subpoena.

3 - exercised a right that the law gives to employees. Examples: (a) Filing a claim for worker compensation. (b) Filing a court complaint against the employer.

4 - reported unlawful employer conduct - "whistleblowing." Examples: (a) Reporting to authorities that the employer's product had been mislabeled. (b) Reporting to the supervisor's manager that the supervisor skipped mandatory product inspections.

Exception: Many courts will not recognize a tort of wrongful discharge in a specific situation if the employee has another remedy under a statute.

Example: The employee is fired for filing a worker compensation claim. The worker compensation statute prohibits firing an employee for filing a claim. Most courts will not recognize a tort of wrongful discharge here because the employee already has a remedy under the statute.

Coming next: Constructive discharge: Employment Law 101: #9

LawMemo publishes Employment Law Memo.

Good faith and fair dealing #7
by Ross Runkel at LawMemo

Two basic principles of contract law seem inconsistent with each other, and cause courts a problem.

One - Employment at-will: The principle that an employer can fire an employee at any time and for any reason and without advance warning. Unless the employer and employee have a different agreement, this usually will be the rule a court will apply.

Two - Covenant of good faith and fair dealing: The principle that every contract includes an implied duty to act in good faith as to the performance and enforcement of the contract.

Let's say an employer fires Jane because she is a vegetarian. Other than that, Jane has been an excellent employee and the employer has no need to reduce the overall number of employees.

If a court applies the at-will doctrine by itself, then Jane has no contract claim.

If a court applies the covenant of good faith and fair dealing, then Jane has a good argument that this was not in good faith.

Courts vary from state-to-state on how to deal with this.

• Some courts say that the covenant of good faith and fair dealing applies to all contracts, including at-will contracts.
• Some courts say that the covenant of good faith and fair dealing is totally inconsistent with the idea of at-will employment, so the covenant of good faith and fair dealing will not be used in these cases.
• This is state law, which varies from state-to-state, so the outcome will depend on which state you're in.

Coming next: Discharge in violation of public policy: Employment Law 101: #8

LawMemo publishes Employment Law Memo.

Employer handbooks #6
by Ross Runkel at LawMemo

Employers often have handbooks or policy manuals that spell out employee behavior rules, procedures for disciplining or firing employees who violate the rules, and "money matters" such as wages, holidays, vacations, and so on.

The question is whether such a handbook becomes part of the contract between the employer and the employee. And there is no easy answer.

Confusion in the courts:

1 - Courts often do not consider a handbook to be part of a contract.

2 - Courts often see a handbook as nothing more than a statement of policy or intention.

3 - On the other hand, some courts in some situations will consider a handbook to be part of a contract.

4 - There has been a trend in the law for courts to view a handbook as a contract.

For a handbook to be part of contract, usually these things must happen:

• The employer makes an "offer." This can be done by the employer distributing the handbook to employees.
• The employee accepts the offer. This can be done by the employee signing an acknowledgement form, or perhaps simply by continuing to come to work.
• There must be "consideration." This means the employee must give or promise to give something of value. Typically, that is simply continuing to come to work.

Disclaimers:

• Over the years, as more and more courts viewed handbooks as contracts, many employers made changes in how they wrote the handbooks.
• The main change has been to include a disclaimer - a provision that says that the handbook is not intended to be a contract.
• Even so, some courts have said these handbooks can be contracts if the disclaimer was not clear or of it was not conspicuous.

Coming next: Good faith and fair dealing: Employment Law 101: #7

LawMemo publishes Employment Law Memo.

Express contracts #5
by Ross Runkel at LawMemo

The simplest and most direct way to overcome the "employment at will" doctrine is to have an express contract.

The employment at will doctrine says that the employee can quit, and the employer can fire the employee, at any time and for any reason and without any prior notice.

This employment at will doctrine is a "default" rule of contract law. That means it applies whenever the employee and employer have not agreed on something else.

Therefore, the solution is simple: Agree on something else.

An express contract can be in writing or it can be oral. (Of course, it is easier to prove something that is in writing.)

Here are some things an employee might want to have in an express contract:

• The employee can be fired or otherwise disciplined only for "just cause" or "reasonable cause" or some such general language.
• A more detailed list of the grounds for discipline or discharge.
• Before the employee is discharged or disciplined, the employee has to have an opportunity to explain or have some kind of hearing.
• Discipline will be "progressive." For example, there should be a warning (rather than immediate discharge) for the first offense.
• If the employee is to be laid off, there must be advance notice and severance pay.
• And surely you can think of other things.

Here are some things an employer might want to have in an express contract:

• An agreement not to compete (non-competition agreement).
• An agreement not to use the employer's trade secrets, customer lists, and so on.
• An agreement to arbitrate disputes rather than take them to court.
• And surely you can think of other things .

Coming next: Employer handbooks: Employment Law 101: #6

LawMemo publishes Employment Law Memo.

Collective bargaining agreements #4
by Ross Runkel at LawMemo

A collective bargaining agreement, or CBA, can be an effective exception to the "employment at will" doctrine.

Employment at will is a state law contracts principle that says that an employer can fire an employee at any time and for any reason.

A CBA is simply a contract between an employer and a labor union, and a CBA can give employees significant job protection. A typical CBA will override the employment at will doctrine.

A typical CBA contains these key job-protection provisions:

1 - An employee can be discharged or otherwise disciplined (for example, by suspension or demotion) only for "just cause."

2 - An employee who is disciplined can file a grievance, or have the union file a grievance.

3 - If the grievance is not settled satisfactorily, the union can require it to be decided by an arbitrator.

4 - The arbitrator will hold a hearing and then issue a decision that is final and binding.

Let's look briefly at each of these provisions.

• "Just cause" can mean many things. Usually it means at least this: (1) The employer must prove that the employee did what the employee was accused of doing. For example, arrived late too often, stole something, performed poorly. (2) The amount of discipline must fit the seriousness of the offense. For example, discharge would be too serious for one incident of arriving to work late.
• Grievance. Usually the employee or union must file a written grievance (perhaps after an informal discussion) with the employee's immediate supervisor. There will be a short time limit, sometimes as short as 10 (yes, ten) calendar days or as long as 30 days. Failure to file a grievance within the time limit can wipe out the employee's claim. Filing a grievance (not going to court) is the only way to enforce the just cause provision.
• Failure to settle. If the grievance cannot be settled at the supervisor level, it usually goes up to a higher level. Eventually, it can go to an arbitrator. Usually it is only the union, not the employee, that gets to decide to send a case to an arbitrator.
• Arbitrator. The employer and union select the arbitrator, who holds a hearing, listens to the evidence, and then makes a decision - usually in writing. The arbitrator's decision (called an "award") is final and binding. The case will not go to court or be reviewed by a court, except in the rarest and most unusual situations.

Coming next: Express employment contracts: Employment Law 101: #5

LawMemo publishes Employment Law Memo.

Employment at-will #3
by Ross Runkel at LawMemo

What does it mean to say one state is an "at-will" state and another state is not? What is "at-will employment" anyhow?

The "at-will doctrine" is a rule of contract law (which is state law). The rule is that an employee can quit at any time and an employer can fire an employee at any time and for any reason. Because this is a contract rule, the employer and employee are free to change it by agreement. But if their agreement is silent on the question, then the employee can be discharged without warning, without a hearing, and without a reason.

When the at-will doctrine is applied by a court, here is what happens as a matter of contract law:

• A job that is described as "permanent" does not mean that it will last forever. It means only that the job is not temporary or not seasonal.


• The employer can discharge the employee at any time and for any reason.


• The employer can discharge the employee for a really stupid reason. For example, simply because the employee asked for a day off.


• The employer can discharge the employee without any warning. For example, for the very first time the employee comes in 5 minutes late.


• The employer can discharge the employee without offering the employee any kind of "hearing" or chance to explain.


• The employer is not required to give an employee two-weeks notice, or any advance notice at all.


• The employer is not obligated to tell the employee the reason for the discharge.

Every state has a different approach, so the law will be different from one state to the next. It's pretty hard to find a state that follows the at-will doctrine without any exceptions; and it's hard to find a state that doesn't follow the doctrine at all. States tend to fall somewhere in between.

Because the at-will doctrine provides an employee no job protection at all, it is important to understand that there are a lot of exceptions. In some states there are so many "exceptions" that one might conclude that the state is not an "at-will state" at all.

Here are some exceptions:

• A contract between the employer and employee that provides greater protections for the employee.
• A collective bargaining agreement between a union and the employer that provides for discharge only if there is "just cause."
• Wrongful discharge in violation of public policy.
• Federal statutes that prohibit certain kinds of discrimination, allow for medical leaves, protect whistleblowers, or provide other protections.
• State statutes that are similar to the above federal statutes. (Some state statutes provide the employee with greater protections than the federal statutes provide.)
• An implied promise.
• Promissory estoppel.
• Employer's handbook, manual, or policies.
• Intentional infliction of emotional distress.
• Duty of good faith and fair dealing.

Coming next: Just cause under a collective bargaining agreement: Employment Law 101: #4

LawMemo publishes Employment Law Memo.

Sources of Employment Law #2
by Ross Runkel at LawMemo

Question: What are the sources of employment law? What are the laws that govern the employer and employee? The constitution (federal or state)? Statutes (federal or state)? Administrative regulations (federal or state)? Decisions by administrative agencies (federal or state)? State common law (that is, judge-made law) such as contract and tort law?

Answer: Possibly all of the above.

Employment law is complex. Get a lawyer to help you.

• American law is complex and often confusing.
• Employment law is one of the most complex branches of law.
• There is no one place one can look to find all the laws that might be involved in a specific case.
• It is a checker-board of state and federal laws, statutes, administrative rules, and "case law" or decisions by courts and administrative agencies.
• Because employment law is so complex, and usually is different from one state to the next, I recommend that nobody should try to handle an employment law situation without an expert lawyer.
• If you have a toothache you need a dentist.
• If you have an employment law problem you need an employment lawyer.

Some sources of employment law to keep in mind. They might not all apply in an individual situation, but often more than one of them will apply.

• Federal constitution (usually only as to state public sector or federal employees and employers).
• State constitution (usually only as to state and local government employees and employers).
• Federal statutes such as Title VII, Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), Family and Medical Leave Act (FMLA), and so on.
• State statutes that are similar to the federal statutes. These statutes vary from one state to another. Often state statutes are more favorable to employees than the federal statutes by applying to a greater number of employers, by provide more employee rights, and by providing more generous remedies.
• Federal administrative regulations or rules adopted by the Equal Employment Opportunity Commission (EEOC), Department of Labor (DOL), and other agencies.
• State administrative regulations or rules adopted by similar state agencies.
• Case-by-case decisions by federal and state administrative agencies.
• State common law (judge made law), especially dealing with contract law and tort law.
• Federal court decisions.
• State court decisions.
• Contracts between employers and employees.
• Collective bargaining agreements between unions and employers.

Coming next: Employment at-will: Employment Law 101: #3

LawMemo publishes Employment Law Memo.

Introduction #1
by Ross Runkel at LawMemo

This week Ross' Employment Law Blog begins publishing a series of about 60 short essays on Employment Law. I'll talk about hot topics like sexual harassment and genetic testing, plus some boring (yet crucial) topics like statutes of limitations and remedies.

This is a new thing for me. Usually I comment on current court cases. (I'll continue doing that, too.) I'm looking forward to Employment Law 101, and hope you'll join me three times a week.

Some of the topics I'll be discussing:

• Sources of employment law
• Employment at-will
• Just cause under a collective bargaining agreement
• Employment contracts - express, implied, oral, written
• Handbooks and policy documents
• Promissory estoppel
• Good faith and fair dealing
• Discharge in violation of public policy
• Constructive discharge
• Whistleblowing
• Discrimination
• Disparate treatment
• Employee's prima facie case
• Employer's non-discriminatory reason
• Pretext
• Mixed motive
• BFOQ - Bona fide occupational qualification
• Disparate impact
• Discrimination because of sex
• Discrimination because of race or color
• Discrimination because of national origin
• Discrimination because of religion
• Discrimination because of age
• Discrimination because of a disability
• Duty to reasonably accommodate a disability
• Discrimination because of union activity
• Discrimination because of sexual orientation
• Harassment - Sex, race, etc.
• Retaliation
• Remedies
• EEOC procedures
• Statutes of limitations
• Family and medical leaves
• Libel and slander
• Non-competition agreements
• Trade secrets
• Ownership of inventions
• Drug testing
• Genetic testing
• Surveillance and monitoring
• Wage and hours laws
• Arbitration under a collective bargaining agreement
• Arbitration under an individual agreement
• Federal Arbitration Act
• Compelling arbitration
• Unconscionable arbitration agreements
• Court review of an arbitration award

Coming next: Sources of employment law: Employment Law 101: #2

LawMemo publishes Employment Law Memo.

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