Chapter 15

Question 1

Employers may hire and fire at will, and an employee may quit any time.

Answer 1

At-Will Employees:

Question 2

Employers violate public policy if they fire or punish employees for certain actions, including:

Answer 2

i. Refusing to commit an illegal act (ex: engaging in purposeful inaccurate balance sheet transactions to make the company’s profitability appear better).
ii. Performing a public duty (ex: jury, military duty)
iii. Exercising a public right (ex: filing for workers’ compensation after an injury)

Question 3

True or False: If a firm dismisses an employee in violation of public policy, the employee may sue for wrongful or retaliatory discharge.

Answer 3

True

Question 4

Part of a bigger contract which relieves one party (only) from any liability.

Answer 4

Exculpatory Clauses in Employment Contracts:

Question 5

True or False: Contracts in Violation of Public Policy - ii. Not favored by most courts and generally held to be against public policy. However, they can be upheld in non-employment circumstances:

1. A restaurant checking a coat: Ticket most likely states the restaurant is not responsible for loss or damage.
2. A parking lot receipt: Parking lot says it is not responsible for loss of contents or damage to the vehicle.
3. A lease: Landlord says they will not be responsible for damage, injury, or loss which occurs on the property.

Answer 5

True

Question 6

A contract that states an employee can’t leave and go into competition against the employer or go to work for a competitor for a certain time (generally 1 – 3 years).

Answer 6

Noncompete Agreement

Question 7

Noncompete Agreement generally legal if:

Answer 7

a. It relates to a sale of a business or employment,
b. Is necessary to protect the employer, and
c. Is for a reasonable time and geographic area.

Question 8

Noncompete Agreement Example:

Answer 8

Holly worked for Avis Rent-A-Car in New Bern, NC. When hired, she printed her name on the top of the employment agreement, but did not sign it. On November 17, she resigned and soon after began working for Hertz Rent-A-Car at the counter adjacent to Avis. Avis was unsuccessful in obtaining a restraining order to prevent Holly from working for its competitor because she had not signed the agreement.

Question 9

Noncompete Agreement Example:

Answer 9

A non-compete agreement executed by Dr. Smith that prohibited him from “establishing a competing cardiovascular surgery practice within 75 miles of Albany, GA for a period of 2 years following date of termination” was upheld by a court.

Question 10

Noncompete Agreement Example:

Answer 10

Eugene McCarthy left his position as Global Sales Director for Nike’s Brand Jordan division in June 2003 to become VP of U.S. footwear sales and merchandizing at Reebok. Nike sought to prevent McCarthy from working at Reebok for 1 year, invoking a noncompete agreement McCarthy signed in 1997 which stated, “Employee will not… be employed by…any business engaged anywhere in the world in the athletic footwear business…” The court upheld the contract.

Question 11

Employer may require employees to sign an agreement that the employee will not recruit fellow employees for another company when/ if they leave their current place of employment.

Answer 11

Anti-Raiding Covenants

Question 12

True or False: Anti-Raiding Covenants are not enforced in all states.

Answer 12

True

Question 13

Anti-Raiding Covenants New York:

Answer 13

Anti-raiding covenants not generally enforced.

Question 14

Anti-Raiding Covenants California and Texas:

Answer 14

Enforced if limited in time and duration.

Question 15

Anti-Raiding Covenants Georgia, South Carolina and Virginia:

Answer 15

Enforceable if agreed to in a contract.

Question 16

Requires that employers to pay insurance premiums for injury and death benefits to employees who are injured or killed on the job in exchange for relinquishment of the employee’s right to sue the employer for negligence.

Answer 16

Workers Compensation

Question 17

Benefits of Workers Compensation:

Answer 17

i. Provide income and benefits to injured workers,
ii. Reduces litigation, attorneys fees
iii. Encourages employers to keep a safe working environment

Question 18

To qualify for workers’ compensation, an employee must show:

Answer 18

i. They suffered an injury,
ii. As a result of an accident or occupational disease, and
iii. Injury arose in the course of employment.

Question 19

Tort lawsuits outside of workers’ compensation are generally not allowed unless injured party can show:

Answer 19

i. There was an intentional tort involved;

ii. Injury was caused by a defective product or toxic substance at work

Question 20

Family Medical Leave Act (FMLA) applies to:

Answer 20

i. Private employers with 50 or more employees, and

ii. All public governmental units

Question 21

Employers must grant workers up to 12 weeks of unpaid, job protected leave/ year:

Answer 21

i. After childbirth or adoption;
ii. To care for a seriously ill child, spouse or parent; or
iii. For the employees’ own serious illnesses.

Question 22

True or False: Family Medical Leave Act (FMEA) may be denied to “key” employees – 10% highest paid, whose leave would cause major economic injury to the operations of the employer.

Answer 22

True