class 3 - employment at will and contracts

Question 1

must know:

Answer 1

 Legal issues raised in crafting a job description according to the text.
 Bona fide occupational qualifications and how they relate to job
descriptions.
 Basic legal issues of job advertising and how the text suggests you
overcome them.
 The legal issues raised by job applications, including resume fraud
 The categories of illegal interview questions and why they are illegal.
 An understanding of the California regulation that addresses questions in
job interviews, particularly the laws about inquiries into criminal history
and salary history.
 Law requiring disclosure of reasonably expected salary ranges, including
disclosure to current employees.
 California law limiting employer’s right to request or require access to
social media usernames and passwords.
 The result and reasoning in the Ullmer case.
 California law on how job applicants and current employees are treated
differently for purposes of drug testing and why.
 California law making off-duty marijuana use legally protected – to a
point. (See my Law at Work column on the topic.)
 The legal issues raised by Googling a job applicant, and otherwise
investigating a job applicant’s social media postings and how the text
suggests that an employer may minimize at least one of the legal risks in
doing such searches.
 California law limiting use of consumer credit reports in hiring process.
 The concept of negligent hiring and the tension it creates between an
employer’s duty to respect an applicant’s privacy, on the one hand, and the
employer’s duty to avoid harm to others, on the other hand.
 How the PBH case came out and the reasoning of the court.
 Definition and elements of contract
 “Employment at-will” under California law and its exceptions
 Implied covenant of good faith and fair dealing
 Holding and reasoning of Dore case
 Express contract
 Implied contract, definition and factors
 Effect of long-term employment on at-will contract
 Legal effect of employee handbook
 When progressive discipline policy applies (to address misconduct issues,
such as theft and tardiness) and when it does not (to address performance
issues).
 Advantages and disadvantages of employee handbook
 Holding and reasoning of Tomlinson v. Qualcomm

Question 2

making a job offer and contractual promise

Answer 2

Positive statements you make to an applicant about long-term opportunities can come back to haunt you if you later fire the person. A judge or jury reviewing the firing may conclude that your glowing statements were actually a a contractual promise (EX: that the applicant’s job would be secure for years or that you wouldn’t fire the applicant without good cause)

Question 3

To protect yourself from such misunderstandings, you can write an offer letter that includes the following key elements:

Answer 3

title of the position that you’re offering
date the job begins
starting salary
reference to the employee handbook (if you have one)
job benefits
disclaimer of oral commitments
reminder of at-will status, and
a statement explaining (and limiting) how the at-will relationship can be altered in the future. Many companies require the signed consent of an important company official, like the president

Question 4

agreeing to job security

Answer 4

Most of the time, a prospective employee won’t object to an at-will relationship. This often happens when the prospective employee is a hot commodity or when the person will have to leave a very secure job or move from far away to take the position

Question 5

If you’re looking to hire a candidate who seems to have a legitimate need for reasonable job security, you may be willing to work out similar agreement. Once you do, you can put these terms in your employment letter or a contract….

Answer 5

…You will need to spell out what will constitute sufficient cause for you to fire the employee. Then you’ll need to define what happens if you fire the employee without cause. This will typically involve you business making a significant payment to the employee to ease the pain of moving to a new job

Question 6

employee handbook advantages

Answer 6

An employee handbook can be of practical help in running your business

Once given to an employee there can be no dispute over whether you gave the employee a list of paid days off or explained your policies on remote working etc.

BONUS: gives you a measure of legal protection if you’re challenged by an employee in a court or administrative proceeding. A handbook that contains clear, reasonable policies is the critical beginning of your paper trail for later

A good handbook will tell your employees how to let you know if they feel unfairly treated or have a workplace problem

Question 7

Your handbook may be treated as a contract that can actually limit your right to fire employees. To avoid that result, state both of the following in the handbook:

Answer 7

Employees do not have employment contracts unless they are in writing and signed by the company president
Your company reserves the right to terminate employees for reasons not stated in the handbook or for no reason at all and with or without prior warning or discipline

Even if your business is small, you can benefit from a handbook just keep it short and sweet

Question 8

handbook contents: benefits

Answer 8

Benefits can be nearly as important to your employees as salary

This includes paid vacations, health benefits, sick pay and unpaid leaves for extended illness, pregnancy or family matters

Federal law doesn’t require you to provide paid vacation days or paid sick days (but states and cities might)

Be clear on whether the employee can carry unused sick or vacation days into the next year and what happens to such benefits if an employee quits or gets fired
Some states comp employees for unused time and other don’t

Also let employees know what insurance benefits your company provides such as coverage, life insurance or retirement plans

Question 9

handbook contents: grooming and dress rules

Answer 9

If you have a reasonable business purpose for this, you can establish on-the-job standards for grooming and dress as a condition of employment

Can not discriminate of course

If you require them to wear uniforms FLSA prohibits you from deducting the cost of work related clothing if doing so would cause the employee’s wage to fall below minimum wage

Question 10

handbook - remote work policy

Answer 10

If you’re one of the countless employers who now offer their employees the ability to work remotely, it’s essential to have a written remote working policy in place so your expectations are clear. The policy should be included in your employee handbook and address topics such as:

how many days per week or month employees can work from home
the hours employees are expected to be working during the day
the timing and flexibility of meal and rest breaks
how hourly employees should track their time
whether laptops, smartphones, and other employer-provided equipment will be monitored
acceptable usage of work laptops, smartphones, and other equipment, and
data protection rules employees must follow when working from home

Question 11

employment at will and limits

Answer 11

Most employees don’t have job security: absent a written contract, employment is at will. For the most part, that means you’re free to fire the employee for any reason or for no reason at all; on the flip side, the employee can quit at any time for any reason

There are some limits, however, on your right to freely fire an at-will employee:
- Racial or gender discrimination
- Other limits are founded on public policy
- Courts sometimes find that an employee has attained job security based on the employer’s oral promises or statements in an employee handbook or other document

Question 12

wrongful discharge cases

Answer 12

Cases in which a former employee claims that employment was terminated for an improper reason or that an employer bungled the process are known as wrongful discharge or wrongful termination cases

Because the laws and court decisions of each state vary, not all of the legal theories for wrongful discharge will be available to all former employees. Also, because the law can change you need to keep up to date on specific rules in your state

Question 13

statutes

Answer 13

If you discriminate illegally in firing an employee, a statute may give that employee the right to sue you for wrongful discharge. Other statutes prohibit firing an employee for specific reasons like whistle blowing or complaining about workplace hazards

You may not fire even an at-will employee for reasons that violate statutory rights granted by congress, your state legislature or logical government. Illegal reasons for firing include:
- Discrimination
- Retaliation for complaining about harassment or discrimination
- Other types of retaliation
- Whistleblowing

Question 14

breach of contract

Answer 14

Employers sometimes male promises to job applicants to entice them to become employees
And some employers may also dangle inducements in front of current employees to discourage them from leaving

A number of judges have ruled that, if a persona relies on such promises, an enforceable contract of employment can be created. An employer may be held liable for wrongful discharge if the employee is fired in violation of that contract
EX: Mark, a diligent worker at AutoTec, is offered a job by a rival employer. He turns down the job after AutoTec’s president tells him he’ll have a job for life at AutoTec if he continues to effectively manage his workload. Three years later, AutoTec fires Mark, even though he has kept up with his work. Mark sues for wrongful discharge, claiming AutoTec violated its employment contract by firing him

Specific promises of job security– either written or oral– are not always necessary for a judge to rule that an employee can’t be fired arbitrarily. Some judges have allowed fired employees to collect damages or be reinstated to jobs because the employer created a legitimate expectation that employees wouldn’t be fired without good cause

The typical focus in these cases is on implications of job security made by the employer in a written document such as an employee handbook
- You can avoid these claims by reminding employees in your handbook that employment is at will and that the at-will relationship can be modified by written contract signed only by a high-level employee

Question 15

breach of good faith and fair dealing

Answer 15

Some wrongful discharge cases are based on the premise that every employment relationship includes an automatic commitment by the employer to deal fairly and in good faith with the employee

Applying this doctrine, judges have held that a discharge was wrongful when an employer has dealt arbitrarily with an employee

Many of thee cases have involved longtime employees who were fired as they neared retirement age

Question 16

violation of public policy

Answer 16

Judges sometimes rule that a firing was wrongful because it was against the best interest of the public

Most courts don’t allow an employer to fire an employee who was trying to correct an illegal or dangerous business practice

Courts also ruled that it is against public policy to fire a worker for refusing to file phony reports with state environmental agency, bribe public officials, commit perjury or engage in industrial espionage

Question 17

having a valid reason

Answer 17

The safest approach any time you fire someone is to be sure you have a legitimate business reason, one that you have considered and documented
You will be able to show that the employee for example did not adequately perform specific job duties or that the employee violated a state company policy

Also, using an open and consistent policy for discipling and firing employees will usually help improve worker morale

Question 18

safely handling layoffs

Answer 18

Usually, you’re free to lay off or terminate employees because business conditions require a reduction in the workforce. But, don’t leave your business open to claims that the layoffs were really a pretext for getting rid of employees for illegal reasons. If your layoff primarily affects minorities you may be hit with a lawsuit.

If you are a larger employer, you must comply with the Worker Adjustment and Retraining Notification Act (WARN). The law covers your business if either of the following is true:
- You have 100 or more full-time employees.
- You have 100 or more employees whose total work amounts to 4,000 or more hours a week, not counting overtime hours.
- To comply with WARN, you must notify employees if you plan to: close an employment site, causing 50 or more full-time employees at the site to lose their jobs
- lay off at least one-third—but not fewer than 50—of the full-time employees at a site, or
- lay off 500 or more employees at one site

Question 19

handling layoffs and exceptions

Answer 19

In those situations, you must notify each employee (or their union reps) in writing 60 days before you close the site or law of the employees
You must also send written notice to the state’s dislocated worker unit and the chief elected officer or the municipality where the closing or layoff will take place

There are exceptions:
You needn’t give a full 60 days notice if a closing or layoff is caused by unforeseen business circumstances or a natural disaster

Question 20

If you are a larger employer, you must comply with the Worker Adjustment and Retraining Notification Act (WARN). The law covers your business if either of the following is true:

Answer 20

You have 100 or more full-time employees.
You have 100 or more employees whose total work amounts to 4,000 or more hours a week, not counting overtime hours.
To comply with WARN, you must notify employees if you plan to: close an employment site, causing 50 or more full-time employees at the site to lose their jobs
lay off at least one-third—but not fewer than 50—of the full-time employees at a site, or
lay off 500 or more employees at one site

A number of states have passed their own layoff notice laws. These laws apply to employers with fewer than 100 employees and not covered by federal WARN laws

Question 21

Guidelines for firing employees - Contractual commitments

Answer 21

Before you fire an employee, check into whether you, or anyone else in the company, made an oral or written contractual commitment that may limit your right to fire. Consider the following:

• Is there a written or oral contract or document (including a hiring letter) that promises the employee a job for a fixed period of time?
• When you hired the employee, did you make any statements about job security?
• Have you assured the employee that you’d fire them only for good cause?
  Have you listed causes for termination—in a contract, employee hand- book, or elsewhere—in a way that limits you to those specified causes?
• Does your employee handbook or other written policy or memo make any promises about job security?

Question 22

Say what you mean and mean what you say

Answer 22

The words you use in hiring someone and in writing an employee handbook can create a contractual commitment unintentionally. To prevent this, your employee handbook and similar documents should reserve your right to terminate employees at your discretion. While you may also wish to list some specific types of conduct that will result in termination, such as dishonesty or excessive absenteeism, those shouldn’t be stated in a way that implies they are the only reasons to end the relationship. Also, your handbook and other communications with employees should not make any promises about long- term job security. If they do, it’s time for a rewrite

Question 23

Be careful when firing at-will

Answer 23

You can be sued
Jury will be filled with employees
Pg. 249 - Jury sympathetic for EE
Employer not required to state reason but they can get sued because of possible discrimination

To avoid being sued - have 1 or 2 things/reasons they are being fired
This is not a negotiation but stating what happened

Question 24

Covenant good faith and fair dealing

Answer 24

Does not displace at-will
If you’re going to do something to kick someone out before they get something (money, promotion etc.) then that is problematic
EX: Client has to sign before you get commission is the deal.. You’re fired and you’re not getting paid → this is not ok. Depriving someone of benefits of agreement by taking their opportunity away at the last minute
EX: firing an employee before retirement is illegal (can sue for this).
Breach good faith only if you’re snatching something from someone just before they would rightfully receive it

Question 25

(SKIT): The case of any time

Answer 25

Context: It is Monday, March 15, 1999. Brook Dore, now working as a regional account director at the Denver office of a national advertising agency is interviewing for a similar job with the Los Angeles office of the advertising agency Arnold Worldwide. After interviewing with several officers and employees of the agency, he is now interviewing with Karen Driscoll, an executive vice president with the agency
Karen: We are looking to grow. If you join us, you will play a critical role in a growing agency. What we’re looking for in bringing someone on for this position is a long-term fix in a gap in our management talent pool, not a Band-Aid. We want to be able to service a broader array of clients.

Legal Question: Could Brook be fired at-will without cause (from employer)?

Outcome: Superior court ruled in favor of the company. He was an at-will employee. Employee appealed and won. Court of appeal because the provisions that any lack of uncertainty is against the drafter of the agreement. At-will did not mean any reason but ONLY AT ANYTIME. At-will simply meant that for the company. Company appealed this.
The California supreme court ruled that the company wins. Employee had no case/lost. Employee was at will and agreed to terms of letter. At will means at will, there is no ambiguity.

Discussion:
Is there a contract?
Letter said any time did not say for any reason or without reason
California supreme court and contracts regarding termination
Offer, acceptance and consideration (giving or giving up) is required for contract to be binding
Consideration example: rent money
Offer example: living on landlord’s platform
What does probationary do at this point (past 90 days)
Does absolutely nothing besides benefits kicking in
Job security does not change. You are still at-will regardless.
Probationary period is just an opportunity to see if you really fit with company
Was this in bad faith
No? Because there was nothing taken away at the last minute like a promotion or retirement
At will means at will
“That was bad faith” → no. at will means at will
Page 252 explains at-will well

Question 26

handout 1

Answer 26

What is a contract?

A contract is an agreement to do or not to do a certain thing.

(Cal. Civ. Code §1549, enacted in 1872.)

What are the elements, or essential parts, of a contract?

· 1. Parties, at least two, capable of contracting.
· Parties can’t be minors, can’t be under the influence
· 2. Their consent
· Evidence is signage or handshake or verbal agreement or an exchange
· 3. A lawful object or purpose
· Illegal contracts like hits (assassinations), bribery, gambling, prostitution
· 4. Sufficient cause or consideration

Why should agreements be as clear as possible?
Contracts are made at the time we are friends for the time we may become enemies.

Question 27

handout 2

Answer 27

Employment at will

An employment having no specified term may be terminated at the will of either party on notice (both parties aware/doesn’t mean 2 weeks/can be then and there) to the other. Employment for a specified term means an employment the parties agree in advance will last more than one month. Employment at will establishes the presumption that an employer may terminate its employees at will for any reason or no reason.
(Source: Lab. Code §2922 enacted in 1937; Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 350.)
Limitations on the Employment at will doctrine
· Fundamental public policy, such as the state’s whistleblower laws and antidiscrimination laws.

Limitations, express or implied to which the parties themselves agree on termination rights, such as an agreement that the relationship will continue indefinitely, pending the occurrence of some event such as the employer’s dissatisfaction with the employee’s work or the existence of some good cause for termination. In this context, good cause means a fair and honest cause or reason regulated by good faith as opposed to one that is trivial, capricious, unrelated to business needs or goals or pretextual.

Question 28

fill in - What is the Implied Covenant of Good Faith and Fair Dealing?

Answer 28

In every contract of employment there is an implied covenant of good faith and fair dealing upon each party to the contract that neither party will engage in conduct for the purpose of denying to the other the benefits of the contract. If any party to the contract violates that obligation, that party is in breach of the employment contract and is liable for damages.

The covenant exists merely to prevent one contracting party from unfairly frustrating the other party’s right to receive the actual benefits of the agreement actually made. Thus, if the employment is at will and not modified by an expressed or implied agreement of the parties, the employer may act arbitrarily or inconsistently without providing specific protections such as prior warning, fair procedures, or objective evaluation.

(Source: Book of Approved Jury Instructions 10.35 as modified by Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349-350.)

Question 29

(SKIT): The case of the pregnant pause

Answer 29

Context: Lona: My name is Lona Tomlinson. In the fall of 1997, I applied to be a manager of business development with Qualcomm here in San Diego. The application I completed said that if I was hired my employment would be at will. Specifically, the application I signed said: “I understand and agree that if I am hired, my employment may be terminated, at will, with or without cause, . . . at any time at the option of either Qualcomm or myself. I understand that no supervisor or representative of Qualcomm other than the Office of the Chairman has any authority to enter into any agreement contrary to the foregoing.” On September 15, 1997, I began working at Qualcomm. I don’t work there any longer
→ Dan: What the approval letter said was: “So long as you return before the expiration of your Family Medical Leave Act entitlement, you will be returned to your position or an equivalent job with equivalent pay, benefits and terms and conditions of employment. . . . [¶] Your family leave begins on December 28, 1998, your job is guaranteed if you return to work by June 14, 1999, based on a 20 hour per week, reduced work schedule Family Leave. . . . Based on this arrangement, you will be returning to active status, 30 hours per week commencing March 22, 1999.”

Legal Question: Could Qualcomm fire Lona while she was on leave of absence?

Outcome: Qualcomm wins. Company wide-force reductions. Position was terminated and there’s nothing for her to come back to. No preferential treatment. Illegal to fire because they are on leave (BECAUSE)

Discussion:
Was there a guarantee that her job will be there when she returns or guarantee that she will return?
Guaranteed when she completes her 20 hours…
Lona: While I’m on leave I can’t be fired
Dan: Yes, you can
Lona is still working but considered on leave because of special hours
Her performance wasn’t good so they let her go
Page 43 of text explains termination for at-will employees
For-cause provision usually no after-pay
Without-cause usually gives after-pay for employee usually
What if more employees knew layoffs were coming and decided to go on leave to prevent getting terminated

Question 30

HANDOUT 3: IMPLIED CONTRACTS

Answer 30

Implied term of employment contract

An obligation in an employment contract limiting the employer’s right to discharge or fire is implied and becomes a term of that contract even though not expressly stated by the employee and the employer when, from all of the circumstances surrounding the employment, whether from words or conduct, it is reasonable to conclude the existence of an actual, mutual understanding between the employee and the employer on such a particular term and condition of employment.

[Source: BAJI 10.12, as modified.]

Factors Courts Use To Determine Whether There Is an Implied in Fact Contractual Term Limiting the Right of the Employer To Discharge

· The employer’s practices and written personal policies. When an employer issues formal policies in handbooks, manuals, and memoranda disseminated to employees, that is strong evidence that the employer intended workers to rely on these policies and that the employees did so rely;
· The longevity of an employee’s service, with mere passage of time in the employer’s service, even when marked with indications of employer approval of the employee’s work, being inadequate alone to form an implied-in-fact contract that the employee is no longer at-will;
· Actions or communications by the employer reflecting assurances of continued employment;
· The practices of the industry in which the employee is engaged.

[Source: Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 680; Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 341-342, 344.]

Question 31

HANDOUT 4: EMPLOYEE HANDBOOKS

Answer 31

Effect of At-Will Provisions in Employee Handbooks
At-will provisions in personnel handbooks, manuals, or memoranda do not bar, or necessarily overcome, other evidence of the employer’s contrary intent. Still, the more clear, prominent, complete, consistent, and all encompassing the disclaimer language set forth in documents disseminated to employees, the greater the likelihood that workers could not form any reasonable contrary understanding. Thus, it is at least possible that an employer can adopt an at-will disclaimer that is not subject to employee legal challenge.
[Source: Guz v. Bechtel, Inc. (2000) 24 Cal.4th 317, 339-341, esp. note 11.]
Disadvantages and Advantages to Employee Handbooks

Disadvantages
· May limit flexibility in responding to workplace issues.
· May encourage employee lawsuits if they are poorly drafted.

Advantages
· It eliminates any dispute from the employee that you inform your employee of your policies, such as termination at-will, sexual harassment, paid days off, and family leave.
· It shows that the employer has adopted fair and uniform policies.
· A handbook is a refrence guide to help managers take appropriate actions in a given situation. Without a handbook, supervisory employees are left to their own devices, which can lead to uninformed, inconsistent, and possibly illegal decision making. A handbook containing formal policies thus promotes fairness and consistency, guarding against different treatment for similar cases.
· It informs employees about how to inform the employer if they feel they have been treated unfairly. This gives employer a chance to react before a small misunderstanding turns into a full-blown legal dispute. In this way, a handbook may minimize litigation.
· All of these advantages are why such handbooks are generally treated as a strong indication about the parties’ contractual understanding of the employment relationship.
[Source: Text, p. 57; Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 344-345; Smith and Mazin, The HR Answer Book (2004): 30-31.]

Legal Disclaimers That Should Be Included in a Handbook

· The handbook is not intended to create an employment contract and is not intended to modify the at-will nature of the employment.

· The handbook is intended only as a guide and is not intended as a complete description of the employer’s policies and procedures.

· The list of acts for which discipline may be imposed provides only examples and is not intended to be all-inclusive.

· A progressive discipline policy does not preclude the employer from disciplining an employee in whatever manner the employer deems appropriate.

· The employer reserves the right to modify the handbook at any time.

· The employees’ receipt of the handbook should be documented by having the employee sign an acknowledgment that repeats key policies, such as the at-will nature of the employment.

[Sources: Text, pp. 56-64; HR Answer Book: 36-37].