Topic 1: The Nature of the Employment Relationship Flashcards
Law
A set of rules for human behavior which are established by legitimate authority and which have a binding force.
The purpose and function of the law is to:
Prevent undesirable, or promote desirable, behavior
Facilitate for private arrangements between individuals
Settle private and public disputes
Determine procedures for changing the law
Regulate the institutions of state to protect individual freedom
Keep the peace
Remedy social injustice
Facilitate planning
Provide for the orderly change in government
What is the primary purpose of law in the context of employment relationships?
To govern behavior, settle disputes, and protect individual freedom
Includes facilitating private arrangements, keeping peace, and remedying social injustice.
What is common law?
A body of law based on judicial opinions and precedents established over time
It includes the doctrine of stare decisis, where courts follow previous rulings.
What does the term ‘stare decisis’ refer to?
The doctrine of courts following precedents set by earlier cases
It ensures consistency and predictability in the law.
What is the supreme law of the land in the U.S.?
The Constitution
All laws must comply with the Constitution or they are void.
What are the two main functions of the Constitution?
Establishes the three branches of government and enumerates citizens’ fundamental rights
The Bill of Rights protects citizens from government restrictions.
What are the three branches of the federal government?
- Legislative Branch
- Executive Branch
- Judicial Branch
Each branch has distinct roles and responsibilities in governance.
What is the role of the Legislative Branch?
To make laws for the general welfare of the people
Comprised of the Senate and House of Representatives.
What is the role of the Executive Branch?
Conducts foreign affairs and enforces laws
Led by the President, Vice-President, and Cabinet members.
What does the Judicial Branch do?
Interprets laws and explains the Constitution through legal controversies
Composed of the Supreme Court and other federal courts.
What is the significance of the Supremacy Clause?
It establishes that the Constitution and federal laws take precedence over state laws
Important for understanding the federal framework of employment law.
What is the role of the Equal Employment Opportunity Commission (EEOC)?
To enforce the Civil Rights Act of 1964
It ensures that employment discrimination laws are upheld.
Define employment-at-will.
The legal doctrine allowing employers to terminate employees without cause
Employees can also leave without reason.
What types of employer-employee relationships exist?
- Employee
- Independent Contractor
Each relationship has different legal implications and rights.
What is the difference between rights and responsibilities of employers and employees?
Employers have the right to manage operations; employees have the right to fair treatment
Rights and responsibilities must be balanced for effective workplace relations.
What is the role of an employee handbook in a legal context?
To outline company policies and procedures, serving as a legal reference
It can protect both employers and employees by clarifying expectations.
What is the doctrine of respondeat superior?
It holds employers liable for the actions of employees performed within the scope of employment
Ensures accountability in employer-employee relationships.
What are the steps in a progressive discipline process?
- Verbal Warning
- Written Warning
- Suspension
- Termination
Designed to protect employers from wrongful termination claims.
What employment law governs discharge practices that protect employees?
Laws that prevent wrongful termination and discrimination
Include various federal and state regulations.
Fill in the blank: The power of the Supreme Court to consider whether a law complies with the Constitution is called _______.
Judicial Review
Which of the following is not a purpose or function of the law?
Settle private and public disputes
Facilitate for private arrangements between individuals
Determine procedures for changing the law
Prevent desirable, or promote undesirable, behavior
Prevent desirable, or promote undesirable, behavior
Prevent undesirable, or promote desirable, behavior
Facilitate for private arrangements between individuals
Settle private and public disputes
Determine procedures for changing the law
Regulate the institutions of state to protect individual freedom
Keep the peace
Remedy social injustice
Facilitate planning
Provide for the orderly change in government
What is a precedent?
A reason a law is made
An exception to the rule
A group or person exempt from the laws
A controlling rule, example, or guide
A controlling rule, example, or guide
When a court decides a legal controversy in a way which establishes a controlling rule, example, or guide, it is said to have established a precedent. This rule provides a framework for other judges to follow in deciding later cases.
The doctrine of a court following the precedent of an earlier court is known as:
Stare decisis
Judicial review
Secondary precedence
Federal rule
Stare decisis
Citizens have confidence in the law when there is predictability. This predictability is achieved when judges follow the precedent established by earlier court decisions. This is known as stare decisis.
What is a judicial review?
When a decision cannot be made in district court, it moves to Supreme Court
The ability of the Supreme Court to overrule every other court
When a business is investigated by the Supreme Court
The power of the Supreme Court to consider whether a law comports with the Constitution
The power of the Supreme Court to consider whether a law comports with the Constitution
Every law in the United States is measured against the Constitution. The power of the Supreme Court to consider whether a law comports with the Constitution is known as judicial review.
Which of the following laws has the least amount of power under the Supremacy Clause?
Federal laws
State laws
The Constitution
Treaties and federal regulations
State laws
The Constitution contains a Supremacy Clause, which mandates that the Constitution, federal law, treaties and federal regulations are the highest laws of the land and have priority over state law.
What is agency in the context of employment relationships?
A contract relationship between a principal and an agent where the principal authorizes the agent to work on their behalf.
Who are the principal and agent in an employment relationship?
The employer is the principal and the employee is the agent.
What obligation do both parties have in an agency relationship?
Both parties have an obligation to act in good faith.
To what extent can an employee act as an agent?
Only to the extent authorized by the employer.
What is vicarious liability?
An employer’s exposure to liability for the acts or omissions of an employee.
What doctrine is vicarious liability derived from?
The doctrine of respondeat superior.
Under the respondeat superior doctrine, when is an employer responsible for an employee’s actions?
When the actions are performed within the scope of employment.
What does ‘scope of employment’ refer to?
Employee conduct that is reasonably related to a job description and foreseeable by the employer.
What is the ‘frolic and detour’ concept?
When an employee takes actions that further their own interests rather than the employer’s.
When may an employer not be vicariously liable due to frolic and detour?
If the employee’s departure from business purposes is substantial.
What is the ‘going and coming rule’?
It shields employers from liability for acts or omissions of employees while commuting to work.
What happens when an employee conducts both personal and employer business simultaneously?
The employer may be liable for the employee’s actions due to dual purpose mission.
True or False: An employer is always liable for an employee’s actions.
False.
Fill in the blank: The employee has the power to act as an agent only to the extent _______.
[authorized by the employer]
What should employers understand regarding agency doctrine?
When a person is acting as an employer or an employee.
Tort
A civil wrong which causes someone harm
Dual Purpose Mission
Occurs when an employee conducts personal and work business at the same time; subjecting the employer to liability for the employee’s actions
Agency is a __________ relationship (a legally binding agreement) between a principal and an agent whereby the principal, expressly or implicitly, authorizes the agent to work on his or her behalf and with the power to bind the principal.
Informal
Contract
Undefined
Formal
Contract
An Agency agreement is a contract because it gives parties duties and privileges with respect to each other which can be enforced.
An employer can be exposed to liability in tort (a civil wrong which causes someone harm) for the acts or omissions of the employee. This employment law concept is best known as:
Contracted agency
Vicarious liability
Scope of employment
Respondeat superior
Vicarious liability
Vicarious liability refers to the idea that a person may be responsible for the bad acts of another. Respondeat superior is the doctrine which underlies and supports this concept in employment law.
Employee conduct which is reasonably relative to a job description and foreseeable by the employer as part of that job description is referred to as:
Scope of employment
Respondeat superior
Employment characteristics
Dual purpose mission
Scope of employment
Scope of employment is the legal consideration of the various foreseeable activities which may occur in the performance of a person’s job.
In the scope of employment context, which of the following is an example of frolic and detour?
An employee runs a personal errand while driving to a meeting at a company branch office
An employee runs an errand on his/her lunch break
An employee works from home for the day
An employee runs a work errand while off work
An employee runs a personal errand while driving to a meeting at a company branch office
An employee pursues self-interest if he or she runs a personal errand while driving to a meeting at a company branch office. This type of departure from the employment relationship is known as frolic and detour.
“Let the master answer for the servant” applies to which vicarious liability doctrine?
Frolic and detour
Respondent inferior
Respondeat superior
Tort liability
Respondeat superior
Respondent Superior, by definition, is the doctrine which underlies the concept of vicarious liability. The translation of this term implies the culpability of the “superior” or “master” party, meaning the employer.
What is the primary difference between an employee and an independent contractor?
Employer obligations to an employee are many and varied, while obligations to independent contractors are limited to contract terms.
What are the consequences for employers who improperly classify workers as independent contractors?
Tax penalties for improper classification are heavy.
What are the three tests commonly used to determine if a worker is an employee or independent contractor?
- The common law agency test
- The economic realities test
- The IRS 20-factor analysis
Under the common law agency test, what is the central question in determining if a worker is an employee?
The level of control retained by the employer.
What does the economic realities test assess?
Whether the worker is substantially dependent on the employer.
List three factors considered in the economic realities test.
- Degree of control exerted by the employer
- Worker’s opportunity for profit or loss
- Permanence of the working relationship
What is the purpose of the IRS 20-factor analysis?
To guide employers in determining if workers are independent contractors.
Fill in the blank: The IRS 20-factor analysis includes examining who controls when, where, and how work is to be done, known as _______.
[Instructions]
What is one indicator that a worker may be classified as an employee under the IRS 20-factor analysis?
The employer sets specific and inflexible work hours.
True or False: Volunteers can become employees if their service results in significant remuneration.
True
What is the first step for an HR professional to determine if an employment law applies to a workplace situation?
Determine which federal employment statutes apply to the firm.
Name one federal employment statute that applies to all employers regardless of size.
USERRA
What is the employee threshold for Title VII to apply?
Fifteen or more employees.
What must an HR professional assess after identifying applicable federal laws?
Look to state law.
Fill in the blank: State law often mirrors federal law but can be _______ than federal law.
[more strict]
What common law rules must an HR professional understand?
Common law rules that apply in the state where the business operates.
Of the following classifications of worker, which causes the smallest obligation to the employer?
Employee
Independent contractor
Union workers
Both independent contractor and employee
Independent contractor
If a worker is an independent contractor, the employer is not subject to wage and hour, anti-discrimination, federal employee tax withholding, or vicarious liability law. Given these factors, employers are often eager to classify workers as independent contractors rather than employees.
Which of the following is not one of the three different tests commonly used to determine if a worker is an employee or independent contractor?
The IRS 20-factor analysis
The common law agency test
The economic realities test
The working description test
The working description test
There are three different tests commonly used to determine if a worker is an employee or independent contractor: 1) the IRS 20-factor analysis; 2) the economic realities test; and 3) the common law agency test.
What is the main purpose of the economic realities test?
Determine whether the worker has little freedom to exit the relationship because they are economically dependent on the business
Determine if a business has enough economic freedom to hire and fire whomever they deem necessary
Discover if an organization can afford to hire more employees
Understand the pressure unions are putting on the cost of business
Determine whether the worker has little freedom to exit the relationship because they are economically dependent on the business
The goal of the economic realities test is to determine whether a worker is economically dependent on the employer – and is therefore an employee – or is really in business for him or herself –and is therefore an independent contractor.
The IRS has adopted the 20-factor analysis as a guide to employers in determining if workers are indeed independent contractors. Which of the following is not a factor?
Relationship: How many hours per year do the employee and employer spend time together outside of work?
Instructions: Who controls when, where, and how work is to be done?
Integration: How closely are the employer’s business processes linked to a worker’s performance?
Training: How much training does the employer give?
Relationship: How many hours per year do the employee and employer spend time together outside of work?
Relationship. How many hours a year the employee and employer are spending time outside of work is immaterial to a determination of a worker’s status as an employee or independent contractor.
True or False. Generally, partners, directors, and major shareholders are not employees.
True.
In most cases, these persons have an ownership interest in the business and, therefore, are not employees.
What is the definition of an employer?
An entity that employs another to work on his or her behalf for pay.
What is an important consideration for employer size in employment law?
The number of employees an employer has, as certain laws apply only to employers with a minimum number of employees.
What is the minimum number of employees for the Age Discrimination in Employment Act to apply?
At least 20 employees.
What is an integrated enterprise?
An arrangement where the operations of two or more employers are so intertwined that they can be considered a single employer for statutory coverage and liability.
List the factors considered to determine if firms constitute an integrated enterprise.
- Degree of interrelation between operations
- Degree of management sharing
- Degree of common control of labor relations
- Level of shared ownership
What is the purpose of the factors used to establish an integrated enterprise?
To establish the degree of control exercised by one entity over the operations of another entity.
What does the term joint employer refer to?
A situation where two or more entities exert control over an employee, making each entity an employer.
What qualifies a business as a covered employment agency under employment law?
If it regularly procures employees for at least one covered employer.
When is a labor organization treated as an employer under federal employment law?
If it represents employees, has a certain membership level, maintains a hiring hall for a covered employer, or is engaged in an industry affecting commerce.
True or False: A labor organization is exempt from federal and state employment law rules.
False.
What is the definition of an employer?
A person who works to provide a good or service for another
A person who pays for the goods or services of another
An entity that produces goods and services
An entity that employs another to work on his or her behalf for pay
An entity that employs another to work on his or her behalf for pay
The definition of an employer is straightforward: an entity which employs another to work on his or her behalf for pay.
Operations of two or more employers are considered so intertwined that they can be considered a single employer for purposes of both federal statutory coverage and liability. This is known as a(n):
Publicly traded company
Conglomerate
Integrated enterprise
Free standing business
Integrated enterprise
The purpose of the doctrine of the integrated enterprise is to give full application to federal and state employment law. A firm may not purposely or unintentionally avoid laws by dividing itself into small units which by themselves would not be covered by an employment law statute.
When two or more entities, which are not engaged in an integrated exercise, exert control over an employee such that each entity may be considered an employer, this is known as the ___________ doctrine.
Double employment
Covered employer
Joint employer
Shared employment
Joint employer
The joint employer doctrine, like that of the integrated enterprise doctrine, allows for the application of employment laws to all employers who play a role in directing an employee’s action.
A business is a(n) _____________ employment agency if it regularly procures employees for at least one covered employer.
Unobligated
Covered
Obligated
Uncovered
Covered
Employers may not avoid the application of employment laws by using third party employment agencies. Hence, when an employment agency procures employees for another it is said to be a “covered” employment agency subject to state and federal employment law.
Which of the following is not a qualification for a labor organization to fall under federal employment law statutes?
An entity is not engaged in an industry-affecting commerce
An entity maintains a hiring hall which procures employees for at least one covered employer
An entity represents the employees of an employer
An entity’s membership exceeds a certain number
An entity is not engaged in an industry-affecting commerce
A labor organization is subject to federal employment law statutes, as if it were an employer, if it 1) represents the employees of an employer; or 2) has a membership which exceeds a certain number; or 3) maintains a hiring hall which procures employees for at least one covered employer; or 4) is engaged in an industry affecting commerce.
What is the employment-at-will doctrine?
It allows employers to terminate employees at any time, for any legal reason, without liability, and employees can leave a job at any time without legal consequences.
Which U.S. state does not fully adhere to the employment-at-will doctrine?
Montana.
What was the original intent of the employment-at-will doctrine under common law?
It represented the freedom to contract and prioritized flexibility over stability in employment relationships.
Why has the employment-at-will doctrine been criticized?
It can leave employees vulnerable, as employers may change wages, benefits, or work conditions without notice.
What are the three common law exceptions to the employment-at-will doctrine?
Public policy, implied contract, and implied covenant of good faith.
What is the public-policy exception?
It protects employees from termination for actions that align with public policy, such as refusing to break the law or engaging in whistleblowing.
How many states recognize the public-policy exception?
At least 44 states.
What are examples of actions protected under the public-policy exception?
Refusing to commit perjury, filing a worker’s compensation claim, reporting child labor violations, or serving on jury duty.
How does whistleblower protection differ between public and private employees?
Most states protect public employees, while only 17 states extend protection to private employees.
What is the implied contract exception?
It arises when an employer’s actions, policies, or promises create a reasonable expectation of continued employment.
How might an employee handbook contribute to an implied contract?
If it outlines progressive discipline procedures consistently followed, deviation may breach an implied contract.
Why are oral promises challenging to prove under the implied contract exception?
Courts are reluctant to enforce them due to the dynamic nature of business and the Statute of Frauds requiring written contracts for long-term agreements.
What is the implied covenant of good faith exception?
It requires both parties in an employment relationship to act in good faith and fairness, and its violation can result in wrongful termination claims.
How many states recognize the implied covenant of good faith exception?
Thirteen states.
What are examples of violations under the implied covenant of good faith exception?
Terminating an employee before their pension vests or before a large commission is due.
Why are good faith exception cases hard to prove?
Definitions of good faith vary, and the at-will presumption is strong.
What is the role of collective bargaining agreements in employment-at-will?
They can override at-will rules by specifying terms of employment and conditions for termination
What must public-policy claims generally rely on to qualify as public policy?
A principle stated in state constitutions, administrative regulations, or ethics codes.
What impact does the at-will presumption have on exceptions?
It remains strong, making it difficult for employees to prove their circumstances fall under an exception.
How do employers counter claims of implied contracts from handbooks?
By including disclaimers stating the handbook does not create contractual rights or obligations.
Statute of Frauds
A doctrine that requires that a contract which cannot be performed within a year of its creation must be in writing
Under the Employment-At-Will Doctrine, _______________.
An employer can hire whomever it wants for whatever reason it wants
If an employee desires to quit, he or she needs to have a legally viable reason to want to depart from the organization
Only federal employers can hire and fire employees at their own will
An employer may terminate an employee at any time, for any legal reason, without incurring liability
An employer may terminate an employee at any time, for any legal reason, without incurring liability
Under the At-Will Doctrine, both the employer and the employee are considered equal bargaining partners who may terminate the employment relationship at any time without indicating cause.
The At-Will Doctrince has come under much criticism in the modern age because ____________.
It only applies to federal jobs and the public feels it should apply to all jobs
It allows for possible harsh consequences for the employee
It gives employees too much power
It diminishes the power of the employer
It allows for possible harsh consequences for the employee
The At-Will Doctrine enables what many would determine to be harsh consequences for employees. These include the employer’s ability to change, at any time and without notice, the terms of wages, benefits, or time off, leaving employees vulnerable and insecure.
Which of the following is not a recognized exception to at-will doctrine under the common law?
Implied covenant of good faith
Implied contract
Public policy
Economic sustainability
Economic sustainability
The common law has developed three exceptions to the at-will doctrine: 1) public policy; 2) implied contract; and 3) implied covenant of good faith.
How many states recognize the public policy exception?
28
37
22
44
44
As stated in the text, at least 44 states recognize this exception.
If an employee is terminated for claiming minimum wage or overtime compensation, engaging in union activities, opposing unlawful discriminatory practices, filing for workers’ compensation, or “whistleblowing,” the employer may face liability for a
public policy exception
implied covenant
retaliatory discharge
economic sustainability
retaliatory discharge
Retaliatory discharge refers to an employer’s termination of an employee for anything other than a work-performance related reason. The term most commonly refers to an employee being terminated for reporting the employer’s wrongful conduct.
What is constructive discharge?
It occurs when intolerable workplace conditions, such as harassment or failure to accommodate disabilities, force an employee to quit because no reasonable person would stay.
What is the tort of intentional interference with a contract?
A claim where a third party pressures an employer to terminate an employee without cause, effectively interfering with the employer-employee relationship.
Under what circumstances can an employee claim intentional infliction of emotional distress due to termination?
When the termination is carried out in an intentionally reckless or outrageous manner causing serious emotional or psychological harm.
What was the outcome of the Noonan v. Staples, Inc. case?
Staples was found guilty of defamation for announcing Noonan’s termination with malice, despite the truth of the reason for termination.
What is the Montana Wrongful Discharge From Employment Act (WDEA)?
A law that prohibits termination without good cause after a probationary period and limits damages for wrongful termination to four years of compensation.
What is progressive discipline, and is it legally required?
Progressive discipline involves remedial steps before termination. It is not a legal requirement unless guaranteed by a collective bargaining agreement, handbook, or employer conduct.
What constitutes an unfair labor practice in termination under the National Labor Relations Board (NLRB)?
Termination that violates a collective bargaining agreement.
How should employers handle termination to avoid retaliation claims?
Ensure that failings are documented, progressive discipline steps are followed, and employees are treated equally to avoid claims of discrimination or retaliation.
Why should employers avoid disparate treatment during termination?
Treating employees differently in the termination process is unlawful and can lead to discrimination claims, similar to the on-boarding process.
What is the best strategy for employers regarding employee privacy during termination?
Protect the privacy and dignity of terminated employees to minimize risks of defamation or other claims.
Arbitration
A procedure for resolving collective bargaining impasses by which an arbitrator (third party) choose a solution to the dispute.
Covenant of Good Faith
A presumption that each party in a contract will deal with each other in good faith and fairness.
Common Law
Principles developed over centuries as a result of legal decisions made by judges in individual cases.
Employee
One who performs services under the direction and control of another.
Employer
One who employs the services of others in exchange for wages.
Joint Ownership
Right of ownership shared by two or more owners such that on the death of an owner his or her right passes on to surviving owner(s), the last survivor becoming the full owner.
Progressive Discipline
Performance management tool designed to modify employee behavior by using a set of increasingly severe discipline steps, with consequences, that hold the employee responsible.
Supremacy Clause
Article VI, Paragraph 2 of the Constitution is commonly referred to as the Supremacy Clause. It establishes that the federal constitution, and federal law generally, take precedence over state laws, and even state constitutions.
U.S. Constitution
Established America’s national government and fundamental laws, and guaranteed certain basic rights for its citizens.
Employees may claim wrongful termination through _________ or constructive discharge.
common law
supreme court
discrimination
tort claims
tort claims
A tort is a wrongul act which infringes on the rights of another. If an employer engages in wrongful behavior towards an employee, the employee may have a civil claim against the employer.
What is the doctrince of Constructive Discharge?
Situation in which the employer helps a discharged employee locate new employment
Conditions of unfairness or mistreatment exist at work to such a degree that no reasonable employee would feel he or she had any other option but to quit
Conditions in which an employer needs to terminate an employee due to changing business plans and strategy
When an employee is creating such a harsh and unhealthy environment for other employees that management is forced to terminate him/her
Conditions of unfairness or mistreatment exist at work to such a degree that no reasonable employee would feel he or she had any other option but to quit
As noted in the text, when conditions of unfairness or mistreatment exist at work to such a degree that no reasonable employee would feel he or she had any other option but to quit, the employer may be found to be “constructing” an environment which forces the employee to leave.
When a third party, perhaps a co-worker or client, pressures the employer to terminate an employee without cause, __________ has occured.
Statute of frauds
Constructive discharge
Voiding a contract
Intentional interference with a contract
Intentional interference with a contract
Tortious interference, also known as intentional interference with contractual relations, in the common law of torts, occurs when a person intentionally damages the plaintiff’s contractual or other business relationships.
_____________ prohibits termination for anything other than good cause once an employee has successfully passed a probationary period and allows for an employee to seek arbitration for a termination dispute.
Stare decisis
Vicarious Liability
National Labor Relations Act
Montana Wrongful Discharge From Employment Act
Montana Wrongful Discharge From Employment Act
The Montana Wrongful Discharge From Employment Act of 1987 prohibits termination for anything other than good cause once an employee has successfully passed a probationary period and allows for an employee to seek arbitration for a termination dispute.
True or False. The Montana Wrongful Discharge from Employment Act limits employee damages for wrongful termination to four years of compensation.
True
The Montana law recognizes that once an employee and employer have an established relationship, the employee is entitled to more protection than the At-Will Doctrine provides. To balance this greater protection, employees are only allowed a maximum of four years of compensation in wrongful termination damages
