Employment Law Outline General Theme for Regulating/Not Regulating: Structure of Legal Responses to Problem 1. Economic Rational a.

Inefficient for government to intervene b. People best at knowing what they want (rational beings) 2. In balance of information between employer/employee (safety) 3. Power inbalances a. Employees may have no other options (captive) b. Employers have more power in general 4. People are irrational, dont know what is best for them 5. Social cost to society from rational choices (third-party effects) Employees v. Independent Contractor 1. Employees are those who as a matter of economic reality are dependent upon the business to which they render service. (Secretary of Labor v. Lauritzen FLSA Standard) a. Control - Nature and degree of the employers control as to the manner the work is performed i. Does employer exhibit pervasive control over operation as a whole b. Profit and Loss - The alleged employees opportunity for profit depending upon his managerial skill i. Concerned about whether could lose everything from investment, than earning less money b/c chose ot pick pickles in a bad spot c. Investment - equipment or materials required for task or employment of workers i. Gloves are not enough (but what about lawyers who are i.c.) d. Skill - Does the service require a special skill i. Like all skills, it increases by doing the work, and could be applied in any field (not just pickle field) e. Permanency - Degree of permanency and duration of working relationship i. Tend to not find this dispositive, because i.c. can return year after year or work for long time, and employee could work for 3 weeks at McDonalds f. Integral Part - Service is an integral part of employers business (side project is ic) i. Unless pick pickles, no pickles made (but does this not affect everything the employer hires to do; how distinguish?(E)) g. Dependence of Worker on Employer (Key consideration) i. Ex Post view (maj) depend on defs land, crops, expertise, equipment, nad marketing ii. Ex Ante view (Eastebrooke) If they chose to not work there would other jobs be available. h. Eastebrook person statute was meant to cover (In FLSA cases, unskilled, lowpaid employees are meant to be protected) 2. Covered v. Non-Covered Employees a. Employees may be covered even if sign paperwork stating not covered i/o/i i. Workers when signed the paperwork did not know themselves to be

employees (Vicaino v. Micrsoft) ii. Or, waiver in contract is held to be definition of office, not explicit waiver (Vicaino v. Microsoft) iii. Reflects willingness to protect workers beyond contract rights At will Doctrine Employment at Will Doctrine 1. Default Condition a. Overrode by mutual understanding between the parties that the employment was for a fixed and definite period (note: permanent or lifetime employment is not for a fixed period) i. Sometimes can be inferred from the terms of the contract 1. Rate-of-Pay Rule hiring at stated sum for week, month, or year, is definite employment for the period named - Jurisdictions are split over whether to enforce ii. If not default, employment is a condition precedent to recover wages unless the contract is divisible or the condition is waived by the employer 2. Employer/Employee can terminate the employment at any time. Tort Exceptions to the At-will Doctrine 1. Damages for Tort Violations of At-Will Doctrine a. Standard Monetary i. Lost Wages ii. Salaries iii. Commissions iv. Benefits v.Expected Reduction in Future Wages (unlike Title VII, not likely to reinstate) b. Mental Distress c. Loss of Reputation and other compensatory d. If conduct is sufficiently outrageous, punitive damages can also be recovered 2. Wrongful Discharge in Violation of Public Policy a. 3d Party Effects - Prevented from firing if did not take on action that would hurt 3rd Parties i. Not 3d party harms that have already occurred (if harmed third party and than report it; Devries (sic)) ii. If only policy affect is on private parties, not firing in violation of public policy b. What is public policy? i. Broadly what is just and right ii. Or Narrow - Specific Statutory/Constitutional Provision must be violated (Adler) c. Four General Patterns of Protected Acts i. Fired for refusal to commit unlawful acts ii. Fired for exercising a statutory right 1. i.e. workers comp iii. Fired for filling public obligation 1. I.e. Ness v. Hockes, participating in jury duty 2. Potential Exception is contractual duty to make reasonable efforts to avoid

jury duty for certain parties such as nurses, teachers, doctors, etc, because harm of being on jury is greater than benefit to society at large iv. Fired for whistle-blowing, recording wrongs against insiders or outsiders 1. Courts split over whether violates at-will doctrine if the disclosure is made internally (Adler) a. Why? Duty to expose serves private interest employer, not public interest External Internal 3rd party Effects Protected Protection?? (Depends on court, or if statutorily protected) and is it warning or asserting public right (Warning if brought under FLSA) No Protection (unless protected by statute

No 3rd Party Effects

No Protection

2. And remember that the disclosure needs to harm 3d parties d. Punitives Awarded if employer acted grossly negligent towards plaintiff i. So if discharge is not illegal at time, no punitives 3. Intentional Infliction of Emotional Distress (iied) backdoor to wrongful discharge claim) a. In terminations, how plaintiff was treated when termination occurred, (Agis v. Howard Johnson) but can apply to general treatment by the employer. (Concern for party, not third party affects is goal); However, if general treatment, may be pre-empted by Workers Comp is arose out of and during the course of employment. b. Punitives? If intended to harm the person; c. Requirements i. Intended or should have know would have caused emotional distress 1. If special relationship (i.e. employees), no need to show intent, just recklessness (or that a reasonable person would have known the conduct would have upset a reasonable person) (Bodewig v. K-Mart) ii. Conduct was extreme or outrageous 1. Defined as so outrageous in character, so extreme in degree as to go beyond all bounds of decency and to be regarded as atrocious and utterly intolerable must go beyond mere indignities, threats, or insults. Rest. 2d Torts 46 2. Tension over whether objective/subjective standard; objective with some characteristics of the person normally 3. Special relationship more subjective b/c should know what would upset the plaintiff, plus harder to leave if in special relationship, (Bodewig) so Rest. Allows for recovery for gross insults not amounting to extreme outrage only if special relationship exists

4. Note: if company policy exists, is it violated 5. While acting in disregard of company policy is unfair, example of atrocious is remove free choice in contradiction of earlier statement, especially if designed to humiliate party (Rulon-Miller Dating Case) iii. Conduct caused the distress iv. Emotional distress felt by the plaintiff was severe and of a nature that no reasonable man could be expected to withstand it Contract Based Erosions of At-Will Doctrine 1. Remedies a. Standard Monetary Damages i. Lost wages, salaries, commissions, and benefits ii. Expected Reduction in the Future 2. Covenant of Good Faith a. Where contract states something given in exchange for work performed, it has an implied covenant of good-faith dealings b. Fortune Standard: Contracted-Rooted Definition of Good-Faith: If contract is established and the other party acts to deny the benefit of the bargain, bad faith i. So cant change position/fire to avoid giving bonus c. Monge Standard Act fairly towards people, anytime fired with malice, violates doctrine; motivation (more tort based) d. Some jurisdictions reject covenant of good faith b/c so inconsistent with the goodfaith doctrine e. Note: Default rule will be set against the employer b/c they are in a position to change the default. 3. Express Modification of Contract a. Courts read into definite term contract a provision that plaintiff can be fired for just cause (Chiodo v. General Waterworks Corp) i. Good Cause? 1. Believe subjectively (reasonable, good-faith belief) that performance was inadequate (no investigation required) 2. Subjective Belief + Reason (no investigation) 3. Correct Subject Belief (or backed up by investigation) ii. Must be able to fire for bad actions and to keep incentive for employee to continue working (moral hazard) iii. Employer has burden to show that the firing was justified iv. Only applies in definite b/c in indefinite, just like employer wants ability to fire, employee wants ability to quit at will b. But if two conflicting terms, so can hire for 28 months but no start date, Court will assume that at-will 4. Implied Modification of at-will (from employee statements, consideration) a. If at-will contract, and employer promises to not fire as long as does good job, does this modify at-will contract? i. Majority restatement of at-will, as long as we need you, well keep you ii. Satisfaction Contract keep you as long as satisfied, fact firing shows no longer satisfied (modified or not? Would economy work?) iii. Hetes Test jury could find fired for just cause or good faith

b. In general, Court will not construe statements if not clear or if aspirational (I hope so) (see Veno v. Meredith) c. Contract may be modified from consideration i. Employer has substantial benefit other than the service the employeei s hired to performed or employee undergoes substantial hardship other than services hired to perform (Veno v. Merdith) d. Pughs list of modification: i. Personnel Policies (See below) ii. Longevity of service (See below) iii. Communication by employer, including continued assurance of job (see above) iv. General Practivces of Industry where working v.Additional Consideration e. Employee Handbook i. Without prominent disclaimer, even if definite term k, terms of manual can be read as modifying employee k. (See Woolley v. Hoffman) 1. No meeting of the minds, but objectively should have known that modified 2. Consideration If manual is given after the job begins or manual is altered, increases employees benefit a. Continued Performance b. Increase loyalty, productivity 3. If manual given before taking job, part of consideration for having job 4. Consideration If manual is altered after starts work, and decreases worker protection a. Employee must receive something in exchange b. UNLESS Court requires them to have knowledge of the earlier and higher benefits (in which case, only need consideration if knew of the earlier benefits) 5. Note: Unions and handbook, stronger language decreases need for unions but abilitiy to fire gives nonunion a cost advantage (so may want) ii. With Prominent Disclaimer (may be not in handbook, maybe in contract/application (See Reid v. Sears), no modification BUT disclaimer must be 1. Very explicit (found case by case looking to) a. Strong language b. Size c. Placement d. Font 2. Misunderstanding Disclaimer is not a defense (See Reid v. Sears); Employee Should ask 5. Reliance as Implied in Fact/Promise to Hire/ a. Beginning of Job i. Even though promise to hire is illusory promise, courts will reward under promissory estoppel theory (b/c relied on promsie and gave up another job, moved to new city etc.) (Grouse)

1. Person reasonably relied on promise to detriment 2. Co. expected tehm do so, limited as justice requires ii. Employees have good-faith opportunity to fulfill obligations of job to the best of ability before fired (under promissory estoppel) 1. Or reasonable expectation that would not be fired for reasonable amount of time after being hired (Dicta of Grouse) iii. Probationary Period Can fire for any reason for 90 days (explicitly atwill); But does that mean no longer at will after 90 b. At-will/Longevity of Service i. Courts use less stringent good cause in indefinite term contract when employee has spent a long time with employer/general practice/promises etc. (Pugh implied contract) ii. Defendants Burden: Burden is on defendant to state reason to fire for good cause iii. Plaintiffs Burden (shifting): Show reason is pretextual or on its face unreasonable 6. Statutory Limitation on At-Will a. Some states have passed statutes mandating good cause for employment terminations, normally in exchange for cap on remedies. Privacy Protections for Employees/Employers Free Speech and Privacy Protections for Public Employees 1. Political Association a. Brennan - Violates first amendment to fire, hire, promote, transfer, or recall based on political support in a low-level position (Rutan) unless position involves policy drawing (or political related activity) i. We have expectation that people will not be harmed for political belief (so justifies erosion of at-will doctrine) b. Scalia Only violate first amendment to fire based on political support (patronage as old as government, so if weakens patronage, weakens democracy) i. Court often distinguishes, maybe because more outrageous/humiliating to be fired 2. Political Speech (Rankin v. McPherson) a. Was the speech a matter of public concern i. Look to the context, is it something the public should know/care about ii. S.Ct. says internal working of office does not rise to level of public concern b. If Yes, Balance need to protect free speech and employers interest in maintaining an efficient office (efficiency to the public, not necessarily efficiency of office itself, looking to): i. Position of employee ii. When/where speech is made iii. Effect of speech on the workplace c. If No, speech is still protected by 1st, but you have no right to keep your job. 3. Unreasonable Searches/Seizures (Violation of 4th Amendment) a. Drug Testing if required for promotion etc.- Does the government have a strong interest in performing the search, based on the nature of the employees duties?

i. More than just symbolic (i.e acting against drugs want enforcers to not be on the drugs) (See Scalias dissent in National Treasury Employees Union v. von Raab) ii. Instead, must be government interest in protecting classified information/carrying guns (lower expectation of privacy) 1. I.e. protecting the border from drugs or navy policy for citizens who have access to classified information. or parties who are carrying guns (Security/safety outweigh privacy concerns); should not be overbroad.. b. In general, does the reasonable expectation of privacy outweigh governments need for supervision, control, efficient operation of the workplace Privacy Protections for Private Employees 1. Political Activities (on the job/off the job) a. No 1st Amendment Protection, so only claim is tortious, firing in violation of public policy i. All jurisdictions recognize protection if third-party effects b. Some jurisdictions recognize if abridges public policy (as seen in statute or precedent) i. Novosel freedom of political association (not forced to lobby) is important public policy from previous cases/right to run for office c. However, political activity in direct contradiction of companys financial interests may not be protected (not sure how far test stretches) (Korb v. Raytheon) or if the job itself has a political twist (See dissent in Novosel) 2. Right to Bargain Collectively (Timekeepers Inc.); Compare to Political Speech under Public a. Employee shall have the right to self-organize, bargain collectively through representatives of own choosing, and right to have concerted efforts for the purpose of mutual aid or protection; Employer cannot fire to interfere with rights (Note: policy is to protect the period when unions are being formed) See Section 7 of NLRB i. Concerted activity or acting on behalf of additional employees 1. Was the complaint private or public? 2. How many other employees brought the complaint? ii. Work-related reason 1. For mutual aid or protection - How many other people does it affect 2. reasonably related to wages or other employment related problem iii. Action must be protected -not violent, breach of contract, or illegal b. Remedies: posting notice, cease and desist order to stop illegal activity, and backpay for affected employee, and reinstatement 3. Invasion of Privacy a. Intrusion in area where employee had reasonable expectation of privacy i. I.e. Objective test from the circumstances (i.e. Trotti, could bring lock from home; were there any previous searches) b. Intrusion must be highly offensive to a reasonable person i. The more targeted the search is, the less offensive ii. The threat of being fired + search is offensive c. Note: Must be actual invasion, if fired for not allowing invasion could sue for

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5.

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wrongful discharge not invasion of privacy/However, consenting to search employee will say defense. Protection for Out of Work Activities a. Some states restrict firing for lawful off-the job activities (ND) b. In TX, only if fired for refusing to do an illegal thing or if 3rd party effects (public duties), but volunteering may not be a public duty (Brunner v. Al Attar volunteering in AIDS Clinic) c. If just cause contract, only if employer demonstrates clear deteriment to the workplace d. Can Employee reasonably rely on company policy as protection of out-of-work activity? As long as like claims are treated alike, limit on ability to fire at-will employee (Rulon-Miller) Right to Privacy (if found in state Constitution) a. Legitimate government interest is balanced against right to privacy; i.e. drugs testing; privacy outweighed be Health and safety concern of employer as long as (See Luedtke) i. Notice needs to be given to employees (reasonable expectation) ii. AND testing should be correleated with employees work and job safety Drug Testing (Common-law right to Privacy) a. Liability is for invasion/intrusion (could be for method of testing or because urianalysis testing reveals so much information about employee) b. Problem with consent/turning down as above Honest and Personality Test a. Polygraph Testing Unlawful to require any employee or applicant to submit to lie detector or use result of one, except if security guard, drug manufacturer, public employers, or National Guard b. Constitutional Violation if state has privacy laws i. a nexus between the questions being asked and the aspects of the job (reasonably related to what testing for) (Soroka v. Dayton Hudson Co) ii. However, test is lower for applicant than for actual employee (Why? Employer has greater need of the information, but b/c applicant has no support have greater need of protection) (Loder) c. FEHA cannot refuse to hire on the basis of religious beliefs or making /non-job related inquiry that expresses religious beliefs d. CA Labor Code protect employees right to engage in political activity (including struggle for homosexual equal rights) and prohibit discrimination against employee for sexual orientation Defamation by employer of employee a. Elements of Defamation i. False statement of fact (or opinion as long as opinion implies false opinion of fact) 1. Causes Actual Harm/Loss of Reputation - Deter 3d party from dealings with ii. Publication iii. False (truth but bad statement is not enough) 1. Statement of fact or opinion are treated the same as long as opinion

implies a false opinion of fact b. Defense to Defamation i. Absolute Privilege 1. Complete defense cant be overcome ii. Qualified Privilege (i.e. employer recommendation) 1. Need to protect privilege to speak outweighs interests in reputation 2. If proven, burden switches to plaintiff to show abuse of qualified privilege a. Knowledge statements made were false or with complete disregard for the truth b. i.e. not doing research, stated worked with employee in giving recommendation when didnt c. In Employee Recommendation employer may be held responsible for false positives (teacher didnt molest when did) Employer Protection under At-will Doctrine 1. Fiduciary/Common Law Duty of Loyalty a. Must act solely for the benefit of the employer in work-related matters b. Competing with employer while on the job i. Going after clients of the firm 1. Actions in mere preparation for competing, but not actively competing against employer (Mulai v. Jet Courier) 2. More than telling clients that leaving, attempts to solicit their business (more than just encouraging announcement, must be trying under cut business prices or pushing to switch; taking advantage of insider information) ii. Getting other employees to quit 1. Even if at-will employee, solicitation to get them away with the effect of hurting the employer is a breach of loyalty iii. Remedy: Loss of payments for time spent engaged in disloyal behavior c. Competing with employer after leaving the job: Theft of Trade Secrets i. Trade Secret if 1. Care is taken to protect information by attempting to keep it secret a. Or if information is not common knowledge b. Non-compete clause is an example of keeping it secret 2. Something valuable generally something taking time to create ii. Employers protection for trade secret 1. Legal to do reverse engineering (or to take product apart to figure out how to work it) 2. Illegal to take advantage of insider/confidential status and memorize and copy down information or to take information out of the company (Schulenburg v. Signatrol) a. I.e. Customer Lists - Can contact clients on list, but only if list did not take a long time to make (more specific, more valuable to the company) 2. Non-Competitive Clause (Contractual Right to Employees Competition) a. Contractual provision to prevent competition by employee after finishes working

with the firm i. Policy: Anti-competitive so scrutinized carefully by the courts b. Test i. Must serve protectable employee interest that court recognizes as a justification to keeps them from working in the future 1. REM Metal v. Logan Test: Only information/skill that is developed by the specific company and keeps its value because it is kept secret; narrow test, does not protect much more than duty of loyalty (i.e. not protected if just better at job than others) 2. But Courts can find broader: Protected Interests can include Employers good relations with clients or significant training (even if not secret, just extensive) a. i.e. in Karpinsky, the court recognized the protectable interest of training an oral surgeon that he would not be competed against by the trained surgeon ii. Must be supported by sufficient consideration 1. at the beginning of k, can be in exchange of employment iii. Must be reasonable in time, geographic area, and scope 1. Scope action must be competing against former employer (i.e. oral surgery not dentistry) (Karpinsky) 2. If unreasonable, a. Blue Pencil Approach- rule out unreasonable sections b. Reformation - the court may rewrite the contract to protect interest c. rule the entire contract invalid iv. Cannot unduly harm the public (i.e. no monopolies) 3. Employee Inventions (Implicit or common-law Right) a. Inventive Employees hired to invent i. Assignment of patent to employer 1. Policy: Employee is doing what paid/hired to do b. Non-inventive Employee Job Duty does not include inventing, is done on the side i. If done on own time and with own resources, employee owns the patent even if related to job and competes with employer ii. Done during work hours or with employers resources, employer has shop rights 1. Shop rights common law right to use invention in the workplace (including use and manufacture rights) a. BUT shop right cannot be assigned by employer to someone else (Francklyn v. Guilford Packing) b. OR infringe on employees right to assign/lease the patent himself (Francklyn) i. Policy: maximize inventions by balancing rights of inventor with rights of employer 4. Employee Inventions (Explicit or contractual right) a. Assignment of patent to employer even if non-inventive employee i. If work is unrelated to business, may be unenforceable

ii. Upheld if relates to work, or if made with employers equipment and consideration given for patent b. Hold-over Clause (assigns right to employer to invention after employment has ended) i. Only applies to ideas formed during work and attributable to work 1. Not related to work if gained idea through information available at work, if unrelated to job (not in R&D) ii. Enforced if reasonable in scope and time (Salori Whitmeyer Test) 1. Protect legitimate interest of employer a. But if information taken is not trade secret or does not look like any research being done by the company, employer does not have protected interest in the information/May not be legitimate if does not resemble work being done by employer 2. No undue harm on employee 3. No harm to the public Prohibitions on Status Discrimination Disparate Treatment (or treat differently because of protected class, requires discriminatory intent) - Plaintiff treated differently because of protected classification (race, national origin, religion or sex) (unrelated to work productivity and immutable trait) - McDonnell Douglas/Burdine/Hicks Test o Plaintiffs Prima Facie Case (Hired) In protected class Applied for job that employee was seeking applicants for and the plaintiff was qualified for the job Was rejected despite qualification Position remained open after rejection o Plaintiffs Prima Facie Burden (Fired) Member of protected Class Satisfactorily Performed Job Was Fired Replaced by member of non-protected class o Defendants Burden of Production Give legal evidence that gives reason non-discriminatory reason why plaintiff was not hired/was fired If employer remains silent, P wins o Plaintiffs Burden of Persuasion (Burdine/McDonnell Douglas); Indirect or Pre-Text Argument: Show reasons offered by defendant is false Direct: Evidence showing a discriminatory reason more likely motivated the employer o Plaintiffs Burden of Persuasion (Post-Hicks) Plaintiff does not automatically meet test by showing reason is false (though it might be enough), (Why? Job may want to say poor performance instead of inter-personal reason, so actual reason may not be discriminatory), need to

show discriminatory reason more likely motivated the employer or that all possible reasons for the plaintiff being fired is false Mixed-Motive Cases (Used when direct evidence exists to suggest that a protected category was used to make a hiring/firing decision) o Plaintiffs Burden (Brennans Majority in PWC v. Hopkins) Protected Class was factor in hiring/promotion/firing o Plaintiffs Burden (OConnors Concurrence in PWC v. Hopkins) Protected Class was a substantial factor in hiring o Plaintiffs Burden (Kennedys Dissent in Hopkins) Plaintiff must prove But for causation, but for considering protected class, would be hired (McDonnell Douglas) o Plaintiffs Burden (Civil Rights Act of 1991) Direct Evidence that protected class was a factor o Defendants Burden (Brennans Majority in PWC v. Hopkins) Affirmative Defense that would have made the same decision at the time it was made if illegitimate factor was not considered If Burden is met, Defendant is not liable o Defendants Burden (OConnors Concurrence in PWC v. Hopkins) More likely than not, same result would have occurred if illegitimate factor was not considered (i.e. business reasons) If Burden is met, Defendant is not liable o Defendants Burden (Kennedys Dissent in Hopkins) No burden of persuasion, (Just burden of production (See above)) o Defendants Burden (Civil Rights Act of 1991) Would have made same decision if factor was not considered at the time of the hiring decision (same as Brennans majority) BUT, even if burden is made, court can impose Injunctive Relief Declaratory Relief But no Compensatory (back pay, front pay, or reinstatement) Systemic Disparate Treatment (entire class treated differently by employer); or employer engages in facially discriminatory policy or engages in practice or policy of discrimination, brought by the EEOC or the US o discriminatory motive is necessary o Plaintiffs Prima Facie Case Actual Treatment (% of protected that are of those hired) Expected Treatment (% of protected in qualified labor pool) What is the applicable labor pool? (reasonable) o Relevant geographical area where hired from o AND depending on qualifications for the job, are either qualified for the job OR willing to do the job (use general population for unskilled jobs) Significant Statistical Disparity between actual and expected (or more than 23 Standard Deviations)

Shows inference of discriminatory intent o Defendants Burden of Production Statistics showing plaintiffs statistics are incorrectly measured o If burden is not met, any individual discriminated against can come forward and collect damages Or, if member of the class, applied for job, were qualified, presumption is that you were discriminated against Defendant can only avoid liability if can show proof it did not discriminate against particular person Employee Defenses under Disparate Treatment o Employee Misconduct: Special Test: If during discovery employee discovers information that, if they had known, would caused them to fire the employee irregardless of their protected status, recovery is limited to back pay (not reinstatement or front pay) (See McKennon v. Nashville Banner) o BFOQ Defense (not allowed for race (only national origin, sex, or religion or under the ADEA for age)) (Affirmative Defenses) We didnt hire b/c of protected class, but reasonably necessary to the normal operations of a particular business (i.e. men cant be wet nurses) Narrowly Construed by Courts First Tier: Qualification seeks to modify operation central to business? Or is it necessary? (Should movers need lift 200 lbs.) Key is how the court defines the essence of the employers business: Is the essence of Hooters sex appeal or selling food? Second Tier: More than convenient/reasonably necessary to particular business (or is it a good proxy) (if movers need to move 200 lbs. is it a reasonable proxy to use women as those who cannot) Impossible or Highly Impracticable to deal with employees on an individualized basis All/substantially all cannot complete the required operation Remedies under Title VII (DT) o Right to Jury Trial o Make Whole Relief Back Pay (wages from first incident of discrimination to date judgment is decided) But plaintiff has affirmative duty to mitigate their damages Lost Fringe Benefits o Restatement/Front Pay Compensation for post-judgment effects of discrimination (cant find comparable judge) (front pay used if restatement is not feasible) o Compensatory Damages Emotional Distress, Pain & Suffering, Loss of Enjoyment of Life Capped (so back pay is separate); Large Employer (500 or more employees) capped at 300,000 o Punitive

Determined by State of Mind (Kolstrad v. ADA) Employer engaged in intentional discrimination with reckless or malicious indifference for employees federally protected right (or employer made decisions knowing violated employees protected rights) so often no punitives in BFOQ if felt legitimate qualification No punitives awarded against public employees Note: Under the ADA, no compensatory/punitive against employer who has made reasonable efforts to accommodate the disability o Attorneys Fees available, but only against plaintiff (if defendant wins) if the lawsuit was frivolous or without merit - Remedies under ADEA o Jury Trial Available o May get whole relief or liquidated damages if knew or showed reckless disregard for whether the conduct violated the statute Disparate Impact (no discriminatory intent required) - Employee criteria has disparate impact on protected class (race, national origin, religion, or sex); o Plaintiffs Prima Facie Case (Griggs v. Duke Power Co). Identification of Facially Neutral Hiring Practice Standard must be shown with specificity unless it is incapable of separation Disparate Impact on Protected Group (Statistical Significance) If success for impacted group is 4/5 of the group with the highest selection rate, the claim is actionable Causal Nexus between the Two o Defendants Burden of Persuasion Business Necessity AND practice is job related o Plaintiffs Rebuttal Show other employment practice that can serve the same legitimate business purpose that will effectively test for job performance without the disparate impact; (Defendant does not have to be aware of alternative method) o Exception: Bona Fide Seniority Systems - Remedies o No right to jury trial o Injunctive and Declaratory Relief Only Attorneys Fees available, but only against plaintiff (if defendant wins) if the lawsuit was frivolous or without merit Remedies for Disparate Treatment/Disparate Impact for Individuals - Under Respondaet Superior, company can be vicariously liable for actions of employees (balance incentive to control employees and feeling actions may be uncontrollable); So employer is liable if o Employee is acting in managerial capacity (hiring/firing) o UNLESS, actions are contrary to good-faith efforts on part of employer to comply with Title VII (must be more than just policy that complies, but active enforcement of policy)

BUT liability is limited to company (Supervisor cannot be individually liable) under Title VII and ADEA (Note: Title VII does not apply to small companies with less than 15 employee) o Why? Paperwork can be financially burdensome on small employers; AND employee of small firm can be wrongful discharge claim in violation of public policy Sexual Harassment - Quid Pro Quo Claim o Quid Pro Quo (rejection of sexual advance) o AND tangible employment harm (not promoting, firing, failure to promote, reassignment, with different responsibilities change of benefits) What is tangible employment harm? Extra work, inappropriate assignment, or denied opportunity to attend conference is not enough, but losing files/office/secretary is enough to appear like a demotion so is (key for vicarious liability) o Nexus between the two o Under quid pro quo, employer is vicariously liable for employee action if employee caused tangible employee harm - Hostile Work Environment (Actionable under Title VII) o Unwelcome conduct motivated by sex o That is sufficiently severe or pervasive to change work environment into hostile work environment o No tangible employment harm needs to be shown o Note: some courts have started to equate discrimination that is sexual in nature under hostile work environment, not because of gender. So in same-sex discrimination, look to evidence of homosexuality/physical attraction o Test to establish cause of action (See Meritor Savings Bank v. Vincent) Conduct was severe or pervasive to alter condition of plaintiffs employment Was environment reasonably perceived and was perceived as hostile/abusive (look to totality of circumstances) (Harris v. Forklift Systems) o Frequency/Severity of conduct o Harshness of Conduct (physically threatening or mere offensive utterance) o Whether unreasonably interfered with work o Effect on employees psychological well-being is relevant to determining whether plaintiff found environment abusive (but not necessary) Conduct altered plaintiffs employment and created hostile/abusive work environment Conduct was unwelcome and based on plaintiffs sex or gender o Vicarious Liable? If supervisor, (see above test) Yes, but affirmative defense is: o Employer acted with reasonable care to prevent and promptly

correct any sexual harassment behavior o Plaintiff unreasonably failed to take advantage of any corrective or preventive opportunities offered by employer If co-employee is harassing Employer knew or should have known of harassment and did nothing about it (negligence standard) - Same-sex Harassment (clarified in Oncale; but only if it can be actionable not how the claims are analyzed or when actionable) o Objective test to show severity of harassment o Still must prove sexual harassment because of sex to be actionable Hetrosexual motivated by hostility towards member of own gender (treated differently than members of opposite sex); cannot be towards particular member of opposite gender OR Harasser was Homosexual; was the nature of the conduct explicitly sexual or evidence that occurred b/c of sex or that homosexual OR Comparative Evidence direct evidence between both genders in sex-mixed workplace o Note: no protection for sexual orientation in Title VII - Pregnancy Claims; Title VII prohibits differential treatment unless it is a BFOQ o General Approach to Claim Sameness/Difference Approach: Like claims should be treated alike; So discriminating by pregnancy is okay because pregnant women are different than non-pregnant men and women (See GE v. Gilbert S.Ct) (Of course, if compare pregnant women to other disabled, may allow compensation under sameness/difference) Inequality Approach: Instead of looking to sameness (since women and men are often different), look to whether treating the same disadvantages one gender over another (same opportunities) o Pregnancy Discrimination Act (in response to GE v. Gilbert) Discrimination on the base of pregnancy is sex discrimination Discrimination on the basis of pregnancy, childbirth, or related condition is sexual pregnancy Women affected by childbirth, pregnancy or related should be treated the same for all employment questions as nonpregnant women similarly situated with respect to their ability or inability to work o So tension between two clauses, first suggests no discrimination because treatment, second (favored by courts) suggests treat as other disabled But PDA was meant as floor of treatment of pregnant, state can create statute giving Advantage over other disabled Discrimination against Disabled 1. Acts a. Rehabilitation Act i. Applies to Federal government, federal contractors, and parties receiving federal funds

b. ADA i. All employees with 15 or more people c. FMLA (some protection see below) i. Disabled have mandated unpaid leave (only to 12 weeks, whereas ADA could be longer if reasonable and does not cause undue hardship) ii. Unlike, ADA where employee does not require to give leave for relative of disabled even if reasonable, mandatory 12 weeks provided by FMLA 2. Rule even if person cannot perform essential function of job, as long as could do so with reasonable accommodation cannot be discriminated against (affirmative burden to accommodate) a. Does individual have a disability? What is a disability? i. Physical or mental impairment that substantially limits one or more major life activities 1. Physical or mental condition = disorder outside normal range of physical/mental conditions (not brown or blue eyes) 2. Substantial limits = temporary condition does not substantially limit (i.e. broken arm) 3. Major life activity = Ability to work (not just one job/employment in general, so being afraid of falling out of trees is not a disability b/c can still do many jobs not in trees), walk, see, hear, and sometime reproduce ii. OR has a record of an impairment 1. Note so recovering drug addict is protected, but not when on the drugs (of course, when is addict rehabilitated enough) iii. Regarded as a person with a physical or mental impairment 1. Purpose is to avoid stigmatization of having illness b. Is the individual qualified for the job i. Qualified if can perform Essential Functions 1. Essential = core feature of job a. Based upon employers idea of feature AND b. What kind of job performed in industry at large i. Frequency with which it is performed ii. Amount of time spent on task iii. Whether performed in past by former occupier of position ii. With or without reasonable accommodation 1. Burden is on the plaintiff to prove reasonable acc. poss. 2. Impose more than diminimus burden, but not if imposes undue hardship on employer (Nelson v. Thornburgh) OR if burden of accommodation is greater than its benefit (See Vande Zande v. State of Wisconsin Dept. of Administration) Affirmative Action 1. Can the plan withstand challenge under Title VII to sex or race based decision on voluntary affirmative action plan? a. Test (See Johnson v. Transportation agency) i. Existence of manifest imbalance that it was designed to remedy in traditionally segregated job category 1. Compare % in particular category to % in relevant labor pool (majority

in Johnson suggest not as strong as in prima facie for systemic or 2 or 3 standard deviations between actual and expected (though what OConnor in concurrence wants) 2. But manifest imbalance cannot remedy when minorities/women lack skill in career 3. Moreover, if no statistical dilemma, AA plan cannot be used to support role-modeling/diversity decisions (see Taxman v. Board of Education) ii. Must not unnecessarily trammel rights of non-minority workers 1. Courts look to whether the party was fired/lost retirement benefits, whether the plan is gradual (case-by-case), and whether it takes position from party with right to the job 2. Can the plan withstand Constitutional challenges (5th/14th) (See Adarand Constructors Inc. v. Pena) a. State-imposed or orderd by the court, or regulated by governmental actor, normally it will come under Constitutional standard b. Note: Plan based on sex has lowered scrutiny than if the plan is based on race (strict scrutiny) c. Even if plan is remedial/offensive, or if under 5th or 14th, strict scrutiny is always applied Regulation of Compensation Fair Labor Standards Act (FLSA) 1. Coverage a. Applies to vast majority public/private, claim can be brought by secretary of labor/private i. Individual Directors can be held liable under FMLA: 1. Any person who acts, directly or indirectly, for the benefit of the employer to any employee (Economic Reality Controls) 2. Needs to have operational control of a significant aspects of the companys day-to-day business b. Individual states may have higher minimum wage law (not pre-empted) c. Only covers workers, not independent contractors i. See Secretary of Labor v. Lauritzen (Section 1) d. Exemptions (See Dallheim v. KDFW-TV for example of application); only preempted from over-time/minimum wage) i. Exemptions are very fact-specific (apply to each individual separately, not to job type) ii. Primary Duty = 1. More than 50% of time spent on it OR 2. other pertinent factors that support the conclusion iii. Executive Employee Exemption 1. Primary Duty is the management of the enterprise in which she is employed or customarily recognized subdivision thereof (participate in decisions of consequence) 2. Customary and Regular Direction of Two or more employees (Training, Supervising, Evaluating, or Disciplining Employees) iv. Administrative Employee Exemption

1. Primary Duty is office or nonmanual work 2. that is directly related to management policies or general business operation (substantial importance to business ops because involves major assignments in conducting the operations of the business or affects business operations to a substantial degree) (not just doing job poorly could cost the business money); i.e. business policy, salaries, promotions 3. Includes work requiring discretion and independent judgment v.Creative Employee Exemption 1. Primary Duty is creative or original in character 2. in a recognized field of artistic endeavor 3. which depends primarily in the talent, invention, or imagination of the employee vi. Tacking 1. Employee performs more than one type of work that would exempt except that a. Neither one can be considered the primary duty b. All of the exempt work taken together constitutes the primary duty 2. Establishes a minimum wage a. Employer does not have to pay on hourly wage, but amount received must be at least the minimum wage i. Effect of Minimum Wage workers either get paid more or get fired (b/c employer cannot afford as many employees) b. Compensation based on amount earned in a weekly period (Marshall v. Sam Dells Dodge Corp.) c. Benefits and Deferred Compensation should be factored into week received, not pro-rated (Marshall v. Sam Dells Dodge) d. What is counted as compensation? i. Not compensation if primary benefit of payment is to employer (Marshall v. Sam Dells Dodge); Instead should be 1. Primarily for the benefit of the employee 2. Accepted voluntarily by the employee 3. And are a kind customarily furnished by the employer or other employers engaged in similar activities. ii. Discretionary Bonuses (like Christmas bonuses) are not included in total e. What does employee receive in damages if underpaid? i. Difference between minimum wage and what paid 3. Requires Compensation for Overtime a. Entitled to 1.5 times regular pay for hours worked (not counted) over 40 hours b. Purpose spread work (more employees are hired rather than hire one and work long hours)and compensate employee for strain of working more than 40 hours c. Because of purpose, employee must receive the pay for work, not fringe benefits (Dunlop v. Gray-goto); d. Agreement to not have overtime between employee/employer is null and void (Dunlop v. Gray-Goto) e. Public Employee Exception can receive compensatory time for time worked

over 40 hours as long as receive 1.5 off for every hour worked, as long as employee cannot accrue more than a certain number of compensatory hours (normally 240); and the time is granted unless it would unduly disrupt the workplace f. Coverage some employees who are entitled to overtime, are not entitled to overtime, including car sales people g. Compensable Time i. Whenever physical/mental exertion is controlled or required by employer and pursued necessarily and primarily for his benefit 1. Before and Work time is not compensable, but coffee breaks are ii. On-Call Time 1. Look to Totality of Circumstances 2. Can the employee use the time effectively for his own purposes? a. Commuting is not compensable, coffee breaks are b. If only required to be within 20 minutes of work at all time, not compensable b/c of freedom, even if 24-7 for 11 months (Bright v. Houston); but compare to Renfro firemen received overtime for on-call time, 24 hours (be within 20 mins, even though 1/3 maintained second jobs). (KS) c. But employers may respond to paying for more compensable by lowering overall wage rate 4. Restrict Ability of Child Labor (not covered) 5. Enforcement tends to be underenforced a. Employers gain from not complying (lower salaries) UNLESS i. Skilled workers; or with long tenure turnover from not receiving adequate compensation may be high ii. OR the penalty for being caught is made sufficiently high b. Claims are only brought by employees who believe not receiving due, and if employee wants more over-time may not seek compliance Family Medical Leave Act (FMLA) (1993) (administered by DOL with claims brought privately or by DOL) 1. Requirements a. 50 or more employees b. Individual Directors can be held liable under FMLA: i. Any person who acts, directly or indirectly, for the benefit of the employer to any employee (Economic Reality Controls) ii. Needs to have operational control of a significant aspects of the companys day-to-day business 2. Cover extended period of leave, not short-term absences that can be covered by sick leave 3. Provides 12 weeks of unpaid leave for: a. Birth or adoption of a child b. Need to care for spouse, child, or parent with serious medical condition OR c. Employees own serious medical condition that precludes them from being able to work i. An illness, injury or medical condition that involves

1. Inpatient care (overnight) in hospital OR 2. Continuing Care (more than 2x) by health care provider 4. Eligible employee has the right to be restored to her position, or to an equivalent position, following the qualifying leave a. However, if do not return from leave, COBRA Benefits begin the next day 5. Elgibility Requirement a. Must have worked at least 12 months for employer b. Must have worked 1250 hours in the 12 months preceding the leave c. Notice Requirement i. If unforeseeable, at least verbal notice of leave and anticipated timing 1. Burden on employer to inquire for more information 2. But more should be provided by employee if can be done so practically d. Certification by medical provider can be required by employer BUT i. Employee must give within time frame of employer, not less than 15 days, and if refuse can be fired ii. Employer must seek certification soon after leave begins and in writing iii. Must advise employee of consequence of not providing 6. FMLA Right cannot be limited by collective bargaining agreement or employee benefit plan (such as an employee handbook) 7. Employee should post, and keep posted a notice setting forth pertinent portions of the FMLA, otherwise a. Civil Fine b. Estopps employer from taking adverse action against the employee 8. Remedies a. Compensatory - Lost wages, salaries, employment benefits, or others lost or denied as result of violation b. Interest on Compensatory c. may get liquidated damages equal to monetary damages and interest UNLESS court concluded acted in good faith b. Employer may be civilly fined if fail to post a notice setting forth the pertinent parts of FMLA (and estopped from taking action against an employee) Unemployment Compensation 1. Characteristics of the Program a. Policy: Provide temporary/permanent wage replacement for workers who experience unemployment for no fault of their own i. Provides cushion for unemployed ii. Gets employed back into work force as quickly as possible (or does it, as cushion gives incentive to wait for best job) (higher benefit longer return to work) iii. But also maximizes value of worker in workplace b. Insurance Policy temporary insurance policy to replace part of what lost if fired for no reason of their own c. Taxation Program administered through taxation program; i. Employers receive credit for tax paid to state UI program

ii. States tax at different rates based on their experience rating (or how many UI claims are filed against them) 1. Gets employers to recognize cost of firing d. In general, eligible for 26 weeks of benefits, or up to 50% of wages up to statutory cap (generally -2/3 average weekly wages in the state) 2. Eligibility for Workers Compensation a. Prior Attachment to Workforce (calculated by states, based on pay and how long person has been employed) b. Involuntarily Terminated i. Disqualified if fired for misconduct 1. McCourtney v. Imprimsis Test Willful or Wanton Disregard for employers interest or conduct demonstrating a lack of concern by the employee for his/her job a. So even though sick child caused McCourtney to miss job 71% of the time, b/c in the past, rarely absent and attempted to find alternative to missing work b. But concern is that this still affects experience rating, causing employer to keep her on at higher cost rather than pay higher tax (here employer is sympathetic b/c did not fire right away) c. Other example: in interview, dont ask dont tell rule (not willful misconduct ot not reveal information in interview) ii. OR if voluntarily quits employment (good cause standard) 1. Wimberly Test did plaintiff leave work for reasons not causally connected to the work or the employer (i.e. discriminated against) a. In Wimberly, applying the sameness/difference approach says pregnancy is not covered by UI 2. MacGregor Test Such cause as would, in similar situations, reasonably motivate the average able-bodied and qualified worker to give up his or her employment with its certain wage rewards in order to enter the ranks of the employed a. Leaving to follow father of child (who lived together for 7 years) to care for elderly father is good cause b. Normally want to discourage parties from leaving job without having another job lined up, but governments policy of supporting keeping families together outweighs this (but not that of non-marital couples, though perhaps married would) c. With satisfaction of Work-Search Requirement i. Eligible for AND actively seeking work ii. PA Rule employee is ineligible to receive benefits any week where failed (See Knox v. Unemployment Compensation Board of Review) 1. Without good cause a. Good faith claimant cannot attach such conditions to his acceptance of work as to render him unavailable for suitable work 2. To apply for work at such time and in such a manner as the department may prescribe or to accept suitable work offered to him by the

employment office 3. WARN Act a. Policy created to diminish harmful affects of plant closing (on workers and on the community in general) b. Provisions i. Covers employees with 100 or more full-time employees ii. Definition of Employment Loss 1. Termination of Employment that is not discharge for cause, voluntarily quitting or retirement 2. For more than 6 months OR 3. greater than 50% reduction in work hours over a 6 month period iii. Requires 60 days notice of 1. Plant Closings a. Single site of employment that is permanently or temporarily closed b. AND the shutdown results in employment loss for 50 or more employees for more than 30 days 2. OR Mass Layoffs a. A Reduction in Force (RIF) (not result of plant closing) b. Results in employment loss at a single site during 30 day period i. BOTH at least 33% of employees and more 50 workers fired ii. OR at least 500 workers are fired iv. EXCEPT 1. Faltering Company Exception a. Only applies to plant closing b. Company must give as much notice as possible, but because notice might reduce chance of getting financing 2. Unforeseeable Business Circumstance Exception a. Applies to both plant closings and RIF b. Still must give as much notice as practical, but is not required to give 60 days if caused by business circumstances not reasonably foreseeable at time when notice would have been required i. Department of Labor Regulations define reasonably foreseeable as if caused by dramatic, unexpected action outside of employers control c. Remedies But Company can buy out violation from employees, so may not be issue (no standing) i. Up to 60 days back-pay/benefits to employee ii. Attorneys Fee iii. Civil Penalty of up to $500 a day of inadequate notice Employee Benefits ERISA 1. ERISA Pre-Emption (applies to both pension or welfare plans) a. Supercedes any or all state laws as they now or in the future relate to an employee benefit plan UNLESS b. Insurance Savings Clause; regulating insurance, banks or securities

c. HOWEVER, a Deemer Clause exists i. Savings Clause does not include employee welfare benefit plans because not insurance company for the purpose of the savings clause ii. Consequently, in-house (self-insured) plans are pre-empted, but contracting out for insurance is not so can be regulated by the states (Met Life Insurance v. MA) 2. Welfare Benefit Plan provide fringe benefits, such as vacation plans, health insurance etc. (Immediate Benefits) a. Less broad regulation than pensions - Pre-Emption bigger deal b. Portability i. COBRA employers with twenty or more employees must continue providing coverage from 18-36 months from the time of the event (for participants, firing (unless fired for gross misconduct); spouses death/divorce/legal separation; dependent loss of dependency status) 1. Why? Because many insurance providers will not cover old illnesses or have statutory period to fulfill before receive coverage and insurance is too expensive to self-insurance ii. HIPPA 1. Group health plans cannot impose pre-existing condition limitation on coverage for more than 12 months (and 12 months is lowered by creditable coverage under other health plans); and cannot have eligibility rules/higher premiums, based on health-related factor 2. Insurers operating in small group market must issue insurance to all small employers and to accept all eligible individual (unless specified stautory exception) 3. Insurers who offer insurance to individuals are required to insure eligible individuals a. Or people who have been covered for at least 18 months under a group health plan, who do not have health insurane, and who are not eligible for other group health insurance iii. Adverse Selection Problem with Portability Plans 1. People who are more likely to take advantage of plans are those with serious health problems, increasing benefits paid out, increasing premiums to all insured parties c. Health Insurance for Disabled i. Same discrimination test as under Pension 1. Retaliation from Exercising right entitled under the plan 2. Discrimination from attaining right that participant may be entitled under the plan a. Plaintiff: Prohibited Employee Action taken to interfere with right b. Def: Non-discriminatory Action c. Pl: Reason is Pre-Text for Discrimination ii. But more difficult to prove than pensions because participant has no entitlement to any level of benefit whereas in pension entitled to full benefit if work until 65 (See McGann v. H& H Music Coverage for AIDS related illness lowered from 1 million to 5 thousand after employee got AIDS; could

not prove pre-text because no proof targeted against employee with AIDS) 1. UNLESS court takes the position that employer cannot reduce benefits for employee who at the time were in the course of medical treatment that is covered by the plan 3. Pension Benefit Plan (Deferred Compensation) a. Deferred Compensation that does not vest until money was given (historically at least see McNevin v. Solvay Products) b. Policy for Creating Government Control over Pensions i. Employee Ignorance Employees often dont know how to maintain their pension coverage (especially if complex, often leads to many denials) ii. Employer Opportunism Employers terminate employees right before vesting to keep from being eligible iii. Lack of adequate insurance for employer - If employer went bankrupt, pensions were often lost unless they were insured c. Types i. Defined Benefit Plan - Employee contribute enough to give set amount of pension (determined by length of service and amount of final salary) ii. Defined Contribution Plan - Employee contribute set amount to pension plan (may give more or less money to employee depending on how the economy is performing) d. Federal Standard i. Minimum Participation ii. Anti-Discrimination ( 510) 1. Prohibits Retaliation against parties making benefit claim 2. OR discrimination to prevent party from receiving benefits in the future a. Plaintiffs Prima Facie Case (See nemeth v. Clark equipment Co) i. Discrimination - Show some kind of prohibited employer conduct was taken for the purpose of interfering with a planned right b. Defendants Burden of Persuasion i. Non-discriminatory reason for action (i.e. closed plant with more closer to retirement to decrease overall costs) c. Plaintiffs Burden i. Prove the reason for action was pretextual 1. Failed in Nemeth b/c difference in cost between plants made them close it without worrying about pensions ii. Note: Nemeth suggests that employer would have to favor pensions over wages in deciding which to close (unless cost is substantial without wages), why? 1. Younger workers can get another job, while older cannot and still retain pension iii. Pensions and Surviving Spouse (Generally the Wife)(See Lorenzen v. Employee Retirement Plan of Sperry & Hutchinson) 1. QJSA - Generally, Participant Spouse receives 100% of annual annuity, after death, non-participant spouse receives annual Qualified Joint and Annual Survivor Annuity (unless participant choses to get lump sum

payment) 2. QPSA (Qualified Pre-retirement Survivor Annuity) or annual annuity commencing when participant would have retired equaled to what participant would have received at retirement 3. Fiduciary Obligation to get spousal approval before agreeing to give out lump sum payment (Lorenzen) 4. Note gender inequality, if traditional split of labor, husband still is the sole owner of the pension plan iv. Gender Inequality - However, ERISA was amended so that time continues to accrue during leave for birth, pregnancy, or adoption of a child 1. Moreover, b/c women typically work less-paying jobs for less hours, a year of service is now 1,000 hours or 20 hours a week v.Fiduciary Duty and Pension 1. Fiduciary Obligation to get spousal approval before agreeing to give out lump sum payment (Lorenzen) 2. Fiduciary shall discharge duty with respect to plan solely in the interest of participants and their beneficiaries a. Must act for the exclusive purpose of providing benefits to participants and beneficiaries b. With the care, skill, prudence, and diligence as a prudent person acting under reasonable circumstances c. By diversifying investments d. And in accordance with plan documents 3. Ballone v. Eastman Kodak test: Fiduciary has breached duty in informing participants if a. Representations made b. That were misleading c. And induced participants to rely on them d. But 3d circuit found for similar facts (HOckett v. Sun Co.), no fiduciary duty to disclose information about incentive program unless under serious consideration (but suggests still no inconsistent statements, cant say not thinking if they are) 4. Who has fiduciary obligation? a. Exercises discretionary authority or control over plan management (controls funds where are going) b. OR has discretionary authority or responsibility in plan administration (decides who is covered or not: Most important) c. Provides investment advice for plan for a fee Prevention and Compensation of Workplace Injuries and Diseases - Goals of Health and Safety Measures (Prevention of Injuries, Compensation of Workers if become Ill - Responses to Problem (Measured in Adequacy, Efficiency, Equity(how treat similarly situated parties) o Workers Compensation (See Below) o OSHA (See below) o Labor Market Worker will receive risk premium in the form of higher wages in

more dangerous occupations Because employer is paying more for labor, has incentive to make workplace safer Compensation is ex ante (before injury) Adequacy: compensation may be lower than full amount because Unbalanced bargaining power between employer and employee Employee has incomplete information about the risks of the job Employee does not bear all the risks (some borne by Medicaid/Public Welfare), so employee may not demand adequate risk differential Moreover, workers tend to not worry about future problems Equity All parties receive the same irregardless of whether they are injured or not (and union workers may receive more than non-unionized) Efficiency no burecracy involved/legal cost of liability, people just vote with feet o Tort System Adequacy Often difficult to prove no assumption of risk, contributory negligence, other element of negligence But if receive, very adequate (include pain and suffering) Equity People who win do very well (all or nothing) Efficiency Costly for all parties to bring and for the state to process; takes long time to process One Response is Employer Liability Statute Employee still must show negligence BUT gets rid of some common law defenses o Fellow Servant Rule injury caused by another employee o Moved from Contributory to Comparative Negligence o No Assumption of Risk (knew of risk entering job market) Workers Compensation 1. General Information provides benefits for all workers injured at work that reduces earnings and causes some ongoing medical expense; a. Original Law held unconstitutional for taking and violate due process (b/c exclusivity giving full recovery for injury), but Court held later valid b/c lawmaking body can change common law rules and as for taking, employers and employees benefit from law b. Trade increase in number of claims receive coverage for decrease in the amount of benefits paid i. So some employees with marginal injuries are hoping to convince court to include in coverage ii. But others are trying to convince court to release from coverage (so can sue in tort under exclusivity) c. Coverage i. Designed to only cover employees (See Intro), not indep. Contra. ii. States have exemptions for certain parties d. Injured Can Recover (More indepth see 957-58) i. Full medical benefits without cost to worker

ii. Disability Benefits (tied to statutory cap, how long injured etc.) iii. No recovery for pain and suffering e. Adequacy - Not as high as under Tort, because no pain and suffering and amount recoverable is tied to statutory cap f. Equity - Treat same injury the same way (except if in different state), but really negligent may not recover more than not negligent g. Efficiency - More efficient than tort, but requires burecracy and difficult cases still wind up in court 2. Exclusivity Provision a. Workers Comp is exclusive remedy against the employer UNLESS the injury was intentional i. Or that the employer knew the injury was substantial certain (Millison v. E.I. du Pont initial exposure to carcinogen not covered (single-injury), but once knew of injury cannot hide from employee by changing result in physical (dual injury)) b. Exclusivity Provision covers both emotional and physical injuries as long as both are work-related (or arises out of and during course of employment) even if injury did not affect earning/caused on-going medical expense, so some employment suits for injuries at work are pre-empted by ERISA (See Livitsanos v. Superior Court) i. Courts split over affect on work-related tort suits (i.e. defamation), no preemption of deceit/fraud c. Normally, exclusivity forbids from suing 3d parties. However, may still sue parties in unofficial capacity (even though it may mean less money) 3. Special Diseases a. Diseases with a long latency period (how do you connect them to employment when exposed to multiple chemicals at multiple companies?) i. SOL bars recovery against normally anyone but current/last employer (Tisco Intermountain v. Industrial Commission) ii. Moreover sol starts from exposure ot the risk, not from manifestation of the risk (may not known when injured) (Cable v. Workmen Comp App. Board) 1. Do we like this rule? Balance evidence of exposure may be gone by the time the injury is manifested/may be exposed by multiple employers with possibility still may be able to prove exposure from iii. One reason why Court may allow less stringent test for OSHA requirements concerning health rather than safety b. Stress-related Diseases no physical event to cause injury or physical manifestation of injury; i. Chicago Board of Education v. Industrial Commission Test 1. Employee must establish causal connection between workplace stress and mental disability 2. Must arise from greater than day-to-day stress (extraordinary condition) 3. Stress must be objectively extraordinary ii. Lapare v. Industrial Commission- Stimulus of Breakdown must be sudden event iii. Kelly Case - treat like physical disability (Eggshell Plaintif)

iv. Some states have no recovery for stress-related diseases v.Other options: 1. ADA, but only if it is an impairment substantially affecting major life activity (and if only one boss causing, cannot recover) 2. FMLA If serious disorder (with certification from health care provider), than may receive 12 weeks of unpaid leave 4. Test for Coverage under Workers Compensation a. Injury i. Affects earning/caused on going medical expense b. Resulting From an Accident i. Problem with Back Injuries, does not normally come from injury (See p. 1052) c. That Arose out of Employment (Causal Connection between employment and injury) i. Determine the Category of Risk 1. Occupational Risk virtually compensable under Workers Comp a. Directly Associated with Work/Employment 2. Personal Risk virtually not compensable a. Directly Related to Person, not Employment b. Money v. Coin Depot Corp. (security guard playing Russian Roulette is personal risk) (How compare to other horseplay case; Prows, maybe because it was accepted) 3. Neutral Risk ii. If Neutral Risk, Determine Type of Risk 1. Act of God/Nature 2. Assault by Stranger 3. Street Risk (bitten by dog) 4. Unknown Cause iii. Determine Legal Doctrine Used in Jurisdiction 1. Proximate Cause Harm must be foreseeable and have unbroken chain of causation (old test; not applied today) a. Problem is with intervening causes 2. Peculiar Risk Peculiar or Specific to the Workplace 3. Increased Risk Increase Risk beyond what the normal population experiences a. See Hanson v. Reichelt Lower Court denied denied for heat stroke for bailer of hay because all population is exposed to risk; or Nippert lower court, held working in area when tornado struck no more at risk than general population 4. Actual Risk Risk has to be actual risk of employment a. Hanson (reversed, should apply increased risk) Actual risk of employment when bailing hay in hot weather is heat stroke 5. Positional Risk (But for employment, would not have been injured) a. Nippert (S.Ct.), but for working in the shed, would not have been injured by the tornado d. And Occurred in the Course of Employment (or the time, place, and activity

engaged in when accident took place) i. Mixed Social and Business Activities 1. Had to subjectively believe participation was required 2. AND the belief was reasonable (See Ezzy v. Workers Compensation participation in softball required b/c boss asked to join team, firm sponsorship of everything, and more pressure on women to play) ii. Horseplay (See Larsons test applied in Prows) 1. Weighs extent/seriousness of deviation a. Look to type/duration of activity (at time) (rubber bands v. heavy machinery) 2. Completeness of Deviation a. Culminates with work employed for (attacked while working, just natural response to attack) 3. Horseplay was Accepted a. Frequent enough to become part of employment b. Employer knew of actions but did nothing to stop it 4. Nature of Work would be expected to include horseplay a. Foreseeability: What do you expect when you put people with rubber bands iii. Going and Coming Rule 1. In general, Injury that occurs during the commute does not fulfill the course of employment test up until arrives at place of employment UNLESS 2. Premise Line Doctrine Injuries sustained in close proximity to employers premise (or a reasonable margin of time and space necessary to be used in passing to and from place work is to be done), b/c employment may created a field of danger for those coming/leaving work 3. Wage Payment or Travel Expense Exception Employers compensation for commuting time implies an agreement that employment relation shall continue during c/g 4. On way to second job-site (but in Santa Rosa Junior College v. Workers Comp, must be something required by employer, not just taking work home with you) 5. Special Mission (Ehrgott v. Jones plaintiff was injured will be driven to the airport for work-related convention by co-worker) a. Required by Employer to go b. Engaged in Duty Assigned to him iv. Manifestation of Injury 1. Normally court looks to where the injury occurs 2. However, court sometime look to the origin of the injury (See Technical tape Corp. Worker intoxicated by working in drum got injured when crashed his car immediately after intoxication) if but for the origin, the injury would not have occurred (even if injury occurs outside of work) 3. But extended only if employer created risk (compare Snowbarger (employee forced to work 86/100 hours during emergency was

compensated when fell asleep at the wheel) to Krushwitz(no compensation when fell asleep at the wheel for volunteering to work a second shift) OSHA (1970) 1. Purpose: Protecting Workers Health and Safety, not minimizing impact of regulations 2. Applies to all employers whose businesses affects commerce EXCEPT a. Unless covered by other federal safety legislation (RR workers) b. Federal Employees, Small Farms, state emp. (unless covered by state plan) c. Small Employers (with ten or fewer employees) with good safety records are exempt from regular inspections d. OR can opt out if state enforcement plan has been approved by feds e. If small entity (100 or fewer employees), special protection includes reimbursement for fees if OSHA acted unreasonable and lower penalities or waiver of penalties for small 3. State Enforcement Plans a. OSHA preempts most state and health activities if OSHA has regulation promulgated on the hazard or in the same general field as OSHA UNLESS i. State agency is designated to run the program with sufficient funds and legal authority ii. State health and safety standards are at least as effective as Fed. b. If no OSHA standard, states are free to regulate c. Dual Impact Laws (Laws with purpose besides health and safety) i. Pre-empted if substantially and directly regulate occupational health and safety (See Gade v. National Solid Waste Management) 4. General Duty Requirement Duty to Furnish employees a place of employment free from recognized hazards causing or likely to cause death or serious physical harm to employees a. Elements i. Employer has to keep workplace free of hazard ii. Hazard has to be recognized iii. Hazard has to be such as causing or likely to cause death (See National Realty and Construction Co.) iv. Hazard must be Preventable (or elimination is feasible) b. Citations are issued by number of violations, not by number of injuries (Reich) c. General Duty and Safety Standards i. Cannot be fined if in compliance with the permanent standard relating to the same hazard ii. However, because standards are hard to implement/increase, So some use United Auto Workers Rule 1. Can be fined in applying permanent and still causing harm to the employee 5. OSHA Safety Standards shall set standards which most adequately assures, to the extent feasible, that no employee will suffer material impairment of health or functional capacity (for health) a. Technological Feasibility in the near future (AFL v. Brennan)

i. Technology needs to be possible, and not so overly expensive as to force noncompliance or putting an entire industry out of business b. Economic Feasibility (AFL-CIO v. Brennan) i. Significant Harm to the entire industry, not to individual firms who have not kept up with the latest technology ii. Upgrading or working conditions, not complete elimination of hazardous occupations was Congresss intention c. Health or Safety Benefit to Workers i. Threshold burden: Significant Risk Test (Benzene Case) 1. Current level of exposure to substance constitutes significant risk (S.Ct. sets around 1/1000 chance of death or serious injury from prolonged exposure) 2. Demonstrates by substantial evidence that new standard would eliminate/reduce risk 3. Burden is on the Secretary of Labor ii. What kind of information? 1. Epidemological Studies (of humans)- Direct Evidence, but often not of the correct level of carcinogen, or exposed to many different car., or not large enough of sample (b/c dangerous and expensive 2. Animal Studies tend to expose too high levels and project to lower levels and extrapolation from animal to human is controversial 6. Cost-Benefit Analysis (See Cottondust Case) a. Only subject to cost-benefit analysis if created as an occupational health or safety standard (not if falls under 6(b)(5) toxic materials or harmful physical agents) i. Why different? Because workers harmed by safety are protected by workers comp, while may be unable to for health problems b. 3(8) - should be reasonably necessary or appropriate to provide safe or healthful; Courts have not stated how they will read 3(8) alone 7. Variances from standards may be granted (1) temporarily if cannot meet standard in time as long as promise to protect employee in interim and can be complied as soon as possible or (2) permanently if employee has provided alternative workplace that is as safe if standard was complied with Arbitration Contract 1. Enforce just like any other contract (Gilmer v. Interstate/Johnson Lane) a. So if in contract has arbitration clause will be enforced b. Unless intent in statute suggests Congress wanted statute to overrule arbitration clause (i.e. held in ADEA) c. And agency did not waive right to bring suit on behalf of employee (EEOC v. Waffle House) 2. Except contract for employees in motion of inter-state traffic are exempted (Circuit City v. Ames) 3. Benefits of Arbitration a. Lowers Legal Bills b. Speedier Process for Redress c. Keeps Claim Quiet 4. Problem with Arbitration

a. Arbitrators paid by employee and parties chose arbitrator (Repeat Player Problem); so incentive to be biased towards employer b. Unequal Bargaining Power suggests employee may not want arbitration (Contract of Adhesion)