Chapter 11: Employment and Labor Law
Learning Objectives
- Explain the employment-at-will doctrine and its exceptions, including wrongful discharge based on public policy, implied contracts, and whistleblower protections.
- Describe the main federal statutes governing wages, hours, leave, workplace safety, and benefits (FLSA, FMLA, OSHA, ERISA, and workers' compensation).
- Explain the National Labor Relations Act and employees' rights to organize, bargain collectively, and engage in concerted activity.
- Analyze claims of discrimination under Title VII, the ADEA, and the ADA, including disparate treatment, disparate impact, harassment, retaliation, and reasonable accommodation.
- Evaluate employer practices around employee privacy, monitoring, drug testing, and immigration compliance.
Week 11. Chapter content to be written. The description below sets out what the chapter will cover.
Employment relationships are one of the most heavily regulated parts of business. Building on the agency chapter, this chapter covers the employer's legal obligations from hiring through termination. It focuses on what every manager needs to know to avoid creating liability for the organization.
11.1 Planned Sections
Employment at Will. The default rule and its exceptions: implied contracts (including handbooks), the implied covenant of good faith, the public-policy exception, and whistleblower statutes. Wrongful discharge claims.
Wages, Hours, Leave, and Benefits. The Fair Labor Standards Act (minimum wage, overtime, exempt and nonexempt employees, and child labor); the Family and Medical Leave Act; COBRA and ERISA; Social Security and Medicare; and unemployment compensation.
Workplace Safety and Workers' Compensation. OSHA's general duty clause, standards, and inspections. Workers' compensation as a no-fault system and the exclusive remedy rule.
Labor Law. The National Labor Relations Act, the NLRB, union organizing and elections, collective bargaining, strikes and lockouts, unfair labor practices, and protected concerted activity for nonunion employees (including social media posts).
Employment Discrimination. Title VII protected classes (race, color, religion, national origin, and sex, including pregnancy, sexual orientation, and gender identity after Bostock). Disparate treatment and disparate impact. Sexual harassment (quid pro quo and hostile environment) and employer liability. Retaliation. The Age Discrimination in Employment Act, the Americans with Disabilities Act and reasonable accommodation, and the Equal Pay Act. Defenses such as bona fide occupational qualifications and business necessity. The EEOC charge process.
Employee Privacy and Immigration. Electronic monitoring, social media and personal devices, drug and genetic testing, background checks, and the use of AI tools in hiring. Form I-9 and employer immigration compliance.
11.2 Featured Case
Bostock v. Clayton County, 590 U.S. 644 (2020). Three employees were fired soon after their employers learned they were gay or transgender. Writing for a 6–3 majority, Justice Gorsuch applied a textualist reading of Title VII's ban on discrimination "because of . . . sex." He concluded that an employer cannot fire someone for being gay or transgender without taking that person's sex into account. Such firings are therefore illegal sex discrimination.
Why this case: It is a major recent employment decision, and it is a strong example of statutory interpretation, linking back to Chapter 1. The majority and dissents disagree over how to read the same statute, which gives students something concrete to argue about.
Discussion question: The majority and the dissents all claimed to follow the text of the statute. How can careful judges reach opposite conclusions from the same words?
11.2.1 Short Case Summaries
- Griggs v. Duke Power Co., 401 U.S. 424 (1971). A high school diploma requirement and aptitude tests that screened out Black applicants at a higher rate, and that had no demonstrated connection to job performance, violated Title VII even without proof of intent. (Disparate impact)
- Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57 (1986). A hostile work environment created by sexual harassment is actionable sex discrimination under Title VII. (Sexual harassment)
11.3 Planned Features
- A "manager's checklist" for lawful interviewing and termination.
- A series of short workplace scenarios in which students identify the potential claim and the employer's best response.
- Key terms: employment at will, wrongful discharge, whistleblower, FLSA, exempt employee, FMLA, workers' compensation, collective bargaining, unfair labor practice, disparate treatment, disparate impact, hostile work environment, reasonable accommodation, BFOQ.