-Go through highlights and Latvia for each reading

-Do summary pieces at the top of each section (like Latvias)

-Compare with DS outline and one H outline > Highlighting cases that are not covered in other outlines
-Refine those highlighted cases that were not covered in other outlines more carefully
-Add little labels to each case: (e.g. Sex stereotyping: Price Waterhouse, Dress code: Jespersen)
Qs:
Is it ok if I include stuff from the Notes after a case? (e.g. probationary periods p.74)
Under an explicit, or implicit just-cause (everything except Pugh good-cause where not as stringent as definiteterm, but implied-in-law), when is reasonable belief enough, and when is actually engaged in prohibited
conduct necessary?
All ???
Four Views of Employment

Free Contract View

o Employment relationship is a private K between two competent parties. We should be skeptical
of govt intervention with party decisions.
Consequences:
Laws regulating employment contracts and this area generally are held
unconstitutional
Employers have few obligations
Examples
Adkins: minimum wage law is unconstitutional interference w/ freedom of K
under 5th Amendment
Gilmer: unequal bargaining power not reason to invalidate arbitration clause
Richard Epstein, In Defense of the Contract at Will
Asymmetric Contracting View
o Employment relationship is a K, but defined by such asymmetries that regulation must occur.
Consequences:
Govt should intervene when appropriate due to asymmetries in bargaining
power self interest is an unsafe guide.
Examples:
West Coast Hotel: upholds minimum wage for women and children viewing
freedom of contract as a qualified right
Darby
Jay Feinman, The Development of the Employment at Will Rule
Third Party Public View
o Employment may be based in contracting relations, but they profoundly impact the public.
Consequence:
So legislature has the right to regulate because of inevitable impact
employment relationship has on the public.
Examples:
Nees
Maybe WCH?
Public View

Employment relationship should not be understood as a private K at all. Its a public institution
inherently subject to regulation. Employers are the fingers of the federal government enlisted
to enforce public policy goals
Consequences:
Public policy requires employers to provides a wage consistent with subsistent
living
Private actors (employers) required to advance public policy goals
Examples:
Egbuna: appropriate for Congress to partner with employers to effectual public
policy, including immigration policy which determines that an employee is
qualified not based on ability to work, but rather on his eligibility to work
Nees: In some cases, such as termination for fulfilling jury duty, the will of the
community will override managerial discretion and termination will not be
allowed because it will affect an important public interest or value
Novosel: Special status of corporations has placed them in a position to control
vast amounts of economic power which may, if not regulated, dominate not only
the economy but also the very heart of our democracy

Introduction

Setting the Scene:

o Adkins:
Statute fixing minimum wages for women and children in D.C. held invalid because:
Must protect against arbitrary interference with liberty of contract
Violates 5th Amendment and 14th Amendment due process
Not enough to be enacted to conserve the morals, the health or safety of the
people because then everything would be valid and due process would be
useless
o Must have a more direct relation before an act can be held to be valid
which interferes with the general right of an individual to contract
Overruled in West Coast Hotel
Dissent: Liberty of contract is not in the text of the Constitution. Pretty much all law
consists in forbidding people from doing things and contract is not exempt. Statute
should be valid.
o West Coast Hotel:
The Constitution does not speak of freedom of contract and that freedom can be restricted
Should be restricted here because of inequality in the footing of the parties
Adkins was a departure now overruled
Public interest is health of women and their protection from unscrupulous and
overreaching employers
Not arbitrary or capricious
Who is an Employee?
o OConnor v. Uber:
CA Employment Test
1st: If services were provided, prima facie case that relationship was
employer/employee

2nd: Burden then shifts to employer to prove independent contractor status (Mixed
law and fact > for jury)
o Most significant factor is right to control work details
Right to discharge is strong evidence gives means to control
all activities
HERE: Drivers set their own hours and work scheudles, provide
own vehicles, little direct supervision <> but Uber has
substantial control over qualification/selection, seems to be able
to fire at will, has expectations and guidance materials,
supervision through rating system.
o Secondary factors:
Performer of services is engaged in distinct occupation
Usually the work is done under a principal or by a specialist
without supervision
Skill required
Who supplies the equipment and place of work
Length of time of service
Method of payment
Part of the regular business of the alleged principal
Beliefs of the parties
HERE: Factors are similarly ambiguous to control factor.
o CA S. Ct. also approvingly cited other factors:
Alleged employees opportunity for profit or loss depending on
managerial skill
Investment n equipment or materials required
Special skill required
Permanence of working relationship
Whether service rendered is integral part of alleged employers
business
Egbuna v. Time-Life Libraries, Inc. (4th Cir. 1998):
Facts: P hired when he had a visa, but it expired and he kept working (unauthorized
employer has burden under law to determing authorization). Corroborates another
employees harassment claims, leaves. Asks for job back. Alleges: D made offer, then
withdrew in retaliation.
Title VII: plaintiffs may seek equitable remedies from the courts for the discriminatory
employment practices of an employer.
Requires a showing that the applicant was qualified for employment
IRCA means unauthorized = unqualified (despite having capacity to perform
the job)
HERE because Egbuna was an unauthorized alien, and IRCA thus declares it unlawful for
employers to employ him, court finds for defendant to avoid sanctioning formation of
statutorily declared illegal relationship. Would nullify IRCA.
What this says about being an employee:
Immigration status is prerequisite - formalistic
Consistent with public conception of employment employers carrying out
immigration policy
o Free contract view would say immigration status is irrelevant
o Public View would say it is highly relevant

o So division of views is not a political reactionary line all the time

Dissent:
When Defendant engaged in retaliation, it was unaware that Egbuna was without
authorization to work.
Pertinent question is whether the employer was motivated by a discriminatory
animus (from SCOTUS decision McKennon in ADEA case)
This holding defeats Congresss desire to eradicate employment
discrimination

Employment at Will

Historical Foundations
o Horace Wood:
1877 treatise: Wood declares that employment at will is an inflexible rule: general hiring
is prima facie employment at will burden on employee to establish a period was agreed
on
o Sanford Jacoby:
Contractarian explanation of the at-will doctrine says that at-will was the rise of a
formalistic approach to contract interpretation which had to give effect othe intent of the
parties, and courts assumed that if parties intended a definite period they would have
expressly said so.
BUT, says Jacoby, that explanation isnt convincing because the rigid
presumption of at-will forced courts to ignore evidence of the parties intentions
and forced permanent or lifetime contracts (usually meant to provide
employment as long as the employee could perform the job) to be interpreted as
terminable at will.
o Jay Feinman:
The at-will rule was an adjunct to the development of advanced capitalism in America
Employment at will is the ultimate guarantor of the capitalists authority over the
worker.
This involves a version of asymmetrical view: employees need their job more than an
employer needs any one particular employee
Says employment at will rule deprives workers of power/voice over the employment
conditions; particularly directed at middle managers who were a new economic group
that, as educated, responsible, and increasingly numerous, represented a threat to owners
of capital b/c they were expected to seek a greater share of profits and owners had to rely
on them more heavily at will rule assured the employees relation to the enterprise
would be precarious
Do we agree? Depends on how replaceable the worker is (less so gives more
leverage); Feinman claims that that it is seldom the case that an employee is
irreplaceable
But see note pg. 57 which casts doubts on Feinmans argument that the at-will
rule comes from the interest of capitalists in controlling middle managers
The idea Fienmans writing against is that employees do have power by virtue of ability
to quit: Feinman is saying that doesnt work bc if we have excess labor supply the power
to fire is much more powerful than the power to quit
What would a contrary rule to at will look like? Firing for just cause which
shifts the power back to employee bc their own effort and performance results in
their employment status

Richard Epstein:
Likes the at will rule for a few reasons:
Utility because contract at will should be respected as a rule of construction in
response to gaps in the contract language it is the most efficient solution
Fairness because parties should be permitted as of right to adopt this form of
contract if they want b/c freedom of contract advances individual autonomy and
promotes efficient operation of labor markets; focuses on employment at will as
an end in itself because we should respect peoples freedom of contract b/c it is
an aspect of peoples freedom of liberty just as selection of a marriage partner,
freedom of speech, etc. are important
o Easier to agree with this argument if parties are on equal footing
o Maybe marriage is a bad analogy because we have to work but dont
have to get married equality of parties is different public/economic
aspect vs. private aspect
Argument seems to presupposed equality of bargaining power.
Skagerberg v. Blandin Paper Co. (SC MN 1936)
Facts: Engineer with experience a D, in negotiations with D for a project, offered job at
Purdue to which he must reply immediately. He calls D and accepts job with them on
basis of agreement (on phone, then put in a letter by P after) providing:
He rejects Purdue job and purchases a home in exchange for: they promise
permanent employment and $600/mo.
He gets fired and sues for breach of K seeks $25K
Court: This is at-will (finds for D)
Permanent = at will
o Exception: Permanent may extend as long as:
Employer is in business and
Employee performs satisfactorily
But only IF he purchases employment with valuable
consideration beyond day-to-day work
Rationale: Wages already compensate for work.
Exception not met because P did not purchase employment.
o Giving up Purdue job insufficient because taking a job always involves
dropping another
o Purchase of house insufficient: Needed a house and got one no benefit
to D
Courts arguments dont really allow at-will rule to be truly default more like
mandatory.
Consideration exception is weird generally what about taking a lower wage??
At-will presumption is strong enough to overcome considerable evidence to the
contrary

Contract Erosions of At-Will

Express Agreements away from At-Will
o Chiodo v. General Waterworks Corp. (SC UT 1966)
Facts (Vague Terms):
P sues for breach of K which employed him for 10 years
D justifies based on
o Insubordination

o
o

Rule:

Cheated the company in payroll practices

Disloyal

Under a contract of employment for a stated term it is to be assumed that the

parties intended that the employee would conform to the usual standards
expected of an employee, and that he would render honest, faithful and loyal
service in accordance with his ability [just cause]
If there is a willful and substantial failure to adhere to those standards it
would be justifiable cause for the employer to discharge him.
o (Burden on employer)
Application:
Though Ps conduct maybe not exemplary he had been a good manager as
evidence by profitable operation of company. Looks like after friction developed
with other officers, they sought to make up accusations of misconduct to justify
discharging him.
But his explanations of irregularities were sufficiently reasonable and so D failed
to meet its burden.
Here the court implied a clause allowing employers to fire employees for cause during
a definite-term contract
Note 5: Profs. Abrams and Nolan synthesize arbitral decisions determining when
employers may fire union workers protected by just-cause:
Just cause for discipline exists only when employee doesnt meet employment
obligations. Employees general obligation is to provide satisfactory work.
Satisfactory work has four components:
o 1. Regular attendance
o 2. Obedience to reasonable work rules
o 3. A reasonable quality and quantity of work
o 4. Avoidance of conduct, either at or away from work, which would
interfere with the employers ability to carry on the business effectively
For just cause, discipline must further one or more of managements legitimate
interests:
o 1. Rehabilitation of a potentially satisfactory employee
o 2. Deterrence of similar conduct, either by the disciplined employee or
by other employees
o 3. Protection of the employers ability to operate the business
successfully
Entitlements of the employee:
o Industrial due process (p71)
o Industrial equal protection
o Individualized treatment
Hetes v. Schefman & Miller Law Office (CoA MI 1986)
Facts (Oral K):
Oral employment contract: I had a job as long as I did a good job.
Gets fired.
Held: These oral representations are assurances that a reasonable jury could
conclude lead her to a for-cause contract
Rule from MI SC:

A provision of an employment contract providing that an employee shall not be

discharged except for cause is legally enforceable although the contract is not for
a definite term the term is indefinite and
Such a provision may become part of the contract either by express agreement,
oral, or written, or as a result of an employees legitimate expectations
grounded in an employers policy statements
What does it mean to do a good job?: Subjective/objective definitions of good job.
The distinction between good faith and just cause is that between a subjective and
objective standard.
Some interpretations bring for-cause back to at-will extremely subjective
standard
Good idea to have all this turn on what an employer said in passing?:
Reliance interest
This case may only apply to upper-level employees assumed there is greater bargaining
at executive level so more legitimate for expectation to arise.
Note 2: Casual words of encouragement might be enough to overcome at-will
presumption (p73)
Note 4: Firing At-Will Employees for Pretextual Reasons: Courts are split on whether
you can some say at-will does not give right to fire for false cause.
Note 5: Probationary periods indicated an implied protections after period is over for
some courts, while most find it consistent with an implied at-will relationship after
probation is over.
Ohanian v. Avis Rent-A-Car System, Inc. (2d Cir. 1985)
Facts (Oral K):
Star employee forced to move around a bunch for to manage different areas of
company
Oral Contract: Assured unless he screwed up badly, there is no way [he was]
going to get fired
Signed letter to choose a relocation plan, but form letter had an at-will provision
in it.
Court:
Interprets totally screws up as generic just-cause and thus reads business
necessity into it
o Distinguishes from Brown v. Safeway Stores where agreements were just
casual comments
o Oral promise > Just-cause relation > Generic Definition
o The more discretion an employer has in cause, the more like at-will it
becomes
Agreement here was a critical one-on-one negotiation
Held:
o Statute of Frauds:
Rule: SoF does not preclude an oral contract unless there is not
the slightest possibility that it can be fully performed within one
year
Just cause firing could occur without breach (business necessity),
so performance could complete within a year.
o Letter:

No evidence that anyone intended it to define the terms of

Ohanians employment.
Oral promise:
Sufficient for a jury to find promise of lifetime employment to a
star employee.

Dissent:
SoF bars totally screws up just cause. Totally screws up doesnt include
business conditions just breach, which is not performance within a year.
Pros for generic just-cause:
Predictability, consistency, ease for courts
Not clearly better for one party (unless employer knows a strong promise will be
watered down, but is just-cause > good job? maybe only in SoF cases!)
If goal is freedom of K, this rule hurts our goals. Predictability may ignore difference
between businesses.
This is oral K setting this rule may incentivize writing.
Fairness concern: many oral Ks are in settings where writing is unlikely
Implied Agreement of just-cause
o Grouse v. Group Health Plan, Inc. (SC MN 1981)
Facts:
Job offer revoked after employee quits another job and turns down another.
Court:
Promissory Estoppel: Promise which the promisor should reasonably expect to
induce action on part of promise, which odes induce such action is binding
if injustice can be avoided only by enforcement of the promise.
o So reliance damages for employee.
Says it would apply even if he had been allowed to start first day under at-will
rule because he had a right to assume he would be given a good faith
opportunity to perform his duties to the satisfaction of respondent once on
the job
What does this standard mean?
Is satisfaction inherently subjective? So is it any different than at-will? Or is
there objectivity somewhere? Does satisfaction need to be related to duties?
Good policy to push employees to allow employees to come to work
Employees must rely on promises of new employers
Or bad policy? Could tell 50 people to come, expecting to fire 40?
Depends on context. E.g. in law firm market, publicity would diminish this
possibility. But harder to say in situation of greater informational asymmetry.
Transfers decision-making authority to juries from employers - is that good?
o Veno v. Meredith (PA Superior Ct. 1986)
Facts:
Employer cosigned employees home; said things like well retire together
Court:
Presumption of at-will may be overcome by
o Express contract
o Implied contract when surrounding circumstances of hiring indicate
that parties did not intend the employment to be at-will

Where employee gives employer sufficient consideration in addition to

services for which s/he was hired (affords substantial benefit, or
undergoes substantial hardships beyond services hired for)
When sufficient consideration present employee should not be
subject to discharge without just cause for a reasonable time
Just cause is a substantial modification, so a clear statement of intention is
required to overcome.
HERE No implied K (factors):
o Statements are broad and vague do not suggest parties contemplated
definite duration of employment
o Aspirational quality to statements
o Notable that ct. doesnt discuss that they seem friendlier than normal so
apparently that doesnt change legal status
o Timing: They werent negotiation statements werent made to get
employee to work there
Also no additional consideration.
Pugh v. Sees Candies, Inc. (CA CoA 1981)
Facts:
First without a reason
Court: Jury could find there was an implied K of good cause
Independent consideration is no longer required (though it is a useful
evidentiary tool)
o May demonstrate an intent that parties intended to shift to just-cause
Other evidence supporting shift to just-cause:
o Duration
Here 32 years
o Commendations/Promotions
o Criticism (or lack thereof)
o Assurances
If youre loyal to Sees and do a good job, your future is secure
(closer to Hetes than Veno) FORK
o Policies
Practice of not terminating admin personnel except for good
cause
Note: Do we like this? Employer becomes bound by its practice.
Dont all companies have policies like this?
Court guidance just cause and good cause are similar and connote a fair and
honest cause or reason, regulated by good faith on the part of the party
exercising the power.
Note 2:
Later in Cleary v. American Airlines (Cal. Ct. App. 1980) court upheld claim of
employee dismissed without cause after 18 years of service holding:
o Termination of employment without legal cause after such a period of
time offends the implied-in-law covenant of good faith and fair dealing
contained in all contracts including employment contracts
But then in Guz (SC CA), longevity alone cannot prove a contractual right to
be terminated only for good cause
o

Policy rationale: Would discourage retention and promotion of

employees.
How do we shift the presumptions for employees who have been there a long
time?
o Pass a statute?
o Burden shifting regime (court adopts here) must show just cause
o

Note 5:
Court notes that good cause is less stringent here than than under a
definite-term contract. So somewhere between objective just cause and
subjective good faith. But where?
o Alaska requires that employee actually engaged in prohibited conduct
o CA only requires reasonable grounds
Note 7:
One way to justify Pugh is to suggest the court is enforcing the implicit life-cycle
contract
o Thats the idea that employees are hired below their worth with the
expectation that they will be paid more than their worth later in their
careers.
Should there be mutual obligations on employee?
13th Amendment though
There are alternatives (like noncompetes) to help with employer investment
Employee Manuals as Ks
o Woolley v. Hoffman La Roches, Inc. (NJ SC 1985)
Facts:
Employee sues for breach based on language in manual that lists causes for
discharge
Was the language exhaustive of discharge reasons, or illustrative?
Depends on if the manual constrains management
Court: Employee manual is binding
A reasonable employee would understand it to be binding
Binding nature of manual depends on understanding of employees:
o Context of the manuals preparation and distribution is critical:
Employer was attractive because of good reputation
EEs get this carefully prepared document called the Personnel
Policy Manual
Distribution itself is suggestive
Ability to change could mean non-binding, but could also
suggest importance since theyre keeping it up to date
o Presume reliance
Otherwise only employees who actually relied on the policy
would be protected, while all employees take the wage hit for
having the protective policy (presumably accepting lower wages
for protection)
o Employers can ensure manuals are not binding by adding a
disclaimer
o Demasse v. ITT Corp. (SC AZ 1999)
Facts:

Manual at time of hiring provided layoffs will be in order of seniority, without

connection to performance or managerial discretion
Changes policy a few years later
Lays off P (in conflict with earlier policy)

Court:
Employer may NOT breach a handbook policy that has become part of the
employment contract despite a unilateral change to the handbook policy
Handbook statement that should reasonably be seen as a commitment from the
employer, the term becomes offer to form an implied-in-fact contract and is
accepted upo acceptance of the job by employee
As with other contracts, an implied-in-fact term cannot be modified
unilaterally
Modification requires:
o Offer to modify
o Assent or acceptance of the offer
Continued employment is not sufficient
o Consideration
Continued employment is not sufficient
Existence of contractual terms can be disclaimed at time of hiring.
Dissent:
Sees continued employment as sufficient consideration/acceptance, because
assumes that the relationship is still essentially at-will
Potential conflict: Does this work with contract doctrine that imagines individual
bargaining?
Employer wants collective terms, but contract law anticipates individual
bargaining.
Solutions: collective agent (i.e. union) who bargains on behalf of employees
o But how do we get there if EEs arent in a union?

Tort, Statutory, and Good Faith Limitations on Employment at Will

Tort Erosions of Employment at Will
o Wrongful Discharge in Violation of Public Policy
Nees v. Hocks (SC OR 1975)
Facts:
o P called for jury duty. D requests that she be excused. She is called for
probably over 2 weeks. Fired.
Court:
o There are instances in which an employers reason or motive for
discharge interferes with an important community interest and this
justifies compensation to the employee
o Jury duty is such an instance
3rd party public conception of employment
Is this the right outcome and is tort law the right mechanism to reach it?
o Is the employer the right bearer of the cost of jury duty? Jury serves the
publics interests not the employers. Costs borne by jurors (if they arent
paid). Should the public bear the cost?
Other questions that arise with public policy torts:

Which community interest are we talking about? Which count?

Which employer actions should be subject to this liability?
Firing sure, but low wages? Lack of health insurance? Anything
that interferes?
o Who: are there other actors who also interefere with such community
interests apart from employers? Can these actors (i.e. professor, spouse)
be sued? Why does this seem ludicrous but suing an employer is not?
(Hint: Do we think of employment as a public institution?)
Wright v. Shriners Hospital for Crippled Children (MA SJC 1992)
Facts:
o Nurse writes letter to national headquarters detailing concerns about
medical staff and admin at hospital
o Internal survey team visits and interviews her and she notes problems
including lack of consistent procedures and standards for patient care
o Fired
Court:
o Even if this was retaliation for her critical remarks, no violation of
public policy
o Redress is available to employees who are terminated for
asserting a legally guaranteed right
doing what the law requires
or refusing to do that which the law forbids
o No statute governs here:
Code of ethics for duties of doctors and nurses (private
professional orgs ethical code) is not a source of public policy
A regulation governing a particular profession has not been held
to be a source of well-defined pub. pol. sufficient to overcome
at-will
o Internal matters cannot be the basis of a public policy exception to
the at-will rule
Report was internal
o Public interest in healthcare, but public interest public policy
o Public policy exception is narrow
Dissent:
o Public interest in health means there must be a public policy to protect
employees who perceive and report detriments to care
Who is right?
o Majority: clarity, looking to statutes
o Dissent: Allow court to see public policy in these statutes even if its not
explicitly stated; legislature was after protecting patient safety;
legislatures recognize certain professional codes can we take PP from
that?
Balla v. Gambro, Inc. (SC IL 1991)
Facts:
o P fired for telling D to reject a shipment that didnt comply with FDA
(got shipped anyway) and implying he would report to FDA (reports
after discharge).
Court:
o
o

o
o

There is no public policy more fundamental than protecting the lives

and property of citizens
And here the discharge was thus in contravention of clearly
mandated public policy
BUT exception: attorney-client relationship
Held: P was at all times an attorney, and the public policy
exception doesnt extent to in-house counsel
Why?
If in-house counsel are granted the right to sue for retaliatory
discharge, employers might be less willing to be forthright
and candid with their in-house.
No concern about PP incentives being lost for in-house counsel
because Rules of Professional Conduct already mandate that they
report things that could result in death or SBI.
Dont want to shift burden of obeying RPC from attorney to
employer

Dissent:
o Lawyers ethical obligation is not enough of a safeguard for the public
policy of protecting lives. Attorneys are human and have families to feed.
o Nor should a corporate employer be protected simply because the
employee it has discharged for blowing the whistle happens to be an
attorney
Note: Variation across states on whether reporting is mandated or simply
permitted when possibility of death or SBI. (See Notes p140: MA: no PP of
protection; IL: PP but not for lawyers; NY: protect only lawyers; CA: protect
everyone)
Intentional Infliction of Emotional Distress:
Agis v. Howard Johnson Co. (SJC MA 1976)
Facts:
o Manager says that until person responsible for stealing is discovered, he
would start firing present waitresses in alphabetical order, starting with P
Court:
o There is a cause of action for IIED without physical injury. Elements:
Intended to inflict emotional distress or knew/should have
known emotional distress was likely result of conduct
Extreme or outrageous
Beyond possible bounds of decency
Utterly intolerable in a civilized community
Ds actions caused Ps distress
Emotional distress sustained by P was severe and of nature that
no reasonable man could be expected to endure it
o Administrative difficulties do not justify the denial of relief for serious
invasions of mental and emotional tranquility (response to floodgate-like
arguments)
o Claim is on impermissible manner of discharge (no wrongful discharge
action because at-will)
o Why was this extreme/outrageous?
Arbitrary

But isnt arbitrariness cool in an at-will scheme? Creates

conflict between tort and employment law?
Maybe this was systematic method of catching thief
Inflicting terror
Where is the line? How to distinguish? Do we want the
court doing this?
Is this just a backdoor way to bring a wrongful-discharge claim? Is there truly
anything separate here?
o Claims can be for manner of discharge (which is different Agis may
have been) and states vary in how they address these cases (p157)
Bodewig v. K-Mart, Inc. (CoA OR 1981)
Facts:
o Customer accuses clerk of stealing money. Search turns up empty.
Register balances. Asked to disrobe to search her body.
Court:
o Two versions of the tort of outrageous conduct
One with intentional conduct to inflict emotional distress
BUT ALSO where the wrongful purpose was lacking, but the
tortious element can be found in the breach of some
obligation that attaches to defendants relationship
o LATVIA:
IIED through conduct
Breach of obligation due to special relationship
o Employee-employer relationship is in that special category
Because of the nature of the relationship with employer having
so much authority power asymmetry worse than landlordtenant
o Jury could find manager put her through degrading and humiliating
experience that exceeded the bounds of social toleration
o Physical manifestations of the distress are not necessary
Distress must be severe, not its manifestations
Why extend this (allowing breaches to count as tortious conduct)?
o Employees cant say no/walk away like with strangers
o Abusive relationships
Cant employees quit?
o Transaction costs
o We dont want her to have to make this choice: this tort is a normative
judgment to keep this choice from existing
Compare to Nees: we dont want employees to have to choose between their jobs
and serving on a jury. Tort law takes these choices off the table.
Most ED claims thrown out:
o High standard for outrageous in Restatement
o Dont want to interfere too much with employment relationship
o Some abusive environments are productive?
NOTE 2: On surface suggests lesser intent standard. BUT later Oregon cases
have clarified that the relationship is relevant to determining whether conduct
was an extraordinary transgression, but should not be used to reduce the intent
requirement.

Statutory Protections
o Legislation classifies certain reasons for discharge as illegitimate (i.e. race, sex ) to ensure that
employees cant be fired for asserting rights from legislature. Title VII, OSHA, FLSA, all have
anti-retaliation clauses.
o Valerio v. Putnam Associates (1st Cir. 1999) FLSA
Facts:
P hired as receptionist and told she was exempt.
She didnt want to be a receptionist, but wrote letter saying If you insist on
classifying me as a receptionist then I demand under FLSA that I be re-classified
as non-exempt and be paid for all overtime hours worked.
Fired.
Court:
Protected under FLSA anti-retaliation clause, even though letter wasnt a
court complaint
o Construes has filed any complaint (29 U.S.C. 215(a)(3)) broadly
o Filed a complaint with an employer counts
As long as there is expectation that employer will place it
on file among the employers official records
But not all abstract grumblings will suffice
o Here:
Letter was sufficiently definite to notify employer that she was
asserting her statutory rights to overtime pay. Letter left no doubt
that she was complaining (so not just a negotiating tool).

Not protected under state law where relevant public policy already vindicated by
statute (MA law).
Reconcile Balla and Valerio with Wright:
A statute that made legal requirements for minimum wage or overtime pay, but
then didnt have anti-retaliation clause would be clear public policy for a tort
action under Wright
o Statutory Changes Dismissal Standards in Other Countries (p183):
MT has abolished at-will by statute requires good cause, but also limits damages to four
years and back pay and pre-empts common-law actions. (see p183 onward)
Other countries place many procedural and substantive checks both when employers fire
an individual worker for misconduct and when they reduce the size of the workforce due
to economic restructuring (p186 onward)
Concerns about Eurosclerosis unemployment that occurs when employers are
afraid of hiring, knowing it will be hard to terminate when conditions worsen.
Good Faith Limitations on Employment at Will
o Fortune v. National Cash Register Co. (SJC MA 1977)
Facts:
P sells registers under complicated commission structure. Terminated shortly
after sale. Given only 75% of bonus and now seeking full commission for sale.
NCR didnt breach express terms of K. Was technically no longer the salesperson
at time of installation.
Court:
There is an implied covenant of good faith and fair dealing, so a jurys
finding of bad faith constitutes a breach

Bad faith where the principal seeks to deprive the agent of compensation
by terminating at the brink of a sale (Restatement). Same principle
here.
o Care about motivations to deprive payment to employee.
This is a general contracts principle at-will employment is no exception.
o Does this depart from at-will?
Caveat: Court notes that implied term is not clear in all at-will employment
relations, but it is here, and its been breached here.
Not clear that it was bad faith here. They didnt keep the money, they gave it to another
salesperson. [but could be vindictive?]
Quantum meruit theory motivating the court?
How do we define bad faith?
o

Employee Speech and Privacy

Employee Free Speech and Political Participation

Questions we ask:
o Is there a First Amendment violation?
o What do we mean by coercion in the employment context?
Rutan v. Republican Party (SCOTUS 1990)
o Facts:
IL govt hiring freeze with exceptions for those with approval given by the office.
Office allowed to consider whether applicant was a republican; under a republican
governor
Obviously, employer is the government, so constitution restricts it.
o Court (Brennan):
Conditioning hiring, promotion, transfer, and recall decisions involving low-level
public employees on party affiliation violates the 1st Amendment
Govt interests served with an exception for policy-making positions
Elrod:
Conditioning public employment on political affiliation coerces belief and state
interest here are not great enough to warrant it
o First Amendment theory that conditioning employment coerces people
o Is a coercion theory right? Is this forcing people to support the republican party? We mean we
dont accept this choice (work for the govt and be a republican or dont work for the govt.
o Why the exception for where employees deal with policy making?
(Govt interest?)
o Dissent (Scalia):
Constitution doesnt tell us whether patronage or merit is the right basis for govt hiring.
Also thinks theres hypocrisy in judges who were picked due to affiliation enforcing this
rule [Not the same thing as an official requirement for non-policy-making roles
though].
Garcetti v. Ceballos (SCOTUS 2006)
o Facts:
Deputy DA wrote memo and testified as a hearing for defense about inaccuracies in
affidavit used to obtain a search warrant
He had gone to supervisors with these findings, but prosecutors decided to
proceed

o
o

Reassigned, transferred, denied promotion

Court:
Pickering balancing test considers:
Public employees interest as a citizen in speaking on matters of public concern;
with
Govt entitys (as employer) interest in carrying out operations efficiently and
effectively
Inquiry:
Did employee speak as citizen on matter of public concern? If no, no 1 st Am
COA based on reaction.
If yes, did govt have adequate justification for treating employee differently
from average citizen (does the fact that speech takes place within employment
relationship mean that govt can suppress it?)
Held:
No 1st Amendment Violation
Controlling factor:
o If public employees statement is pursuant to official duties, s/he is not
speaking as a citizen for 1st Amendment purposes.
Speaking at work is not dispositive
o Lots of citizens do important speech as citizens at work.
Speaking about matter related to work is not dispositive
Dissent (Souter):
Criticizes categorically separating citizens interest from employees interest.
When speaking on matters pertaining to work may be when that citizen is most engaged
in civic duty
On doctrinal level: must balance individual interest in speech with govt interest
(Pickering)
This should still apply, but govt interest is admittedly higher when employee is
speaking about official duties.
Rationales for this rule:
Employers have heightened interests in controlling speech made by employees in their
professional capacity
Where govt has created this speech opportunity, can control the speech that results
(speech owes its opportunity to official duties and wouldnt have existed for the private
citizen)
Judicial oversight problems
Other protections (beyond 1st Am) for whistleblowers
Sachs: When employee is speaking in official capacity, this is when govt interest is at its
height.
Incentives? What would Ceballos now be inclined to do? Can speak about the matter generally,
but cant write a memo to superiors? Isnt that bad?
Is this a good rule?
Employment relationship criticism: better to have the chance to respond to internal
criticism.
1st Amendment: Maybe speech is not about speech, but rather that public has 1 st Am
interest in hearing about these issues (op ed deserves more protection than internal
reporting)
Or is 1st Am agnostic w/r/t where speech occurs?

Aimed to avoid constitutionalizing the employee grievance

Dont all grievances contain speech? (Yea court doesnt want unlimited employee
freedom to speak about work without allowing employers to react)
o Majority vs. Dissent:
Majority: Not protected. Dissent: Maybe lets do the balancing.
Sachs: litigation costs matter. Do we give public employers the right to say not
protected in those cases or do we weigh interests?
Under Souters dissent: Govt employees now have to consider the potential
ramification of their speech; would have to hope that their speech is found to be
important enough to be protected.
Novosel v. Nationwide Insurance Co. (3d Cir. 1983)
o Facts:
Employer involved in statewide campaign and asks employees to join lobbying efforts for
bill; tells them to get signatures (participate in political action).
Novosel (employee) refuses to lobby (private statement of opposition to companys
political stance)
Fired.
Sues for wrongful discharge
o Court:
Cognizable expression of public policy may be derived from state or federal
constitution
Free expression is public policy
Clearly mandated public policy when it strikes at the heart of a citizens social
right, duties and responsibilities
Public employee cases are relevant: show that an important public policy is in fact
implicated wherever the power to hire and fire is utilized to dictate the terms of
employee political activities
Relevant because public employment cases are not just about the role of the
govt as an employer, but about distortion of political power when economic
power is used to coerce
These public policies are implicated when power to fire is used this way the
relevant source of coercion is economic; and this doesnt vary between the
public and private sector
o Also privacy arguments at play (employer shouldnt be involved in this sphere of political
participation)
o Sources of Public Policy: (1) Statutes, (2) Common Law, (3) Constitution
Constitution is a good source of public policy because its such a high legal authority and
shows importance of policy
Although its so vague that you can basically find any policy in it
o Does this decision obliterate state action doctrine? (destroys public/private line?)
o Do we even want to stop employers from having this coercive power?
Citizens United rejected that expenditure of corporate $ distorts the political process
BUT this is different because there the corporate personality was speaking, and
here its about the relationship between two persons. We care not for distortion
issues (changing the debate), but for coercion making Novosel personally take
a political action he doesnt want to.
o Does it matter that the bill in question concerns the business (insurance)?
o

Should ERs be able to compel EEs to participate in activities relevant to financial success
of the firm?
One response: hire lobbyists if you want to lobby you cant require other EEs to lobby.
If someone in lobbying dept doesnt agree; OK to fire them (job description)
This works for big companies, but what about smaller ones that cant hire more
people?
Is there a question of whether ERs through exercise of economic power can coerce political
behavior a reasonable reading of the issue in public EE cases?
Public ERs are inherently different from private in some ways (3d cir: sure, but
economic coercion occurs in both contexts)
Balancing test for where 1st Am protections apply: could come out differently in public
and private contexts could be worse for public ER to coerce than private ER
PA recognized wrongful discharge tort in Geary explained reason for tort: there are areas in
EEs life in which ER has no interest. Discharge tort grounded in zone of activity that ER cant
influence through their economic power
Sounds grounded in privacy considerations
Should courts have decided based on privacy rather than political freedom?
What sources of privacy rights? Torts, statutes not just constitution
More substantively, whats at stake? Is the problem influencing political behavior or that
the ER is interfering in private zone/off limits to ER?
Geary: Privacy as autonomy
This case: we have tort of wrongful discharge where discharge violates PP; PP can be found in
the constitution. How can we limit Novosel (to not the whole constitution)?
Novosel protects a certain kind of speech because of the assumption that political speech
is so important. Nothing here tells us why just 1st Am>>
One broad reading of the case: cant fire ppl when that discharge would violate the
constitution theres nothing to say right to speech or privacy is more important than the
right to bear arms (could think this case applies to all)
Novosel hasnt had precedential effect, but it raises important questions
ALSO SEE Judge Becker concerns (p228)

o
o

Employee Privacy Rights On and Off the Job

Whats an employees reasonable expectation of privacy?
o OConnor v. Ortega (SCOTUS 1987): - 4th Amendment
Facts:
Ortega heads residency program at hospital (public hospital, so constitution
applies directly)
Suspected of sexual harassment inter alia
Put on paid leave
Internal investigators go through his office, desk, cabinets. Go through personal
items.
Court:
Touchstone is reasonable expectation of privacy
o Without that, govt can search as it wishes
First Step: What kinds of reasonable expectations can a public employee
have in the workplace?
o Searches by police are reasonably expected, but internal searches?
First must distinguish the searcher:

Operational realities of the workplace may mean no reasonable

expectation of privacy when searcher is your employer because of the
way business have to run. (e.g. lots of people visit or use this office
daily)
o Case-by-case analysis: looking to facts to see if employee had
reasonable expectation of privacy in office, desk, and cabinets.
o HERE: Hes been in that office for 17 years, keeps personal items there,
no policy against personal items
Held: Ortega has reasonable expectation of privacy
Second Step: Now balance the invasion of the employees legitimate
expectations of privacy against the govts need for supervision, control, and the
efficient operation of the workplace. In other words, Was the search itself
reasonable?
o Both the inception and the scope of the intrusion must be reasonable
o Less interest in privacy at place of employment than at home
o Public employers need wide latitude to enter employee offices for workrelated reasons and probable cause would be intolerably burdensome
o Employees can leave their shit at home
Held: Generally a search of an employees office by a supervisor will be justified
at its inception when there are reasonable grounds for suspecting that the
search will turn up evidence that the employee is guilty of work-related
misconduct. The search will be permissible in scope when the measures adopted
are reasonably related to the objectives of the search and not excessively
intrusive in light of the nature of the misconduct.
Sachs: Why not just say no privacy at work?
Is it correct that employees can really leave all personal effects at home (medications nad
other things you dont want your employers to see)?
Should there be an expectation of privacy in the workplace?
In context of govt employment, reason to be especially protective of privacy
(constitutional principle)? Or is the issue not employment privacy, but what is done with
the findings?
K-Mart Corp. Store No. 7441 v. Trotti (CoA TX 1984) State privacy tort
Facts:
No individual lockers. Employees can purchase their own locks and in those
cases they dont have to provide a combination or duplicate key. P had her own
combo lock.
One day she finds, after locking locker, that the lock is hanging open. Her stuff
was in disorder.
Manager says lockers were searched because of suspicion that unidentified
employee had stolen a watch and some price guns were missing.
Court:
Invasion of privacy (TX common law): Intentional intrusion upon solicitude that
is highly offensive to the reasonable person
New trial needed because cant conclude as MoL that standard was met (jury
needs instruction on invasion of privacy which is a highly technical term)
Is this right? Isnt this highly offensive from the facts?
Set the line at bodily v. property search?
o

Look at Agis needed outrageousness there (arbitrariness could make it

outrageous) but in privacy context, arbitrariness isnt as meaningful?
Should the employer need probable cause or at least reasonable suspicion before
going into someones stuff, if its not, highly offensive?
She didnt provide the key no reason to research > reasonable expectation of
privacy?
To know if theres an invasion of privacy, we have to know the employers motivations
Same inquiry: Offensiveness contains some notion of why youre doing the
search
Do we import 4th amendment principles? (reasonable suspicion, probable cause)
Damages: Whats the right amount here?
A lot of that is punitives trying to stop K-Mart from doing this
Why did the jury think this was such a big deal? Basic harm of searing
someones purse? If its about that the employer will find, its not the search
thats the problem, but rather the harm that would follow from them finding
whatever it is. Punitives are appropriate when problem is freedom/autonomy.
o Trio of cases: Agis, Bodewig, Trotti: management trying to catch a thief in all three: What can
management do? What investigatory technique isnt tortious?
Should they just fire someone who wont comply with search? Mgmt doesnt want to fire
people unless they know the person is responsible?
Better to have cameras? Everything captured on camera is public behavior > No
expectation of privacy/no monitoring problem
Where the employees private life affects their employment
o Brunner v. Al Attar (CoA TX 1990)
Facts:
Employee works at Apollo and tells employer that she also volunteers at an AIDS
foundation.
Promises no danger of spreading it (since it wont infect her), and shes
volunteering solely in free time
Employers (Al Attars) fire her
Court:
No public policy violation here
TX recognizes 2 policy exemptions:
o Cant fire for refusing to do illegal acts
o Cant fire to avoid contributing to or paying benefits under the
employees pension fund
Brunners case doesnt fit either and court wont create a new one.
We dont easily create new public policy exceptions to at-will (talks about cases
where bad shit happens, like one guy who reported to management that some
supervisors were engaged in fraud and theft)
Should this have been brought as a privacy claim instead of a wrongful discharge claim?
Invasion of privacy rather than public policy?
Sachs: Is there a problem with what the employer did here?
1. Fact that employer reaches into employees private life
Private doesnt mean revelation of confidential fact; instead theres an idea of
spheres; employment sphere and private sphere

When an employer uses economic power to influence what an employee

does in the private sphere, thats a problem (See this in US Steel case
cited in Novosel) there are areas in an employees life in which the
employer has no right to intrude that could give rise to tort COA
Where do these ideas come from? Appropriate legal rules for private sector? Does the
background rule of at-will justify them?
Should there be legal enforcement of separation/ability to be free in private life?
On the one hand an employer controls too much of your life if you let them
overreach
BUT practical problems from the inevitable overlap
Should an employer have to prove that private life affects the work world?
o Then it starts to look more like just cause, not at-will
Is this all about expectations?
o There are jobs where there should be an expectation that you dont do
certain things in free time (ACLU and Heritage Foundation)
Might depend on what kind of employee high up Nike
shouldnt wear Adidas?
Could large law firm say youre expected to work for us all the
time?
o Labor market problem: accept lower wages to keep private life private?
Should an employer be able to ask you to provide them with access to all of your
social media? Were a customer oriented business, need to be able to monitor?
o No expectation of privacy?
o Employer interests?
Rulon-Miller v. International Business Machine Corp. (CA CoA 1984)
Facts:
Was dating bf for many years and everyone knew and was cool with it. Years
later, supervisor calls her in and says dating is a conflict of interest (bf worked at
rival company).
Gave her choice and couple weeks to decide
But then next day calls her back again and fires her.
IBM policies sent out in memo from Watson
Court on wrongful discharge claim:
Looks to K terms > Two competing company policies: Watson memo, and
Conflict of Interest policy from performance manual
Watson memo: cant intrude into private lives. Behavior is of concern only when
it harms the company in some way.
o Held:
This creates a contractual right to privacy
Memo protect 2 forms of privacy: secrecy (right of
nondisclosure), and autonomy, (right to make decisions in your
private life)
Conflict of interest policy: deals mainly with competing financial involvement,
but also say must be free from any association that would interfere with
independent exercise of her judgment in best interests of IBM
o Record doesnt show this applies to friendships. Jury question and jury
said no. So privacy policy wins.
Court on IIED claim:
o

Jury could have rightly found conduct was extreme and outrageous
o He said he made the choice for her when firing, so could be
humiliating, degrading intending to show her powerlessness
o Sachs: This opinion is sloppy and aggravating
Sachs: Two ways to understand this opinion:
1. This is an objection to at-will rule: powerlessness is run of the mill in at-will
discharge, but court doesnt like the asymmetry of power OR
2. Not just at-will discharge: Watson memo made this case different, and the K
breach made the discharge extreme and outrageous
What do we mean by privacy?
Her relationship was well-known so it wasnt shaming
Issue was seeking to control her private life (not in the Trotti sense of prying into
her private life for facts she wouldnt disclose)
o In these two cases: a little like a tort, privacy invasion, K, IIED > Should we put this in a statute?
Could we? How would we draw the line? Should the principle of separation be enforced/legally
actionable?
There are a bunch of statutes that get grouped as lifestyle determination say you
cant be fired for things you do off the job unless an employer can show off-work
activity impacts work performance
Enacts principle of work/non-work divide (should we have a federal statute like this?)
o Does the employer have a legitimate interest in policing private matters?
Does the employer have an autonomy interest comparable to the employees? Different
kinds of employers for small mom & pop shops, this kind of statute might be a
problem?
Drug Tests
o Skinner v. Railway Labor Executives Association (SCOTUS 1989)
Facts:
Federal Railroad Safety Act authorizes Federal Railroad Administration to make
regulations that authorize railroads to administer breath and urine tests to
employees
4th Amendment challenge
o Constitution only implicated when public employer or public regulation
o Employer is private, but FRA is involved (public regulation)
If train accident, all employees tested no need for individual suspicion.
Court:
Balancing: Does the govts need to monitor compliance with [drug and
alcohol] restrictions justify the privacy intrusions at issue absent a warrant
or individualized suspicion?
Warrant is NOT necessary (would add little to the assurances of certainty and
regularity in the regs and would hinder govts objectives in program)
Individualized suspicion is NOT necessary (when it would jeopardize an
important govt interest )
Transportation restrictions, blood tests, urine tests, all totally chill and not unduly
extensive impositions on individual privacy and bodily integrity
o Fine because diminished employee expectations of privacy for working
in this industry.
o Note: Court taking the whole into its parts
Court analyzes government interests:

o
o
o

Dissent:
Invasion of privacy not minimal
Govt interest inflated: fear of accident is deterrent, not a post-accident drug test.
So Skinner tells us what happens when the Constitution is in play (jack shit I guess)
Different from Ortega because individualized suspicion not necessary

Sanchez v. Georgia Gulf Corp. (LA CoA 2003)

Facts:
D conducts random drug tests
Sanchez (employee) tests positive for cocaine metabolite and fired
Claims drug was a prescription med but was never able to argue
Argues that under state drug-testing statute, should be allowed to provide the info
Court:
The statute mandated procedure for employers to follow if they conduct
drug tests (has requirements like contacting employee and comparing medical
history)
The procedures are mandatory
o If at-will defeats, the statute would be useless
o Positive cocaine test invalid as a matter of law
Would there have been a claim without the statute?
Tort claims:
o Like Trotti: invasion of privacy
o Like Novosel: wrongful discharge tort: due process rights, public policy
requires this is private employment?
What if suspicion of drug use came from something else, like participation in Occupy
Wall Street?
In some states, would there be a false cause action???
Negligent Hiring [???what about constitutional claims? Gilmer only deals with statutory]
o Thatcher v. Brennan, (SDMS 1986)
Facts:
P brought action against Brennan individually and his employer Mead Johnson
for fight with Brennan
Brennan got in road rage fight with P and he was on his way to the post office to
mail business-related stuff
Court:
Rejects respondeat superior claim because must be in scope of employment
which has a few tests: [Do I need to know this??? This is the negligent hiring
section]
o Whether the employees conduct is so unlike that authorized that it is
substantially different
o Whether the act complained of is committed in the prosecution of the
employers business and within the scope of the employees authority
o

Duties are fraught with risk of injury to others can lead to disastrous
consequences
Difficult to identify impaired employees
Regulation increases deterrent effect (and increases info on RR
accidents)

Whether such act is in the furtherance of the business of the master and
as an incident to the performance of the duties of the character or kind
which he was employed to perform
o Whether the act was done in the course of and as a means of
accomplishing the purposes of the employment and therefore in
furtherance of the masters business
o Held:
Purpose of assault was personal, so not in scope of employment
Rejects negligent hiring claims because to win on negligent hiring, plaintiff
must prove that:
o Propensity for violence
o Employer knew or should have known of such propensity
o Employer in disregard for the rights of those persons with whom
Brennan could reasonably be expected to come into contact, hired
the employee, either negligently or with callous disregard for the
rights of such persons
o Held:
The personality and adaptability tests he took showing he was
moody and aggressive were insufficient to put Mead Johnson on
notice.
If the case had gone the other way:
Moody people wouldnt get hired
Note 3: One response to cases like Thatcher is that companies wouldnt test.
o However, failure to test employees can lead to lawsuits:
o Southern Bell Tel & Tel Co. v. Sharara: Court of appeals reversed SJ
ruling that employer should give periodical psych tests to people who
enter homes
Concurrence noted that there should be other screening and
interviewing of employees in such positions and that mandatory
psych tests may violate privacy and other rights
Defamation Claims: What can employers say about employees?
o Zinda v. Lousiana Pacific Corp. (SC WI 1989)
Facts:
2 years before employment with D, Zinda fell and got injured due to faulty
waferboard manufactured by employer
Did not report on job application (personal health history section)
Filed a lawsuit one year into employment alleging permanent disabilities
Employer fires employee for falsification on original forms
In company newsletter comings and goings section, writes falsification of
emp. forms"
o A copy reached his wife at a nearby hospital (outside the company)
Court:
Communication is defamatory if it harms reputation so as to lower employee
in estimation of community or deters third parties from dealing with him
o BUT some defamations fall on conduct deemed privileged by law
o Here: common interest privilege attaches to the employer-employee
relationship:
o

Statements on subject in which persons making and receiving

statement have common legitimate interest
Legit interest in reducing gossip and increasing
knowledge of what gets you fired
BUT the privilege can be abused
Knowledge or reckless disregard as to falsity
Published for other purpose
Made to persons not included in privilege
Includes info not necessary for privilege
5ncludes unprivileged info as well

Held:
o

Just because it involved incidental communication beyond the confines

of the privileged group doesnt mean its an abuse of privilege as a matter
of law.
But it would be so easy to at least try to keep info privileged (just write confidential or
put in a memo rather than newsletter.
Difficulties in this day and age how to advise?
But maybe easier because of things like password protection?
What is employer was wrong about claim but published it?
Abuse of privilege reckless disregard of falsity?
What if employer wasnt reckless? Why not negligence standard?
Sigal Construction Corp. v. Stanbury (CoA (highest court in) DC 1991)
Facts:
Fired by D then seeks employment and prospective employer calls for reference
Employer says positive and negative things (some very negative) based on
reputation and impression never worked with or evaluated personally.
But didnt mention lack of knowledge, told him he had worked with Stanbury.
P doesnt get hired
Court:
Opinion/fact distinction is dumb, so opinions like this one can be considered
factual and can result in defamation
Defeating qualified privilege requires malice
o Gross indifference or recklessness so as to amount to wanton and willful
disregard for the rights of employee
Held:
o Sufficient evidence here for a jury to find abuse of the privilege rumor
was conveyed as fact. Court restricts holding to cases where these 3
things happen:
Conveyed info that cant be traced to anyone with personal
knowledge of the employee at stake
Nondisclosure: Didnt disclose nebulous source of info
Misleading: Led prospective employer to believe he had worked
with employee
Why do we protect this info under a conditional privilege?
Protects honesty between employers
Protects fluid labor market via information
Is gossip a good source of info? (Problems, but sometimes it is)

Is it enough if you disclose your source of info is gossip?

Would we fix this by formalizing the process?
o (HR dept, performance reviews, reviews that eliminate bias)
Legal regime to ensure this?
o Defamation (reckless if theres no formal attempt?); statute

Putting it together
o Privacy in employment law setting means a lot of different things:
Privacy claims of office and personal effects
Privacy claims in Brunner and political views
Privacy of drug tests
Defamation
o Theme:
Whats the appropriate scope of employer power?
Broad in the sphere of the employer and workplace does it extend to the
employees private life?

Employee Duties and Promises

In general:
o With trade secrets, noncompete clauses, and employee inventions clauses, courts seem to have a
higher bar for reasonability of restricting employee activity:
Public policy in favor of competition
Public policy in favor of employee autonomy
Duty of Loyalty and Trade Secrets
o The Theory of Trade Secrets and Noncompetition Clauses:
Becker distinguishes between two types of job training:
Specific training (only valuable to particular employer; employers should be
willing to pay for this)
General training (valuable to many employers > in theory employees must pay
the full value, normally in lower wages)
What if general training is too valuable for employee to pay in lower wages?
Employer may require employee to pay for general training before hire
Employer may pay for the training, but attempt to limit the employees ability to
leave until the employee has worked long enough to repay the employer for the
investment
Can we think of job training broadly to include valuable business information?
There may be a role for laws or Ks that impose limits on the ability of employees to
leave employment and take their job training with them
Justified when employers provide job training that is too expensive for employee
to pay for ahead of time at at the time of training
Encourages employees to produce valuable information and provide expensive
general training
Employers may otherwise have to take inefficient steps to protect information
(dividing tasks weirdly for example)
Courts must distinguish between two types of restrictions:
Those that protect employers when they disclose info to employees or invest in
training

Those that prevent employees from using general training that they have already
paid for themselves
Jet Courier Service v. Mulei (SC CO 1989)
Facts:
Company is courier for canceled checks
Mulei (employee) makes plans to form new venture to compete with Jet
Talks to people about joining > Fired
Opens company and poaches clients and staff
Court:
Restatement: Unless otherwise agreed, an agent is subject to a duty to his
principal to act solely for the benefit of the principal in all matters connected with
his agency
Fairness dictates that an employee not be permitted to exploit the trust of his
employer so as to obtain an unfair advantage in competing with the employer in a
matter concerning the latters business [Active competition is impermissible]
But theres a privilege in favor of employees which enables them to prepare
or make arrangements to compete prior to leaving
o Line separating preparation from active competition may not be clear
o It is the nature of the preparations which is significant
Key inquiry: Were Muleis actions solicitations? Or mere
preparation?
Held:
o Contact with customers might have been solicitation
Not necessarily just preparation because ACT didnt start
actually competing until Mulei was fired
o Contact with employees may have been solicitation
Not necessary for the employees to break contract for it to be a
breach (so that the other employees were at-will is not
dispositive see factors below)
Rule:
o Factors for determining whether an employees actions amount to
impermissible solicitation of co-workers:
Nature of employment relationship (so at-will does matter???)
Impact or potential impact of the employees actions on the
employers operations
Extent of any benefits promised or inducements made to coworkers
o That he continued operating Jet well doesnt mean lack of breach.
Cannot be compensated for period in which he was disloyal.
Note: Does it make sense for compensation to turn on loyalty
rather than performance? (sure if its an accepted duty
Performance is relevant, but under other laws)
Is duty of loyalty consistent with the at-will rule?
At-will rule only covers when you can leave
Interest in competition weighs against duty of loyalty
https://goo.gl/bVnR0C
Pepsico, Inc. v. Redmond (7th Cir. 1995)
Facts:

Court:
Illinois Trade Secrets Act allows injunctions for threats of disclosure, provable
by showing inevitable disclosure
HERE:
o Disclosure would be inevitable > affirms injunction
How specific was this conclusion to the facts of this case? Do we have this whenever
high-ranking executives go to competitors? Or is it exclusive to marketing strategy?
Should the employee be able ot work at Pepsi until then? No way repeats problem over
and over But what can he do?
Make Pepsi pay for the injunction?
Its been priced into his high executive salary?
Make Quaker pay? Make them negotiate?
Enforcement of Non-Competition Clauses
o REM Metals Corp. v. Logan (SC OR 1977)
Facts:
Welder denied raise and goes to competitor
Clause in K: Would not engage in any business in competition with REM in the
US within one year
Court:
Non-compete test:
We will enforce these covenants only when:
o (1) Employer has sufficient protectable interest in the skills and
knowledge of the employee
Determined by court: general vs. specific skills/knowledge
General knowledge acquired does NOT by itself give
the employer a sufficient interest to support a restraining
covenant
Burden of proof on employer
To show existence of trade secrets, info or relationships
that pertain peculiarly to the employer, or other special
circumstances
Contemplates whether skills/training paid for by employer or
employee (priced into lower wages?)
o (2) Covenant is reasonable in scope and duration
Here:
o REM failed to meet burden of proving trade secrets/specific knowledge
[Failed first prong]
Court turns the contract into a trade secret analysis K clause almost irrelevant
Why disregard specific clause? Why treat this term differently?
o Asymmetry of bargaining power

Redmond was employee at Pepsi managing marketing, moved to Quaker

(Gatorade)
Pepsi seeks preliminary injunction to stop him from disclosing secrets (and from
assuming any duties with Quaker relating to pricing, marketing, and distribution)
o Argues that disclosure of Peps marketing strategy will be inevitable
because his role at Gatorade will be directing marketing strategy

Behavioral economics problem cognitive failure on employees part

contemplate wages, but not post-job terms
o Deleterious effects on public and free competition
o Affirmative/negative difference: distinction about what an employee can
do rather than a restriction on what the employer does (providing wages,
pension, etc.) > scared of limiting employees?
Karpinski v. Ingrasci (CoA NY 1971) Fails second prong
Facts:
Employer oral surgeon hired D (employee)
Employee agrees never to practice oral surgery + dentistry within the 5 boroughs
of Ithaca except with the employer or if the employer fires and replaces him
Leaves and opens competing dentistry office > employer seeks injunction
Court:
Clear breach, but not dispositive because powerful considerations of public
policy militate against sanctioning the loss of a mans livelihood
Here only a partial injunction can be granted > some components of the
noncompete must be severed because they are not reasonable
Reasonableness test:
o Territorial Scope:
Absolute size
Good fit
o Temporal ban:
Can be forever, not necessarily unreasonable
[Here not, so when would the temporal element be
unreasonable???]
o Substance:
Cannot be too broad
Here:
o Unreasonable to preclude employee from practicing dentistry instead of
just oral surgery > too broad, substance unreasonable because they
wouldnt be in competition.
o Other parts reasonable
Why do we subject covenants not to compete to a reasonableness test but not other
provisions of employment contracts?
Many provisions cover post-employment (i.e. pension), and many limit
employees ability to walk away/say no
One reason may be that it undermines autonomy
Also employment relationship is over (but thats often the case)
Public policy interest in liquidity of labor market and at-will default
Maybe theyre not so bad > Coase theorem Note 2 can pay to waive injunction and
final outcome will be efficient regardless of injunction (yea but incentives may be
wack because too much of the benefit will be going to one party? Transaction/negotiation
costs)
Vagaries in reasonableness makes it hard for lawyers to advise clients on enforceability
Monopoly position may be relevant in allowing enforcement (Note 4) ??? Can I write
about this kind of thing on the exam? Stuff from notes?
Overbroad clauses may be struck, rewritten, maybe only if separable, maybe kill contract
(depends on court)
o

Outsource International, Inc. Barton & Barton Staffing Solutions (7th Cir. 1999)
Facts:
OSI employer files TRO and preliminary injunction against former employee
Barton and his new competing company
Court:
IL will enforce when reasonable and necessary to protect a legitimate
business interest of the employer
o 2 situations in which employer has legitimate business interest:
Where customer relationships are near-permanent and but
for the employees association with the employer the employee
would not have had contact with the customers
Where the former employee acquired trade secrets or other
confidential information through his employment and
subsequently tried to use it for his own benefit
Here:
o Court finds both situations could apply
o And no real arguments raised about lack of reasonableness in scope
Dissent (Posner):
This is totally the right result in terms of substantive justice but wrong in terms
of IL law
IL has historical basis of hostility toward noncompetes: paternalism in a culture
of poverty, restricted employment and a thin social safety net
o People were tricked into them
But now, theres no longer any good reason for such hostility
o Note: Is a judge equipped to make this kind of judgment?
If not, how can we support judges imposition of reasonableness
on noncompete clauses?
Hostility focuses on quashing competition and this is de minimis doesnt
require judicial enforcement
Value in enforcement:
o Employee access to trade secrets
o Human capital investment
Can be abused by employers but traditional K doctrines of fraud, duress, and
unconscionability can curb/police this
o Reasonableness is a consideration in those defenses
Employee Inventions
o Ingersoll-Rand Co. v. Ciavatta (SC NJ 1988)
Facts:
K: Holdover clause gives employer rights to employee inventions made within
one year of termination if attributable to work done during employment
Ciavatta was never involved in research on friction stabilizers but invented
something related after being terminated
Court:
Courts apply reasonableness test to holdover agreements
o To protect employer trade secrets, confidential info, and customer
relations
NJ test for reasonableness for CNCs:
o

Noncompetition covenants are reasonable/valid if:

Simply protects the legitimate interests of the employer
Imposes no undue hardship on the employee
Not injurious to the public
Applies same test to this holdover clause because theres an interest in protecting
competition in both cases
Employer legitimate interests:
o Trade secrets are paradigmatic interests > its about protecting
employers from theft or piracy of trade secrets, confidential info, or
knowledge/technique in which the employer has a proprietary interest.
Here:
Not the unique type of info we would deem protectable
o When an employment environment promotes research and info
protectable
Here:
This wasnt a think tank environment such that it
was protectable
[So what is? How will we know when we see it? Distinct
from equipment? Is this nonsense? Do we want
structured or unstructured brainstorming?]
o Manner of departure is a factor (I guess in determining if it protects
employers from theft of private info (legitimate interest))
Not dispositive, but if they left to develop a competing product,
that could mean something
Here:
o He only started thinking about the invention
months after termination
Common law:
Individuals have a right to their inventions
o If employee is hired to design something, invention is employers
o If not hired for the purpose, employer has a shop right in invention >
Implied license to make use of invention
o

Prohibitions on Status Discrimination

Disparate Treatment (Our cases examine individual rather than systemic???)

o Title VII
703(a)(1)-(2)
(a) It shall be unlawful employment practice for an employer
o (1) to fail or refuse to hire or to discharge any individual, or otherwise to
discriminate against any individual with respect to his compensation,
terms, conditions, or privileges of employment, because of such
individuals race, color, religion, sex, or national origin; or
o (2) to limit, segregate, or classify his employees in any way which would
deprive or tend to deprive any individual of employment opportunities or
otherwise adversely affect his status as an employee, because of such
individuals race, color, religion, sex, or national origin.

 706: Enforcement provisions

(g): If the court finds that the respondent has intentionally engaged in or is
intentionally engaging in an unlawful employment practice charged in the
complaint, the court may enjoin the respondent from engaging in such unlawful
employment practice, and order such affirmative action as may be appropriate,
which may include reinstatement or hiring of employees, with or without back
pay (payable by the employer, employment agency, or labor organization, as the
case may be, responsible for the unlawful employment practice). Interim earnings
or amounts earnable with reasonable diligence by the person or persons
discriminated against shall operate to reduce the back pay otherwise allowable.
[No remedies if discharge was not due to a Title VII violation].
McDonnell Douglas Corp. v. Green (SCOTUS 1973)
Facts:
P is black
Laid off > thought discharge and general hiring practices were racist >
Participated in stall-in protest
Unknown if he participated in lock-in
Reapplied and was denied for participation in stall-in and lock-in
Court:
3-step test for a racial discrimination claim in a Title VII trial:
o Claimant has initial burden of proof to make a prima facie case:
Member of racial minority
Applied and was qualified for a job for which the employer was
seeking applicants
Despite qualifications was rejected
After rejection position remained open and employer continued
to seek applicants from persons of complainants qualifications
o Burden shifts to employer to show rejection for nondiscrimination
reasons
Here:
Illegal protesting met rebuttal requirement
o [How much of this depends on conduct being
illegal? On being illegal towards the employer?]
o Once employer articulates nondiscriminatory reason, burden shifts
back to employee to prove that the reason is just pretext
Examples of such evidence: Employee treatment by employer,
white employees in similar activity retained, even broader
employer policy of discrimination may be considered.
Here:
Remanded for this
Title VII changes the at-will rule:
Provides some impermissible justifications for employment decisions
Under at-will rule, what should count to fulfill the employers burden of showing
nondiscriminatory basis for decision? [Is any reason, including no reason
legitimate???]
In theory, broad leeway, but in reality, employer must show good reasons (a la
just-cause). Title VII thus not only proscribes bad reasons; it requires good
reasons

Price Waterhouse v. Hopkins (SCOTUS 1989)

Facts:
Hopkins up for partner, totally qualified, but negative remarks of partners about
interpersonal skills (i.e. aggressive) keep her from being elevated. Advised to
be more feminine if she wants to get partner.
Expert witness says sex stereotyping influenced this decision
o Aggressiveness is often a virtue when exhibited by males
Court:
Valid Title VII Claim: Employment decision because of sex includes sex
stereotypes
PW gave 88 people partner that year. 0 were women.
o Hypo: What if 44 new partners were women who were feminine enough?
Still has title VII claim same sex stereotyping discrimination
would be occurring against her.
Employer would not be liable if it can prove that even if it had not taken gender
account, it would have come to the same decision
o This is NOT a question of if the same decision would have been justified
o The question is if the same decision would have been made asks about
what actually motivated them at the time of decision
Must show that legitimate reason standing alone, would have
induced it to make the same decision
o [But does this distinction actually avoid the problem or being able to
offer other random reasons?]
Jespersen v. Harrahs Operating Company (9th Cir. 2006)
Facts:
Harrahs has a Personal Best program with elaborate dress code:
o Some requirements for both sexes: clothes/shoes, well groomed
o Men only: short hair, no makeup
o Women only: Hair must be done and down, makeup at all times
P doesnt wear makeup (conflicts with her self-image) > fired
Court:
No title VII Sex stereotype violation
No discriminatory effect
o Due to unequal burdens?
An appearance standard that imposes different but essentially
equal burdens on men and women is not disparate treatment
Here:
o Not more onerous for one gender than the other
-_o Inappropriate to take judicial notice of time and
money involved with makeup (so says no
evidence)
o Due to sex stereotyping?
Touchstone is reasonableness: context of overall standard
imposed on employees in a given workplace
Women must wear makeup to look their best
Sexually appealing might matter

Here:
o

o
o

Dissent 1:
There is sex stereotyping: message is that womens undoctored faces compare
unfavorably to mens cultural assumption that womens faces are incomplete
without full makeup
Dissent 2:
That^, and unequal burden: there is no doubt that putting on makeup costs money
and takes time dont need an expert witness for that. Facially unequal policy.
Also legitimate to consider personal burden finding it inconsistent with her selfimage. > Those of us not used to wearing makeup would find it intrusive!
Sachs:
Yea this was stupid. Perhaps due to anxiety about going too far with dress codes.
Why would Harrahs make this rule in the first place?
Customer preference (normative preferences)
o [Thought: this rationale has serious limits. For example, you cant use
customer preferences as a basis for only hiring one race or sex; that
would be a clear violation of Title VII or would it? At least with sex, it
can be OK if it connects to your company goals (Think Hooters). So
where is the line???]
Gendered ideas about employee morale/professionalism
Complainant v. Foxx (Equal Employment Opportunity Commission Appeal from decision of
Federal Aviation Administration (Agency) 2012)
Facts:
Air traffic controller not selected for permanent position despite being well
qualified
Alleged he was not selected because he was gay
Supervisor made negative comments about his sexual orientation
Court:
Coverage of a sexual orientation claim is the same as any other Title VII case
involving allegations of sex discrimination: gender has been taken into
account
A complainant alleging that an agency took his or her sexual orientation into
account in an employment action necessarily alleges that the agency took his or
her sex into account.
o Sexual orientation is premised on sex-based preferences, assumptions,
expectations, stereotypes, and norms

Only evidence to support stereotyping claim is

Jespersens own subjective reaction to the
makeup requirement no evidence to indicate
that the policy was adopted to make women
conform to a commonly-accepted stereotypical
image of what women should wear
Nothing sexualizing like short and revealing
so its not sexist!
[Afraid of floodgates all dress codes
differentiating could be Title VII (yes)]

Also sexual orientation discrimination is associational discrimination

on the basis of sex > treated differently for associating with a person of
the same sex
And statute prohibits discrimination based on association with a
person of another race (including interracial marriage)
o Also necessarily involves gender stereotypes > LGB people can bring
claims if their conduct is viewed as insufficiently masculine or feminine.
Also direct stereotype with the discrimination is that real men
should date women
Rule [summarizes above]: Each of the following is sufficient:
o Involved treatment that would not have occurred but for the
individuals sex
o Based on the sex of the person(s) the individual associates with
o Was premised on the fundamental sex stereotype, norm, or
expectation that individuals should be attracted only to those of the
opposite sex
Get someones notes on what was said in class about this???
The Bona Fide Occupational Qualification (BFOQ) Defense
o This is narrow exception for sex and does not exist for race (Sachs in class) [???Supp. 118:
authentic atmosphere of an ethnic Chinese restaurant (C.D. Cal. 1970)][Also supp. 116: French
cook in French restaurant contemplated by senate > so not just sex]
o 703(e) provides for it with religion, sex, or national origin???
o Dothard v. Rawlinson (SCOTUS 1977)
Facts:
22 year old women denied job as a Correctional Officer
AL rules for COs:
o Statute: Height and weight requirements (52/120lb)
o Admin. Reg. 204: Gender requirements for contact positions that
require close physical proximity to inmates (most CO positions)
Court:
Statute:
o P need only show that facially neutral standards cause discriminatory
pattern
o Burden to D to show requirement has manifest relationship to the
employment in question
o Burden back to P to show other selection devices that serve the interest in
efficient and trustworthy workmanship, but dont discriminate
o Here:
Could measure strength directly. These requirements arent legit.
Regulation:
o Discrimination based on sex is valid only when the essence of the
business operation would be undermined by not hiring members of
one sex exclusively
Need a factual basis for believing that all or substantially all
women would be unable to perform safely and efficiently the
duties of the job involved.
And no stereotyping.
This is very narrow, however>
o

Dissent:
Otherwise unlawful discrimination is justified by the Court on basis of barbaric
conditions in AL prisons. Should judge based on normal operation.
We need to fix the prisons not remove women.
No evidence women guards would lead to excess danger
Rationale of harder to maintain order perpetuates myth that women, wittingly
or not are seductive sex objects > Women shouldnt have to pay the price for
threat of depraved conduct.
To deprive women of job opportunities because of threatened behavior of
convicted criminals is to turn our social priorities upside down.
I hope lower courts limit this to extreme AL prison facts
Does the dissent rely on facts or lack thereof?
Is it Title VII against the world? Title VII is the normative ideal and well fix the
world to it > fix the job, the environment, etc. so that gender is not a BFOQ.
Wilson v. Southwest Airlines Co. (NDTX 1981)
Facts:
Ps are men who were categorically denied positions as flight attendants for
Southwest
Southwest says attractive female attendants necessary for branding (love
campaign) and business success
o The rebranding got them out of a slump in 1970
o But surveys of customers indicate that female attendants arent such an
important factor compared to other factors
o Court: At most the survey shows that attractive, pleasant personnel are
liked by some passengers
Court:
No BFOQ defense
The defense is narrow
Legislative history: best interests of business subjective belief would have
sufficed > that was cut.
BFOQ only where it is necessary for the purpose of authenticity or
genuineness broadened to where satisfying customer preference is
reasonably necessary to the normal operation of the particular business
Rule:
o 5th Cir. 2 step BFOQ test:
Does the particular job require that the worker be of one sex
only?
Tests whether sex is so essential that a member of the
opposite sex simply could not do the same job

While 204 explicitly discriminates against women, it qualifies as a

BFOQ
Prisons are really bad and there are sex offenders
Risk not only to women Cos but also prison security > harder to
maintain order:
Inmates deprived of a normal hetero environment would
assault women guards for being women

Is that requirement reasonably necessary to the essence of

the employers business?
Assures the qualification being scrutinized is one so
important to the operation of the business that the
business would be undermined if employees of the
wrong sex were hired
Its about necessity not convenience
Diaz: To recognize a BFOQ for jobs requiring multiple abilities, some sex-linked
and some sex-neutral, the sex-linked aspects of the job must predominate
o Here:
Tangential to the essence of the job
If we considered making a profit the essence, the rule would
be swallowed by the exception
Here:
o Not like Fernandez where Latin American and SE Asian customers
would not work with a woman > here customer preference for one sex is
not so strong that business would be undermined if employees of other
sex were hired

Customer preferences arent enough > some customer preferences are

illegitimate (discriminatory ones)
How is this distinct from Fernandez?
Tied to economic norms must be able to tie everyone in the market in order to
guarantee that the regulation isnt just competitive disadvantage
[If part of Title VIIs goal is changing customer preferences, that can be
controlled domestically, but not internationally]
Why commit to FCPA and not norms like these?
Does this case rely on evidence? (If the survey results were different, would we feel
differently?)
Maybe we can distinguish between business essence vs. competitive strategy
Last paragraph: this case has disquieting strains: in our demand for non-racist, nonsexist goals the demand for equal rights can be pushed to silly extremes; Such inability
to absorb the minor indignities suffered daily by us all without running to court may stop
it dead in its tracks what does this mean?
Silly that men are bringing claims?
Silly because the harm is so little?
Maybe that claims with small harms will demean the Title VII jurisprudence?
That its not the role of the legal system to solve every point of potential
frustration in the workplace to a certain extent, people need to be thick-skinned
to be adults worthy of the laws protections
This issue doesnt disappear: Hooters lawsuit
Settled > can hire women only as servers, but must hire men as hosts and
bartenders
Hooters alleged the business essence was vicarious sexual entertainment, EEOC
said No, youre a restaurant
Who gets to determine what a businesss essence is? The business? Judge?
Agency? Evidence matters?
Differences between Hooters and strip clubs:

Essence is restaurant; must choose

Title VII wants to change customer preferences of positions like
servers, secretaries, etc. this impacts an industry and you dont want to
inject these jobs with vicarious sexual entertainment; some
competitive strategies are illegitimate?
Disparate Impact: Policies/laws that are facially neutral
o Griggs v. Duke Power Co. (SCOTUS 1971)
Facts:
Dukes employment policy used to explicitly favor whites.
After CRA, set up hiring tests (general aptitude (not work-related)) and high
school diploma for any dept other than Labor
Court:
CRA proscribes practices that are fair in form but discriminatory in
operation if they are unrelated to business necessity
Here:
o Due to discrimination > unequal educational opportunity > black
applicants will do worse on tests
o These tests have no connection to job performance
o No intent inquiry; good intent does not redeem discriminatory practices
Elements of a disparate impact claim:
1) Identify a facially neutral factor used to make an employment decision and
2) prove that the factor has a disparate impact on a protected group. If the P can
prove those elements, the employer may defend by
3) proving that the factor is justified by business necessity
^from Griggs, but subsequent cases show:
4) Where a factor with disparate impact is justified by business necessity,
plaintiff can prevail by demonstrating that other selection processes with lesser
discriminatory effect could suitably serve the employers business needs.
EEOC has proposed a rough rule of 80% selection rate showing disparate impact (???
Not in required material, so should i?)
o Ricci v. DeStefano (SCOTUS 2009)
Facts:
New Have fire dept tests for lieutenant and captain:
o Tests:
Written and oral weighed 60/40
Rule of 3: must choose from 3 highest scorers
Much more tailored to the job
o 15 slots open: none will be filled by black applicants even though 25
passed the tests
o New Haven sees potential Title VII violation here if they use the
results > throws out results [makes this decision based on race of
successful candidates]
Ps are whites/Hispanics who would have been considered; allege not adopting
the test results is disparate treatment
Court (Kennedy):
Adopts strong-basis-in-evidence standard as a matter of statutory
construction to resolve any conflict between the disparate-treatment and
disparate-impact provisions of Title VII
o
o

Can engage in disparate treatment when strong basis in evidence to

believe they would be subject to disparate impact liability without doing
that
Begins analysis agreeing that throwing out results is disparate treatment >
question is whether Citys aims (avoiding disparate impact liability) are
legitimate
Looks at 14th Am. Equal protection cases on remedial actions based on race
o Only constitutional when there is a strong basis in evidence that the
remedial actions were necessary
Burden shifting analysis (disparate impact):
o (1) Ps: prima facie case of disparate impact
o (2) Ds: show practice is job-related for position and consistent with
business necessity
o (3) Ps: Show employer refused to adopt available alternative practice
with less disparate impact that serves the employers legitimate
business needs
City would only be liable (without throwing out results) if it failed (2) or if
potential Ps could show (3)
Court finds neither
o City says less discriminatory alternative different weighing on
written/oral tests or different interpretation of the rule of three
o Court says no showing that 60/40 is arbitrary and its the product of
negotiations with the union
[why does this matter? And what is the makeup of the union?]
o Court: Altering the rule this way would violate the ban on changing test
results
[Would it though?]
o Court: Also, tests were clearly job-related business necessity
Held: No strong basis in evidence the City would have been on the hook for
discriminatory impact liability, thus throwing out results was illegitimate
Dissent (Ginsburg):
Rejects strong basis in evidence test
I would hold: An employer is getting rid of a test because its results would have
discriminatory impact that choice could not violate Title VII if the employer
has good cause to believe the device would not withstand examination for
business necessity [actually based on Griggs and whatnot]
City had ample cause to believe this and throw out results
o [Like why weigh a written exam heavily for a firefighter position?]
Also totally weird to say that attempting to comply with Title VIIs disparateimpact provision is an act because of race
Concurrence:
The case merely postpones the evil day on which Court will have to confront
question: Whether, or to what extent, are the disparate-impact provisions of Title
VII consistent with the Constitutions guarantee of equal protection?
Why shouldnt a prima facie case of disparate impact be enough?
Note: Ginsburg is not that far from Kennedy. Shes accepting the premise of the
case and the analysis, shes just setting a lower/broader standard
Reasonable Accommodation
o

Americans with Disabilities Act

2 (12101)
(a) Congress finds:
o (1) Physical or mental disabilities in no way diminish a persons right to
fully participate in all aspects of society, yet many people with
physical/mental disabilities have been precluded from doing so
because of discrimination; others who have a record of a disability or
are regarded as having a disability also have been subject to
discrimination
o (4) Victims of such discrimination have had no legal recourse
o (7) the Nations proper goals regarding individuals with disabilities are to
assure equality of opportunity, full participation, independent living,
and economic self-sufficiency
(b) Purpose of the acto (1) to provide a clear and comprehensive national mandate for the
elimination of discrimination
o (2) to provide clear, strong, consistent, enforceable standards addressing
discrimination
3 (12102)
(b) The term discriminate includes
o (5)(A) not making reasonable accommodations to the known physical or
mental limitations of an otherwise qualified individual with a disability
who is an applicant or employee, unless such covered entity can
demonstrate that the accommodation would impose an undue hardship
on the operation of the business of such covered entity; or
o (5)(B) denying employment opportunities to a job applicant or employee
who is an otherwise qualified individual with a disability, if such denial
is based on the need of such covered entity to make reasonable
accommodation to the physical/mental impairments of the employee or
applicant
12107: same as Title VII powers/remedies ( 705, 706, 707, 709, 710)
503: Prohibition against retaliation and coercion
(c) Remedies and procedures under 107 also available to aggrieved person for
violations of subsections (a) (retaliation) and (b) (coercion)
Generally:
Prohibits discriminatory treatment AND requires employes to take affirmative
measure to accommodate these protected classes
o [What is the conception of employment here? Pol]
Sutton v. United Airlines (SCOTUS 1999)
Facts:
Twin sisters are severely myopic but have perfect vision with glasses
Denied positions as pilots because of Uniteds rule on uncorrected vision
requirement
o Note: Why does the airline have this rule? Why not require pilots to have
an extra pair of glasses in their pockets? Is there a different screening-out
aim? Perhaps customer confidence > but is that legitimate >dont we
want to change those preferences w/ Title VII and ADA?
Court:

ADA says a disability is ( 12102(2)):

(A) a physical or mental impairment that substantially limits one
or more of the major life activities of such individual
(B) a record of such an impairment; or
(C) being regarded as having such an impairment
o Should disability be judged with or without corrective measures?
EEOC says without, but not us!
o Disability should be judged with corrections
Three provisions of ADA lead to this conclusion:
substantially limits in the present indicative verb form
with respect to individual so its an individualized
inquiry
Congress found that some 43,000,000 Americans have
one or more disabilities which is inconsistent with
definition that doesnt include corrections
Also we need this definition in order to consider debilitative
effects of corrective measures (like psychotic medication)
o Held: Failure to state a claim w/r/t subsection (A)
o What about subsection (C)?
Two ways to fall into this section:
Employer mistakenly believes individual has physical
impairment that substantially limits one or more major
life activities
Employer mistakenly believes that an actual, nonlimiting
impairment substantially limits one or more major life
activities. [this one is relevant here]
o Court: substantially limits requires that Ps be unable to work at
least a broad class of jobs (one job is not enough of a major life
activity)
o Court: an employer is free to decide that physical characteristics or
medical conditions that do not rise to the level of impairment are
preferable to others, just as it is free to decide that some limiting, but
not substantially limiting impairments make individuals less than ideally
suited for a job
[???? ??? Doesnt this produce weird results as you move along the spectrum on
spectrum disabilities? Vivian might have made this point]
Dissent:
o If the act was just about present ability to participate in society, many
impairments wouldnt be disabilities. Congress wanted them covered.
o Should be considered without mitigating measures (would consider Ps
disabled under ADA in subsection (A))
ADA Amendment Act of 2008, P.L. 110-325 (2008)
Ameliorative effects of mitigating measures should NOT be taken into account
EXCEPT: eyeglasses and contact lenses
Regarded as prong (third prong, (C)) no longer needs action to limit a major life
activity to be prohibited
12101 Note:
o

(a)(4): Sutton and companion cases narrowed the broad scope of protection
intended
U.S. Airways, Inc. v. Barnett (SCOTUS 2002)
Facts:
Employee hurts back, invokes seniority rights to transfer to mailroom.
Two years later, some more senior employees bid to take the mailroom position.
P asks for accommodation exception to seniority rule doesnt get it
Fired
Was the position a reasonable accommodation? Or is that preferential rather
than equal treatment (US Airways argument)
Court:
Act requires preferences in the form of reasonable accommodations. The
goal of equality may require preference.
ADA:
o Discrimination includes not making reasonable accomodations
o Reasonable accommodation may include reassignment to a vacant
position
The fact that an accommodation would provide a preference in the sense
that it would permit the worker with a disability to violate a rule that others
must obey cannot, in and of itself, automatically show that the
accommodation is not reasonable.
Ordinarily it will be unreasonable for an accommodation to trump a
seniority system, but this P should still have an opportunity to overcome
presumption to show accommodation is reasonable based on facts.
o Some things that might undermine value of seniority system:
Employer frequently departs
Lots of exceptions to seniority rules
Scalias Dissent:
Should never be an exception for ADA allowing overriding of seniority systems
Majority has a mistaken reading of ADA: Only requires suspension of
employment rules that would not be barriers but for a disability (ADA does not
speak to neutral workplace rules)
Thus, a seniority system even if it has a harsher impact on the disabled is not
a disability-related obstacle, so its an equal burden for disable and non-disabled
Pros of Scalia dissents logic:
Making majoritys legal rule ignores that seniority systems may sometimes
directly take into account disability things
Clearer (alternative is a standardless grab bag of which workplace preferences
are reasonable)
Souters Dissent (w/ Ginsburg): Barnett has met standard to show accommodation is
reasonable
Nothing exempts seniority rules from ADAs reasonable accommodation
requirement; Employer imposed this system unilaterally
Also employer has a disclaimer that the employee manual is not a contract, so
employer hasnt created reasonable expectations of strict adherence to seniority
system.
Barnett considered an accommodation which would have imposed costs mostly on other workers
in the form of lost opportunities. But that is only one of a wide variety of possible costs.

More commonly, the issue is more direct: how much must an employer spend?
Leading study says most accommodations are inexpensive
Usually costs more to replace employee
Costs can also appear in other forms like:
Leave of absence:
o Varies by case (see p543)
Work from home:
o Varies by case (see p543)
Sexual Harassment
o Meritor Savings Bank v. Vinson (SCOTUS 1986)
Facts:
P works for four years then takes indefinite sick leave and is fired.
Alleges had been constantly sexually harassed and raped by VP/manager.
Court:
Title VII claim: sexual harassment is sex-based discrimination
Title VII is not limited to economic or tangible discrimination hostile
work environment also violates Title VII
o Statutory language:
Terms, conditions or privileges of employment is expansive,
not limited to economic discrimination
o EEOC 1980 Guidelines:
sexual harassment is a form of sex discrimination independent
of economic quid pro quo if sufficiently severe to unreasonably
interfere with work performance or create hostile work
environment
For sexual harassment to be actionable it must be severe enough to alter
conditions of employment and create abusive working environment
Even if sexual contact was voluntary that wouldnt be a defense to a Title VII
sexual harassment suit: question is whether advances were unwelcome
o Harris v. Forklift Systems, Inc. (SCOTUS 1993)
Facts:
Subject to insults w/r/t gender
Quits
Note: Court stresses that these comments occurred in presence of others how does this
shaming aspect weight on analysis?
Deeply undermining employees standing in workplace, which is clear alteration
of terms/conditions of her employment
District Court: conduct was not so severe as to be expected to seriously affect her
psychological well-being and thus work performance
Court:
Two poles (court chooses middle path)
o One end: making anything merely offensive actionable
Looking for an objectively hostile work environment
o Other end: requiring tangible psychological injury
Title VII isnt about injury this way, its about equal work and
advancement opportunity; can be hindered without psychological
harm

When the workplace is permeated with discriminatory intimidation,

ridicule, and insult that is sufficiently severe or pervasive to alter the
conditions of the victims employment and create an abusive working
environment, Title VII is violated.
Scalia concurrence:
Concerned about the lack of clarity giving juries power to decide whether
conduct is egregious enough to warrant award of damages > offers no better
alternatives.
Vicki Schultz: Reconceptualizing Sexual Harassment
Current paradigm involves male superiors sexual advances on less powerful female
subordinate > based on sexual desire
This article challenges the sexual desire-dominance paradigm which ignores
conduct that consigns people to gendered work roles that do not further their own
aspirations or advantage.
Paradigm is Underinclusive:
o Most gender-based hostility is not driven by sexual desire, nor is it
sexual in content
May also be overinclusive:
o Some sexualized activity in the workplace is OK
The actual prevalent harassment: actions designed to maintain work as bastions of
masculine competence and authority
She proposed the Competence-centered paradigm
o Upholding the image that jobs demand masculine mastery by
undermining females competence to do work; a drive to maintain the
most rewarding lines of work
Where sexual misconduct occurs, it is typically part of a broader pattern of
harassment designed to reinforce gender difference and to claim work
competence and authority as masculine preserves
The competence centered approach works for same-sex harassment too:
o Men who dont fit stereotype of masculinity also challenge the
competence dont meet harassers image of suitable manly
competence
Although this analysis recognizes that same-sex, gender-based hostile work
environment harassment may include antigay conduct, it does not conflate
harassment on the basis of gender with harassment on the basis of sexual
orientation.

Regulation of Compensation

Minimum wage and overtime compensation:

o Recall Adkins and West Coast Hotel
o FLSA of 1938
o Primary challenge today is not incursion of freedom to K, but commerce clause authority
o Fundamental questions about FLSA remain
Fair Labor Standards Act: 29 USC 206, 207
o In syllabus: 29 U.S.C. 206(a); 207(a)(1), (e) & (h)
206(a) is minimum wage provisions
207(a)(1) says at least 1.5 pay over 40 hours in a week

207(e) defines regular rate, including all remuneration, but not: gifts, pay for non-work
periods like vacation or sickness, discretionary pay, trust payments (to retirement plans
and similar), extra compensation due to going over 8 hours in a day, extra compensation
for working on holiday/weekend, and a couple others.
207(h)
(1) Except as in (2) sums excluded from regular rate under (e) are not creditable
toward wages required under 206 or overtime compensation required under this
section
(2) Extra compensation paid in paragraphs (5), (6), and (7) of (e) shall be
creditable toward overtime pursuant to this section [thats extra pay for hours
over 8 per day/over normal working hours, extra pay for
holidays/weekends/sixth/seventh day of workweek, and extra pay at premium
rate for work outside hours established in good faith by contract as normal.]
o Covered Employer if 203: engaged in commerce with $500,000+ gross sales
o Minimum wage ($7.25/hr)( 206(a))
o FLSA has 3 principal substantive obligations:
Minimum wage
Premium pay for overtime work
Restricts ability of employers to employ children
o Policy on p594: Economics of minimum wage are complicated > there are a lot of indirect harms
and benefits (p596)
Overtime provisions intended to spread work > sometimes leads to lowered wages to
offset premium > also people sometimes just work for multiple employers instead
Could be paternalism for health and happiness > corrects for market failures
United States v. Darby (SCOTUS 1940)
o 2 questions:
Does Congress have the constitutional power to prohibit the shipment in interstate
commerce of lumber manufactured by employees making less than min wage or not
getting overtime?
Does Congress have the power to prohibit the employment of workers in production of
goods at other than prescribed wages and hours?
o District Ct. held that manufacture is not interstate commerce > outside of Congressional power
under Commerce Clause and Fifth and Tenth Amendments
o Court:
First question:
Motive and purpose of regulation is plainly to make effective the Congressional
conception of public policy that interstate commerce should not be made the
instrument of competition in the distribution of goods produced under
substandard labor conditions
Interstate shipment is clearly interstate commerce and Congress has power
of that for sure
Second question:
Is employment under other than the prescribed labor standards, of employees
engaged in the production of goods for interstate commerce so related to the
commerce and does it so affect it so as to be within Congresss power to regulate
it?
Congress may choose the means reasonably adapted to the attainment of the
permitted end even though they involve control of interstate activities

FLSA is Constitutional > valid

David Card and Alan Krueger: Myth and Measurement: New Economics of Minimum Wages:
o Evidence does not singularly agree that an increase in minimum wage reduce employment >
Their book presents evidence showing recent minimum wage increases have not had the negative
employment effects predicted by textbook models and some new evidence even points toward a
positive effect of the minimum wageo n employment, though most show no effect.
1) Study in fast-food industry in NJ after minimum wage increase showed employment
was not affected adversely and it actually expanded
2) A cross-state analysis finds that the 1990 and 91 increases in federal minimum wage
didnt affect teenage employment adversely
3) New evaluations show historical relationship between minimum wages and teenage
employment is weaker and no longer statistically significant
4) Document a series of anomalies associated with low-wage labor market and minimum
wage increase in minimum wage generates ripple effect leading to pay raise for other
workers
5) Recent increases in minimum wage have reduced wage dispersion, partially reversing
trend toward rising wage inequality.
6) Examine impact of news about minimum wage legislation on value of firms that
employ minimum wage workers. Stock market event studies show that it led to little or
no change in market value of low-wage employers
29 USC
Bright v. Houston Northwest Med. Ctr. Survivor, Inc. (5th Cir. 1991): on call
o EE is medical repair tech required by ER (D) to wear beeper and be on call for all hours hes not
working, must be within 20 minutes of work, cant be intoxicated, but otherwise could (and did)
sleep, be with friends, etc.
o Court looks at relevant SCOTUS precedent:
Armour & Co. v. Wantock: firemen who work 8-5 then on call 5-8 compensated
Distinction: Doesnt have to stay at place of business in our case
Skidmore: same distinction
o Looks at 5th Cir. Precedent:
Theyve found restrictions ok before and theyre stricter than here
o Test: Can the EE use the on call time effectively for his/her own purposes?
o Held: Bright could
o Dissent:
Other cases involve situation where employer had more than one employee sharing the
oppressive schedule. Here literally no free time.
ER enforcing restriction thrust of FLSA
o Is this the right test? Bright might be able to do some things, but hes seriously restricted!
Shouldnt he have to be compensated?
Options:
Has been paid for this, factored into wages
o How to judge if true? Bargaining power obvs
Much more than 40hr workweek, should get time and a half
o Too much? Not what Congress meant by overtime
Some sort of reduced compensation for on-call hours?
o Limiting principle? How to define?
Are you on call if you have to keep a blackberry all the time? Is
that less intrusive?

Should the law limit number of hours on call?

Dissent emphasizes Bs being on call all the time
EEs need to have some time that is theirs
Public/private distinction?
o Phones/email collapse the work/private spheres.
Do we want legal intervention to correct that?
Does this bother us?
Youre not working, but you are youre in the middle. Bright
says youre not working full stop. Why isnt it youre
working full stop?
Recall Brunner and the statutory purpose policing the line between work
and nonwork

What counts as minimum wage?

o Marshall v. Sam Dells Dodge Corp., (NDNY 1978)
Ps (EE) sell calls for D (ER). ER doctored books EEs worked 55h/wk but EEs got
$56/wk plus commission. Some staggered receipt of commission, but there are weeks
when P made only $56 for 55 hours of work
Min wage was 1.60-2.65
ER argued workweek not relevant time period; want to calculate over a broader period
(including commissions)
Why would we care that there are some weeks EEs received less than minimum wage if
over the course of a year they made more than minimum wage?
Ct cites Brooklyn Savings Bank: failure to pay statutory minimum may be
detrimental to maintenance of minimum standard of living necessary for
health, efficiency and general well-being of workers.
Must pay minimum wage all weeks.
Why put burden on ET rather than requiring EEs to put aside some $ for low
weeks?
o Problems include:
Drop below net min wage for a while before getting pay, same
concerns about standard of living
ER fires EE before commission, then never earned
o Note: Behavioral economics and paternalism: we need to enforce
smoothing income because EEs wont be able to do it well
Court: The Act requires that each employee receive, each week, an amount equal t o
the minimum wage times the number of hours worked
Ct cites DOLs interpretations of 206 which talks about workweeks and
which also requires base salary by workweek
o Admits 207 clearly stronger connection to workweek than 206
Ct criticizes ERs practice which established workweek as relevant pay period by
paying weekly paychecks
o [But the whole point of the case is the irregularity of ERs payments, so
relying on ERs practice is pretty strange]
What counts as overtime?
o Dunlop v. Gray-Goto, Inc. (10th Cir. 1976)
D (ER) didnt pay overtime work, but instead paid EEs fringe benefits (vacation,
bonuses) which equal or exceed amount EEs would have received for time and a half

Dc: fringe benefits could be set off against overtime pay (partially relying on express K
between ER and EEs allowing the substitution)
Statutory question: Does FLSA allow ER to substitute fringe benefits for overtime
pay?
Court: These fringe benefits are within 207(e)(1)-(4) so they are not creditable
towards overtime pay
207(a) requires that EE be paid 1.5x regular rate for all hours >40
207(e) defines regular rate of pay as all remuneration paid to employee with 7
exceptions:
o (1)-(4) are gifts unrelated to hours
o (5)-(7) are extra compensation
207(h) says subsections (5)(-(7) are creditable towards overtime pay (thus (1)-(4)
are not)
Is this correct?
Nature of the things that can be counted:
o (5): compensation at premium rate for hours > 8 in a day
o (6) premium compensation for weekends + holidays
o (7): premium compensation for extra hours beyond K
Unifying principle: $ earned for some kind of extra work
Any way to argue ERs fringe benefits offerings are more like (5)-(7) than (1)(4)?
o They get these benefits because of extra work.
What about the facts that EEs contractually agreed?
No private agreement between parties can circumvent the FLSA
o Asymmetric bargaining power, paternalism
o Counterargument in favor of being able to waive?
EEs might prefer this substitution and they wouldnt get it in any
other way doesnt give effect to EE preferences
Detrimental effects of overtime requirement: possibility of ERs
hiring more EEs instead EEs then just work two jobs
Effect of this holding?
The ER could put $ in a paycheck and then immediately take it out to put it
toward a benefit: just changes accounting
o Still better because at least theyre being clear about it?
o Is there a difference in taxes at all?
What about allowing waiver of minimum wage? (i.e. providing dental care or childcare in
exchange for $1 less of minimum wage)
How is it maximizing EE welfare and preferences to not allow them to choose
this?
o Weve chosen a value that trumps policy judgment that workers should
have a minimum amount of actual income

Lauren Weber:
o In general, broad exemptions have curbed the number of workers who can pursue overtime
claims
o $455 weekly salary floor has limited claims and as many as 88% of salaried workers may be
ineligible for overtime pay
o Even if the boss doesnt order workers to respond to email or handle other tasks during off hours,
employers arent immune from lawsuits

Labor-standards rules state that workers must be paid when employers allow work to take
place

Peter Goodman:
o Describes the job of being a chicken catcher dangerous, bad for health, low income
workers/migrant types used to be dominated by black people, now many Latinos. Make average
of $300-$800 per week but most considered independent contractors so no FLSA protections
Davis v. Mountaire Farms, Inc. (D. DE 2005)
o Chicken catching crew includes catchers and one supervisor.
o Ps (EEs) are supervisors seeking overtime payment from D
o Are supervisors executives (and therefore exempt)?
Note: these questions will determine whether EEs of companies like Uber and Instacart
are covered by the FLSA
o FLSA bona fide executive capacity four requirements:
Salaried at $450/wk
Primary duty is management
Customarily/regularly directs work of 2+ EEs
Authority to hire/fire or special weight in those decisions
o Here, no question of 1 or 3. Only questions are 2 and 4.
Primary duty?
EEs argue the policies were so detailed in guidelines all leaders do is carry out
those policies (not managing)
Court: Primary duty was management and well-detailed policies dont
negate that
o Ensuring policies are carried out is the essence of management work
Input into hiring and firing?
Ps say they rarely make recommendations, and when they do, its not given much
weight
Court disagrees: doesnt have to be unfettered discretion to meet particular
weight
Davis v. Mountaire Farms (3d Cir. 2006)
o Reversed on the basis that theres a genuine dispute of material fact w/r/t particular weight
question
It seems like just a limited power to borrow EEs from other crews and make referrals
o Which court has it right?
o Why do we have an exemption for bona fide executives?
Protection for ER these EEs have greater compensation and authority and dont need
the coverage
o Cases about Uber and Instacart: Are drivers employees or independent contractors?

Unemployment
Unemployment and Unemployment Insurance
o The UI Program:
Premised on the assumption that employees lose their jobs through no fault of their own:
Thus voluntary departure and willful misconduct generally exclude
Meant to be temporary job search requirement
Using payroll tax (so it does harm the ER) (since Social Security Act of 1935)

46 states have adopted bases higher than the $7000 federal base
State UI programs vary, but all have certain commonalities:
Eligibility depends on earning a certain amount, working a certain number of
weeks, or some combination, during a preceding base period (used to measure
workers prior attachment to the work force)
Most claimants must wait a week to collect benefits
Benefits:
o Full-time workers are commonly eligible for 26 weeks of benefits
o Generally 50% of weekly wages up to a statutory maximum (most cap it
at - 2/3 of the average weekly wages in the state) (smallest minimum
is $5 in HI; largest maximum is $943 in MA)
Revenues are held in federally-managed unemployment trust fund
1970s amendments: added coverage of state and local govt employees (even though
federal unemployment tax only covers private-sector EEs)
Primary goal: dampening the extent of cyclical unemployment
Work Search Requirements
Basic requirement that recipient seeks other employment
Knox v. Unemployment Compensation Board of Review (PA 1974)
Facts: EE was laid off with possibility of recall he hopes for recall (worked
there 17 years and had seniority) but in the meantime he seeks and has
unemployment insurance. He gets a job referral duing an interview and he
mentions he might be recalled and
said hed go back if he were recalled.
Doesnt get new job
Benefits terminated
Unemployment Compensation Law 402(a): which states: EE is ineligible for
weeks in which unemployment is due to failure without good cause to apply
to/accept suitable work when offered
o Suitable work > work
Protection for EE: Keeping EEs in their labor market; to force
them to work at 7/11 would disrupt labor market
How to define?:
Type of work
Level of pay/seniority
EE argues statute has in mind behavior that is irresponsible, lackadaisical, etc.
he was just being honest
Court: we sympathize, but attaching a condition to a new job that essentially
renders you unavailable for hire makes you ineligible for benefits
Given that EE could have quit at any time after hire, the statute suggest he should
not say anything in the interview and go to work:
o Is that good?
EE would feel bad (moral code) and the prospective ER is
harmed
But the rule promotes liquidity of markets and not supporting
these EEs with public money while ERs get to have labor on the
hook with a potential recall
o Would a rule allowing UI sans job search requirement be good?
Maybe, if theres a time limit allowing for recall

But seems like ERs would get to use that to cut costs in slow
times
Do we like the job search requirement?:
o Why not just a time limit?
o Isnt the low wage (1/2 weekly wages prior to unemployment) enough
incentive?
o Too intrusive? Govt getting too much of a role in individual choice?
But this is public $ and govt subsidizing these individuals
choices
Disqualification from UI Benefits
Wimberly v. Labor & Industrial Relations Commission (SCOTUS 1987) :good cause
pregnancy personal reason no UI
Facts: EE left because she was pregnant. ER policy allows leave without
guarantee of employment upon return. When EE returned, no job. Claim for UI
denied because MO rule denies coverage for EEs who leave voluntarily
Most states UI Policies require applicants to satisfy:
o Set amount of wages (or hours)
o Available for work
o May be disqualified for reasons in state law (i.e. voluntarily leaving
without good cause)
Is pregnancy good cause?
o Majority rule: pregnancy is good cause
o MO and a few others require good cause to be directly
attributable to work or ER pregnancy is personal
Rationale?
Instances were ER has control are when EE should get
benefits
o Federal law: (PDA 3304(a)(12): no person shall be denied
compensation under such state law solely on the basis of pregnancy or
termination thereof
Court: When Congress says solely on the basis of pregnancy states cant
single out pregnancy to deny benefit. Here the rule is neutral and just
disqualified pregnancy among a huge group of others also disqualified
o Its not even necessary to know EE was pregnant in order to deny
coverage. Enough to know reason wasnt applicable to job.
o EE admits this isnt pregnancy discrimination, but wants states to make
an exception to rule for pregnancy
o Court: Congress didnt intent to give pregnancy preferential treatment,
just equal treatment:
Is this right or is PL right?
Disparate impact and sex discrimination (title VII,
PDA)
Statutory text attaches solely on the basis of
pregnancy to the individual, not the statute, and in this
case she was denied benefits solely on the basis of her
pregnancy
MacGregor v. Unemployment Insurance Appeals Board (SC CA 1984):
Personal, but imperative and compelling

Facts: P (EE) waitress at Ramada; leaves work when pregnant; moves to NY with
unwed partner to care for his ailing father; cant find work in NY; goes back to
CA and files for UI
Note: Clearly would lose in MO
CA rule 1256: individual denied if she left work voluntarily without good
cause and good cause may exist for personal reasons if they are
imperative and compelling in nature
o reasonably motivate the average able-bodied and qualified
worker
Court: Leaving job to go with fianc to care for father with newborn is good
cause
o Leaving to be with a spouse is good cause (explicitly in statute)
Leaving to be with nonmarital partner is NOT enough absent
something else
Public Policy: Marriage
o Leaving to be with nonmarital partner PLUS child is enough
PP in maintaining nuclear family and strong parent/child
relations
Is the court focusing on UI or are they really making family policy?
o Court is favoring some families/relationships and not others
o Is it legitimate to do that through UI?
Yes! This is what states do all the time in law
Policing line of good personal reasons and bad ones
involves making some objective line so its not just an
individuals definition of imperative or compelling
Problems of proof determining contours of personal
relationships marriage and children help this
McCourtney v. Imprimis Technology, Inc. (CoA MN): misconduct
Facts: McCourtney (EE) fired after working at D (ER) for 10.5 years for
absences due to sick baby; she tries to located professional childcare; unable;
absent a LOT January May
o She doesnt challenge discharge, just denial of benefits
MN Law: individual discharged for misconduct denied benefits:
o What is misconduct?
Willful/wanton disregard of ERs interests
As found in deliberate violations of behavior ER has
right to expect
Carelessness/negligence to such degree
Inefficiency, unsatisfactory conduct, failure of good
performance as result of inability/incapacity, good-faith
errors, etc. are NOT misconduct.
Court: Frequent absences NOT disqualifying misconduct. She made good faith
efforts, unable to find child care, absences are excused and due to circumstances
outside her control
Why have separate standards for discharge and benefits?
o Doesnt work with at-will default
o Why not judge on good cause for firing standard (for UI)?

Policy goals for saying poor performance may qualify you to be fired but
also for UI because its not your fault?
o Policy reasons to construe statute broadly such that fault includes
something more than not being able to do the job?
UI supposed to encourage you to have a job best effort at job
you have if you still lose it UI will cover while you look for
another
Dissent: This makes the ER the victim of EEs problems obtaining childcare by
requiring the ER to either (1) allow absences like this, or (2) pay for UI at
potentially great expense
o [This is an overstatement, but UI does come from payroll tax on ERs
that corresponds with number of workers unemployed]
o Other social welfare programs have been developed to handle the
childcare issue
Is it legitimate for MN to advance child care policy through UI?
o This isnt the full solution but its the right thing to do, so at least were
doing this for starters
o Recall Brunner and the desire to allow individuals activity in the
personal sphere to be separate: ERs may control the work-sphere and the
non-work sphere. Are we now saying theres no more separation?
If UI is doing all these things, is it right that ERs bear the costs?
o Yes, theyre better positioned to do so; creates an incentive to treat EEs
like humans and be reluctant to fire them
o What does this say about how we see the employment relationship? 3 rd
party public? Public view?
The Hamilton Project, Reforming UI for the Twenty-First Century Workforce
Says US economy and workforce have changed dramatically since UI created: shift from
manufacturing to service industries as principle source of employment, widespread
deregulation, and a more open economy have changed nature of employ/unemployment:
permanent job loss and long-term unemployment are more common and contingent and
part-time work is routine; these changes had led to decline in recipiency rate of UI
3 challenges to current system:
1) program variation in states: leads states to fear generous programs will
decrease business competitiveness in race to bottom
2) overly restrictive eligibility criteria: too often disqualify workers with
intermittent work histories and lower-wage workers; eligibility may have little
evident economic rationale; no self-employment coverage for over 10 million
self-employed
3) shortcomings w/ regard to level, duration, and financing of benefits:
average level of replacement is only 35% of previous wages, often below poverty
line; duration only deals with short term cost of unemployment and doesnt
address long-term losses from re-employment at lower wage; disproportionate
high tax burden on lower-wage workers
3 Policy Proposals: designed to make UI system more responsive to current economy and
labor force:
1) Set federal standards regarding program eligibility, benefits, and financing
2) Supplement basic UI w/ a wage-loss insurance program to assist those reemployed at lower wages: would provide new incentives for workers to find new
jobs
o

 3) Allow self-employed workers to contribute to Personal Unemployment

Accounts
Federal Regulation of Plant Closings:
WARN ON PAGE 681
o Barry Bluestone & Bennet Harrison: The Deindustrialization of America:
For victims of plant closings unemployment consequences can be very severe ranging
from total depletion of savings to foreclosures and reliance on public welfare UI rarely
enough
Impacts on Physical and Mental Health: acute economic distress associated w/ job loss
causes a range of physical and mental health problems compounded by inability to obtain
normal health care and poorer nutrition and housing; can lead to increased blood
pressure, high cholesterol, ulcers, respiratory disease, etc; also increased headaches, upset
stomachs, depression, aggressiveness, alcoholism, anxiety also special psychological
problems arise in small communities where plant was localitys major employer; feelings
of lost self-esteem, grief, depression, and ill health can make it harder to find new job and
debilitating type of blaming the victim syndrome can evolve causing workers to feel
plant closing was their own fault
Ripple Effects in Community: When large businesses close down they can have
extraordinarily costly ripple effects in economy primary effects are businesss
employees, supplier firms, and govt loss of corporate income and tax; secondary shocks
include decreased retail purchases in community, reduction in earnings at supplier plants,
increased unemployment in other sectors; tertiary effects in form of increased demand for
public assistance and social services, reduced personal tax receipts, and layoffs in other
industries all these effects are magnified in company town situations
o Michael Luo: Job Woes Exacting a Toll on Family Life
Explains the greatest damage inflicted by recession and unemployment in many cases is
emotional and psychological, not financial; children have become hidden casualties with
adverse impact in school performance and self-esteem; more pronounced when father is
unemployed
o Worker Adjustment and Retraining Notification Act of 1988 (WARN)
Notice for any plant closing or mass layoff:
Plant closing: shutdown of single site causing employment loss for 50 or more
employees during 30-day period
Mass layoff: Reduction in force other than plant closing that causes employment
loss during a 30-day period for 50 employees and one-third of the workforce, or
for 500 employees even if less than one-third of the workforce
Two major exceptions:
Faltering company:
o Trying to keep plant open, and good faith belief notice would jeopardize
negotiations
Unforeseeable business circumstances
o New Accounts concerning Republic Windows:
Workers laid off from RW with only 3 days notice. Claimed to be owed vacation and
severance pay and should have had 60 days notice under WARN; workers engaged in
factory sit-in in protest and asking for their benefits; workers said management had kept
financial struggles secret, removing heavy equipment in middle of night, eventually were
successful in wining 60 days severance pay and earned vacation time; banks originally
said it wasnt their responsibility as lenders to ensure the company made the required

WARN payments and had been discussing closing over 6 months earlier giving plant
plenty of time to fufill WARN obligations; but banks agreed to lend money to pay
Roquet v. Arthur Andersen LLP (7th Cir. 2005):
Facts: ER is accounting firm with 27K+ EEs
Nov 2001: SEC subpoena (discovered EES for ER destroyed docs a week earlier)
Mar 2002: DOJ seeking indictment
Mar 7 2002: DOJ files sealed indictment for obstructing SEC investigation
Mar 14: indictment unsealed
Apr 8: informed EEs of layoffs coming
Apr 23: Layoffs
Q: would a similarly situated ER have seen the consequences or was the response
reasonable?
Court: ERs response was reasonable
ER wouldnt have reasonably reacted til mar 14, the date of unsealing
Ps argue: shredding docs in Nov should have led foreseeably to this mass layoff
Business circumstance is reasonably foreseeable when its probable not
merely possible
o And on 2/22, (60 days), not reasonably foreseeable, hadnt even been
indicted
Is this an appropriate construction of unforeseen circumstances?
Dissent:
o Should require notice at point when layoffs become foreseeable and
require notice at that point
By Mar 1, ER should have provided notice
o Its not 60 days all-or-nothing (requirement not eliminated); its a
requirement to give as much notice is practicable
Debate as to how to take account of when layoffs become foreseeable and how to
determine unforeseen circumstances continues to play out with WARN act
Fiscal Cliff sequester (1/2/13): 60 days earlier (before election) defense
contractors announced they would notify thousands of EEs of impending layoff >
DOL issued guidance: uncertainty of sequestration, so no requirement or
encouragement to notify EEs
Why is notice such a big deal?
Gives jump start to find another job and minimize unemployment
Would an EE rather have compliance (and notice) or violation (and 60 days
backpay)
o If part of the harm of job loss is not just income (as mentioned above)
then severance is not equivalent to notice
Effect of publicity of layoffs (no bargaining power/public response)
Why not have a statute requiring 60 days notice AND 60 days severance
State laws vary:
o CT may: require ER closing plant to continue health insurance for 120
days
o MA might: takeover requires notice and severance

Workplace Injuries and Diseases

Introduction:
o Intro Material
Peak in workplace accident fatalities was 1907 (more than 7,000 in just railroads and
mines) now annual number varies btwn 4,300-6,600 and workplace injury rate also has
declined
Costs: Natl costs of workers comp program have fluctuated over time but many studies
show many workers w/ work-related injuries and diseases dont receive workers comp,
particularly for occupational diseases; also significant indirect costs associated w/
workplace injury and disease including lost wages, retraining replacement workers
expenses, etc
Goals of Health and Safety Programs: Goals are first prevention of injuries and illnesses
and second compensation of workers injured or ill through cash benefits, medical care,
and rehabilitation services; but goals become less clear when you begin to flesh them out
willing to lose jobs for expensive safety measures e.g.? There are four principal
approaches:
(1) The Labor Market: serves compensation by paying higher wages for risky
jobs (risk premium) thus ex ante compensation; and serves prevention bc
employer is incentivized to improve workplace safety to reduce the risk premium
[prestatutory approach]
(2) Tort Suits: Recovery from suit provides ex post compensation and prevention
from employer incentive to improve safety to avoid tort liability [prestatutory
approach]
(3) Workers Comp: Cash benefits, rehabilitation services, and medical care in
compensation ex post; prevention from employer incentive to keep insurance
premiums down by having fewer cases of comp claims (experience rating)
[statutory approach]
(4) Safety and Health Laws: prevention from legal requirement to provide safe
and healthy workplace [statutory approach]
Questions to consider are whether the approaches are adequate? (Sufficient
resources and incentives?) And if the approach is equitable? (Various classes of
workers and employers treated fairly?) And finally if the approach provides
delivery system efficiency? (Desired levels of adequacy and equity w/ least use
of delivery resources i.e. employers, insurance carriers, govt agencies, attorneys,
doctors, etc)
o John Fabian Witt, Toward a new History of American Accident Law and The Accidental Republic
Explains how traditional tort law made it increasingly more difficult for injured
employees to collect b/c a lot of the accidents werent employers fault due to
industrialization of workplace: faultless victims of non-negligent injury precipitated
compensation crisis in accident law
tort law served as a poor compensation mechanism for accident victims
Quotes Roosevelt saying the mounting toll of industrial accidents required bold changes
in nations laws and that we should take the burden off of employee bc work done for
employer is ultimately work done for the public so is bitter injustice to make employee
bear all burden; said workers should receive a certain definite and limited compensation
for all accidents arising as incidence of their job duties regardless of negligence of
employer
Employer gets more certainty of obligation and less burden and cost from
litigation and worker gets relieved from bearing burden of non-negligent injury
By 1920 42 states had compensation systems like Roosevelts idea

Workers Compensation
o An Overview of Current Workers Compensation Programs
Workers comp principle has two elements: workers benefit from no-fault system
enabling them to recover where theyd be unsuccessful in tort and employers benefit
from limited liability
BUT remember workers comp is not a completely symmetrical system: since its not an
automatic claim employee must necessarily weigh the pros and cons of actually bringing
suit
Coverage of Workers: about 97% of workers are covered nationally but states vary bc
some exempt 1) employers w/ limited number of employees; 2) certain industries; 3)
certain occupations; also independent contractors are normally not covered
Coverage of Injuries and Diseases: Must meet certain legal tests to receive benefits,
generally:
1) must be a personal injury (some states exclude mental illness)
2) that results from an accident (some states thus exclude injuries developed over
time)
3) that must arise out of employment; and
4) that must occur during course of employment (generally meaning must occur
on work premises during work hours)
Disease coverage is a problem bc most develop over prolonged period
Medical Care and Rehabilitation Services: Most state workers comp laws require
employer to provide full medical benefits w/o cost to worker; this has become
increasingly expensive; medical rehab like physical therapy is likely to be covered but
many states dont provide vocational rehabilitation services that might be necessary to
prep injured worker for new job
Cash Benefits: Vary substantially among states in maximum amount, duration, and type
but generally not subject to state or federal income tax; (1) impairment approach rates
degree of impairment from injury and bases cash on that; (2) loss of earning capacity
approach rates loss of earning capacity as result of injury or disease; (3) actual wage loss
approach gives benefits based on actual loss of wages
Temporary Total Disability Benefits: completely unable to work but temporarily
Temporary Partial Disability Benefits: still recovering but can work to some
degree
Permanent Partial Disability Benefits: most complicated, controversial, and
expensive type of benefit; paid to worker w/ permanent consequence from injury
thats not totally disabling (like loss of hand); either (1) scheduled PPD benefits
are paid based on list in workers comp statute or (2) nonscheduled PPD benefits
paid for those not on list
Permanent Total Disability Benefits: completely unable to work for indefinite
period
Death Benefits: paid to survivor of worker killed on job
Financing of Benefits: Workers comp are prescribed by state laws but the laws assign
responsibility for provision of benefits to the employer who in turn provides the benefits
through one of three mechanisms: (1) by purchasing private insurance; (2) by purchasing
state workers comp fund insurance; (3) by qualifying as a self-insurer; nationally breaks
down to 50/25/25% (1/2/3); workers comp insurance premiums are experience rated
o Which Injuries are Compensable?

Injuries must be work-related, almost always defined as: only accidental injuries arising
out of and in the course of employment and this language has been interpreted to
encompass four legal tests: 1) injury, 2) resulting from accident that, 3) arose out of
employment (AOE test) and 4) in the course of employment (COE test)
COE Test:
Ezzy: off-duty recreational activities are a reasonable expectancy of
employment where P subjectively believes theyre expected and that belief is
objectively reasonable; if yes to both, meets the COE test
AOE Test:
This test meant to distinguish among three types of risks: (1) occupational risks
(like machinery breaking) that are universally compensable; (2) personal risks
(like heart seizure from drug overdose) that are universally noncompensable bc
are personal to claimant; and (3) neutral risks where cause of injury is neither
distinctly occupational nor personal or cause is unknown (may or may not be
compensable in each state);
Types of neutral risks include a) act of nature, b) assault by stranger, c) street
risks, d) unexplained death common legal tests for AOE for these neutral
things used now are: 1) Increased Risk Doctrine which requires job increase the
quantity of the risk, even if not peculiar to the occupation and 2) Actual Risk
Doctrine which allows compensation even if risk was common to the public as
long as is an actual risk of employment (p. 930)
Hanson: Court abandons increased risk doctrine and replaces with actual risk
doctrine for AOE questions
Injuries and Diseases for Which Compensability is Problematic
Workplace stress, cumulative trauma (i.e. carpel tunnel syndrome), back disorders,
respiratory diseases, heart disease, and many types of cancers are conditions for which
determination of compensability is vexing; they have many common characteristics:
1) workers comp laws sometimes treat these as injuries, sometimes diseases, or
both
2) often result from interaction of congenital, degenerative, work-related, and/or
personal lifestyle factors
3) symptoms may include subjective complaints (my back hurts) in addition or
instead of objective medical evidence
4) there are often competing medical theories about the cause
5) legal rules to decide whether condition is work-related are inconsistent w/
prevailing medical opinions about causation
6) disabilities may result from interaction of old or underlying med problems and
new work-related accident or exposure
7) many states amended workers comp in 1980s to make it more difficult for
workers with these conditions to satisfy the legal requirements and limit
employers liability
Workers comp doesnt cover illnesses, etc from job loss based on the fact that stressors
from job loss are too common to be compensable arguably everyone who loses a job
suffers from that and most states fear avalanche of claims in such situation
not in the nature of workers comp laws to deal with this broader swath of
problems

Chicago Board of Ed: workplace stress case; Court says mental disorders not resulting
from trauma must arise from a situation of greater dimensions than the day to day
emotional strain and tension which all employees must experience
Exclusivity
Founding principle of workers comp in exchange for no-fault system (good for
worker) workers comp became the exclusive remedy against employer for injury on the
job (good for employer); workers get less money than they would in tort and employers
give up tort defenses to liability thus employers pay more often but less money each
time
But there are several exceptions to exclusive remedy doctrine that allow injured
employee to bring tort suit against employer or another party
Millison: employers behavior falls into exception to exclusivity if it was
intentional meaning either a) there was substantial certainty of harm or b) if the
context in which injury occurred can fairly be viewed as fact of life of
employment or is plainly beyond legislatures contemplation for recovery under
only Workers Comp
To Whom Does Exclusive Remedy Provision Apply? p. 902
Under exclusivity injured worker may still be able to bring tort suit against a third party
who was at least partially responsible for the injury i.e. manufacturer of machinery that
was defective in design and sold to employer; manufacturer of asbestos for not providing
adequate warnings about dangers, etc
In general third party is liable for entire amount of damages experienced by worker
including lost wages, medical expenses, pain and suffering, and punitive damages and in
most states the third party cant require employer to pay portion of the damages courts
have reasoned exclusivity principle would be jeopardized if they could
Some states though require worker to elect either workers comp or a tort suit, not both
Ezzy v. Workers Compensation Appeals Board (CA CoA 1983) (COE test)
Facts: Ezzy (law clerk) injures finger playing softball for firms team
Compensation judge denies recovery: didnt occur in COE
Statute: 3600(a)(8): No workers compensation coverage for off-duty, recreational,
social, or athletic activity not part of work-related duties unless the activity is a
reasonable expectancy of, or expressly/impliedly required by employment
Court: its a close case but this was objectively reasonable:
Reasonable expectancy test:
o Subjective belief of expectancy
o Objectively reasonable belief
Here the low position and pressure on female EEs, substantial benefit to form,
firm paid for uniforms, and liberal construction of statute for EEs: tip the scales
in Ps favor
Do we agree that softball was reasonable expectancy of employment?
No: shes not required to play; no clear repercussions for saying no
o Obviously you could have a formal requirement to play
o As long as youre not required to do one activity , but encouraged to
participate in a menu of activities, this isnt required [although then 3
dangerous activities on list, but each one is individually a personal
choice???]
o We dont want to disincentivize ERs from encouraging social,
recreational, and athletic activities
Yes: This is impliedly required

Trying to cultivate relationships with partners, engage in firm culture, get

hired back/good reference; part of analysis of if shes a team player
choosing to participate in extra activities part of the set of factors on
which an EE will be evaluated
o Particularly for those lower on the hierarchy stronger if participations
is encouraged by superior
Problem: if we construe reasonable expectancy too broadly, it makes it the rule, but its
supposed to be an exception
Problem: were treating different EEs differently in the same context
This is an awkward result, but it might not be a problem; it might just reflect
reality
Hanson v. Rechelt (SC IA 1990): AOE Test
Facts: Hanson (farm worker) died of heatstroke while baling hay for ER
The sun killed EE. During employment, but from the heat.
IAs previous test: general public increased risk rule
Required that the employment intensified conditions experiences by public in
general
Wax: death by heatstroke employment brought no greater exposure to natural
hazard
Larsons criticism:
Comparison should be made with broad cross-section of public: what would an
average person do in these conditions (i.e. 120 degrees outside)? THEN
comparing EE to general public, we see the employment exposed the worker to
greater risk
o Vis-avis what someone not so employed would have been doing that day
Court: forms new actual risk rule: not a question of increased risk, but the risk ER
exposes EE to.
If the nature of the employment exposes the EE to the risk of such injury, the EE suffers
an accidental injury arising out of and during the course of employment. And it makes no
difference that the risk was common to the general public on the day of the injury.
Lets say it was death by lightning strike recovery?
GPIR test: probably not, no increased risk
AR test: yes, hes outside because of employment
So which test is better?
Workers compensation is supposed to supplement tort law, so how relevant is
foreseeability?
Actual = did this happen in some generic sense because the person was
employed?
Chicago Board of Education v. Industrial Commission (CoA IL 1988)
Facts: Claimant is an elementary school teacher; leaves job after 10 years because of
great psychological debilitation caused by workplace (allegedly chased, kick, bitten,
scratched, robbed)
Hed also been discharged from army for psychological issues and didnt have
friends
Legal position: workplace stress (if bad enough) can lead to mental disorder such
that it qualifies as a workplace disease
Statutory language: workplace disease must arise out of and in the course of
employment due to risk peculiar to employment and not common to general public
o

Court: Conditions EE faces are not much worse than normal teacher
Standard: if not caused by trauma, must be caused by situation greater than
day-to-day emotional strain and tension all EEs must experience
Why this test? Why not just stress occurring on the job?
Higher threshold level necessary to avoid floodgates
Court changes general public to employed persons
Concerns about fabrication and causation (difficulty of ascertaining cause of
stress)
Are these concerns legitimate reasons to adopt restrictive interpretations?
Isnt a floodgates argument a too much justice argument?
Could be an attempt to give effect to legislatures intent (more claims than
legislature could possibly have intended)
Is the court comparing EE to other teachers the right comparison? Should it be EE v
other EEs generally? Who is the relevant comparison set?
Assumption of risk is a tort principle it should not be informing what the court
is doing here, but it is
Assume economic downturn mass layoff EE suffers mental/emotional injury due to
loss of work. Comp will cover mental/emotional injury from work conditions but not loss
of work. Why not? Should it be?
Dont want to hold ERs responsible for eggshell EEs its a reality many must
deal with/fact of industrial life
Administrative difficulty (floodgates and fabrication)
But just because injury is common doesnt mean we shouldnt try to deal with it:
shouldnt have to be unusual
Problem of mental (v. physical) injury
Note: MA SJC recognized mental disease from layoff in 70s (then reversed by
statutory amendment)
Job loss can have a profound impact on children. Should there be workers compensation
for childs mental injury due to parents job loss?
That solution should not be through employment: we need a broader social safety
net than that
Connection between ER and child is too attenuated
Millison v. E.I. Du Pont de Nemours & Co. (SC NJ 1985)
Background: bargain of workers comp: workers give up right to sue ERs in tort, but in
exchange they get recovery without showing fault through workers comp.
EEs recover more often, but get less $
ERs give up defenses, but pay less $
Thus exclusivity is central, and workers comp must be exclusive remedy.
Here, theres a tort action for injury sustained at work from asbestos
ER: these claims are barred by NJ statute
EE: claim belons in the intentional wrong exception
o ER knew/should have known about asbestos; intentionally concealed
knowledge
o ERs medical workers concealed knowledge of EEs asbestos injuries
(Yearly physicals by co. drs showed asbestos injury and
concealed that info and sent them back to work)

No question that these EEs will be able to recovere workers comp. Question is if they are
limited to that remedy.
Court must defined intentional in ER conduct:
Mere knowledge and appreciation of a risk is not enough. P/EE must show
substantial certainty that exposing EE to working conditions would lead to
injury
What worries the ct about construing intentional harm more broadly than this?
You couldnt have industry this way theres almost always some sort of
knowing exposure to risk of injury/disease
We couldnt have workers comp if intent was this broad no exclusivity
Courts second route around the exclusivity provision: look at the context in which the
conduct took place: Cannot be fairly viewed as a fact of life of industrial
life/employment.
Were not in the coverage of this statute thats not what workers comp is for
wasnt contemplated by legislature
o What does this have to do with intentionality? Is this another way of
showing intentionality, or is it a new exception?
Court applies the tests:
Ps generic first claim doesnt meet intentionality standard
o This is type of harm contemplated by legislature
o Knowledge is not substantial certainty
o Generic harsh reality of industrial life
Ps second claim is a valid cause of action
o Well beyond failure to warn
o Actively misleading EEs who have already fallen victim
o Fraudulent concealment is not a risk EE should have to assume
o Not within bargain struck by Compensation Act
Which part of courts test are they using for 2nd claim?
Substantial certainty? Or not a normal part of industrial life?
o The latter: ERs doctors intentionally concealed the disease not part of
normal industrial bargain
Highest level of generality: not within normal industrial life: not part of
workers comp bargain
Another approach to this exception focuses on actual intent as deliberate intent to
injure: how is this standard?
left jab to the chin standard: way too high a bar even 2 nd count wouldnt
survive by this standard
But it avoids complex line-drawing as to what EEs should expect out of
industrial life - administrability
The Occupational Safety and Health Act
o Overview of OSHAct
Increase in injury rate in manufacturing sector in 1960s led to conclusion that some
action was necessary to reverse the trend and that states were unable or unwilling to enact
the strict regulations necessary to improve workplace safety and health: purpose is
mainly prevention
Coverage: covers virtually all private sector workers primary exceptions are those
covered by other safety legislation (miners e.g.); federal employees arent covered

Administrative Structure: created three major federal agencies to implement federal

policy including the Occupational Safety and Health Administration (promulgates
standards, inspects workplaces for compliance, prosecutes violations)
Promulgation of Standards: OSHAct didnt directly prohibit or require action - 5(a)(1)
general duty clause requirement to create place of employment free from recognized
hazards likely to cause death or serious physical harm and 5(a)(2) requires employers to
comply w/ standards later promulgated which include: interim, emergency temporary,
and permanent standards
Variances: employer can request variances to standards as either (1) temporary variances
(max 2 years to comply) or (2) permanent variances (if provided alternative means of
equal safety)
General Duty Clause: 5(a)(1) in general citation under this clause is only permitted if
no specific standard promulgated under 6 applies; there are four elements of a general
duty violation: 1) employer failed to keep workplace free of a hazard to which employees
of that employer were exposed; 2) hazard was recognized; 3) hazard was causing or
likely to cause death or serious physical harm; and 4) was feasible method to correct
hazard
Enforcement: Sec of Labor has broad powers to inspect workplaces and OSHA has
developed a regular inspection program and will also inspect on basis of employee
complaint; inspection prohibits advance notice to employer and may require warrant (see
Marshall); if violation Secretary required to issue citation to employer w/ reasonable time
for abatement; penalties for employer vary depending on severity of offense
State Plans: OSHA preempts most state safety and health activities, subject to certain
exceptions; however states can run their own safety and health programs if a) a state
agency is designated to run it, b) the agency has sufficient funds and legal authority, and
c) standards are as effective as OSHA standards
Substantive Criteria for OSHA Standards
Act doesnt clearly enunciate substantive criteria to be used by OSHA in setting standards
but 6(b)(5) says in promulgating standards dealing w/ toxic material or harmful physical
agents the standard must assure, as feasible, no employee will suffer material impairment
of health or functional capacity and considerations shall be 1) attainment of highest
degree of health and safety protections, 2) available scientific data in the field, 3)
feasibility of the standards, and 4) experience gained under this and other health/safety
laws
Recurring issue under OSHA is what should be used when creating standards; most
common are:
(1) Technological feasibility
(2) Economic Feasibility
o AFL-CIO: holds both considerations are permissible and something is
technologically infeasible if technology is not on the horizon and
economically infeasible only if it would be prohibitively expensive
(3) Benefits to workers health and safety
(4) Cost-benefit analysis
The Third Criterion: Benefits to Workers Health or Safety
Secretary must demonstrate through scientific evidence the benefits to workers health
and safety from the proposed standard under 6 or an enforcement action under 5(a)
general duty clause
Scientific evidence can be produced in an epidemiological study or in animal experiments

Quantitative Risk Assessment and Risk Analysis are the terms commonly used in
occupational health and safety area to describe the procedure to establish the benefits to
workers broadly defined its a method to estimate the likelihood that a particular
amount of exposure to a substance will cause the adverse health conditions
The Fourth Criterion: Cost-Benefit Analysis
Another possible criterion for evaluating the proposed health or safety standard is
desirable if benefits equal or exceed cost
Controversial though b/c monetary value must be assigned to possible advantages and
disadvantages; generally rely on info from labor market by comparing wages of jobs that
differ in their rate of workplace injuries or fatalities
Costs include everything from wages of personnel in administering and supervising
standard to capital expenditures for the equipment to costs of training workers, etc
In deciding the size of the program/stringency of standard there is the (1) economists
solution which would choose the size for which the marginal benefit of program equals
the cost; (2) nontransferable resources solution which rejects assumption of an
opportunity cost (which includes costs of not allocating the resources to more
productive areas of the economy); and (3) maximum safety at all costs solution which
would increase size to point where anything more would reduce the safety.
Enforcement
OSHA enforces Act through inspections conducted by compliance offers and citations for
violations fix a reasonable time for abatement of each violation; OSHA may also propose
a penalty for each alleged violation which employer can contest
Inspection task is daunting jurisdiction over 7 million workplaces w/ only about 1,000
federal and 1,000 state safety inspectors
Penalties: generally fines but there are three criminal penalties for willful violations that
result in death; for giving advanced notice of inspection; and for knowingly making false
statement
OSHA relies on site-specific targeting plan to schedule unannounced comprehensive
inspections for high hazard work sites and also has been attempting to promote a less
contentious relationship w/ business community through one-year exemptions for
compliant employers and no-cost consultations by OSHA to identify hazards and give
recommendations for compliance
OSHA inspects either through the programmed, targeted inspections or unprogrammed
inspections triggered by employee complaints, referrals, or other publicity
Marshall: 4th Amendment rights of employers requires warranted inspections by
OSHA
Criminal Prosecutions of Employers
OSHA primarily relies on civil enforcement but has 3 criminal penalties most
significant being 17(e) for willful violation of a standard causing employee death but
scope of criminal provision is limited willful requires deliberate action taken w/
knowledge of OSHA standard or plain indifference to its requirements (no criminal
prosecution for ignorant repeat violations or any violations resulting in serious injury)
Criminal prosecutions will never be a common method of encouraging workplace safety;
at most a dozen people have been jailed for OSHA violations; plus substantial resources
are required for criminal prosecutions
Criminal prosecutions are potentially useful for deterrence bc get attention of high-level
execs and also useful for raising public consciousness about safety issues and corporate
responsibility
Federal Versus State Authority for Workplace Safety and Health

State Authority Ceded Under OSHA: OSHA preempts state safety and health activities
however states can run their own safety and health programs if certain conditions are met
under 18(c) Sec of Labor may approve a state plan if a) a state agency is designated to
run it, b) the agency has sufficient funds and legal authority, and c) standards are as
effective as OSHA standards
As of 2010 were 22 approved state plans; however OSHA reviewed found
deficiencies in all of them there is evidence that state plans are lax (e.g. NC
fire) but states have 4-5x the inspectors per worker that the federal govt has
Other Sources of State Authority: OSHA preempts state plans that directly compete w/
OSHA standards but certain state laws w/ dual impacts, one being a safety or health of
workplace regulation gets trickier; two examples: (1) occupational licensing acts and (2)
right-to-know acts
Dual purpose may be preempted by federal guidelines on basis of state
regulations competition w/ them
State laws are preemepted when they serve as an obstacle to the accomplishment
of the federal standard, but may be permitted when promulgates more inclusive
standard
See Gade
AFL-CIO v. Brennan (3d Cir. 1975)
1 in 5 EEs with hands in dies lose hands No hands in dies standard responsibility
of ER to implement policies to effectuate the standard challenged secretary revokes as
economically (technologically) infeasible
Union claims Secretary relied on economic feasibility and thats not allowed
Even if some companies cant afford new standards and go out of business, thats
what Congress intended
Court: no, Congress did not intend to eliminate industry
2 of the Act: Statement of purpose upgrading of working conditions, not
elimination of hazardous occupations
Secretary may consider feasibility of toxic hazard eliminations (per 6(b)(5)) so
he must be able to with general hazards
o [weird logic]
Court agrees with 2d Cir. that to a limited extent OSHA is suppoed to be a
technology-forcing piece of legislation
o Court draws a line: technology that looms on todays horizon
If so, Secretary cant reject as infeasible
o Can OSHA make this distinction? How? Reasonable legal standard?
Very vague, hard to know when things will come out
Other options? Force OSHA to make a rule thats less
technologically infeasible?
o This doesnt save the no hands in dies regulation
There are some industrial activities with hazards so great and of such little
social utility that the Secretary will be justified in total prohibition:
o Good standard? Shouldnt the market take care of this? Can it? How can
OSHA do it?
Secretary of Labor determination of social utility (subjective?)
and then they just shut it down? Even if economically
successful?
o What is social utility?

Maybe if we price in workplace injury and other externalities, maybe we

can see the industry has little value
Economic feasibility:
o Line drawn (using Hodgson) OSHA is supposed to guarantee health
even if costly, BUT prohibitively expensive amounts to infeasibility
o Not quite in the statute: so wheres this coming from?
Implied that Congress was balancing economics and safety?
Cant we read that feasibility applies to toxics but NOT
everything else based on 6(b)(5)?
o Economic feasibility may exist for some firms but not others
If only the biggest companies in a sector can afford a new
standard, you can:
Impose the standard and contract/concentrate the market,
or
Not impose the standard
Court: in these scenarios, wait/delay imposition of standard
How to apply this rule?
Belief that competition and employment must be
preserved even though it may run against safety
doesnt this counter OSHA?
o Economically infeasible standards would prove unenforceable
(uniformly ignored) and thus administratively impossible
[Does resistance to a legal mandate justify not imposing the legal
mandate though?]
The court is making up a feasibility standard thats not in the statute. Thats not
crazy, but is it right to add it in? Where does it come form? Should it apply to all
aspects of employment law?
o Absurdity canon?
Is shutting down businesses for EE health absurd?
o Defer to agency where statute is silent
Marshall v. Barlows, Inc. (SCOTUS 1978)
Problem of advance notice: If ER knows OSHA is coming, may change conditions to
prepare, BUT unannounced inspections lead to 4th Amendment questions
Facts: ER refuses to allow OSHA to enter without warrant
OSHA 8(a) authorizes inspection without warrant
Court rejects this interpretation and mandates warrant
Looks at origin of the 4th Amendment and concern about govts general
warrant to enter, inspect and search (home and business alike) generally
warrants are necessary (homes and businesses; criminal and civil)
Secretary relied on exception for closely regulated industries (i.e. firearms,
alcohol) Court says this exception means THESE industries may not have a
reasonable expectation of privacy: this exception is not relevant here
o OSHA coverage is much broader: the Secretary is trying to turn the
exception in to the rule
o [Why doesnt wage and hour regulation regulate all business such that
the reasonable expectation of privacy is gone? Race to the bottom
problem?]
o

BUT STILL no requirement of probable cause to believe conditions

in violation of OSHA exist.
A warrant showing that a businesss has been chosen for an
OSHA search on basis of general administrative plan from
neutral sources would protect 4th Amendment rights
[So really, a warrant is so easy to get this requirement
is kind of dumb compare with Skinner too]
Secretary made reasonableness argument: Court should balance goals of
OSHAct with incremental protection of privacy of business owners a warrant
would afford
o Ex parte warrant: Sec. says there would be administrability problems
o Court: Most ERs will consent and there is no need to show probable
cause for ex parte warrants
o Court: Privacy interests are more than incremental
Leads to unbridled discretion to govt officers
Does this privacy protection make sense w/r/t safety and health of EEs? Privacy
interests weighty enough to trump those?
o Is this actually about govt abuse generally?
o This is a strange exception to a generally broad grant of regulation ability
of the workplace
o [Compare to Skinner: suspicionless blood and urine testing of EEs in
train crashes does NOT violate 4th Amendment because public interest of
safety and minimal privacy interest in EEs seems incongruous if looking
at the logic of this case how to reconcile? Problem with unbridled
discretion of the agent here? Is that fear the way to reconcile? Why isnt
that in the opinion?]
Whirlpool Corp. v. Marshall (SCOTUS 1980)
Regulation from Sec. of Labor: no right to walk off job because of unsafe conditions
Exception: When EE must choose between not performing a task or serious
injury or death no reasonable alternative good faith: may choose not to
work
o If fired for this, not a legal discharge
Reasonable person inquiry: Is there a real threat of death or sbi; EE must have
sought from ER and been unable to obtain a correction of dangerous condition;
insufficient time due to urgency of the situation to eliminate the danger through
resort to regulatory enforcement channels (Through OSHA)
Facts: Whirlpool (ER) is a plant where heavy things fall from conveyor belt. Steel mesh
screen catches them. EEs must remove objects from screen (sometimes by walking on
screen). In 1974, an EE fell through and died. So ER began to repair screen and forbade
EEs from walking on screens.
Ps (EEs) voiced concern to superintendent about safety of screen, then the plant
safety director (asking for OSHA contact info) foreman then assigned them to
work on section of old screen (direct violation of ER rules) Ps refuse Sent
home without pay for the day.
Is this regulation a permissible gloss by the Secretary of Labor? Do these Ps fall within
exception?
Court: We defer to Secretarys interpretation
Statute silent on this exact issue, so is it consistent with acts objective and
history?
o

Objective: prevent occupational deaths and injuries (through

prophylactic measures and general duty clause)
o Court: regulation is an appropriate aid to these ends; thus valid unless
contrary to legislative historys intent
o Legislative history:
ER argues there were provisions like this that were proposed and
denied so congress clearly didnt intend this interpretation
Court: Those provisions were not analogous
Why did ER care about this case enough to take it to SCOTUS?
Concerns over how much discretion the secretary has in the general duty clause
Worried this would make unruly/disobedient behavior/walkouts OK
Power dynamics concern ER v. EE whos the boss
Alternative approaches:
Walkout by nonunion workers to protest an unsafe workplace can be considered
concerted activity under 7 of NLRA (thus protected)
More in Tesla
Gade v. National Solid Wastes Management Association (SCOTUS 1992):
Statute: 18(c) allows Secretary to approve state program thats at least as effective as
federal program
18(b) gave states option of pre-empting this way
What can states do if they dont have an approved plan? Dual-impact laws? (in the
name of public safety and occupational health)?
IL laws (1988) with stated purpose to promote job safety and to protect life, limb,
and property licensing regimes for EEs handling hazardous wastes
Legitimate public safety interest here? Yes.
But 1986 Superfund Amendments and Reauthorization Act (SARA) direct
OSHA to establish federal licensing and training regulations.
Court: OSHA pre-empts all non-approved state regulations of occupational safety
and health for which a federal standard is in effect
That includes field preemption and conflict preemption
DOL argues: theres an additional purpose (public interest purpose) so its not
preempted
Court: we cant just look at purposes must also look at effect
And OSHAct preempts all state law that constitutes, in a direct, clear, and
substantial way, regulation of worker health and safety
o [whatever that means]
The IL statute does that.
On the other hand, state laws of general applicability (fire safety and traffic
safety) that do not conflict with OSHA standards, and that regulate conduct
of workers and non-workers alike, will not be preempted
What if IL really was only interested in public health and the only way to regulate was
through ERs?
Policy arguments for and against:
o For: Congress wasnt intending to regulate or prevent regulation of
occupations with 3rd party/public risks and harms
o Against: Interest in uniformity of regulations (served by preemption)
People v. Chicago Magnet Wire Corp. (SC IL 1989):
o

Facts: ER uses highly toxic substances in coating wires indictments for 5 directors, for
aggravated battery and reckless conduct doesnt meet any of the criminal provisions in
OSHA
Court: OSHA does not preempt criminal charges
OSHA doesnt cover criminal law ( 18 doesnt refer to criminal law at all)
ER argues criminal law does the same as OSHA (deterrence)
Court: criminal law does other things too (punish, regulate society generally)
ER: but OSHAct does provide for some criminal charges
Court: these narrow provision and weak penalties suggest legislature did not
consider egregious conduct like that causing serious injury and death.
Preemption would be wrong.
o [Doesnt this mean Congress did legislate on this, and chose a limited
recovery intentionally?]
Does this case survive Gade?
Some say no: supplemental statutes are denied by Court in Gade and dualpurpose statutes with some purposes in line with OSHA (regulating workplace
health and safety) still means preemption
Some say yes: criminal statutes are different (like laws of general applicability
applies to everyone, workers and non-workers alike)
Assuming it is good law post-Gade, what criminal law would be preempted?
Some sort of crime for exposing EEs to risk/dangers
Hypo: lets say a Chicago mayor directs prosecution of general crime (like aggravated battery) to
one and only one type of D: ERs exposing EEs to hazards (functional substitute for something
that would be formally preempted) preempted?
Yes?
Under Gade we look at effect, not purpose
What if the Mayor throws in a few other Ds for show?
Facts problem? Intent problem? Remedy problem?
Under Chicago Magnet, no preemption shes allowed to do this
Is it appropriate to enforce employment regulations through criminal law?
Yes ERs are committing crimes (i.e. false imprisonment, physical abuse)
What about a minimum wage or overtime violation?
Yes: Still good because criminal liability is a better way to enforce regulation
(today efficient breaches happen all the time) and incentivize compliance
No impractical, who would you punish? Raising fines is better.

Employee Leave

Introductory Material and the Right to Leave Time

o Leave time important type of employee benefit employees have been fired for missing work for
many reasons that are personally compelling but not legally protected (car for child, illness,
pregnancy illness, family member emergency)
o Leave also important b/c plays role across a variety of broader workplace issues women tend to
request more than men so leave time is central to leveling playing field; also important for
individuals w/ disabilities to participate fully in labor market; leave also increasingly important in
addressing family/work conflicts

Employer practices on leave time vary significantly and key variable is whether leaves is with or
without pay; most employers provide paid leave for some reasons like sickness 62%, vacation
77%, personal reasons 37%, and family obligations 10%
o Leave time generally not governed by ERISA and so are generally governed by state contract law
and different state and federal laws, some of which require employers to provide it
o Right to Leave Time: Most important law granting right is Family and Medical Leave Act of
1993 (FMLA) which generally requires employers w/ 50 or more employees to grant up to 12
weeks unpaid leave to eligible workers who have serious health conditions, need to care for
newly born or adopted child, or need to care for spouse, child, or parent w/ serious health
condition. FMLA protects right to take a leave, to retain health insurance benefits while on leave,
and to return to same or equivalent position after leave; also prohibits retaliation; FMLA enacted
to help men and women balance the conflicting demands of work and personal life; failure to
provide FMLA may result in comp, lost income damages and interest; only 11% of employers in
country (but 75% of employees) are covered mostly bc theyre small business and dont qualify
[does small business exception make sense? maybe yes employer w/ more employees is more
able to replace someone temporarily gone]
ADA may also allow leave as a reasonable accommodation for disabled
Pregnancy Discrimination Act may allow leave for pregnancy
Uniformed Services Employment and Reemployment Rights Act leave for military duty
Also many states have own laws that expand FMLA rights
o Why does a small business exemption make sense?
Relieves a prohibitive/disproportionate cost from small business (that large companies
can swallow)
EE need/interest does not vary depending on ER but were balancing costs fo ER with
interests of EEs. Is that the right way to deal with this problem?
Could we shift costs away from ERs such that EEs can still have leave?
o Collectivize costs insurance scheme
o Could the state pick up the bill?
o Put it in unemployment umbrella?
Would it be fair to have the state cover it for only small businesses?
Whitaker v. Bosch Braking Systems Division (WD MI 2001)
o Facts: P (EE)s job requires standing throughout her shift. Pregnant. Doc tells her not to work
more than 8 hours a day
o P wants to use FMLA to not work overtime
(FMLA applies to intermittent leave and reduce schedules)
o To enforce FMLA rights, an EE must show:
Serious health condition
Prevents her from performing her duties
And she gave reasonable notice
o Is pregnancy a serious health condition?
FMLA: a serious health conditions is an illness, injury, impairment, or physical or
mental condition involving (a) inpatient care in a hospital, or (b) continuing treatment by
a healthcare provider
Period of incapacity due to pregnancy meets (b) inability to work, etc. due to serious
health condition
P argues pregnancy is always a serious health condition ER says only when incapacity
due to pregnancy
Court:
o

Pregnancy is not per se serious health condition, BUT

If pregnancy renders her unable to work, it meets the incapacity standard
ER argues this is just a normal pregnancy:
o Court: We must take contexts into account
o Two women with normal pregnancies may be exposed to different risks
(special risks) because of different job duties
Thus the conditions of the job are taken into consideration in determining
incapacity it involves interaction between EE and job
Reason for this lawsuit is EE was given disability leave by ER she was given some $,
but not as much as the FMLA would have given.
Why did she want FMLA?
o $ plus right to return
Why would ER choose disability leave instead?
o Save $
o If short-term disability leave is undesirable, fewer women will seek leave
at all
o Maybe ERs dont want this middle road where pregnant EEs can work,
but not overtime want all or nothing
o Maybe they just dont want pregnant EEs around at all
Should the law impose on ERs what kind of leave they can provide?
o In this case, doing so acknowledges EEs desires more fully
o EEs have an interest in continuing to work if they can, and that
outweighs ERs interest in maintaining schedules and preferences
o Interest in giving EEs the choice
Byrne v. Avon Prods., Inc. (7th Cir. 2003)
o Facts: EE is a good worker for 4 years, but the in 1998, he starts sleeping on the job; then left
work early (feeling sick); ER calls and his sister says hes sick; ER contacts EE, EE doesnt show
for meeting and gets fired.
After 2 months treatment, EE tries to return
ER says no
o EE sues under ADA and FMLA
o Court: EE was suffering from severe depression
EE had attempted suicide, had hallucinations, etc.
o ADA analysis
Qualified individual with disability = one who with or without reasonable
accommodation can perform essential functions of employment
EE argues: reasonable accommodation would have been time off for treatment
Court does not accept:
Not working is not a means to perform jobs essential functions
Time off may be apt for intermittent conditions (e.g. instances of lupus
inflammation), but an inability to work for a multi-month period is not protected
o FMLA analysis:
Depends on ERs knowledge of qualifying condition (the notice requirement)
Was there notice?
Court: EEs sister saying he was sick was insufficient
Was EEs unusual behavior enough to notice?

Court: that can be the case sometimes, but his symptoms are more complicated
and it was possibly not sufficient here, BUT
If you cant give notice, you may be excused (If notice is not feasible the notice
requirement doesnt control)
Court: notice may not have been feasible here: remand.
Rogers v. City of San Antonio (5th Cir. 2004) Military leave
o Ps (EEs) are firefighters and reservists who must train 1 weekend/mo and 1 two-wk period/year)
o EEs argues under USERRA seekgin:
1) Regular pay for time absent
2) Overtime and training opportunities
3) Bonus day and perfect attendance
4) Cap on lost overtime
o EEs: use USERRA 4311(a) nondiscrimination principle cant deny benefits on basis of
membership, services, or obligations
o ERs: use USERRA 4316(b)(1): nonseniority rights only need to be the same as those generally
provided by the ER for those on non-military leave
o Court: 4316 applies here because were not dealing with seniority rights
The question is: Did ER treat Ps the same as other EEs on non-military leave?
No differential treatment here w/r/t asks 1 and 2.
Remanded w/r/t 3 and 4 to determine if other kinds of involuntary nonmilitary
leave (i.e. jury duty) would entitle those EEs to those benefits
So if ER is not discriminating between different types of leaves, no USERRA
violation
USERRA required reservists to be entitled to the same treatment afforded to
coworkers not having such military obligations
o 6th Circuit (Monroe): this means treat reservists absences =
nonmilitary absences
o 5th Circuit (West): this means treat reservists as if they were
constructively present at such places as bargaining agreements (puts a
very heavy burden on ER)
Escalator system
o THIS COURT FOLLOWS MONROE, and rather than West
(overruled for 5th Cir.)
USERRA v. FMLA:
o Discharge rights: EEs returning from USERRA leave may only be discharged for cause (for
one year after return)
Burden on ER showing rightful discharge
Notice requirement
If job eliminated, ER must show EE would have been fired sans leave
Defines just cause
o No equivalent provision in the FMLA
o Why do this in USERRA?
We dont want discrimination
We want to encourage people to join/work in armed forces
Dont want ER to be thinking about future leave
o Shouldnt something like this exist in FMLA?
More of an effort to incentivize workers to join armed forces than having a family
But EEs who will have families consider ability to return after leave

o
o

Title VII, ADA all have reinstatement provisions if ER discharges for asserting rights under
these statutes:
West, anomalous aspects of USERRA, old S Ct. escalator principle why so much in the
military context?
Public policy concern for armed forces and protecting those who serve
Military personnel have a special relationship with the public
Military leave more likely to be recurring
Is congress making employment policy? Or family/military policy via employment policy?**
If the former, more likely theyd treat leaves equivalently
Employment is becoming a site/tool for shaping other policies
Employment is deployed by Congress to achieve other ends (family, military,
antidiscrimination)
If this is true, we begin to have a better sense of how employment is a public institution

Enforcement of Employment Rights

Common Enforcement Issues

o Enforcement gap in employment law
Substantive guarantees v. experiences of workers and ERs do not match
o Christianburg Garment Co. v. EEOC (SCOTUS 1978)
CRA Title VII 706(k) allows for attorneys fees to be awarded at courts discretion
(may allow the prevailing party)
Rule for prevailing Ps:
Prevailing P entitled to fees unless special circumstances make that unjust
(Piggie Park Enterprises)
Why have this presumption?
Congressional intent to have Ps act as private AGs to enforce crucial public
policy
Incentivizing Ps to bring claims
Why isnt winning enough of an incentive?
Extending analogy of AG those harmed dont pay
Additional cost for ER (deterring effect)
These are cases where monetary recovery will be small (especially compared to
attorneys fees) (i.e. discrimination cases)
What about the prevailing D?
ER argues: prevailing parties (in statute) includes Ds
Court: Ps Ds and statute allows discretion no mechanical construction
o Equitable considerations for Ps are stronger than for Ds
Incentives: P as chosen instrument to vindicate Congresss policy
of the highest priority (Ps bring cases)
Punishment: Awarding fees to Ps = $ from party who violated
federal law (extra burden for a violating ER)
EEOC: should be a bad faith standard for P paying D fees
Court: bad faith standard is already assumed by the law, so legislation
awarding discretion to judges requires something else
o Some legislative history to concern of unjustified suits being brought
(wanted Ds to recover more than this bad faith standard)

Congress trusted Title VII to adversarial process with vigorous

prosecution and vigorous defense. Congress would not have intended to
distort this process by enacting a section that allowed frivolous suits
Court adopts standard: Ds should be awarded fees only when action is
frivolous, unreasonable, meritless, or without foundation
Why isnt winning enough of an incentive for Ds?
o Is it a question of D incentives? Or still about P incentives?
o If we want vigorous defense, there might be a CBA for fees v. settling
that we want to avoid
Here, the EEOC lost, but had enough of a foundation such that ER cannot recover fees on
the standard
Is it right to have different standards for Ps and Ds?
Tension between desire to incentivize private litigation, desire to have vigorous
prosecution and defense, and avoiding frivolous claims
Is it right that these DFs will be vindicated of claims shown to have done
nothing wrong and then they still have to pay so much in fees? Isnt it then
inevitable that the DF is paying the costs?
If theres a public policy here, should the public pay the bill when DFs havent
done anything wrong? (i.e. Congress reimburses these ERs)
o This might make sense in the abstract, but unintended consequences:
That makes it cheaper for DFs to violate CRA in general if part
of the disincentive is attorneys fees in litigation
DFs then given incentive to pay way more to litigate if confident
that theyll eventually win if they pay enough
We dont want the public to bear the costs for a DF winning a
particular litigation just because the proof of that case failed
o What if we have violators also pay fines that go into a fund that
reimburses prevailing DFs?
Preventative influence: incentivizing ERs to stay away from the line (if we think
nonfrivolous, DF-victorious cases are probably close to the line)
Bahramipour v. Citigroup Global Markets, Inc. (ND CA 2006)
EE is a Citi broker suing on behalf of class for wage and hour protections
CAs Unfair Competition Law prohibits unlawful, unfair, or fraudulent business
practices incorporates federal and state laws violation of those laws can be litigated
under UCL
EE sues under UCL rather than FLSA because:
UCL has 4 year SoL (FLSA has 2-year)
UCL has opt-out class action (FLSA has opt-in)
Giving up some things (like punitive damages)
ER argues: FLSA preempts UCL (conflict preemption state statute is an obstacle to
federal objective)
Court: No conflict preemption here
Class action question: purpose of opt-in provision not harmed here
o Congress was preventing enormous liability of windfall payments
o Not relevant here, no liquidated damages, just restitution
SoL: 2 year SoL was to protect ERs and ensure uniformity
o Court: Uniformity w/r/t federal statute, not state statutes
Courts logic feels strained, why are they doing this?
o

CA court (like CA legislature) wants to strengthen wage and hour remedial

regime:
o If theres a shortcoming in federal statute, should states be able to come
in and have harsher/stronger regulations?
What if a state thinks the shortcoming is that the federal statute
has regulated too much and Congress could not have intended
those obligations?
Should we assume Congress always has an interest in
uniformity?
Should we allow states to react to local industries and voters?
Federal policy as floor not ceiling?
David Weil: Individual Rights and Collective Agents:
Public goods problem and cost of exercising rights
Costs of exercising rights
o Information costs: knowing rights, conditions and how to enforce
o Potential employer retaliation
o EEs must balance these costs and benefits
Public goods problem: collective good individual good
o Cost to individual > benefit to individual, even though benefit to firm is
much higher than costs to individual
Lets say cost: $20, individual benefit: $20, but overall benefit to
all 100 workers is then $2000 we should have these claims but
we wont because of the costs/benefits to the individual bringing
the claims
Solution: Collective agent of workers to solve public goods problem and reduce costs
Requirements of such agent:
o Interests aligned with workers
o Means of efficiently gathering and disseminating information
o Ability to protect EEs from retaliation and discrimination
Agent representing all 100 workers can bear $20 costs and they see the $2,000
benefit. Lets say each worker pays $0.20 they each see $20 benefit with only
$0.20 costs
Potential types
Unions, workplace committees, public interest organizations,
third party monitors, legal service organizations
Unions do this in theory, but theyre very flawed (interest not
always aligned)
If enforcement relies on collective agent, should we have a mandated collective agent in
the workplace? (assuming Weils characterization of the problem is right)
Would a mandated workplace committee work? (p. 215-17)
Do we avoid this because of our commitment to the individual contracting
conception of employment? Fear that this will lead to unionism? Anticompetition?
Alternatively, could we do this by reducing information costs or increasing damages?
Political unfeasibility problem: damages would have to be so high to do this
Damages always less effective than a structural strategy
Sachs:

if robust enforcement of employment law depends on collective agent, should

employment law do something to facilitate or mandate such an agent in
workplace? Maybe at the very least employment law should prevent employers
from blocking the creation of a collective agent but not sure if it should be
mandating it per sel Maybe one reason to make them mandatory is to avoid the
free-rider problem so the workers who dont want to pay the $1 a/c dues dont
get a free ride; Sachs: but if you are going to mandate something what would you
mandate? Is it even conceivable to mandate something like this? What would the
organization/collective agent be? A union is a model in the sense that it is a
collective agent placed in the workplace BUT that is about collective bargaining
which we dont need we need something to do enforcement so maybe were
looking at some kind of mandatory agent that represents workers and brings
enforcement actions for workers;
One reason not to make it mandatory in some situations there might be very
high agency costs: slack, disconnect btwn principals (workers) and the agents,
unscrupulous agents, etc
o Balbuena v. IDR Realty LLC (NY CoA 2006)
Entered States without permission of federal immigration authorities
IRCA intended to remove incentive for illegal immigration by eliminating job
opportunities which drawl illegal aliens
Strong presumption against preemption
Labor law intends to apply to all workers in qualifying employment situations, regardless
of immigration status
Another conclusion would reward employers who knowingly disregard the employment
verification system in defiance of the primary purposes of federal immigration law and
would actually increase employment levels of undocumented aliens
IRCA does not bar maintenance of a claim for lost wages by an undocumented alien
Arbitration of Employment Disputes
o Basic Question: whether and on what terms an ER can insist an EE arbitrate in a private forum
and when an EE can insist on litigation?
o Federal Arbitration Act: to reverse judicial hostility to arbitration agreements
o Gilmer v. Interstate/Johnson Lane Corp. (1991) UPHOLDS arbitration provision in K
Facts: G (EE) contracts when registering as a securities representative with NYSE
includes an arbitration provision (NYSE R. 347)
Interstate (ER) fires EE when hes 62 years old
EE files claim under ADEA ER files motion to compel arbitration
When have we seen waiver before?
FLSA: cant waive statutory employment rights
Whats different here?
o Court distinguishes between waiving substantive statutory rights and
waiving court as forum to claim
Substance/procedure distinction
Does FAA apply to employment Ks?
Clause in 1 says it doesnt apply to Ks of employment of seamen, RR EEs, or
any other class of workers engaged in foreign or interstate commerce
Court: we wont decide this today since were not dealing with an employment K
Court (White): Arbitration is not inappropriate

Weve upheld many clauses in Ks agreeing to arbitrate statutory rights this is

generally OK. Terms of K will be upheld unless EE can show Congress
intended for the arbitration not to cover ADEA claims
EE argues: mandatory arbitration is inconsistent with purpose of ADEA
o ADEA is supposed to handle individual grievances, yes, but its also
supposed to advance important public policies
Court: sure, but judicial resolution of claims is also individualized. As long as
a claimants grievances get resolved in arbitration, its fine
EE: arbitration is less effective than litigation for antidiscrimination claims at
effectuating the purposes of ADEA
o Goal of systemic change/advancing PPs
Arbitration is < litigation
Public/private distinction information dissemination
Judges > arbitrators
o Enforcement requires access to judicial forum under ADEA
Court: providing access to court does not mean the court is the
only forum in fact, ADEA is flexible and allows for EEOC
o This cuts EEOC out of the picture
Court: a claimant can still file with the EEOC. Then the EEOC
chooses whether to certify claim to sue. Then you cant go to
court. But the EEOC could sue on your behalf, so theyre still in
the picture.
EE: inadequacies in the process of arbitration make it inconsistent
o Arbitrator too likely to be biased
Court: no reason to assume bias, and rules protect against that
(i.e. FAA gives courts authority to overturn if evidence of bias)
o Discovery too limited
Court: (1) age discrimination claims probably dont require more
discovery than RICO/antitrust claims (which are arbitrable); (2)
parties trade the procedures and opportunity for review of
courtroom for the simplicity, informality, and expedition of
arbitration
NYSE arbitrators not bound by rules of evidence
Courts 2nd claim is different it concedes there are shortcomings
but theyre OK
Whenever theres a waiver, the party is theoretically
getting something in return. Is this logic OK? Congress
expected claimants to have rights and safeguards for
ADEA is it OK that theyre not there because the
claimants get efficiency in return?
Court: These attacks reflect suspicion of arbitration we dont allow post-FAA
EE: unequal bargaining power in these terms
o EEs are going to have to accept mandatory arbitration provisions if its a
condition of employment waiver not voluntary
Court: mere inequality of bargaining power is not a sufficient reason to
hold that arbitration agreements are never enforceable in the employment
context

Courts should enforce arbitration agreements save upon such grounds as

exist in law or in equity for the revocation of any K (9 USC 2)
This involves the sort of fraud or overwhelming economic
power that would provide grounds the revocation of any K
Who is right? If EE is right, how is this provision different from any other provision in
the employment K?
Circuit City Stores v. Adams (2001) UPHOLDS arbitration provision in employment K
FAA interpretation
FAA 1 excludes Ks of employment of seamen, railroad employees, or any
other class of workers engaged in foreign or interstate commerce.
FAA 2 provides that FAA applies to a contract evidencing a transaction
involving commerce
In Allied-Bruce, Court ruled that contracts of employment of workers involving
commerce extended to Congresss fullest breadth involving is the functional
equivalent of affecting
Adams (EE) says commerce should be consistent for these provisions, in which case
employment Ks are excluded under 1
Court (Kennedy): FAA covers employment Ks generally, per 2; 1 only gives
exemption to employment contracts for transportation workers
Textual barrier to EEs interpretation:
o Any other workers is a residual phrase. If this were meant to include
all workers, why would they list seamen and railroad workers?
o We follow ejusdem generis: list of specific words general words
must refer to objects similar in nature to those enumerated
o engaged in interstate commerce here = actually moving interstate
Even without ejusdem generis, same result: involving engaged in
o The first is broad, language generally used to give Congress authority to
regulate to the outer limits of its commerce power
o engaged in is much more limited
This EE is covered by 2, not 1 arbitration provision enforceable
Armendariz v. Foundation Health Psychcare Services, Inc. (CA 2000) arbitration provision
UNENFORCEABLE
Agreement between PLs and ER limits remedies PLs may recover by arbitration to only a
sum = wages from discharge date to decision date
PLs claim sex-based harassment and termination on basis of perceived sexual orientation
(illegal under CAs Fair Employment and Housing Act (FEHA))
Court: arbitration agreement unenforceable
Rights required with arbitration enumerated in Cole (D.C. Cir. 1997):
o Impartiality, greater than minimal discovery, written award, all types of
relief otherwise available in court, does not impose unreasonable
costs/fees on EEs
Inability to recover remedies is not just procedure if we want arbitration to
be effective substitute forum for vindicating rights, remedy is an essential
component of this vindication
PLs argue that requiring EEs to share costs of arbitration prevents them from
vindicating FEHA rights
o

Court agrees: EEs may have to pay some administrative costs and representation
fees, but youd never have to pay a judges salary only analogous costs make
sense
o Objection: if only ER pays judge impartiality problem
Court: bias of arbitrator is not from paying the bill but because
ERs are repeat players (arbitrators salaries from more cases
incentive to please ERs to get hired again; this isnt solved by
splitting the fee) and we have other institutional safeguards to
protect against corrupt arbitrators
o Objection 2: arbitration costs < litigation costs, so claimants will have a
net benefit to arbitrate
Court: true, but damages awards are also lower
[If we knew ration of costs: awards was better in arbitration,
would court still be right here?]
Is our inclination a reflection of a persisting suspicion of arbitration? (the very same
suspicion that the Court has told us time and again we are not allowed to have (FAA))
Or is it a skepticism of the voluntary nature of arbitration provisions in
employment Ks?
AT&T Mobility v. Concepcion (2011) upholds provision in consumer Ks not
unconscionable
Does the FAA prohibit sales from conditioning enforceability of arbitration agreements
on refusal to permit PLs to make claims and join as a class?
Facts: Mr. and Mrs. Concepcion have K for cell service with AT&T that includes
mandatory arbitration provision and requiring claims to be brought in an individual
capacity
Their claim is tiny plan advertised free phone then charged $30.22 of
sales tax (based on phones value)
C sues with class alleging fraudulent advertising etc. against AT&T
Procedural requirements for arbitration per K:
Customers file 1 page Notice of Dispute on website
Then ATT may offer to settle or go to arbitration by filing separate form
ATT must pay all costs for nonfrivolous claims
If aware > ATTs last written settlement offer, ATT will pay a $7,500 minimum
recover and 2x claimants attorneys fees
CA and 9th circuit rule provision unconscionable (based on Discover Bank)
Discover Bank rule: where you have (1) a class action waiver (2) in a consumer
K of adhesion (3) with predictably small sums of $ and (4) allegations that the
party with superior bargaining power has carried out a scheme to deliberately
cheat consumers unconscionable
o Why unconscionable?
Attempt by company to exempt itself from legal obligations
CA civ. Code 1688: any attempt to avoid legal responsibility for
violations is unlawful
Individuals are not going to pursue tiny claims. Aggregating
might make it worth it. This is not in the interest of the company.
It gives the company aw ay to commit small-scale fraud and
not be held responsible.

FAA language: arbitration agreements are enforceable save upon such grounds as exist
at law or in equity for the revocation of any K (general K grounds)
Court (Scalia): Discover Bank rule is preempted by the FAA; this provision is not
unconscionable; enforceable
C argues: Discover Bank rule applies to all Ks, not just arbitration agreements so
it meets the requirement of FAA 2
Court: just because it would apply to Ks generally does not save it many such
rules would disproportionately affect arbitration
o Ex: requiring FRCP, or FRE, or jury ruling
C argues: this is different those would be preempted
Court: those arent different requiring class action availability is as inconsistent
with arbitration as requiring FRE or jury rulings
o Why?
Principal advantage of arbitration is informality and thus
speed; class action is antithetical to that
Class action is formal by definition
Compares class-wide arbitration to bilateral arbitration (6 month
resolution v. cases still open)
o Class actions huge risk for DFs
Big payouts
Especially since theres such limited judicial review
Dissent (Breyer):
Discover Bank falls squarely in the 2 carveout because it applies to Ks
generally
o If the K simply said no class action suits without mention of arbitration
at all, that would be unconscionable under Discover Bank and not
preempted by FAA
Class action is not like jury or FRE: class actions are not inconsistent with
arbitration class action arbitration is actually quite common in CA
o Scalia: even if some arbitration survived Discover Bank in CA, the
disparate impact on arbitration still cuts it
Majority made the wrong comparison: should be comparing class
arbitration to class litigation we see its much more efficient still
o Also, class action arbitration is much more efficient than 1,000 suits
o If the question is incentivizing arbitration we should be comparing class
arbitration to class litigation, and AT&T would definitely prefer class
arbitration to class litigation
Whos right?
o Dissent, obviously. Unconscionability!
o [hard to imagine a requirement that avoids unconscionability that
wont disproportionately affect arbitration as long as it requires some
level of procedure
American Express v. Italian Colors Restaurant (2013) - - even upheld in Antitrust context
Facts: Amex has K with IC (merchants) accepting Amex cards
Provision: all disputes must be resolved by arbitration, and you may not proceed
as a class
ICR brought class action re: violations of Sherman Antitrust Act
Why does ICR think they can do this?

To prove antitrust claim, we must have an economic expert, which would

require several hundred thousand dollars to $1M theyd be entitled to
$38K if victorious, at most.
o If they can join with similarly situated litigants, claim is viable
Claim the arbitration clause prohibits them from effective vindication of
federal claims
2d Cir ruled for ICR
Court (Scalia): upholds provision
Ks should be enforced according to their terms unless FAAs mandate has
been overridden by a contrary congressional command
o We didnt see such a command in Gilmer and we dont see one here
o Antitrust laws do not guarantee an affordable procedural path to the
vindication of every claim
Is there something different here?
Antitrust peculiarly promoted by Congress
The existence of a statutory right may not guarantee this,
but this is an arbitration agreement blocking
mechanisms PLs would otherwise have. This K
blocks this path.
o No guarantee in FRCP 23 either
ICR: There is a judge-made FAA exception for invalidating agreements that
prevent the effective vindication of a federal statutory right
Court: This does not apply here
o This rule is dictum (Mitsubishi)
o This is a narrow exception, only for:
Waiver of partys right to bring certain claims/pursue certain
COAs
Maybe also filing/administrative fees so high as to make access
to the forum impracticable
o Where does it not apply?
Expenses involved in proving a remedy does not constitute
elimination of the right to pursue that remedy for this
standard
o Court doesnt dispute that individual antitrust claims would be
impractical/unfeasible
Does the courts distinction make sense?
Formalistic distinction: clauses waiving rights not OK
o You dont need the effective vindication rule to know that
Filing/administrative fees v. proving fees?
o Day in court the door is open to claimants and thats all that matters
If its too expensive once there, thats just part of the federal
system
If we dont like this distinction, how should we view the effective vindication
exception?
What is the relevant set of #s? Must be as affordable as federal court the cost
structure of litigation
o This way you can say this is the cost of the statute, and the arbitration
isnt creating the problem
o

Dissent (Kagan): the effective vindication exception is more than dicta, and it
applies here
Provisions creating prohibitive costs amount to effective vindication problems
This interpretation furthers the aims of both FAA and Sherman Antitrust Act
o If the FAA seeks to promote arbitration, the majority ruling does not do
that. These kinds of provisions provide a foolproof way of killing off
claims that are valid. The FAA prefers arbitration, not de facto
immunity. Thats what the effective vindication rule ensures.
Majority thinks Concepcion resolves this case because we rejected class arbitration as
necessary, but the dissent says Concepcion is not applicable here
ICR is not claiming a class action is necessary, but that they must have some
means of making an effective claim some cost-shifting mechanism. All such
mechanisms are barred here.
Concepcion was not about the effective vindication rule CA barred the
provision even when claimants could bring individual claims
Concepcion dealt with state law and thus preemption here its a federal statute
with federal claims counterweighing FAA arguments
Does Armendariz survive Concepcion and Italian Colors?
Maybe if filing fees are exorbitant, this could fit well in the effective vindication
exception
The remedies provision? Less clear remedies tied to substance of the statutory right
to vindicate, so yes, probably
Chavarria v. Ralphs Grocery Co. (9th Cir., Oct. 2013)
Facts: PL (EE) signs employment K:
7: method choosing arbitrator party not demanding arbitration makes first
strike to list of 3
o Basically ends up with ER getting to always choose no AAA or JAMS
arbitrators
10: split fees at outset of arbitration evenly between PL and ER
13: ER can unilaterally modify sans notice
EE argues: unconscionable
CA law has procedural and substantive standards for unconscionability claims:
Procedural: manner in which K was negotiated
o Oppression and surprise
Oppression: absence of choice and unequal bargaining power
Did weaker party have a real choice?
Surprise: disclosure unclear; reasonable expectations
o Court: there was procedural unconscionability
K was a condition of employment, presented to EE on a take it
or leave it basis here she could consent to arbitration or seek
work elsewhere
And terms were only given 3 weeks after signing
o [Is this right?]
Yes - Employment law should not treat all EEs the same (i.e.
CEOs v. Chavarria) and this acknowledges those differences
How is arbitration provision distinct from the rest of the
terms?

Other terms seem more central to the K more

bargainable
Substantive: K is unjustifiably one-sided to such an extent that shocks the
conscience
o 7:
ER argues: it wont always be the party choosing the arbitrator,
bc in situations like this case, since they filed the motion
compelling arbitration, they are the party who demanded
arbitration
Court: this is ridiculous that encourages EEs to disregard
policy and file lawsuit that is unnecessary, just to compel motion
by ER. Also ERs motion to compel is still not a demand (EEs
still need to file pleadings consistent with FRCP)
o Court: resolving costs up front before merits would impose costs on EE
that are preclusive (approx. $3500-$7000/day)
Preemption issue: CA law and the FAA
Court: CA law not preempted by the FAA here
o Italian Colors
This case fits within the exception: this falls in the right to
pursue exception because filing fees and costs to get in the
door are too high and dont care about merits of claims
o Concepcion
Court: this isnt a case with disproportionate impact on
arbitration
[Seems like the court is reading Concepcion the way Kagan
would have wanted: Concepcion outlaws discrimination in state
policy that is unfavorable to arbitration]
Invalidation is agnostic towards arbitration. It does not disfavor
arbitration; it provides that the arbitration process must be fair
Is this really consistent with S. Ct. precedent?
Is fairness an issue here and not in Italian Colors, Gilmer, and Concepcion?
o Difference in imposing costs
o Bias is almost guaranteed here
This doesnt undermine something about arbitration the way Scalia discussed in
Concepcion, and we dont read Concepcion to bar all rulings that have
disproportionate impact on arbitration. There is a fairness element there must
be something about the state rule thats inconsistent with FAA aims that then
requires preemption
How broad is this ruling? Can Concepcion and Italian Colors just be cabined to class
action waivers?
Lewis v. Epic Sys. Corp.:
Arbitration clause violates NLRA which provides collective bargaining rights and other
concerted activities.
Contracts stipulating the renunciation by the employees of rights guaranteed by the
NLRA are unlawful and may be declared to be unenforceable by the Board
Class proceedings fit under 7s concerted activities
Epics arbitration provision impinges on those rights
Not preempted by the FAA:

shall be validsave upon such grounds as exist at law or in equity for the
revocation of any contract
o Illegality is one of those grounds
Illegal here because of NLRA
Samuel Estreicher, Predispute Agreements to Arbitrate Statutory Employment Claims:
Addresses some of the policy and legal questions concerning predispute agreements to
arbitrate in employment takes the view that arbitration agreements should be
encouraged as an alternative, supplementary mechanism in addition to administrative
agencies and courts for resolving claims bc it offers a less expensive, more expeditious,
less draining and divisive process BUT says it should not entirely supplant agency or
court adjudication
Says arbitration of public law disputes requires that certain adjudicative quality standards
be met in order to promote the public policies behind the laws and these standards can be
met w/ the following essential safeguards:
no restriction on right to file charges w/ administrative agencies
reasonable place for holding arb
competent arbitrator
fair and simple method of exchange of info
fair metod fo cost sharing to ensure affordable access to all
right to independent representation
range of remedies equal to those in litigation
written award explaining rationale
limited judicial review
Says objections to arb citing deficiencies in the process is overdrawn were offered a
picture of private litigation under ideal conditions and arbitration is depicted at its worst
but we should be assessing relative merits of litigation and arbitration under real-world
context
Also addresses voluntary nature of these agreements and says yes there should be a
knowing waiver and should satisfy general contract principles but requiring
voluntariness is going too far bc injects element of uncertainty about whether the
agreement will be deemed binding and this uncertainty will discourage such agreements;
also would detract from desire uniformity of internal dispute resolution programs if
upheld for some employees but not all
Richard, A. Bales, Compulsory Arbitration: The Grand Experiment in Employment:
Gives example of implementation of an arbitration system in Anheuser-Busch which
employs roughly 45,000 employees currently runs one of the most extensive and welldeveloped programs for non-judicial resolution of employment disputes
In developing the system, company sought to (1) open lines of communication btwn
employees and management to resolve disputes; (2) reduce legal expenses; and (3) quick
and fair resolution of disputes
Initial roll-out of program included three publications program guide, policy statement,
and highglights brochure; these highlighted the benefits of the program, including
simplicity, quick resolution, economy, and availability of full remedies; new employees
receive DRP training and management provided refresher trainings periodically;
material also reinforces the requirement that DRP be used and that at-will employment
still exists
Results show general success with all goals; third goal success most striking w/ number
of claims resolved quickly and efficiently

This system also aligns with the Employment Due Process Protocol for Mediation and
Arbitration of Statutory Disputes Arising Out of Employment Relationship (Due Process
Protocol) which says agreement should be made knowingly and outlines standards
regarding choice of representative, fees for representation, and access to information

The Future:
Mike Ramsey: Carnegie Mellon Reels After Uber Lures Away Researchers
o Uber poached their researchers to make autonomous cars because their researchers used to be in a
partnership designing them
o Taxi and ride-sharing services could become one of the first widespread applications of fully
autonomous vehicles
o Will replace drivers
Derek Thompson: A World Without Work
o Case study of Youngstown which had steel mills shut down and regional depression
o Luddite fallacy: allusion to 19th century British brutes who smashed textile-making
machines at dawn of industrial revolution fearing the machines would put hand-weavers
out of work. but now, horse analogy, horse was made more productive through centuries of
invention, but car made it obsolete.
But there are reasons to cry robot now
Computers explain decline in labor
Nonworking men common now
o Three possible futures:
Consumption
Communal Creativity
Contingency
o Maybe employment becomes spectrum instead of current binary
o Universal income?:
Might replace lost wages, but would do little to preserve social benefits of work
Carl Benedikt Frey: The Future of Employment
o 47% of total US employment is at risk of computerization
o Wages and educational attainment exhibit a strong negative relationship with an occupations
probability of computerization
Richard Freeman: Who owns the robots rules the world
o As companies substitute machines and comps for human activity, workers need to own part of the
capital stock that substitutes for them to benefit from these new robot technologies
o Govt redistribution would not work
o Provides examples.
Philipe Van Parijs: Basic Income: A simple and Powerful Idea
o Cash, regular basis, individual basis, irrespective of income (but rich fund more)
o Benefits:
Rate of take up of benefits higher because of information
Lesser stigma, benefit on its own, plus increase take up
Not interrupted when accepting a job, so remove a piece of the unemployment trap
**Can move toward contract view away from public view because employment is less inherent to life