HRMN 408 WEEK 1: EEOC and Professional Code of Ethics

Pre-employment testing became very popular in the 1950s as a way to increase efficiency in U.S. business. Since then, pre-employment testing has been a regular practice. Employers believe they can increase production and reduce costs by weeding out applicants using various tests. But often the tests used do not actually identify the characteristics sought to be removed from the workplace.

Two Forms of Testing

Eligibility tests help determine if an employee is capable and qualified to perform the requirements of a position. Examples include intelligence tests, physical stamina, eye examinations, achievement and aptitude tests, and tests for personality traits. The purpose of this testing is to find the best individual for the job through achievement and personality indicators.

The problem with eligibility tests is that they may appear facially neutral, but they may have a disparate impact on a protected class. Nonetheless, the 1964 Civil Rights Act (Title VII) allows tests that have an adverse impact if the test has been professionally developed and validated. A validated test is one in which studies have proven that it evaluates what it says it is intended to evaluate. If used properly, a validated test will not only find the best candidate, but also reduce the chance for discriminatory choices based on conscious or subconscious employer bias.

Ineligibility testing, such as drug tests, polygraphs, and HIV testing, are designed to ensure that the individual is free of impairments that limit an applicant's ability to perform. As technology has improved, tests for addictions have become more efficient, less expensive, and more prevalent.

To protect individual employees' rights (such as the right to privacy), courts perform a balancing test to determine the legality of ineligibility testing. They weigh the conflicting interests of the employer in securing a problem- or substance-free workplace against the privacy rights of the employee and protections against, for example, self-incrimination.

Legality of Testing

Generally, employees and government contractors receive greater protection than private-sector employees because many of the protections derive from the Constitution (the Fourth Amendment's unreasonable searches and seizures, Fifth Amendment's self-incrimination, and the Fifth and Fourteenth Amendments' due process clauses).

Certain tests have Title VII implications because implementing them has a disparate impact upon a protected class. For example, an employer's test for English-language competency would have an adverse impact on individuals of non-English speaking origin.

Title VII specifically exempts professionally developed employment tests of eligibility from disparate impact claims, as long as the test is not designed, intended, or used to discriminate.

To be legally valid, an employer must demonstrate that a test is a business necessity and predictive of job performance. For example, a test for intelligence must actually test intelligence and intelligence must be necessary for adequate performance. Note: Even when these two requirements have been satisfied, the test may still be challenged if a less discriminatory alternative exists.

To show business necessity, the employer must demonstrate that the quality measured by the test is a bona fide occupational qualification (BFOQ) necessary to adequate performance in the position. To show the second prong, the employer must show that the test is valid, that it measures what it purports to measure, and measures it accurately.

Test Validity

When a selection test has been demonstrated to have an adverse impact on a protected class, the test must be validated. The choice of validation strategy depends on the type of inference the user wishes to draw from the test scores.

Criterion-related validation uses a simulation exercise to predict performance. It must be shown to accurately predict job performance as evidenced by the ability to do the job.

Content validation tests for those skills actually required by the specific position. The closer the test exercise to the actual job, the more valid the test.

Construct validation considers the psychological makeup of the applicant and compares it to those traits necessary for adequate job performance.

The test must measure for a job-related requirement. An employer must show that the specific trait tested for is a BFOQ. It must also be viewed in the context of the company's operation and history of the testing program.

Legality for Testing for Ineligibility

An employer may want to test for ineligibility to:

· improve safety, such as through drug testing, which has been shown to reduce workplace injuries, thereby improving production and minimizing workers' compensation costs

· reduce costs resulting from drug abuse, theft, and personality conflicts

· improve productivity through reduced absenteeism and a more efficient workforce

Employee Legal Claims Against Testing

Many states put requirements on testing, such as a reasonable suspicion of theft or drug abuse. There is also a common law invasion of privacy and reckless or even negligent infliction of emotional distress if the employer's conduct is outrageous. In determining the reasonableness of the employer's conduct, the courts balance the employer's reason for the test against the extent of its intrusion on the employee.

Other claims include wrongful discharge based on a public policy and defamation. Two exceptions to the defense of wrongful discharge are that the employer has a reasonable good faith suspicion of an employee's drug use and that the employee's job responsibility involves public safety. Defamation requires intentional injury resulting from publication of false statements about another.

Many courts hold, however, that in the private sector (where there is no employment contract) employers have every right to test employees. If the employees don't like it they can leave.

Forms of Testing

Polygraph Tests

With accuracy rates between 50 and 90 percent, polygraph tests have little, if any value. The Federal Employee Polygraph Protection Act of 1988 ended the use of polygraphs in selection and greatly restricts its use in other situations. The employer may not:

· directly or indirectly indicate a test measuring honesty can be administered

· use, accept, refer to, or inquire about the results of a test

· discharge, discipline, or discriminate against an employee who refuses to take or who fails a polygraph test

Exempted employers include those that provide security or protect nuclear facilities; ship or store toxic substances; or protect public transportation, negotiable instrument, and the like.

A private employer may have an investigation exemption to test current employees if:

· the test administered is in connection with workplace theft or incident investigation.

· the employee had reasonable access to the missing property or loss incurred.

· the employer had reasonable suspicion that this employee was involved. Suspicion is defined as observable, articulable basis in fact indicating employee.

· the employee is given written information about the basis for the investigation.

Generally, the employee cannot waive protection of the act.

Integrity and Personality Tests

As employers' use of polygraph tests have been restricted, they have turned to subjective tests purported to measure honesty or integrity through analysis of answers to numerous questions. They also look at handwriting and other nontraditional forms of employee selection to discover personality information. Although the validity of such tests in discovering useful information is at issue, they have not been shown to produce an adverse impact on any protected group.

Basic intelligence tests are considered too blunt to determine specific employment-related results. Personality tests are allowed, provided they test relevant parts of the applicant's personality.

Physical ability testing of applicants for very physical jobs are also under close scrutiny. The Americans with Disabilities Act (ADA) requires testing of essential functioning. General tests of fitness—such as the ability to lift 100 pounds—are less likely to be appropriate.

Drug and Alcohol Testing

Businesses lose millions of dollars each year because of employee drug use. Employees who use drugs are less productive, the quality of their work product is suspect, and they can be a danger to themselves and others around them, especially if they are operating machinery, including automobiles. Proponents cite these facts in support of drug testing. Opponents to drug testing cite the Fourth Amendment's protection from unreasonable searches and seizures. The Fourth Amendment protects an individual's right to be secure in person, property, and effects.

In most situations, the employer must have a reasonable suspicion that the employee is using drugs. A reasonable suspicion exists when the employer can draw a reasonable inference from the facts and circumstances. The employer must document the circumstances in writing and the sources must be creditable.

The Drug Free Workplace Act of 1988 authorizes drug testing of federal employees and contractors and those employers receiving federal grant money. Provisions of the act include the following:

· the employer must publish in a conspicuous place that drug use is prohibited

· the employer must educate employees on the dangers of drug use and offer counseling and treatment programs

If a criminal conviction arises from a workplace abuse offense, the employer is required to administer an employment sanction or advise and direct the employee to an approved substance abuse treatment program.

The most common type of test is a urine test. It involves mixing urine with chemicals. Its limitations are that it:

· detects legal drugs but does not distinguish among different drugs

· does not show time or quantity of consumption

· can detect only one drug at a time

· is reliable for only one to three days

A more reliable test analyzes hair follicles. Considered less intrusive than the urine test, it is reliable for up to three months and shows time or quantity of consumption.

Employees addicted to and currently using drugs or alcohol are not covered by the ADA. If a worker is in or has completed a rehabilitation program, then the employee is covered.

Medical Testing

Many employers require pre-employment or post-offer medical tests to ensure that the applicant is physically fit for the position. An employer is prohibited from testing before a job offer to protect against discrimination based on disability. All employees within the same job category must be subject to the same medical examination; individual applicants cannot be singled out. And information from the examinations must be kept separate from other personnel-related information.

Tests for HIV and AIDS

These tests are considered inappropriate for two reasons. First, HIV is not transmitted through casual contact, so the legitimate business criterion is hard to meet. Second, testing does not determine the individual's HIV status at the time of the test. In addition, the ADA prevents any action based on the information acquired.

Occupation Specific Regulations

When the government requires or encourages testing in the private sector, constitutional scrutiny applies. For example, the Department of Transportation requires testing of private-sector transportation employees in safety or security positions.

Ask Yourself

Review Questions

1. Why would an employer want to test prospective and current employees?

2. When is random drug testing permissible?

3. List the four criteria that a private employer must establish to be able to require a current employee to submit to a polygraph test.

4. Testing that ensures that potential employees are capable and qualified to perform job requirements is called:

a. criterion testing.

b. content testing.

c. eligibility testing.

d. race norming.

Nothing is more important to the employee than the opportunity to earn a raise, a promotion, or simply to retain a job. For the employer, the goal is to retain and to promote the right employee for a specific job. Generally, the employer and the employees look to the performance appraisal (PA) as a guide to their individual goals. Therefore, PAs must be designed to determine exactly what they set out to test.

PAs have the potential for a discriminatory effect both in the way they are used and how they are administered. To avoid a discriminatory effect, some employers use a variety of mechanisms to conduct a performance evaluation. The different types include:

· management by objective, in which the employee and the manager set goals for the employee and then measure the employee's performance against those goals

· checklist system, in which the employee's performance is judged against a list of factors

· summated scale, in which the manager evaluates how often the employee satisfies each of a number of behavior-based statement

There are legal implications to PAs. They are subject to scrutiny because there is a potential for bias.

Disparate impact, disparate treatment, and defamation are all possible in PAs. If an employer makes known to the world the results of an evaluation, it may be subject to a claim of defamation when:

· the employer states false and defamatory words concerning the employee

· the employer negligently or intentionally communicates these statements to a third party without the employee's consent, thereby subjecting the employee to harm or loss of reputation

Note that truth is a complete defense to a defamation charge.

Regulation of Work

Although it is impossible for the employer to identify everything that is prohibited or allowed in the workplace, a clear policy regarding the intent or mission from the employer is important. Some rules may be considered to be understood, but it is wise to obtain a written confirmation from employees of that understanding.

A good example of this is the company drug policy. Although it is clearly understood that drug use is not to be tolerated on the job, the employer may still want to put the policy in writing and have the employees sign forms indicating they have read the policy. The statement allows the employer to make clear its antidrug attitude and present the penalties for a violation.

Insubordination

When an employee is insubordinate, the employee either defies or ignores orders given by the employer. To avoid an inconsistent application of discipline resulting from insubordination, an employer should identify situations considered to be insubordination and require corroboration by another supervisor.

Discipline

All disciplinary decisions must be nondiscriminatorily applied and objectively administered. To be fair, the system should provide specific guidelines and communicate this information to employees.

Any action taken should be factually and completely documented by the employer. This ensures that the employee receives adequate feedback, and lawsuits will not hinge on the memory of individuals.

Documentation of discipline, appraisals, warnings, and commendations should be retained in each employee';s file and be given to the employees to provide them with the opportunity to appeal.

Review Questions

1. Aronson evaluates the performance of her employees, but she refuses to provide any feedback under the theory that the less she says, the lower the likelihood of liability under Title VII. Is she right?

2. How can an employment evaluation result in disparate impact discrimination?

3. Insubordination problems can be minimized by:

a. severely disciplining employees suspected of insubordination.

b. using the Uniform Employment Selection Procedures.

c. implementing the decision from Albermarle Paper Co. v. Moody.

d. clearly identifying behaviors considered to be insubordination and requiring documentation of the occurrences.

The Fair Labor Standards Act (FLSA) requires the payment of a minimum wage for workers and sets standards under which covered employees may work. It also sets the rate at which they must be paid if they work over a certain period of time during a week and it prohibits pay differentials based solely on gender.

The purpose of the minimum wage laws is to ensure that all workers—especially those at the lower end of the pay scale—maintain at least a minimum standard of living that keeps them from poverty. (Minimum wage is actually below the poverty line, however, so we still have not legislated a living wage.)

General Provisions

The FLSA is administered by the Department of Labor's Wage and Hour Division, which has the authority to investigate, gather information, issue regulations, and enforce provisions of the act. Many states also have wage and hour provisions administered by comparable state agencies.

In addition to regulating child labor, wages, and hours, FLSA also requires employers to keep records on wages and hours, although there is no particular form in which such records must be kept.

FLSA contains antiretaliation provisions to protect employees who file a complaint or participate in a FLSA proceeding. If FLSA is violated by the employer underpaying employees, employees may recover back wages. There is two-year statute of limitations, which stretches to three years for willful violations.

Who is Covered

Two types of coverage are available in FLSA—individual coverage and enterprise coverage. An individual employee's job is covered if it involves interstate commerce directly (such as a truck driver traveling from state to state) or moving or preparing goods for interstate commerce, including phoning and using the mail.

Enterprise coverage applies to all employees of a business if the business is engaged in interstate commerce or producing goods for interstate commerce and meets a minimum gross annual income requirement. Retailers or service businesses must have annual income of at least $362,500; other businesses must have an income of $250,000 or more.

FLSA covers federal employees; however, state and local employees are covered under FLSA's child labor and equal pay provisions only if the service being conducted is a traditional government activity, such as law enforcement and fire protection or education. But most states have their own wage and hour laws that can apply to state and local government employees.

Minimum Wages

After World War II, the minimum wage law was established to avoid another depression by attempting to provide everyone with enough money on which to live without causing an economic harm to business owners. Employers are required to pay covered employees a certain minimum hourly wage. Since 1997, the minimum wage has been $5.15 per hour. In 1938 when FLSA was enacted, it was 25 cents per hour.

Covered employees working over 40 hours per week are entitled to overtime pay of at least time and a half. Wage rates may be lower if industry wage orders make them so in Puerto Rico, the Virgin Island, or American Samoa. If the covered employee is an apprentice, learner, or disabled worker, then under certain circumstances, they may receive less than the minimum wage if the employer obtains a certificate issued by the Department of Labor's wage and hour administrator.

At least 41 states have statutes that provide coverage for employees exempted under FLSA, with 16 setting limits above those of the federal law.

Note that under FLSA, some employees are exempt from the overtime provision but not the minimum wage provisions. Because of their salaries are generally higher, however, this does not present a problem (for instance, executives or teachers). The following are exemptions from both the wage and overtime provisions:

· outside sales people, executives, administrative, and professional employees, including teachers and academic administrative employees in elementary and secondary schools

· employees of certain individually owned and operated small retail or service establishments not part of a covered enterprise

· employees of certain seasonal amusement recreational establishments, messengers, full-time students, employees of certain newspapers, switchboard operators of small telephone companies, seamen employed on foreign vessels engaged in fishing operations

· farm workers employed by anyone who uses more than 500 person-days of farm labor in any calendar quarter of the preceding calendar year

· casual babysitters and companions to the elderly

Maximum Hours

FLSA does not limit the hours employees >work, but rather sets the standards for the hours constituting a normal work week for wage purposes. The states then set wage rates for hours worked over and above the normal week.

Child Labor Laws

The FLSA sets minimum age standards for allowing children to work. Most children cannot work before age 16, and 18 is the minimum age for jobs deemed hazardous by the Department of Labor. Children between the ages of 14 and 16 may work at certain types of jobs that do not interfere with their health, education, or well being, such as the traditional newspaper deliverer. Certain agricultural work is permitted also.

Ask Yourself

Review Questions

1. What is the rule regarding maximum hours and overtime?

2. Explain the child labor law and its exceptions.

3. True or false: The FLSA applies to individuals, but not to an enterprise as a whole.

4. To counteract high unemployment rates among certain groups:

a. an employer is free to disregard minimum wage laws.

b. employers pay unemployment insurance.

c. the FLSA requires employers to engage in affirmative action hiring with respect to race, gender, religion, national origin, and color.

d. the FLSA allows employers to pay a training wage that is lower than the normal minimum wage rate.

Most people recognize that the remarkable technological developments of the 1990s were generally very beneficial to society. Many people are beginning to realize they have their downsides as well. Primarily, new technologies allow others to obtain personal information about people at levels and ways unheard before the advent of the computer and other high-technology devices. For example, employers can now determine who employees talk to on the phone, for how long, and even what was said. Employers are now using information derived from the applicant's saliva, hair, or urine to predict who may have future health problems or who may have children with future health problems. All this is done in the name of saving the business money. One area of increasing concern—but as of yet not uniformly regulated—is the use and monitoring of e-mail.

Employer Need for Information

Certainly there are some good reasons for employers to collect information about their employees. In our increasingly competitive economy and its emphasis on service and information, the individual employee can be the employer's greatest investment. Clearly, employers have an incentive and interest—but not always the right—to gather whatever information they can on their employees. At some point, the employer's right know must be offset by the employee's right to privacy.

Foundations of the Privacy Right

The Constitution is silent on the right to privacy, but the right of privacy has been acknowledged as necessary for the fulfillment of other constitutional rights we hold. These fundamental rights include the right of free speech, to marital privacy, and to be free from unreasonable searches and seizures, which is constitutionally guaranteed.

Employees in the public sector have additional protection because the Constitution protects individuals from wrongful intrusions by the state or anyone acting on behalf of the state.

Constitutional Protection

The Fourth Amendment protects against unreasonable searches and seizures. A search has been interpreted to include any collection of blood, hair, or urine samples, or other bodily invasions, as well as personal information acquired from oneself or others. For a search to be considered unreasonable, it must be unjustified at its inception and impermissible in scope.

One court held that a search was justified at its inception when the employer has reasonable grounds for suspecting the search will turn up evidence that the employee is guilty of work-related misconduct or that the search is necessary for a noninvestigatory work-related purpose such as retrieving a file.

A search is permissible in scope when:

· the measures adopted are reasonable related to the objectives of the search

· not excessively intrusive in light of the nature of the misconduct being investigated

The unreasonableness of a search must be balanced with the extent of the invasion and the extent the employee should expect to have privacy in this particular area against the employer's interest in the security of its workplace, the productivity of workers, and other job-related concerns. For example, when the employer searches employer-owned property—such as desks, lockers, and file cabinets—the employees should be given notice, but no consent is required. When the employer searches personal affects—such as purses, briefcases, and wallets—the employer should inform the employee of the process and obtain the consent first. The employer is guilty of false imprisonment if the employee is not allowed to leave the premises during the search.

The Fifth and Fourteenth Amendments also protect a government employee's right to privacy by prohibition on the states' right to restrict individual fundamental rights, such as the right to travel.

When the state attempts to infringe on fundamental rights, that restriction is subject to strict scrutiny (the most difficult standard to meet) by the courts. To be justified, the state must a show a compelling state interest and that the infringement is the least intrusive alternative available. For those interests not considered fundamental, the state restriction must be rationally related to a valid state interest.

The Privacy Act of 1974 applies only to federal government employees. It regulates the release of personal information about federal employees by federal agencies. The act prohibits the release of any employee information that allows the employee to be identified, unless the employee consents. When an exception applies, the employee consent does not apply.

There are four basic principles addressed by the Privacy Act:

· employees should be able to correct an inaccurate record

· employees should be able to prevent information from being inappropriately revealed, unless required by law

· the person in charge of maintaining the information must ensure its security and proper use

· employees should have access to their own files

The right to privacy is not absolute, however. It is subject to a balancing test of the employee's right to privacy and the requestor's need to know.

Two options for relief are available—criminal penalties and civil remedies, such as damages, and injunctive relief.

The Federal Wiretapping Statute protects public- and private-sector employees from employer monitoring of their phone calls and other communications without a court order. There are two exceptions to the statute:

· interception is authorized when one of the parties to the communication has given prior consent

· when the equipment used is also used in the ordinary course of business (known as the business extension provision)

The privacy of private-sector employees is significantly less protected than that of public employees. Employers suggest that employees take one of three options when faced with objectionable intrusions—quit, comply, or object and risk termination.

Actually, states protect employee privacy in one of four ways:

· legislation mirroring federal laws

· state constitutions that recognize a right to privacy

· protection in certain areas, such as personnel records and the use of credit information

· personal injury torts and other legal theories

Tort Theories

Three tort theories involving invasion of privacy are public disclosure of private facts and defamation, intrusion into seclusion, and publication in a false light. The last two theories are discussed here.

Intrusion into Seclusion

To be actionable, the employee's sphere of privacy must be invaded to the point that it would be objectionable to a reasonable person. The employer can respond with justifiable business purposes for the intrusion.

Employers may regulate employees' off-work activities when they believe it affects the employee's work performance. But the courts will look very closely at such cases to ensure the regulation is sufficiently related to a legitimate business interest.

Publication in a False Light

In a false light claim, the employee is compensated for the inability to be left alone. In a defamation claim, the damage is injury to reputation in the public's perception.

The right to make any of these claims are effectively waived by the employee if the employee allows the information to be published. But the employee cannot be compelled to self-publish by the employer, such as when the employer provides a false basis for termination.

A claim for breach of contract may also be available for an invasion of privacy, assuming the employee can establish an express or implied employment contract exists.

The scope of the right to privacy extends to the way the employer gathers and processes the information. Improper retrieval of information may be an invasion when the improper filing or dissemination of the file may leave the employer liable to a defamation claim. The employer must also be careful to ensure that the information does not get into the wrong hands.

Employer Defenses

An employer can defend against these torts by establishing the truth of the information communicated. Employers are also immune from liability for statements made in good faith, and/or those made in a judicial proceeding. Good faith means the statements were not made with malice or ill will toward the employee.

Waiver of Privacy Rights

Courts differ on the question of whether or not the employee's right to privacy can be waived. To be valid, any waiver must be voluntary. There must be some form of consideration, namely a job offer, given to the employee due to the superior bargaining the employer generally holds. The courts have required the waiver be knowingly given. They must also be clear, unambiguous, and in writing.

Ask Yourself

Review Questions

1. True or False: A fundamental right is a right guaranteed by the Constitution.

2. True or False: A reasonable search does not include the collection of bodily fluids, such as blood samples and urine.

3. The tort of compelled self-disclosure occurs when:

a. an employer requires former employees to provide their own references.

b. an employee is required to submit to testing that yields damaging results.

c. an employee is required to submit to a lawful search that nevertheless yields damaging results.

d. an applicant is prejudiced in finding new employment because of being required to reveal false and defamatory reasons for termination from a former job.

4. What tests are employed by the courts to determine whether state action is constitutional?

5. Under what conditions will a private- or public-sector employer be exempt from the general prohibition against the monitoring of employee telephone calls?

Labor law is an entire body of law unto itself, very different from the larger body of employment law. Although the term employment law refers to a wide range of issues related to the workplace, labor law focuses specifically on issues related to labor unions and collective bargaining agreements. Rather than each employee striking individual deals with the employer, the law permits employees to do so in an organized way, provided the workers have similar work interests and agree to allow a representative speak for them. This is called collective bargaining.

The theory behind collective bargaining is that it is in the employer's and the employees' best interest if the employer only has to deal with representatives of the workforce, as opposed to negotiating with each member separately.

Collective bargaining was not something employers initially welcomed. It was a right won by workers only after nearly 100 years of struggle on many fronts in the streets, in Congress, various state legislatures, and in the courts.

The Sherman Anti-Trust statute was frequently used by courts and the opponents of collective bargaining to find organizing efforts by workers to be illegal. That finally changed with the passage of the first of four important labor laws.

The Norris-LaGuardia Act was the first major labor law. Enacted in 1932, it restricted the ability of courts to issue injunctions against unions engaged in concerted activity. Historically, employers used antitrust law against employees who hoped that by banding together, they would improve their bargaining position with the employer. The act also outlawed "yellow dog contracts," an employer practice in which applicants had to agree that they were not a union member as a condition of employment.

The Wagner Act or the National Labor Relations Act (NLRA), passed in 1935, established the right of employees to form unions, bargain collectively, and strike. It also defined unfair labor practices. The National Labor Relations Board (NLRB) is another result of that legislature. The NLRB (an independent agency) conducts elections among employees to determine what union—if any—is to represent specific workers, adjudicates unfair labor practice claims, and generally administers the NLRA.

In collective bargaining, employees with a community of interests (meaning similar workplace concerns and conditions) form a single bargaining unit. The community of interests is based on factors such as similarity of the jobs employees perform, work conditions, skills, and training.

Unions are created when a sufficient number of employees sign authorization cards, a majority votes for a union in a union representation election, or the NLRB orders the employer to bargain with a union. The last method is used only when the actions of the employer are so outrageous that the NLRB determines no other method can yield a fair indication of employee sentiment. The NLRB supervises the elections and certifies the results in such a case. Unions are composed of nonsupervisory or managerial employees and may include part-time workers.

Under the NLRA, an employer is required to bargain collectively in good faith about wages, hours, and terms and conditions of employment. These are considered mandatory bargaining subjects. Employers may bargain about other matters (permissive subjects), but only a refusal to bargain over mandatory subjects is considered an unfair labor practice.

The intent of the collective is to prevent management from unilaterally instituting workplace policies that affect workers. The law requires that the parties bargain in good faith, not that they reach an agreement. Examples of bad faith bargaining are if one party refuses to offer any evidence to explain or support a position, one side rejects a proposal and makes no counter proposal or fails to show up for negotiations.

The duty of fair representation requires the union to represent all employees fairly and nondiscriminatory. Employees will sometimes use this clause to challenge the union leadership's decisions or the contract itself.

In most collective bargaining agreements, job and union security are the main issues for the employees, while the employers are concerned with freedom from labor strikes and slowdowns. Other topics often included are seniority, benefits, employment classifications, and the role of arbitration in solving disputes. Often the agreements will allow for midterm bargaining over certain issues not settled or subject to unforeseeable change.

Unfair labor practices may include activities that attempt to control or influence the union, interfere with, or restrain union affairs. It is also unfair for employers to promise an increase or reduction of benefits to influence the outcome of an election.

The union's shop steward—elected by the members—is the intermediary between the union and the employer. The steward may collect dues, recruit new members, and be the first line of representation when an unfair labor practice complaint has been raised.

The NLRA permits certain strikes and lockouts as a legitimate form of protest. During a strike, the members do not work. Instead, they often gather outside the employer's place of business, carrying signs about the nature of the strike and chanting slogans to draw attention to the striker's demands and to discourage others from supporting the employer's business.

Strikes may be called for economic reasons or because of an unfair labor practice. As long as they are legal, the striking workers are considered employees. Once the strike is over, the strikers have a right to reinstatement, provided they offer an unconditional return to work. If the strike was for economic reasons and the employer replaced the strikers, then they do not have a right to immediately return to work. Workers out on an unfair labor private strike have a right to return immediately, even if the employer has hired replacement workers.

An employer may impose a lockout on employees. During a lockout, the employer either closes shop, thereby preventing employees from working, or brings in replacement workers. An employer must engage in negotiations with the union during a lockout. Strikes that are not authorized by the union are called wildcat strikes and are illegal.

Many collective bargaining agreements contain clauses that prevent strikes and lockouts. They use the grievance process to resolve disputes.

The Taft-Hartley Act was enacted in 1947 in response to perceived excesses by the unions. The act defines labor practices as unfair when the union refuses to bargain or coerces employees to join the union and charges members discriminatory dues and entrance fees. It also allows states to establish right-to-work laws, meaning individual workers in a unionized shop are not required to join the union. Despite their nonparticipation in the union, the union must still represent these workers as part of the bargaining unit.

If a state is not a right-to-work state, then it is permissible for a collective bargaining agreement to contain a union security clause, meaning all workers in the shop must join the union.

The Landrum-Griffith Act, also known as the Labor Management Reporting and Disclosure Act, established basic procedures for unions to follow to ensure democratic and fair elections and to provide individual union members with a bill of rights. The act also safeguards union funds, prohibiting use of union funds for anything other than those expenses benefitting the union or its members. Funds cannot be used to support candidates for union office and union officials. Stealing and embezzling union funds was also made a federal crime.

Labor Relations in the Public Sector

The NLRA applies only to the private sector. Federal employees are covered by the Civil Service Reform Act of 1978, which established the Federal Labor Relations Authority. State and local government employees are covered by a state public employees relations commissions.

Probably the most significant difference between public and private collective bargaining is the fact that public employees cannot strike. The prohibition on striking is grounded in the need to protect public health, as well as the doctrine of sovereignty, meaning the federal government has the highest authority in such matters.

There are also differences in what can be negotiated. Federal employees cannot bargain over wages, hours, or benefits. They can bargain about the numbers, types, the use of grades of positions, procedures for performing work, exercise of authority, the use of technology, and the alternatives for employees harmed by management decisions.

Ask Yourself

Review Questions

1. True or false: Any employee—except corporate officers—can be a union member.

2. True or false: Management's refusal to bargain in good faith is an unfair labor practice, regardless of the subject matter in question.

3. As part of every employment interview, the employer asks the applicants their views on unionization. Discuss the legality of this behavior.

4. What is the purpose in locking out the employees if during a lockout the employer must continue to negotiate with the union?

The Occupational Safety and Health Act (OSHA) is a federal law enacted in 1970 to improve safety in the workplace. Before OSHA, employees had only the common law (general principles of personal injury/torts law, contract law, and the like) to protect them from injuries in the workplace. The act creates both specific and general standards for employers to follow. It imposes two requirements on employers:

· compliance requirements—employers must comply with all of the safety and health standards dictated by the Department of Labor

· general duty clause—employers must furnish to each employee a job and workplace free from recognized hazards that are causing or are likely to cause death or serious physical harm

OSHA is enforced by the Occupational Safety and Health Administration, an agency within the Department of Labor. Approximately 25 states have similar agencies and act as a partner with the federal OSHA. The act is enforced through inspections of the workplace by compliance officers following a complaint, a grievance, or reports of fatal or multiple accidents. In certain high-risk industries, routine inspections regularly are conducted. All inspections are conducted without notice.

An antiretaliation clause protects workers who notify OSHA of hazardous conditions. Penalties and abatement orders are assessed in connection with a violation.

Compliance Provisions

A number of specific requirements regarding the physical layout of the work site must be met. For example, all employees must be trained on protective measures. Medical examinations must be provided by employers to employees exposed to dangerous chemicals.

Emergency Temporary Standards

When a grave danger is discovered by a compliance officer, the act allows the Secretary of Labor to establish temporary emergency standards that are effective immediately upon publication in the Federal Register without having to go through the lengthy rule-making process required by the act. The emergency standards are effective until regular standards are approved.

The general duty clause protects employees against certain hazards in the workplace when no other applies. The clause reads: "Each employer ¼ shall furnish to each of his employees employment and a place of employment that are free from recognized hazards that are causing or are likely to cause death or serious physical harm¼"

Although the definition of a recognized hazard has not been completely settled, the most often adapted definition is that a recognized hazard may take the form of actual knowledge when the employer actually knows of the hazard, or constructive knowledge if the industry recognizes the hazard even if the employer doesn't actually know of the hazard.

Actual knowledge can be demonstrated in two ways:

· past safety practices or policies of the employer suggesting that the employer knew there might be a hazard

· the hazard is so obvious that anyone would be aware of it

Barring actual knowledge, the employer may be liable for knowledge of those hazards of which the entire industry is aware.

When an employee believes the employer has violated its general duty to provide a safe working environment, the employees may refuse to work in that environment or to perform a particular task. The employee's refusal must be based on a reasonable apprehension of death or serious injury, coupled with a reasonable belief that no less drastic alternative is available. Under these circumstances, the act protects the employee from retaliation.

Employer Reporting Responsibilities and Employee Rights

Any employer with 11 or more employees is required to maintain records of work-related injuries. An injury is considered work related if:

· it occurred on the employer's premises

· it occurred as a result of work-related activities

· the employee was required to be there by the employer

· the employee was traveling to work or to a place as required by the employer

The records must contain the following information:

· incident date

· category of illness, if applicable

· description of incident

· identification of affected employee

· extent of injury or illness

· if incident was an illness, whether the employee was transferred or terminated

This information must be posted for all employees to see each year from February 1 to March 1.

Within six days of any incident, a report must be filed with OSHA. Any incident involving five or more employees, or any fatality, must be reported within 48 hours. Employers in some relatively low-risk industries are not required to report.

According to the act, employees have the right to request and participate in inspections, receive notice of an employer's violations or citations, be given access to monitoring procedures and results, and be given access to medical information.

Employer defenses to charges of violating the general duty clause include:

· reckless behavior—when the employee is willfully reckless, notwithstanding the employer's efforts to train and educate workers about the dangers and hazards. The employer will be held liable for only the foreseeable, plausible, and therefore, preventable acts of employees.

· physical or economic impossibility of compliance—when an employer has no choice and employees refuse completely to comply with a safety standard, the employer can apply for a variance, meaning this particular employer is free from compliance based on the specific situation.

· employee reduction of risk—when an employer cannot on its own make a workplace safe, but through acts of the employees the workplace can be made safe, the employer is allowed to require those acts for anyone who chooses to work there.

· greater hazard defense—employers may assert that compliance with a health and safety standard would subject the employees to a greater hazard than that which would be prevented by the compliance.

Ask Yourself

Review Questions

Review Questions

1. True or false: Baker was an employer with an exemplary safety record for nearly ten years when an accident took the life of an employee. In the ensuing investigation to determine OSHA liability, Baker cannot assert as evidence his outstanding safety record.

2. Briefly describe the two duties imposed on employers by section 5(a) of the Occupational Safety and Health Act.

3. Under what circumstances is an employer protected against employee action for refusing to work in a particular area or perform a particular task?

Congress passed the Employee Retirement Income Security Act (ERISA) in 1974 in response to growing concern for the protection of worker pension plans. At that time, it was increasingly evident that employers did not have sufficient funds available to meet their pension obligations. The purpose of ERISA is to encourage cautious and careful management of retirement funds by employers.

ERISA applies to all employee benefit plans, defined as "any plan, fund, or program established or maintained for the purpose of providing medical, surgical, or hospital care or benefits in the event of sickness, accident, death or unemployment or vacation benefits." ERISA does not protect welfare benefits.

ERISA protects two types of plans—defined benefits and defined contributions. Defined contribution plans are those in which the amount of the contribution by each employee is set and the employee merely receives whatever amount (principal and interest) is in the account at the time of retirement. Defined benefit plans are those in which the amount the employee is to receive at retirement is set at the time the employee enters the plan. It is similar to an annuity.

Eligibility and Vesting Rules

ERISA requires that all individuals age 21 or over who have completed one year of work must be covered by their employer's pension plan. An employee's right to his or her interest in a plan is considered vested (acquiring rights) after 3 years and must be 100 percent and nonforfeitable by 7 years. However, the employee may not have access to the money until retirement.

Fiduciary Duties, Reporting, and Disclosure Requirements

ERISA establishes specific requirements (or fiduciary duties) that each plan coordinator (or fiduciary) must follow. Fiduciaries are held to a high standard of loyalty to the fund participants and are obligated to act first and foremost in the best interests of the fund.

Fiduciaries are directed to manage the fund "with the care, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims." In other words, they are to act with reasonable care.

In 1985, Congress created the Consolidated Omnibus Budget Reconciliation Act (COBRA) that set the standards for retrieval (withdrawal) of funds by pension managers. Before an employer can terminate a plan, the employer must purchase a fully funded annuity for the plan beneficiaries who have already retired and create a new plan with adequate funds to meet the existing obligations for current employees.

If the employee is legally terminated or otherwise loses the right to benefits, COBRA requires the employer to extend employee health insurance coverage for up to 18 months at the rates originally charged.

ERISA also specifies:

· diversification of fund portfolios

· a prohibition on conflicts of interest

· employee access to information concerning the plan

Employers must fund the normal costs of the plan each year and amortize their employees' liabilities from previous service over no more than 40 years, and from the formation of new plans over 30 years. They must also purchase insurance from the Pension Benefits Guarantee Corporation (PBGC) to cover potential losses if a plan terminates. Pensions for retired workers must be insured at 100 percent while those of current workers must be insured at the level vested at the time of termination.

The Department of Labor enforces ERISA issues related to disclosure requirements. The Internal Revenue Service enforces issues related to vesting and funding requirements.

An individual may file an action under ERISA. In addition, there is an antiretaliation clause. Employers have the right to reduce or modify employee benefits as long as similarly situated participants are treated alike.

Ask Yourself

Review Questions

1. True or false: ERISA does not protect retirement plans against misfeasance by plan trustees.

2. If the amount an employee puts into a pension plan is specified, but the amount paid out in benefits is not, the employee is:

a. enrolled in a defined benefit plan.

b. enrolled in a defined welfare plan.

c. eligible for PBGC protection.

d. enrolled in a defined contribution plan.

3. Distinguish between pension benefits and welfare benefits.

Before workers' compensation statutes were common, employees injured on the job had very little recourse to recover damages for their injuries. They could sue their employer. That was not likely because the injured employee generally had very few financial resources to support a lawsuit. But if the employee did prevail in a suit against an employer, the employee could be awarded substantial money, creating an uncertain financial exposure for employers.

Workers' compensation laws were designed as a trade-off for both the employee and the employer. In exchange for giving up the right to sue, the employee receives a relatively easy and quick compensation for the work-related disability. The employer is relieved of the financial risk of paying a large damage award to an employee for a workplace accident.

The purpose of workers' compensation laws is to make the workplace operate more efficiently by lowering the number of accidents, lost time, and lower production. Workers' compensation statutes are remedial in nature, meaning that they are to be broadly construed to permit recovery when possible.

General Statutory Scheme

Workers' compensation statutes in some form have been adopted in all states. The employer pays an insurance premium that pays benefits to employees injured during employment. The benefits cover lost wages, medical benefits, and may compensate an injured worker for the loss of use of a body part.

Depending on the state law, an employer may oppose the employee coverage by claiming:

· contributory negligence—the employee did some act that falls below the reasonable care standard appropriate for the circumstances, thereby contributing to the injury

· voluntary assumption of risk—the employee knowingly engaged in an act that the employee knew could result in injury

· fellow servant doctrine—the accident was the fault of some other employee's misdoing

Filing Claims

After an accident, an employee files an incident report with the state workers' compensation agency. The circumstances surrounding the incident are investigated and compared with the medical report that established the worker's disability from earning wages. A determination is made as to whether or not the worker is entitled to coverage and the degree of coverage (partial or total, temporary or permanent). If the worker is not satisfied, the decision may be appealed. Generally, agricultural and domestic workers are not covered.

Covered Injuries

Workers' compensation laws apply to accidental, personal injuries arising out of or in the course of employment. Coverage includes mental and emotional and physical injuries. The issue of occupational diseases—medical conditions that are not the result of one traumatic incident—are also often covered.

One of the more frequently contested areas is whether an accident occurred in or arose out of the course of employment. Having an injury occur at work does not necessarily mean it is covered. If it occurred away from work, that does not necessarily mean that it is not covered. The key to determining coverage is whether the injury has a causal connection with the employee's employment or is reasonably incidental to it.

Benefits

There are five categories of benefits:

· medical benefits

· temporary total disability

· permanent partial disability

· permanent total disability

· death