Case Study

BHR 3565, Employment Law 1

Course Learning Outcomes for Unit I Upon completion of this unit, students should be able to:

2. Examine the responsibilities of the parties to an employment contract. 2.1 Compare and contrast positions on noncompete clauses. 2.2 Determine which states' laws support ethical reasoning in the resolution of a case. 2.3 Discuss the legal implications for employers and employees of requiring employees to sign

noncompete agreements.

Course/Unit Learning Outcomes

Learning Activity

2 Chapter 1 and 2 Unit I Case Study

2.1 Chapter 1 and 2 Unit I Case Study

2.2 Unit Lesson Preface Unit I Case Study

2.3 Chapter 1 and 2 Unit I Case Study

Reading Assignment Preface: Guide to Briefing Cases, pp. xxiv-xxvi Chapter 1: First the Forest, Then the Trees: An Overview of Employment and Labor Law Chapter 2: Employment Contracts and Wrongful Discharge Additional Reading Assignment: In order to access the following resource, click the link below. DCS Sanitation Management v. Castillo, 435 F.3d 892, (8th Cir. 2006). Retrieved from https://advance-lexis-

com.libraryresources.columbiasouthern.edu/api/permalink/d34471c6-4b5b-4640-8dbe- 202b87d433b1/?context=1516831

Unit Lesson Employer-Employee Relationship The traditional employer-employee relationship is described as employment-at-will, which simply means that the relationship exists as long as both the employer and the employee want it to exist. That is, employment- at-will means that an employee can resign whenever he or she wants to resign for any reason or for no reason. It is often said that an employee must give notice to an employer before the employee resigns, but that idea arises out of the employee hoping for a positive reference from the employer not a legal requirement. Employment-at-will also means that an employer can discharge an employee at any time and for any reason or for no reason, as long as the discharge does not constitute discrimination under federal or state law.

UNIT I STUDY GUIDE

An Overview of Employment and Labor Law

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This traditional employment relationship is sometimes modified by employment contracts. Employment contracts are governed by the rules that apply to contracts in general. An employment contract is based on an agreement between the employer and the employee and states express consideration (i.e., the employee promises to work for the employer for a specified period, and the employer agrees to pay the employee a specified amount of compensation). It must be made between parties that have the legal capacity to enter into a contract and be for a legal purpose. Employees hired with a contract can only be terminated according to the provisions of the contract. Conversely, employees hired under the at-will doctrine can have their employment terminated at any time and for any legal reason by either the employer or the employee. As with any other contract, the breach of an employment contract entitles the non-breaching party to recover damages that arise because of the breach of the contract. An employee who is fired in violation of an employment contract can recover any compensation due under the contract that has not been paid. For an employer, that means an employee who quits in violation of an employment contract may have to pay the costs of finding, hiring, and training a replacement. They may even have to pay back some of the compensation that has already been paid to the employee who breached the employment contract. Another relatively recent issue that has arisen in the employment relationship is whistleblowing. Whistleblowing occurs when an employee reports to the employer or to federal authorities the unlawful actions of other employees. It is easy to see where problems can arise when there is whistleblowing, so there are several federal laws that are intended to encourage employees to report unlawful activities related to employment and to protect employees who report unlawful activities, including the following:

 the Whistleblower Protection Act that prohibits employers from retaliating against employees who report wrongdoing,

 the False Claims Act that encourages employees to report activities that defraud federal or state governments, and

 the Sarbanes-Oxley Act that encourages employees to report activities that they reasonably believe violate federal security laws.

Introduction to the Court System This unit will begin the exploration of employment law. This field has changed over the years, and the progression of the legality of employer-employee rights is an interesting area to follow. Courts look at common law and statutory law when deciding these cases. Common law is any court decision that has been handed down over the years by the courts of record. These decisions may be from state or federal courts. The decisions may have been appealed to a higher court. On appeal, the decisions may be affirmed or overturned on the state or federal level. If a higher court has ruled on a case, that decision gives the case more weight. Different states have different names for courts of record. In New York state, the lowest court of record is called the supreme court; it is a county court. The cases from this court are appealed to the appellate division in the department where it will be heard. New York has four appellate departments. A party may then seek redress to the highest court in New York state, which is the court of appeals. When the highest court in a state makes a ruling, it becomes the law in that state. When the U.S. Supreme Court or another federal court makes a ruling, it becomes the law in the United States. In the federal system, the highest court is the U.S. Supreme Court. The state and federal system have different jurisdictions to hear cases. The federal courts will not hear cases that are solely within the jurisdiction of the states and vice versa. Federal courts have jurisdiction if the issues concern constitutional rights and in cases that involve the federal government. In the area of employment discrimination, some conduct is illegal under state and federal laws. Both the states and the federal government have laws that forbid employment discrimination, and such an action could be brought in either court.

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Statutory laws are laws that are passed by state or federal legislative bodies. Courts can rule on statutes to interpret unclear language or to determine whether the laws are constitutional. Statutes are strictly construed by the courts. Many sections of employment law are governed by statutes. Interpretation of Cases The textbook has many examples of cases that were decided by the courts. It is important to know how to interpret what the cases mean. The title of a case has the citation below it. The plaintiff is the first name followed by a "v." (which means versus or against). The party who has been sued is the defendant, and that name follows the "v." in the case name. The citation will give you the history of how the case has proceeded through the court system. If the citation has the abbreviation for a state, then the case was heard in a state court. The abbreviations "U.S." or "Fed." mean the case has been appealed to a higher court, and this will be noted in the citation. The decision of a case that has been appealed to a higher court will tell you the judges that agree with the decision; the judges that do not agree and dissent (they have been outnumbered), and possibly a concurring judge. If a judge concurs, he or she agrees with the majority but for different reasons. Usually the concurring judge will write his or her own decision and tell you why he or she has ruled that way and why he or she came to the same decision but for different reasons. Generally, when looking at a case, a good mnemonic to use is IRAC (issue, rule, application, and conclusion). First, identify the issue in the case. What are the parties trying to have decided? The current rules of law or statutes are then cited. How are the rules of law applied? What conclusion or decision has the court fashioned? This mnemonic will also guide you in writing papers. Deciphering the Case Study The party appealing or the appellant is DCS Sanitation Management, Inc. They were also the plaintiff or the party that sued the employees for violating a noncompete clause. The defendants or persons who were sued are Elroy Castillo, Efren George Castillo, and Adolfo Martinez. The case is in federal court. The plaintiff lost in the lower District Court of Nebraska and is appealing. The federal court applied Nebraska law instead of Ohio law in this case. The U.S. Supreme Court denied hearing the case (DCS Sanitation Management v. Castillo, 2006). The case involved two different states so the conflict of the two state laws gave the federal courts jurisdiction.

DCS Sanitation Management, Inc., Appellant, v. Eloy Castillo; Efren George Castillo; Adolfo Martinez, Appellees.

No. 05-1201

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

435 F.3d 892; 2006 U.S. App. LEXIS 1758; 152 Lab. Cas. (CCH) P60, 135; 23 I.E.R. Cas. (BNA) 1772

October 14, 2005, Submitted

January 25, 2006, Filed SUBSEQUENT HISTORY: Rehearing denied by, Rehearing, en banc, denied by DCS Sanitation Mgmt. v. Castillo, 2006 U.S. App. LEXIS 8154 (8th Cir., Apr. 4, 2006) US Supreme Court certiorari denied by DCS Sanitation Management, Inc. v. Castillo, 2006 U.S. LEXIS 7161 (U.S., Oct. 2, 2006) PRIOR HISTORY: [**1] Appeal from the United States District Court for the District of Nebraska. The head notes of the case give a quick overview of the legal issues that are considered in the case. Look at the headnote below. It is designated as HN4. The number four designates where in the decision this issue is discussed. This allows you to quickly look at the procedural issues of conflict or choice of law. Civil Procedure > Federal & State Interrelationships > Choice of Law > General Overview Under the second part of the test for choice of law cases, application of the chosen law is precluded if application of the law of the chosen state would be contrary to a fundamental policy of a state that has a

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materially greater interest than the chosen state when certain factors are applied (DCS Sanitation Management v. Castillo, 2006). Now that you know how to decipher the cases, enjoy reading them, and think about how you can apply these laws in your workplace!

Reference DCS Sanitation Management v. Castillo, 435 F.3d 892, (8th Cir. 2006).

Suggested Reading In order to access the following resource, click the link below. In the video linked below, Beth Milito of the National Federation of Independent Business Small Business Legal Center explains what at-will employment means and provides five elements to include in an at-will statement that should be given to all applicable employees. National Federation of Independent Business (NFIB). (2015, April 24). Understanding employment at will:

NFIB legal ease [Video file]. Retrieved from https://www.youtube.com/watch?v=rryJ9gJq7s0&feature=youtu.be

Click here for the video transcript.