HRM 6302 DB I

HRM 6302, Employment Law 1

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

1. Discuss the legal significance of the employer-employee relationship. 1.1 Identify the regulation of employer-employee relationship through applicable law and judicial

decisions. 1.2 Recognize types of workers and employers, and recognize when an employment relationship

exists. Required Unit Resources Chapter 1: Overview of Employment Law, pp. 3–34 Chapter 2: The Employment Relationship, pp. 37–67 Unit Lesson Whether through discussion in the workplace or through your academic work, you likely have heard of the concept of employment at-will. At its most basic level, being employed at-will means that your employer can terminate you without cause at any time. Likewise, you can resign your employment at any time for any reason. The vast majority of employment relationships in the United States are at-will. When jobs are plentiful and good workers are scarce, it is advantageous for the employee to be able to move freely to a better position with another employer. This is a common occurrence when the economy is strong. In these conditions, employers often compete for the most skilled and experienced workers with higher compensation, stock options, and other benefits. During times of economic downturn and recession, the at-will concepts benefits employers, who can pare down their workforces or even shut their doors. At-will employees have little protection from these actions and may end up unemployed. At-will employment allows the employer to respond to economic problems swiftly and efficiently. Rather than having to keep employees when there is little to do, employers can control costs and work toward a recovery. At-will employment, therefore, is clearly an integral part of our economic system. As we will see, the concept of at-will employment is not an absolute. Employment laws that confer rights on employers and impose obligations on employers modify employment at-will. This unit introduces the range of employment laws that we will explore in more detail in future units. As you read the text for this unit, consider whether we as a society have gone too far in regulating the employer-employee relationship. Are there gaps or outdated regulations that need addressing? Consider also whether the remedies for violations of employment laws are sufficient to rectify the wrong and deter future violations. This unit also introduces the types of workers, a timely topic in today’s workplace. The many varieties of employees—full-time, part-time, temporary, seasonal, and subcontracted—expand the options available to employers. Moreover, the continual evolution of the concept of “work,” combined with the growth in technology, has given rise to the “online gig” economy, where work is done when, where, and as needed, outside of a traditional ongoing employment relationship (Dokko et al., 2015).

UNIT I STUDY GUIDE Introduction to Employment Law

HRM 6302, Employment Law 2

UNIT x STUDY GUIDE Title

Consider the status of an Uber driver requested through an application on a smartphone or device. In the current regulatory system, the driver is either an employee or an independent contractor, a distinction important in many ways that determines the applicability of wage and overtime rules, benefits eligibility, rights of protection from discrimination, and other rules. Actual cases involving Uber drivers demonstrate the difficulty of forcing these new types of workers into one of two legal classifications. A group of Uber drivers brought a class action lawsuit alleging they were misclassified as independent contractors and legally are employees. The court determined that the arbitration agreements drivers signed at the outset of providing services for Uber

were unconscionable and unenforceable because they forced drivers to settle disputes in individual arbitration rather than as members of a class (Fisher, 2016). Having approved the class action to move forward, the court found that there was enough evidence of control by Uber over the drivers that the case could proceed to a jury for decision. Later, the court found that a proposed $100 million settlement covering 300,000 drivers in California and Massachusetts, under which the drivers would have remained independent contractors, was not fair, adequate, or reasonable (Nagele-Piazza, 2016). This was primarily due to the potential penalties under California law that could be imposed if the drivers were found to be employees versus the amount of the proposed settlement (Fisher, 2016). Then, on appeal, the federal appeals court in California reversed the lower court ruling that the arbitration agreements were unenforceable, making it difficult for the class action to proceed, but leaving questions about the appropriate legal classification of Uber drivers. The key battlegrounds in employment law are class actions, the use of arbitration agreements, and worker classification. The Uber case begs the question of whether the economy, aided by technology, is creating workers that do not fit into any of the established categories but have characteristics that confound neat and traditional classification. Is it time for the legal system to recognize that workers do not always fall into one of these two categories and that other categories may be appropriate? Should our laws be evolving at the same pace our workforce is evolving? In the meantime, the lines between types of workers and even workers and employers continue to be increasingly blurred, and human resource (HR) professionals face the challenge to draw on knowledge of the legal definitions and ability to assess risk to advise management on important business decisions. While most questions of proper classification of workers like the Uber case do not involve the company’s business model, worker classification is a critical and often complex issue for organizations. Human resources organizations recognize the importance of legal knowledge for HR professionals. In 2016, the Society for Human Resource Management (SHRM), the leading professional organization for HR practitioners, published the SHRM Competency Model to define what it means to be a successful HR professional. The SHRM Competency Model consists of nine competencies in four areas, the first of which is technical competency, or HR knowledge. According to SHRM (2016), HR expertise or knowledge is critical to success in job performance by HR professionals. It is the knowledge needed by HR professionals to design, enact, evaluate, and maintain sound human resource management practices. HR professionals must acquire comprehensive knowledge concerning policies, principles, laws, regulations, and practices (SHRM, 2016). A necessary building block to a position that designs and develops organizational policy is knowledge and understanding of the laws and regulations that govern the workplace. The goal of this course is not to teach everything you will ever need to know about employment law but to present and explain the foundational concepts that make up the law of the workplace and provide the tools to follow and apply the inevitable evolution of employment law. The most important skill is being able to spot the legal issues in an existing or

Image of Uber smartphone application (TruthVoice, 2016)

HRM 6302, Employment Law 3

UNIT x STUDY GUIDE Title

potential situation. Once you learn to perceive where the landmines are or could potentially be waiting, you can garner resources and research to manage around them. One thing is clear: It is an extremely exciting time for employment law and human resources. There is much to learn and know, as the employment law and HR landscape is constantly changing. Having solid foundational knowledge and staying abreast of current issues and laws is the key to being able to develop human resource strategy in these challenging times. As you work through this course, keep in mind that the concepts covered are concepts that can and will apply to daily human resource practice. Consider how the legal concepts apply to your experience and how they will enhance your future experience. Soon, you will become more capable of hearing facts and seeing situations in a different way, one that involves spotting legal issues and thinking of solutions, the hallmark of a successful HR professional.

References Dokko, J., Mumford, M., & Schanzenbach, D. W. (2015). Workers and the online gig economy: A Hamilton

Project framing paper. Brookings Institution Press. Fisher, D. D. (2016, September 7). Appeals court deals blow to Uber class actions, holding arbitration pacts

enforceable. Forbes, 2. https://libraryresources.columbiasouthern.edu/login?url=http://search.ebscohost.com/login.aspx?direc t=true&db=bth&AN=117944918&site=ehost-live&scope=site

Nagele-Piazza, L. (2016, August 22). Federal judge rejects Uber’s $100 million settlement with drivers.

Society for Human Resource Management. https://www.shrm.org/resourcesandtools/legal-and- compliance/state-and-local-updates/pages/uber-settlement-rejected.aspx

Society for Human Resource Management. (2016). The SHRM Competency Model.

https://www.shrm.org/LearningAndCareer/competency- model/PublishingImages/pages/default/SHRM%20Competency%20Model_Detailed%20Report_Final _SECURED.pdf

TruthVoice. (2016, November 2). Ride-Chicago [Image]. http://truthvoice.com/2016/11/this-small-startup-

wants-to-kill-uber-and-this-is-their-plan/ Suggested Unit Resources In order to access the following resources, click the links below. The following PowerPoint presentations are supplements to the textbook chapter readings and are provided for further knowledge and review of the unit materials. Chapter 1 presentation (PowerPoint) or Chapter 1 presentation (PDF) Chapter 2 presentation (PowerPoint) or Chapter 2 presentation (PDF) Learning Activities (Nongraded) Nongraded Learning Activities are provided to aid students in their course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information.

HRM 6302, Employment Law 4

UNIT x STUDY GUIDE Title

At the end of each chapter of your textbook, scenario-driven questions provide legal issues and realistic situations that relate to employment law. Exploring these questions allows you the opportunity to further your understanding of the concepts in each chapter and prepares you for similar situations you may encounter in your workplace.

• Review the Chapter 1 questions in your textbook on pages 35–36. • Review the Chapter 2 questions in your textbook on pages 68–70.

HRM 6302, Employment Law 1

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

1. Discuss the legal significance of the employer-employee relationship. 1.1 Identify the regulation of employer-employee relationship through applicable law and judicial

decisions. 1.2 Recognize types of workers and employers, and recognize when an employment relationship

exists. Required Unit Resources Chapter 1: Overview of Employment Law, pp. 3–34 Chapter 2: The Employment Relationship, pp. 37–67 Unit Lesson Whether through discussion in the workplace or through your academic work, you likely have heard of the concept of employment at-will. At its most basic level, being employed at-will means that your employer can terminate you without cause at any time. Likewise, you can resign your employment at any time for any reason. The vast majority of employment relationships in the United States are at-will. When jobs are plentiful and good workers are scarce, it is advantageous for the employee to be able to move freely to a better position with another employer. This is a common occurrence when the economy is strong. In these conditions, employers often compete for the most skilled and experienced workers with higher compensation, stock options, and other benefits. During times of economic downturn and recession, the at-will concepts benefits employers, who can pare down their workforces or even shut their doors. At-will employees have little protection from these actions and may end up unemployed. At-will employment allows the employer to respond to economic problems swiftly and efficiently. Rather than having to keep employees when there is little to do, employers can control costs and work toward a recovery. At-will employment, therefore, is clearly an integral part of our economic system. As we will see, the concept of at-will employment is not an absolute. Employment laws that confer rights on employers and impose obligations on employers modify employment at-will. This unit introduces the range of employment laws that we will explore in more detail in future units. As you read the text for this unit, consider whether we as a society have gone too far in regulating the employer-employee relationship. Are there gaps or outdated regulations that need addressing? Consider also whether the remedies for violations of employment laws are sufficient to rectify the wrong and deter future violations. This unit also introduces the types of workers, a timely topic in today’s workplace. The many varieties of employees—full-time, part-time, temporary, seasonal, and subcontracted—expand the options available to employers. Moreover, the continual evolution of the concept of “work,” combined with the growth in technology, has given rise to the “online gig” economy, where work is done when, where, and as needed, outside of a traditional ongoing employment relationship (Dokko et al., 2015).

UNIT I STUDY GUIDE Introduction to Employment Law

HRM 6302, Employment Law 2

UNIT x STUDY GUIDE Title

Consider the status of an Uber driver requested through an application on a smartphone or device. In the current regulatory system, the driver is either an employee or an independent contractor, a distinction important in many ways that determines the applicability of wage and overtime rules, benefits eligibility, rights of protection from discrimination, and other rules. Actual cases involving Uber drivers demonstrate the difficulty of forcing these new types of workers into one of two legal classifications. A group of Uber drivers brought a class action lawsuit alleging they were misclassified as independent contractors and legally are employees. The court determined that the arbitration agreements drivers signed at the outset of providing services for Uber

were unconscionable and unenforceable because they forced drivers to settle disputes in individual arbitration rather than as members of a class (Fisher, 2016). Having approved the class action to move forward, the court found that there was enough evidence of control by Uber over the drivers that the case could proceed to a jury for decision. Later, the court found that a proposed $100 million settlement covering 300,000 drivers in California and Massachusetts, under which the drivers would have remained independent contractors, was not fair, adequate, or reasonable (Nagele-Piazza, 2016). This was primarily due to the potential penalties under California law that could be imposed if the drivers were found to be employees versus the amount of the proposed settlement (Fisher, 2016). Then, on appeal, the federal appeals court in California reversed the lower court ruling that the arbitration agreements were unenforceable, making it difficult for the class action to proceed, but leaving questions about the appropriate legal classification of Uber drivers. The key battlegrounds in employment law are class actions, the use of arbitration agreements, and worker classification. The Uber case begs the question of whether the economy, aided by technology, is creating workers that do not fit into any of the established categories but have characteristics that confound neat and traditional classification. Is it time for the legal system to recognize that workers do not always fall into one of these two categories and that other categories may be appropriate? Should our laws be evolving at the same pace our workforce is evolving? In the meantime, the lines between types of workers and even workers and employers continue to be increasingly blurred, and human resource (HR) professionals face the challenge to draw on knowledge of the legal definitions and ability to assess risk to advise management on important business decisions. While most questions of proper classification of workers like the Uber case do not involve the company’s business model, worker classification is a critical and often complex issue for organizations. Human resources organizations recognize the importance of legal knowledge for HR professionals. In 2016, the Society for Human Resource Management (SHRM), the leading professional organization for HR practitioners, published the SHRM Competency Model to define what it means to be a successful HR professional. The SHRM Competency Model consists of nine competencies in four areas, the first of which is technical competency, or HR knowledge. According to SHRM (2016), HR expertise or knowledge is critical to success in job performance by HR professionals. It is the knowledge needed by HR professionals to design, enact, evaluate, and maintain sound human resource management practices. HR professionals must acquire comprehensive knowledge concerning policies, principles, laws, regulations, and practices (SHRM, 2016). A necessary building block to a position that designs and develops organizational policy is knowledge and understanding of the laws and regulations that govern the workplace. The goal of this course is not to teach everything you will ever need to know about employment law but to present and explain the foundational concepts that make up the law of the workplace and provide the tools to follow and apply the inevitable evolution of employment law. The most important skill is being able to spot the legal issues in an existing or

Image of Uber smartphone application (TruthVoice, 2016)

HRM 6302, Employment Law 3

UNIT x STUDY GUIDE Title

potential situation. Once you learn to perceive where the landmines are or could potentially be waiting, you can garner resources and research to manage around them. One thing is clear: It is an extremely exciting time for employment law and human resources. There is much to learn and know, as the employment law and HR landscape is constantly changing. Having solid foundational knowledge and staying abreast of current issues and laws is the key to being able to develop human resource strategy in these challenging times. As you work through this course, keep in mind that the concepts covered are concepts that can and will apply to daily human resource practice. Consider how the legal concepts apply to your experience and how they will enhance your future experience. Soon, you will become more capable of hearing facts and seeing situations in a different way, one that involves spotting legal issues and thinking of solutions, the hallmark of a successful HR professional.

References Dokko, J., Mumford, M., & Schanzenbach, D. W. (2015). Workers and the online gig economy: A Hamilton

Project framing paper. Brookings Institution Press. Fisher, D. D. (2016, September 7). Appeals court deals blow to Uber class actions, holding arbitration pacts

enforceable. Forbes, 2. https://libraryresources.columbiasouthern.edu/login?url=http://search.ebscohost.com/login.aspx?direc t=true&db=bth&AN=117944918&site=ehost-live&scope=site

Nagele-Piazza, L. (2016, August 22). Federal judge rejects Uber’s $100 million settlement with drivers.

Society for Human Resource Management. https://www.shrm.org/resourcesandtools/legal-and- compliance/state-and-local-updates/pages/uber-settlement-rejected.aspx

Society for Human Resource Management. (2016). The SHRM Competency Model.

https://www.shrm.org/LearningAndCareer/competency- model/PublishingImages/pages/default/SHRM%20Competency%20Model_Detailed%20Report_Final _SECURED.pdf

TruthVoice. (2016, November 2). Ride-Chicago [Image]. http://truthvoice.com/2016/11/this-small-startup-

wants-to-kill-uber-and-this-is-their-plan/ Suggested Unit Resources In order to access the following resources, click the links below. The following PowerPoint presentations are supplements to the textbook chapter readings and are provided for further knowledge and review of the unit materials. Chapter 1 presentation (PowerPoint) or Chapter 1 presentation (PDF) Chapter 2 presentation (PowerPoint) or Chapter 2 presentation (PDF) Learning Activities (Nongraded) Nongraded Learning Activities are provided to aid students in their course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information.

HRM 6302, Employment Law 4

UNIT x STUDY GUIDE Title

At the end of each chapter of your textbook, scenario-driven questions provide legal issues and realistic situations that relate to employment law. Exploring these questions allows you the opportunity to further your understanding of the concepts in each chapter and prepares you for similar situations you may encounter in your workplace.

• Review the Chapter 1 questions in your textbook on pages 35–36. • Review the Chapter 2 questions in your textbook on pages 68–70.