Indiana Wesleyan University

1. Indiana Wesleyan University ADM 510 Human Resources & Employment Regulation

2. Agency Relationships • Agency: A fiduciary relationship that results when one person (the principal) manifests her consent that another person (the agent) will act on her behalf and subject to her control, and the agent manifests his consent to so act. • Fiduciary: A person who undertakes to act on behalf of and primarily for the benefit of another. • Fiduciary Duty: A duty arising from the trust and confidence placed in a fiduciary by those on whose behalf and for whose benefit she acts.

3. Why is it important to determine a worker’s status? • Determines whether an employer is subject to certain regulations such as FMLA, Workers’ Compensation Benefits, overtime, and unemployment security benefits. • Employment and withholding taxes. • Terms and conditions of employment. • Vicarious liability and respondent superior.

4. Employee • Employee: A person • (1) who works for, and receives payment from, an employer, • (2) whose working conditions and methods are controlled by the employer, and • (3) for whose acts and omissions occurring in the scope of employment the employer is liable.

5. Independent Contractor Independent Contractor: A person • (1) who works for, and receives payment from, an employer, • (2) but whose working conditions and methodsarenot controlled by the employer, and • (3) for whose acts and omissions the employer is not liable.

6. Determining Status To determine whether a worker is an employee or an independent contractor, courts consider the following: • (1) how much direction and control the employer exercises over the details of the person’s work, • (2) whether the person is engaged in an occupation or business distinct from that of the employer, • (3) whether the work the person performs is usually done under the employer’s direction or without employer supervision, • (4) who supplies tools used by the person, • (5) the duration of the person’s employment, • (6) how the person is paid for his work, and • the degree of skill required of the worker. By contrast, the IRS bases its determination whether a person is an employee using a single factor: the degree of control the business exercises over the worker.

7. Respondeat Superior An agent is liable for her own torts. In addition, a principal may be liable for its agent’s torts if the agent’s tort resulted from: (1) the principal’s own tortious conduct, (2) a tortious act authorized by the principal, or (3) the agent’s unauthorized tort committed within the scope of the agency.

8. Independent Contractor Liability • As a general rule, an employer who has no legal power to control the details of the independent contractor’s performance is not liable for any torts committed by the independent contractor, even if committed while performing the contract. • Exception: Unusually Hazardous Activities – An employer is strictly liable for injuries caused by those performing unusually hazardous activities (e.g., blasting, using poison) on the employer’s behalf, regardless of whether the person causing the injury is an employee or an independent contractor.

9. At Will Employment This means that you are free to take a job at any time for any reason and free to leave the job at any time for any reason. This also means that your employer may hire or not hire you and terminate you for any reason or for no reason at all at any time.* *The reason cannot be an impermissible reason such as racial discrimination, whistle-blowing, jury duty, retaliation, or other exception found in law.

10. At Will Employment Employment in Indiana is “at will” unless: • You have a statutory property interest in your job; • Contract employee; • Independent contractor: • Covered by a labor agreement (contract); or • Your at will employment is transformed to “for cause” employment by assurances made by your employer (Estoppel or implied K).

11. At Will Exceptions: Whistle-Blower • Employee’s reporting of an employer’s wrongdoing. • Generally, in Indiana an employee must rely on a whistle-blowing statute for protection. • Indiana has only public sector whistle-blower protection under state laws.

12. At Will Exceptions: WARN • Worker Adjustment & Retraining Notification Act. • Plant Closing = Employment loss of 50 or more workers during 30 day period. • Mass layoff = 500 workers in 30 day period or 50-499 workers in 30 day period if they comprise 1/3 or more of the active workforce. • 60 day notice requirement.

13. At Will Exceptions: Public Policy • Law or regulation that specifically protects an employee from discharge is a statement of public policy. • Is the policy clear? • Will such a discharge discourage other employees from exercising their rights or discourage compliance and frustrate the policy?

14. At Will Exceptions: Fair Dealing • Found in contract law that each party has an obligation to act in good faith in the fulfillment of each party’s contractual duties. • Indiana does not follow this doctrine with respect to at-will employment.

15. At Will Exceptions: Promissory Estoppel • Employer made a promise that the employee reasonably relied. • As a result of such reliance the employee was injured (loss of job). • In Romack v. Public Service Co. of Indiana, 511 N.E.2d 1024 (Ind.,1987) the Supreme Court, Dickson, J., held that employee who had “lifetime” employment with state police, was recruited by defendant employer because of his unique skills, and was promised permanency of employment could be discharged only for cause.

16. At Will Exceptions: USERRA The Uniform Services Employment and Reemployment Rights Act guarantees eligible veterans a right to reemployment and freedom from discrimination and retaliation. For veterans who served more than 181 days active duty, an application for reemployment must be made with the employer within 90 days after completion of military service duty.

17. Wrongful Discharge • Absent a contrary provision in a written agreement between the employer and employee, employment is presumed to be “at-will” – meaning that the employer may terminate the employee at any time, for any reason, or for no reason at all. • However, discharge in violation of an employment contract, for-cause employment, labor agreement, and for the reasons excepted from at-will employment may result in compensatory or punitive damages paid to the plaintiff by the employer.

18. Constructive Discharge • Employee is “forced out” because of employer behaviors that make it so unfavorable or detrimental to remain in the workplace that the employee finds it intolerable to endure. • Courts will consider the employee as terminated by the employer.

19. Retaliatory Discharge Retaliation against an employee for exercising rights under law (ADA, ADEA, or EEOC for example). • Protected activity. • Adverse action by employer. • Causal connection between protected activity and the adverse action.

20. Covenants Not to Compete • Contract in writing. • Protects a legitimate business interest. • Ancillary to a legitimate business relationship. • Reasonable in scope and duration. • In the market area. • Not contrary to public policy

21. Title VII of the Civil Rights Act of 1964 42 USCA § 2000e Title VII of the Civil Rights Act of 1964 prohibits the unequal treatment of persons based on race, color, national origin, religion, gender, age, or disability.

22. Disparate Treatment Disparate Treatment: Intentional discrimination by an employer against employees or applicants who are members of a protected class (e.g., Hispanics, females, disabled persons). To prevail on a disparate treatment claim, a plaintiff must prove that: (1) she is a member of a protected class; (2) she applied and was qualified for, or was employed in, the position in question; (3) she was rejected, demoted, or terminated by the employer; and (4) the employer subsequently filled the position with a person not in a protected class.

23. Disparate Impact Disparate Impact: Practices or procedures which, although not intentionally discriminatory, have the effect of discriminating against members of a protected class. “Four-Fifths Rule”: The EEOC deems a challenged practice or procedure to be discriminatory if it results in members of a protected class being hired, retained, or promoted at a rate less than four-fifths of the rate for the group with the highest corresponding rate.

24. Color or National Origin • Discriminating on the basis of color or national origin with regard to hiring or promoting employees is illegal unless the discriminatory policies or procedures have a substantial, demonstrable relationship to realistic qualifications for the job in question. • Discriminating against employees on the basis of color or national origin with regard to employment conditions or benefits is illegal.

25. Religion • Religion: Employers are required to reasonably accommodate their employees’ religious beliefs, unless doing so would cause undue hardship to the employer’s business. • An employee’s religious beliefs need not be based on the tenets or dogma or a particular church, sect, or denomination, as long as it is sincere.

26. Gender Federal law prohibits employers from: (1) discriminating against applicants and employees on the basis of gender, (2) classifying jobs as “male” and “female,” or (3) advertising jobs in help-wanted columns designated “male” and “female,” • unless the employer can prove that the gender of the applicant or employee is essential to the job in question.

27. Gender: Pregnancy Pregnancy: Federal law also requires employers to treat women who are pregnant, have recently given birth, and/or have a medical condition related to pregnancy or childbirth the same as any other employee who is temporarily unable to perform some or all of his or her job functions.

28. Gender: Affinity Orientation Title VII of the Civil Rights Act of 1964 does not prohibit discrimination on the basis of affinity orientation. Accordingly, discrimination based on sexual orientation is not protected under Title VII, but some state laws do provide protection from discrimination based on affinity orientation.

29. Gender: Equal Pay Act29 UCA § 206(d) Equal Pay Act: Federal law prohibits gender-based differences in wages paid for equal work on jobs whose performance requires equal skill, effort, and responsibility under similar conditions.

30. Who is covered by Title VII? • All government employers. • Employment referral agencies. • Private employers with 15 or more employees. • Unions. • All levels of employees of covered employers.

31. Limited Exceptions to Title VII • Soldiers and Sailors of the Armed forces (civilians are covered). • Bona fide private clubs (does include labor organizations which are covered). • Indiana tribes (semi-sovereign political entity). • Religious organizations are covered, but may hire employees based on religious beliefs.

32. Veteran Preferences • Title VII specifically preserves statutory veteran preferences from any challenge under Title VII. • 42 USCA § 2000e-11

33. Proceeding through the EEOC • Complaint to EEOC (180 days or 45 for federal employees) • Notice to employer • Notice to referral to mediation if appropriate • Charge is mediated if both parties agree • If no mediation or unsuccessful, EEOC investigates • Parties try to conciliate • If no conciliation, EEOC makes determination • If no cause, employee given right to sue letter • If cause, employer is given notice of proposed remedy • If employer disagree, appeal to next agency level.

34. Judicial Review of Claims • EEOC may file a civil action in federal court. • EEOC decisions get de novo review in court. • Persons must exhaust the administrative review process before going to court.

35. Remedies • Back pay. • Front pay. • Reinstatement. • Seniority. • Retroactive Seniority. • Make-whole or injunctive relief. • Compensatory and punitive damages. • Attorney fees. • Medical costs.

36. Employees prima facie case • Belongs to a protected group • Was qualified for the job • Was rejected • Position remained open and search continued Employer claims action was taken for legitimate nondiscriminatory reasons. Employee counters that the reasons are simply a pretext for discrimination.

37. Employer Defenses • Bona Fide Occupational Qualification defense (BFOQ). • Business Necessity. • Employee’s claims (facts) are not true. • Applicant was not otherwise qualified for the position.

38. Human Resources Planning JobAnalysis Determine recruitment & selection needs Recruiting & Hiring

39. Job Analysis Job analysis determines the tasks, duties and responsibilities of the job. • A job analysis should be done for each job in the organization. • Job analysis can be done by: • Observe current workers. • Questionnaires filled out by worker and managers. • Current trends are toward flexible jobs where duties are not easily defined in advance.

40. Reliability & Validity Selection tools must be reliable and valid. • Reliability: the degree to which the tool measures the same thing each time it is used. • Scores should be close for the same person taking the same test over time. • Validity:Does the test measure what it is supposed to measure? • Example: does a physical ability test really predict the job performance of a firefighter? • Managers have an ethical and legal duty to develop good selection tools.

41. Looking for the SKAs • Skills, • Knowledge, and • Abilities needed to succeed in a specific job. Proper screening tests and devices will reduce or eliminate an employer’s risk to disparate impact claims.

42. Employer References As we observed recently, the “free flow of information about performance helps prospective employees, prospective employers, and the economy in general.” Passmore v. Multi-Management Serv., 810 N.E.2d 1022, 1027 (Ind.2004) (former employer sued for failing to tell future employer about rumors concerning employee). Liability arising out of employment references “poses rather more complex competing policies.” Id. (citing Susan Oliver, Opening the Channels of Communication Among Employers, Can Employers Discard Their “No Comment” and Neutral Job References Policies?, 33 Val. U.L.Rev. 687 (1999)). Attempting a balanced approach to these competing interests, Indiana recognizes a qualified privilege for communications between former and prospective employers. Chambers v. Am. Trans Air Inc., 577 N.E.2d 612, 615-16 (Ind.Ct.App.1991). Like the privilege afforded intra-company communications, that privilege protects human resource needs by permitting former employers “to give sincere yet critical responses to requests for an appraisal of a prospective employee's qualifications” without fear of a defamation action. Id. at 615. That privilege may be overcome by showing some abuse of the privilege, such as actual or express malice. Id. at 616. Trail v. Boys and Girls Clubs of Northwest Indiana, 845 N.E.2d 130Ind. (2006)

43. Polygraph Protection Act Prohibits: • Requiring or causing employees to take lie detector tests; • Using the results of a lie detector tests; and • Taking negative action as a result of a lie detector tests. • Exceptions: police, people dealing with $$, certain security personnel.

44. Exceptions to Polygraph Protection Act • Given in conjunction with ongoing investigation. • The employee had access to the lost property. • Employer has reasonable suspicion that the employee is the culprit. • The employee is provided with a statement of the loss and the basis of suspicion.

45. Drug Screening • For private employers there is no 4th Amendment or other constitutional issues. • Look to your state law for prohibition or regulation on drug testing. • Government employers must be cognizant of USC issues: • Articulable suspicion • Safety sensitive employees • Watch out for tort traps such as false imprisonment, IIED, defamation, & wrongful termination.

46. Workplace Drug Testing Employees have sued employers for Intentional Infliction of Emotional Distress (IIED), Battery and Wrongful Discharge and Defamation. The courts have held that when a collective bargaining agreement provides for employee drug-testing, and the IIED and the Defamation claim(s) are “inextricably intertwined” or “substantially dependent” on the collective bargaining agreement terms, they are pre-empted by § 301 of the Labor Management Relations Act. [i] Employers can be held liable if an employer makes defamatory statements to individuals outside the scope of the employer’s collective bargaining agreement. [ii] [i]Meier v. Hamilton Standard Electric Systems, Inc., 748 F. Supp. 296 (ED Pa 1990); Chube v. Exxon Chemical Americas 769 F. Supp. 557 (MD La 1991); Spietz v. Kaiser Aluminum & Chemical Corp.,672 F. Supp. 1368 (WD Wash 1987). • [ii]Id.

47. Drug-Free Workplace • In 1986, President Reagan issued a Drug-Free Workplace Executive Order that required federal agencies to take steps to eliminate drug abuse in the federal workplace. [i] Many state agencies and private organizations followed the President’s drug-free workplace initiative by instituting drug awareness programs. • The principal purpose of any drug awareness and testing program should not be to catch offenders, but rather to: • promote personal well-being and safety, • deter first time and casual drug use, and • encourage those who are in rehabilitation not to relapse. [i]Drug-Free Federal Workplace, Exec. Order No. 12,564, 51 Fed. Reg. 32,899 (1986).

48. Last Chance Agreements (“LCA”) In general, last chance agreements are probationary contracts negotiated by an employer with an employee who faces termination or serious discipline. The employer agrees not to execute the discipline, and the employee promises to rehabilitate his or her performance in definite ways. Last chance agreements usually contain a clause by which the employee waives his or her right to any administrative disciplinary appeal if the employee violates the agreement within a distinct timeframe.

49. Enforceability of LCA The courts have found: 1) employees may voluntarily waive their statutory rights; 2) the fact that an employee may face serious discipline or termination does not nullify the voluntariness of the agreement; 3) employers may not illegally discriminate, negotiate in bad faith, abuse discretion or engage in prohibited personnel practices; 4) employers must inform the employee of the alternatives and consequences of the agreement and not misstate the employees options; 5) to avoid findings of unfair arbitrary and capricious agreements, the agreements should not be open ended (usually one year) and be directed towards correcting the employee’s specific behaviors, conduct and derivative unsatisfactory performance; and 6) there must be review for determining whether the agreement was breached by the employee.

50. Affirmative Action (“AA”): Life in the 60s • Oppression of the Rights of Women and Minorities. • Right to Vote. • Restriction of First Amendment Rights: Free Speech / Right to Protest. • Discrimination. • Separation of Races. • Violence.