The body of law that governs the employer-employee relationship, including individual employment contracts, the application of tort and contract doctrines, and a large group of statutory regulation on issues such as the right to organize and negotiate collective bargaining agreements, protection from discrimination, wages and hours, and health and safety.
In the modern world, employment is the means by which goods and services are provided. Beyond establishing an economic relationship between employer and employee, work provides a powerful structure for organizing social and cultural life. The employment relationship is more than the exchange of labor for money. In U.S. society, self-worth, dignity, satisfaction, and accomplishment are achieved primarily by one's employment responsibilities, performance, and rewards. The development of employment law demonstrates the importance of work. Since the 1930s, employees have acquired more legal rights as federal and state governments have enacted laws that give them the power and authority to unionize, to engage in collective bargaining, and to be protected from discrimination based on race, gender, or disability.
History
English common law, and subsequently early U.S. law, defined the relationship between an employer and an employee as that of master and servant. The master-and-servant relationship arose only when the tasks performed by the servant were under the direction and control of the master and were subject to the master's knowledge and consent.
With the rise of industrialization and mass production in the 1800s, the U.S. economic structure changed dramatically. Employers needed masses of employees to run the equipment that produced capital and consumer goods. By the end of the nineteenth century, the U.S. economy was attracting millions of immigrants. In addition, migration from country to city accelerated.
Nineteenth-century employment law was based on the concept of liberty of contract: a worker had the freedom to bargain with an employer for terms of employment. This concept was challenged when workers organized into unions and engaged employers in collective bargaining. The U.S. legal and economic systems at the time were opposed to the idea of collective bargaining. Union organizers noted the inequality of bargaining power between a prospective employee and an employer.
Judges were hostile to attempts by state governments to regulate the hours and wages of employees. In Lochner v. New York, 198 U.S. 45, 25 S. Ct. 539, 49 L. Ed. 937 (1905), the U.S. Supreme Court, on a 5-4 vote, struck down a New York state law (N. Y. Laws 1897, chap. 415, art. 8, § 110) that specified a maximum sixty-hour week for bakery employees. The Court ruled that the law was a "meddlesome interference" with business, concluding that the regulation of work hours was an unjustified infringement on "the right to labor, and with the right of free contract on the part of the individual, either as employer or employee."
The U.S. labor movement's persistent attempts to break free of the liberty-of-contract doctrine ultimately led to major changes in employment law. The New Deal era of the 1930s brought federal recognition of the right of workers to organize themselves as unions and collectively bargain with management. The passage of the Wagner Act, also known as the National Labor Relations Act of 1935 (29 U.S.C.A. § 151 et seq.), established these rights and also proscribed unfair labor practices (actions taken by employers that interfere with the union rights of employees). The act also established the National Labor Relations Board, a federal administrative agency, to administer and enforce its provisions.
Since the 1950s, the federal government has led the way in providing employees more rights concerning the employment relationship.
Physical Safety
Both federal and state statutes regulate workplace hazards to avoid or minimize employee injury and disease. These laws deal with problems such as dangerous machinery, hazardous materials, and noise. A more recent trend has been the banning of smoking in the workplace. All of these laws place the burden on employers to maintain a safe and healthy workplace.
The federal government's main tool in workplace safety is the Occupational Safety and Health Act of 1970 (OSHA) (29 U.S.C.A. §§ 651-678 [1988]). OSHA attempts to balance the employee's need for a safe and healthy working environment against the employer's desire to function without undue government interference. OSHA issues occupational safety and health standards, and employers must meet these standards or face civil and, in rare occurrences, criminal penalties.
When an employee is injured on the job, the employee may file a compensation claim with the state workers' compensation system. Prior to World War I, an injured employee had to sue his or her employer in state court, alleging a tort violation. This rarely proved successful, as employees were reluctant to testify about work conditions and risk the possible loss of their job. Without witnesses, an employee had little chance of recovery. In addition, employers were protected by legal defenses to negligence that usually allowed them to escape liability.
Dissatisfaction with this situation led the states to enact workers' compensation laws, which set up an administrative process for compensating employees for work-related injuries. These systems provide compensation while a worker is physically unable to work (temporary disability), provide retraining if the employee can no longer perform the same job, and provide compensation indefinitely if the worker has been severely injured (total disability). Medical benefits are paid for treatment of work-related injuries. Depending on the state, employers fund this system by making state-regulated contributions to a workers' compensation insurance fund, paying insurance premiums to a private insurance company, or assuming the risk through self-insurance.
Discrimination
Since the 1960s, employment law has changed most radically in the protection it gives employees against discrimination in the workplace. Although the federal government banned racial discrimination in the making of contracts in the Civil Rights Acts of 1870 and 1871 (42 U.S.C.A. §§ 1981, 1983), the federal courts narrowly construed the provisions to prevent their being used in the employment context. Not until the 1970s did federal courts allow those provisions to be applied to complaints of discrimination by individual employees (McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273, 96 S. Ct. 2574, 49 L. Ed. 2d 493 [1976]).
Federal legislation in the 1960s provided employees more avenues to challenge alleged discrimination. The 1963 Equal Pay Act (29 U.S.C.A. § 216 (d)) requires employers to pay men and women equal wages for equal work. The Civil Rights Act of 1964 (42 U.S.C.A. § 2000e et seq.) contains broad prohibitions against discrimination on the basis of race, color, religion, national origin, or sex. Discrimination against persons ages forty and over was banned in 1967 by the Age Discrimination in Employment Act (29 U.S.C.A. § 621 et seq.).
Major amendments to the general civil rights acts were passed in 1972, extending coverage to federal and state employees; in 1978, clarifying the protection of pregnant women; and in 1991, overruling a series of decisions by the Supreme Court that had restricted the reach of antidiscrimination statutes.
In 1990, Congress enacted the Americans with Disabilities Act (ADA) (42 U.S.C.A. § 12101 et seq.), forbidding discrimination against qualified individuals with disabilities and requiring reasonable efforts to accommodate persons with disabilities in some situations.
With the growth of federal antidiscrimination statutes, many states have passed laws banning employment discrimination. A number of cities have also enacted their own programs. Some states and cities deal with issues not covered by the federal statutes, such as discrimination on the basis of sexual orientation.
Termination of Employment
Historically, employment law has limited an employee's right to challenge an employer's unfair, adverse, or damaging practices. The law has generally denied any redress to an employee who is arbitrarily treated, unless the employee is represented by a union or has rights under a written employment contract. Absent these two conditions, or a statutory provision, the general rule has been that an employee or an employer can terminate the employment relationship at any time, for any or no reason, with or without notice. This rule forms the core of the "at-will" employment doctrine.
The at-will doctrine was articulated and refined by U.S. state courts in the 1800s. It provided employers with the flexibility to control the workplace by terminating employees as economic demand slackened. For employees, it provided a simple way of leaving a job if a better employment prospect became available or if working conditions were intolerable.
The at-will employment doctrine has been modified by courts and legislatures. A public policy exception recognizes that an employee should not be terminated because the employee refused to act in an unlawful manner, attempted to perform a duty prescribed by statute, exercised a legal right, or reported unlawful or improper employer conduct ("whistle-blowing").
At-will employees may be protected even if no written contract exists. Many state courts now recognize employee rights that are contained in personnel policies or employee handbooks. As businesses grow larger, formal rules and procedures are needed to streamline administrative issues. A handbook or employment policy manual usually contains rules of expected employee behavior, disciplinary or termination procedures that apply if the rules are violated, and compensation and benefit information. An employer must follow the rules for firing an employee that are set out in the handbook or manual, or risk a lawsuit for wrongful termination.
If an employer terminates an employee, the employer must be prepared to show "good cause" for the firing. With the many statutes that forbid discrimination in the workplace, the employer has the burden of showing a nondiscriminatory reason. Good cause can include inadequate job performance, job-related misconduct, certain types of off-the-job conduct, and business needs.
Privacy and Reputation
When an individual seeks employment some privacy rights are surrendered. To become employed, the individual will be asked to disclose personal information and may be required to submit to continuing evaluation. Current or prospective employees may be asked to submit to a physical examination, a polygraph examination, a psychological evaluation, a test for illegal drugs, or a test for HIV. Employers have the right to search lockers or frisk employees even if no reasonable suspicion of theft exists. The modern workplace can be checked by an employer through the monitoring of phone lines and personal computers.
Courts and legislatures have expressed increasing concern about the improper use of information that employers collect on employees. Employers who distribute information more widely than necessary, reveal confidential medical or personal information about an employee, or intrude on an employee's personal, off-work behavior risk lawsuits for invasion of privacy.
The issue of defamation also affects employment law. Defamation is subdivided into the torts of libel, which involves a writing, and slander, which concerns speech. Liability for defamation may be imposed if an employer makes a statement about an employee that is false and hurts the reputation of the employee. Employers have been successfully sued for defamation for communicating unfavorable job recommendations about a former employee. As a result, employers are reluctant to give more than basic employment history when asked for a job reference. Also, twenty-five states have enacted "good faith" job reference laws, which protect employers who divulge employee job performance information to a prospective employer.
Wage and Hour Regulations
The Fair Labor Standards Act (FLSA) (29 U.S.C.A. § 201 et seq.) imposes minimum wage standards and overtime standards on most employers. The minimum hourly wage is a means of ensuring that a full-time worker can maintain a minimum standard of living; overtime standards mandate that an employer pay employees at least time and a half for working more than eight hours a day. The FLSA does not preempt states or localities from setting a higher minimum wage. An employer operating in a state or locality with a higher minimum wage than that set by the FLSA must abide by the higher standard.
Pensions and Other Employee Benefits
The federal government regulates employee benefit plans under the Employee Retirement Income Security Act (ERISA), 29 U.S.C.A. § 1001 et seq., passed in 1974. Title I of the act (29 U.S.C.A. § 1011 et seq.) provides rules with respect to participation, vesting and funding of benefits plans, fiduciary responsibility, reporting and disclosure, and administration and enforcement. Title II contains tax law provisions as amendments to the Internal Revenue Code of 1954 (26 U.S.C.A. § 401 et seq.). Title III deals with jurisdiction, administration, and enforcement (29 U.S.C.A. § 1201 et seq.). Title IV creates the Pension Benefit Guaranty Corporation and establishes a system of employee plan termination insurance (29 U.S.C.A. § 1301 et seq.).
ERISA does not require an employer to provide employee benefit plans. However, if an employer sets up a qualified plan (one that meets ERISA's standards), the employer can take a tax deduction for the employer's contribution. The employer can also deduct the full amount of an employee group health plan that meets tax code standards.
The Family and Medical Leave Act of 1993 (FAMLA) (29 U.S.C.A. § 2601 et seq.) establishes the right of employees to take unpaid leave for family reasons. FAMLA applies to employers of fifty or more. It entitles an employee to take up to twelve weeks of leave during a twelve-month period because of the birth of a child to the employee, the placement of a child with the employee for adoption or foster care, the serious health condition of a family member of the employee, or the employee's own serious health condition.
See: Age Discrimination; Civil Rights; Disabled Persons; E-Mail; Employment at Will; Gay and Lesbian Rights; Labor Law; Labor Union; Lochner v. New York; Pension; Sex Discrimination; Sexual Harassment.
