CHAPTER 9. EMPLOYMENT LAW by John E. Bolmer, II. Regulation of Employment

Transcription

1 CHAPTER 9 EMPLOYMENT LAW by John E. Bolmer, II Regulation of Employment In most instances, the term "employer" means a person or entity which engages another to do work and which exercises the right of control over the manner in which the work is performed (48 Am. Jur. 2d, Labor and Labor Relations, 934). The relationship between an employer and an employee is one of the most important relationships affecting our day-to-day lives. It is not surprising, therefore, that the relationship is subject to a wide variety of laws at the state and federal level. The following are some of the many agencies and statutes involved in this area: (1) Occupational Safety and Health Administration (OSHA) -- safety in the workplace (29 U.S.C. 651 et seq.). (2) Fair Labor Standards Act of wage and hour regulation, minimum wages, child labor (29 U.S.C. 201 et seq.). (3) Equal Employment Opportunity Act of anti-discrimination in employment (42 U.S.C. 2000e et seq.). (4) Workmen's Compensation Act of Colorado -- insurance requirements for on-the-job injuries (C.R.S et seq.). (5) Americans with Disabilities Act of anti-discrimination against persons with disabilities (42 U.S.C et seq.). (6) Family and Medical Leave Act -- requiring unpaid leave for medical care (29 U.S.C et seq.). Minors in the Workplace The Fair Labor Standards Act of 1938 was an attempt to correct many of the problems Congress saw in the Depression-era workplace. One of the problems was the oppressive or dangerous employment of minors. The child labor provisions of the 1938 Act ban the shipment or delivery of "any goods produced in an establishment" using "oppressive child labor" (29 U.S.C. 212). (Note that Congress does not directly prohibit oppressive child labor, but only the shipment of goods resulting from such labor based upon the need to tie such prohibition to the powers given Congress by the U.S. Constitution.). "Oppressive child labor" means employment of persons under 16 (with numerous exceptions) or employment of persons between the ages of 16 and 18 in certain hazardous industries, such as mining (29 U.S.C. 203). Many of the child labor provisions are administered by the Children's Bureau in the Department of Labor. Colorado's statutes allow for a lower minimum wage for minors than for adults and list jobs that are "permitted" for youths nine or older (e.g., shoe-shining, gardening if no powerdriven equipment involved), 12 or older (e.g., baby-sitting, certain agricultural work), 14 or older (e.g., non-hazardous occupations in manufacturing, clerical work) and 16 or older (jobs 111

2 involving use of a motor vehicle, "if the minor is licensed to operate the motor vehicle for such purpose...") (C.R.S , ). The following table summarizes permissible and impermissible work by minors. Statutory Cite C.R.S C.R.S C.R.S (2) C.R.S (3) C.R.S (4) C.R.S C.R.S C.R.S Summary Minimum wage may be 15 percent lower for minors than for adults, unless a minor is emancipated, i.e., supporting oneself. No minor under age fourteen shall be permitted employment except for school work, chores, work done for a parent (parent cannot be getting paid for the work), newspaper delivery, acting, modeling, or otherwise performing. On school days, during school hours, no minor under age sixteen shall be permitted employment; no work after school for more than six hours unless the next day is not a school day. Except for babysitters, no minor under sixteen shall be permitted to work between the hours of 9:30 p.m. and 5:00 a.m. unless the next day is not a school day. No employer may work a minor more than 40 hours in one week or more than 8 hours in one day. At age 9, a minor may work in a non-hazardous occupation such as delivering handbills, shoe shining, yard work not involving power driven devices, snow removal by hand, caddying, and similar activities. At age 12, a minor may engage in the following non-hazardous occupations: door to door sales and delivery, babysitting, yard work with power driven devices, snow removal with power tools, and similar activities. At age 14, a minor may engage in the following occupations: nonhazardous jobs in manufacturing, messenger service, operation of elevators, janitorial work, clerical work, warehousing and storage, nonhazardous construction, retail food service, retail gasoline service, retail merchandising, occupations in restaurants and hotels, occupations in parks and recreation. Duties of the Employee A contract of employment may set forth the duties owed by the employer and the employee to each other and to others. Often, such a contract will spell out the grounds for which an employee may be discharged "with cause." In the absence of such a contract, most jurisdictions, including Colorado, have developed a catalogue of duties implied by the employment relationship itself. In most jurisdictions, the employee owes the following duties to the employer: (1) Obedience to orders and instructions of the employer; (2) Devoting time to the employment (that is, showing up during the specified hours); 112

3 (3) The duty to exercise reasonable care; that is, the duty to prevent harm to the employee and others caused by negligence. (see 27 Am. Jur. 2d, Employment Relationship, 216, 217, 218, 220). In addition to these on-the-job duties, many jurisdictions restrict the employee's ability to use trade secrets (including lists of clients or processes) or to compete with a former employer. Under a Colorado statutes, non-competition covenants (agreements by employees not to compete with their employers during and after their term of employment) are unenforceable, except in cases of (1) contracts for the protection of trade secrets, (2) contracts relating to sale of a business, (3) contracts providing for recovery of education expense for certain employees, and (4) contracts with executives, management or professional staff. Even in Colorado, where an employer may fire an employee not under contract for any reason (see "Firing" below), the employee's breach of his duties to the employer may be a significant issue. For example, the Colorado Employment Security Act provides for unemployment compensation to persons unemployed "through no fault of their own," but limits compensation to employees guilty of insubordination, careless work, and other breaches of their duties. Duties of the Employer The most obvious of the duties the employer owes to the employee is the duty to provide compensation for services, which is largely a matter of contract law. In Colorado, an employer's duty to pay promptly a discharged employee is governed by C.R.S , which provides for penalties (50 percent of amount owed) in the event payment is late. Most employers are also subject to the requirement to provide unemployment insurance, insurance for on-the-job injuries and a reasonably safe place of employment (C.R.S , et seq.; , et seq.; and 29 U.S.C. 651 et seq.). Most of the employer's duties have become the subject of legislation. (See "Regulation of Employment" above). The employer also owes duties to persons other than the employee. For example, under the theory of "respondeat superior" (literally translated: let the master answer), an employer may be held liable for negligent acts of its employee and may itself be liable for negligence in the hiring or supervision of its employees. (For a detailed discussion of negligence in the employment arena, see the "Torts" portion of this booklet). Employers are also responsible for withholding the proper amount of social security and other payments from the employee's check (26 U.S.C. 3101, 3403). Firing/Termination Firing (or what the Courts politely term termination of the employment relationship ) is often an emotional experience. It is not surprising, therefore, that civil actions based on discharge are common. Colorado follows the majority of states in generally refusing to recognize claims for wrongful discharge by employees without a contract. In Colorado, an at-will employee (one without a contract for a specific period of time) may be fired for any reason or for no reason (see, for example, Lampe v. Presbyterian Med. Center, 590 P.2d

4 (Colo. App. 1978) and Justice v. Stanley Aviation Corp., 530 P.2d 984 (Colo. App. 1974)). Such an employee is equally free to quit. A significant limitation on this rule is that an employee may not be fired for a "wrong" reason. Examples of improper bases for firing include: 1. Race, age, sex, religion, or national origin (42 U.S.C. 1983, 2000e-2(e); 14th Amendment; C.R.S ). 2. Refusal to perform an illegal act (Martin Marietta Corp. v. Lorenz, 823 P.2d 100 (Colo. 1992)). 3. Reporting the employer to certain regulatory agencies (see, for example, 42 U.S.C. 2000e-3(a). 4. Considerations contrary to public policy (Rocky Mountain Hospital and Medical Serv. v. Mariani, 916 P.2d 519 (Colo. 1996). For further discussion, see W.E. Wakefield, "Liability for Discharging At-Will Employee for Refusing to Participate in, or for Disclosing, Unlawful or Unethical Acts of Employer or Coemployees," 9 ALR 4th 329). PROBLEM 1: Consider the following situation: (i) Alice is the only black, female employee in a factory; (ii) she is over 50; (iii) she does not get along with her supervisor; (iv) she has recently been absent from work with no explanation or permission; and (v) recently, she was not properly credited for overtime and reported this fact to a state official. Alice is not under contract. Can she be fired? If so, on what basis? If not, why not? Explain. Under federal and Colorado law, it is clear that Alice could be fired for any of reasons iii or iv above or for no reason at all, but she may not be fired for any of reasons i, ii or v. The problem frequently faced is this: how does one determine the basis for firing an employee? Often, the answer to this question is left for the courts to establish. Colorado recognizes additional limitations on the right to fire an at-will employee. If the employer distributes an employee handbook or policy manual which contains specific procedures for termination of employment, and if the employee relies on those procedures, the employer may become bound to follow those procedures (Salimi v. Farmers Insurance Group, 684 P.2d 264 (Colo. App. 1984); Continental Airlines, Inc. v. Keenan, 731 P.2d 708 (Colo. 1987); Lutfi v. Brighton Community Hospital Ass n, 40 P.3d 51 (Colo. App. 2001)). Also, if an employer expressly covenants it will treat its employees fairly or that it will act in good faith towards them, the right to fire may be subject to that express contractual agreement. (Decker v. Browning-Ferris Industries of Colo., Inc., 931 P.2d 436 (Colo. 1997); Decker v. Browning-Ferris Industries of Colo., Inc., 947 P.2d 937 (Colo. 1997)). 114

5 Colorado Revised Statute Section creates an uncommon limitation to the right to fire. The statute prohibits terminating an employee "due to that employee's engaging in any lawful activity" away from work. An exception is allowed if the activity relates to an occupational requirement or is related to the responsibilities of the particular employee, or if the firing is necessary to avoid a conflict of interest or the appearance of a conflict of interest. This statute was intended to protect smokers from being fired for smoking off the job. But the language of the statute is not limited to smokers. PROBLEM 2: (a) Under the language of C.R.S , can someone be fired for being gay? (b) Can someone be fired for posing in a nude magazine? (c) Could the answers to these questions depend on the nature of the job and its duties? Hiring Many of the anti-discrimination and social policy provisions applicable to firing employees also limit the employer's absolute discretion in hiring employees. Often the motives for not hiring a particular person are a matter of speculation. The Americans with Disabilities Act ("ADA") was intended to bring persons with disabilities into the mainstream of the American workplace. The ADA defines "disability" broadly to include any physical or mental impairment that substantially limits one or more major life activities (such as breathing, seeing, walking, etc.). The ADA also protects those with a history of disability (such as a person who has recovered from heart problems) and those regarded as having an impairment. PROBLEM 3: (a) Is a person in a high risk group for AIDS disabled? (b) Is such a person regarded as having a disability? The ADA requires most employers to provide "reasonable accommodations" for those with disabilities to enable them to do the job. What is "reasonable" will vary from case to case and may depend, in part, on the financial resources of the employer. One example of a reasonable accommodation is the construction of a ramp to allow workplace access to wheelchairs. A significant feature of the ADA is that the cost of such a ramp would be borne by the employer. 115

6 PROBLEM 4: Two linebackers are considered by a professional football team. One is clearly a better player, but that one is also deaf. The deaf player could do the job if he had an interpreter on the sidelines. Is the team required to hire the deaf player? Why, or why not? Overtime and Minimum Wages The federal Fair Labor Standards Act establishes guidelines for most employers with regard to minimum wages and payment of overtime. The present federal minimum wage for businesses "engaged in commerce or in the production of goods for commerce" is $5.15 per hour (29 U.S.C. 206). In general, overtime at the rate of one and one-half of the standard hourly rate must be paid for all hours in excess of 40 during any one work week (29 U.S.C. 207(a)). Minimum wage and overtime requirements are subject to numerous exceptions. For example, there is a separate minimum wage for handicapped employees and students (29 U.S.C. 214). Furthermore, management, executive employees, and other classifications of employees are exempted from overtime provisions (29 U.S.C. 213). For those employees not covered by the federal Fair Labor Standards Act, Colorado's regulations may apply. The minimum wage under Colorado law is currently the same as the federal rate. (Colorado Division of Labor, Minimum Wage Order No. 21). Minors and handicapped persons may be paid 15 percent less than the adult minimum wage (C.R.S ). Overtime, under Colorado law is work in excess of 40 hours in any week or work in excess of 12 hours in any shift. Federal and Colorado statutes prohibit an employer from discriminating in the amount of wages paid based on gender (C.R.S ; 42 U.S.C. 2000e-2(e)). Issues related to equal pay for equal work revolve around the question of what constitutes equal work. Employers cannot discriminate solely on the basis of gender, but some other basis (such as seniority with the company) may provide justification for salary differences. Worker's Compensation The primary purpose of Colorado's Workmen's Compensation Act is to compensate employees for job-related injuries regardless of fault (Frohlich Crane Service, Inc. v. Mack, 510 P.2d 891 (Colo. 1973)). The Colorado system is typical of the jurisdictions with workmen's compensation statutes in that employees are compensated regardless of any negligence on their part. This feature represents an increase in liability of the employer. As a trade-off to this increase, however, employers responsible for injuries are granted immunity for most claims of the employee. 116