Chapter 39Chapter 39THIRD PERSONSTHIRD PERSONS

IN AGENCYIN AGENCY

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The relationship of employer and employee The relationship of employer and employee is created by the agreement of the parties is created by the agreement of the parties and is subject to contract principles. and is subject to contract principles. If the contract states a specific duration, the If the contract states a specific duration, the

employer cannot terminate the contract at an employer cannot terminate the contract at an earlier date unless just cause exists. earlier date unless just cause exists.

Collective Bargaining Agreements.Collective Bargaining Agreements.

The Employment RelationshipThe Employment Relationship

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Employment RelationshipEmployment Relationship

If no definite time period is set forth, the If no definite time period is set forth, the individual is an individual is an at-willat-will employee, and the employee, and the employer can terminate the contract at any employer can terminate the contract at any time. time. Some courts limit this if the discharge violates Some courts limit this if the discharge violates

public policy or is contrary to good faith and public policy or is contrary to good faith and fair dealing in the employment relationship.fair dealing in the employment relationship.

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Duties and Rights of EmployeeDuties and Rights of Employee

The duties of an employee include:The duties of an employee include: Performing the service of the contract.Performing the service of the contract. Refraining from disclosing trade secrets.Refraining from disclosing trade secrets. Allowing the employer to freely use any Allowing the employer to freely use any

inventions created on work time with employer’s inventions created on work time with employer’s materials (called shop right).materials (called shop right).

The rights of an employee include:The rights of an employee include: To be paid according to the contract (at least the To be paid according to the contract (at least the

federal minimum wage).federal minimum wage).

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Employer EmployeeConsent

(Individual or CollectiveBargaining Agreement)Pays

CompensationPerforms services/works

under employer’s direction and control

IndependentContractor

Perform duties free from control by other party

AgentNegotiates contracts on behalf of an under control of principal

Differs from:

Employment RelationshipEmployment Relationship

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The Fair Labor Standards Act regulates The Fair Labor Standards Act regulates minimum wages, overtime hours, and child minimum wages, overtime hours, and child labor. labor.

Under the National Labor Relations Act, Under the National Labor Relations Act, employees have the right to form a union to employees have the right to form a union to obtain a collective bargaining contract or to obtain a collective bargaining contract or to refrain from organizational activities.refrain from organizational activities.

Labor Relations LawsLabor Relations Laws

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Pension PlansPension Plans

The Employees Retirement Income Security The Employees Retirement Income Security Act (ERISA) protects employees’ pensions by Act (ERISA) protects employees’ pensions by requiring: requiring: (1) high standards of those administering the funds, (1) high standards of those administering the funds, (2) reasonable vesting of benefits, (2) reasonable vesting of benefits, (3) adequate funding, and (3) adequate funding, and (4) an insurance program to guarantee payments of (4) an insurance program to guarantee payments of

earned benefits. earned benefits.

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Unemployment BenefitsUnemployment Benefits

Unemployment compensation benefits are Unemployment compensation benefits are paid to persons for a limited period of time paid to persons for a limited period of time if they are out of work through no fault of if they are out of work through no fault of their own. their own.

Persons receiving unemployment Persons receiving unemployment compensation must be available for compensation must be available for placement in a job similar in duties and placement in a job similar in duties and comparable in rate of pay to the job they comparable in rate of pay to the job they lost. lost.

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Benefits Provided by LawBenefits Provided by Law

Twelve-week maternity, paternity, and Twelve-week maternity, paternity, and adoption leaves are available under the Family adoption leaves are available under the Family and Medical Leave Act.and Medical Leave Act.

Employers and employees pay Social Security Employers and employees pay Social Security taxes to provide retirement benefits, disability taxes to provide retirement benefits, disability benefits, life insurance benefits, and Medicare. benefits, life insurance benefits, and Medicare.

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Employees’ Health & SafetyEmployees’ Health & Safety

The Occupational Safety and Health Act The Occupational Safety and Health Act provides for: provides for: (1) the establishment of safety and health standards (1) the establishment of safety and health standards

and and (2) the effective enforcement of these standards. (2) the effective enforcement of these standards.

Many states have enacted “right-to-know” Many states have enacted “right-to-know” laws, which require employers to inform their laws, which require employers to inform their employees of any hazardous substances present employees of any hazardous substances present in the workplace. in the workplace.

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Working Conditions

Privacy

DrugTesting

E-MailMonitoring

Safety

OSHA

Wagesand

Hours

Fair LaborStandards

Act

Sweat ShopCode

ContractTerms

National LaborRelations Act

Regulations of Working ConditionsRegulations of Working Conditions

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Compensation for Employees’ InjuriesCompensation for Employees’ Injuries

Workers’ compensation laws provide for the Workers’ compensation laws provide for the prompt payment of compensation and medical prompt payment of compensation and medical benefits to persons injured in the course of benefits to persons injured in the course of employment without regard to fault. employment without regard to fault. An injured employee’s remedy is generally limited An injured employee’s remedy is generally limited

to the remedy provided by the workers’ to the remedy provided by the workers’ compensation statute. compensation statute.

Most states also provide compensation to workers Most states also provide compensation to workers for occupational diseases. for occupational diseases.

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Compensation and Benefits

Regulation of CompensationRegulation of Compensation

Fair LaborStandards

Act

Pensions

ERISA

Unemployment SocialSecurity

Family andMedical

Leave Act

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Employee PrivacyEmployee Privacy

The Bill of Rights is the source of public sector The Bill of Rights is the source of public sector employees’ privacy rights. employees’ privacy rights.

Private sector employees may obtain limited privacy Private sector employees may obtain limited privacy rights from statutes, case law, and collective rights from statutes, case law, and collective bargaining agreements. bargaining agreements.

Employers may monitor employee telephone calls, Employers may monitor employee telephone calls, although once it is determined that the call is personal, although once it is determined that the call is personal, the employer must stop listening or be in violation of the employer must stop listening or be in violation of the federal wiretap statute. the federal wiretap statute.

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Employee PrivacyEmployee Privacy

E-MailE-Mail Monitoring. The ordinary-course-of-business Monitoring. The ordinary-course-of-business and consent exceptions to the Electronic and consent exceptions to the Electronic Communications Privacy Act of 1986 (ECPA) give Communications Privacy Act of 1986 (ECPA) give private employers a great deal of latitude to monitor private employers a great deal of latitude to monitor employee E-mail. employee E-mail.

SearchesSearches. Notification to employees of employers’ . Notification to employees of employers’ policies on searching lockers, desks, and offices policies on searching lockers, desks, and offices reduces employees’ expectations of privacy, and a reduces employees’ expectations of privacy, and a search conducted in conformity with a known policy is search conducted in conformity with a known policy is generally not an invasion of privacy. generally not an invasion of privacy.

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Employee PrivacyEmployee Privacy

Drug and alcohol testing is generally Drug and alcohol testing is generally permissible if it is based on reasonable permissible if it is based on reasonable suspicion; random drug and alcohol testing may suspicion; random drug and alcohol testing may also be permissible in safety-sensitive also be permissible in safety-sensitive positions.positions.

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Employer-Related Employer-Related Immigration LawsImmigration Laws

Immigration laws prohibit the employment of Immigration laws prohibit the employment of aliens who have illegally entered the United aliens who have illegally entered the United States.States.

Immigration and Naturalization Act.Immigration and Naturalization Act.Immigration Reform and Control Act of 1986.Immigration Reform and Control Act of 1986.Immigration Act of 1990.Immigration Act of 1990.Employer Verification (Form I-9).Employer Verification (Form I-9).