An employee-employer relationship is a legal one that can take several forms. This part of the course specifically addresses this legal relationship that exists between the parties. The most common types are: 1) at-will or 2) contractual (express or implied). In either case, once an employee is hired, both the employee and the employer have certain rights and obligations under the law. Employment law is important to businesses and governs matters such as wage and hour laws, unemployment compensation, workers compensation, employee privacy rights, labor organizing, strikes, picketing, the Civil Rights Act, discrimination, and sexual harassment.
Employment law has developed throughout our history as part of the common law and through statutory enactments to reflect public policy and societal values. Even a hundred years ago, the common law, although not as fully developed as today, still applied to employment relationships. For instance, in addition to common law contract principles that might have applied, the doctrine of promissory estoppel had been used in an employment setting since the 18th century. The common law regulates employment and is enforced by the government and private parties. Historically the power within an employment relationship was not evenly balanced between employer and employee. That imbalance had no small part in the development of the more sophisticated, modern elements of employment law.
Under the employment at-will doctrine, either party - the employee or employer - can terminate the relationship at any time and with or without a reason – so long as the termination is not in violation of public policy or for an illegal reason, such as discrimination. This doctrine is uniquely American. In all other industrial democracies workers are protected from termination without “just cause”. At least eleven states impose an implied covenant of good faith and fair-dealing to the employment relationship, whether at-will or contractual, requiring the parties to deal fairly with each other. In other states, no such requirement exists in an at-will relationship, which sometimes leads to actual or apparent unfairness and a harsh ending of that relationship.
Employment contracts can be express or implied. One form of employment contract is a collective bargaining agreement whereby an employer and a representative union negotiate a contract that creates a relationship with many workers at once.
Employment is one form of agency relationship. The employer is the principal and the employee is the agent. Not all agents are employees, but all employees are agents. The other type of agent is known as an independent contractor. The distinction is significant to certain differences in liability, such as tort and tax liabilities.
You will also learn about labor unions in this module. Many people today believe that labor unions are a recent concept. This is not the case. In fact, labor unions existed in the early 1800s and while they have evolved they have held true to basic principles. As you will learn, the purpose of labor unions was to protect the rights of workers and give employees the right to organize and to bargain collectively for wages and terms and conditions of employment. Organized labor and management are governed by the Wagner Act of 1935 (NLRA), the Taft-Hartley Act of 1947 and the Landrum-Griffith Act of 1959 and organized workers are a very important part of our nation’s history. Understanding the function and place of labor unions in the workplace is an important piece of legal knowledge for business managers.
In an increasingly diverse society, an important aspect of employment law is prevention of discrimination in the workplace, specifically through the Civil Rights Acts of 1866 and 1871, the Equal Pay Act of 1963 as amended, the Civil Rights Act of 1964 as amended (Title VII), the Age Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the Americans with Disability Act of 1991 as amended, and others, including similar state laws that seek to enhance existing federal legislation. Today, the employee-employer relationship is much more regulated than it was a hundred years ago and there are a vast number of state and federal laws that govern hiring and firing. This stems mainly from the broader recognition of individual rights in our society.