Instructor Manual For
Employment Law for Business, 10th Edition, Dawn Bennett-Alexander
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Chapter 1-16
Chapter 1
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The Regulation of Employment
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Chapter Objective
The student is introduced to the regulatory environment of the employment relationship. The
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chapter examines whether regulation is actually necessary or beneficial or if, perhaps, the
relationship would fare better with less governmental intervention. The concepts of ―freedom‖ to
contract in the regulatory employment environment and non-compete agreements are discussed.
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Since the regulations and case law discussed in this text rely on an individual‘s classification as
an employer or an employee, those definitions are delineated and explored.
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Learning Objectives
(Click on the icon following the learning objective to be linked to the location in the outline
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where the chapter addresses that particular objective.)
At the conclusion of this chapter, the students should be able to:
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1. Describe the balance between the freedom to contract and the current regulatory
environment for employment.
2. Identify who is subject to which employment laws and understand the implication of each
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of these laws for both the employer and employee.
3. Delineate the risks to the employer caused by employee misclassification.
4. Explain the difference between and employee and an independent contractor and the tests
that help us in that determination.
5. Articulate the various ways in which the concept ―employer‖ is defined by the various
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employment-related regulations.
6. Describe the permissible parameters of non-compete agreements.
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Detailed Chapter Outline
Scenarios—Points for Discussion
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without the prior written consent of McGraw Hill LLC.
, Scenario One: This scenario offers an opportunity to review the distinctions between an
employee and an independent contractor discussed in the chapter (see ―The Definition of
Employee,‖ particularly Exhibits 1.3–1.5). Discuss the IRS 20-factor analysis, as it applies to
Dalia‘s position. In light of the low level of control that Dalia had over her fees and her work
process, and the limits upon her choice of clients, students should come to the conclusion that
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Dalia is an employee (therefore, eligible to file an unemployment claim), rather than an
independent contractor.
Scenario Two: Soraya would not have a cause of action that would be recognized by the EEOC.
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Review the section ―The Definition of ‗Employer‘‖ with students, and discuss the rationale that
determines the status of a supervisor vis-à-vis anti-discrimination legislation. Because Soraya is
Soraya‘s supervisor, not her employer, he cannot be the target of an EEOC claim of sexual
harassment.
CCC, Soraya‘s employer, would be vulnerable to an EEOC claim if the company lacked or failed
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to follow a system for employee redress of discrimination grievances. However, in this case,
CCC appears to have a viable anti-discrimination policy that it adhered to diligently;
consequently, Soraya would be unlikely to win a decision in her favor. The court in Williams v.
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Banning (1995) offered the following rationale for its decision in a similar case:
―She has an employer who was sensitive and responsive to her complaint. She can take
comfort in the knowledge that she continues to work for this company, while her harasser
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does not and that the company's prompt action is likely to discourage other would be
harassers. This is precisely the result Title VII was meant to achieve.‖
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Scenario Three: Students should discuss whether or not Mya non-compete agreement is likely to
be found reasonable by a court, and elaborate the aspects of the agreement that Mya might
contest as unreasonable (see section below, ―Covenants Not to Compete‖). Does Mya have a
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persuasive argument that the terms of her non-compete agreement are unreasonable in scope or
duration? Might she have grounds to claim that the agreement prohibits her from making a
living?
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Given the diversity of state laws regulating non-compete agreements, discuss the range of legal
restrictions that might apply to Mya‘s particular agreement with her employer. As an employee
who works across several states, Mya‘s defense may depend upon the presence—and specific
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language—of a forum selection clause in her non-compete agreement. Consider what language
would be more likely to provide Nan with a strong defense against the breach of contract claim.
Mya might also argue that the company‘s client list is available through public means, and
therefore, her access to this list should not be prohibited.
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General Lecture Note for Employment Law Course
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In order to teach this course, instructors have found that students must be made to feel relatively
comfortable with their peers. Instructors will be asking the students to be honest and to stay in
their truth, even at times when they feel that their opinion on one of these matters will not be
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without the prior written consent of McGraw Hill LLC.
, popular or accepted by the group. In order to encourage an open atmosphere, it is therefore
necessary for the class to feel comfortable with and to be aware of itself as a group. Here are two
exercises, which have proven to be useful in reaching that goal in some classes:
Cultural Introductions
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Have students sit in groups of four or five. Once they are in their groups (some instructors call
them families, so as to prevent a feeling of competition), have students introduce themselves,
as well as provide a bit of cultural introduction (where they or their parents are from, where
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they may have lived, or other ―cultural‖ information, like they are from the suburbs, or they
work for a certain industry, or they went to a catholic school, etc.). They should also discuss
times when they may have been more aware of this cultural difference than others. This will
only be shared with the families. In this way, each student is made aware of the fact that she
or he belongs to a number of different cultures, their gender, race, and ethnicity, as well as
geography, age, type of education, etc. Generally ―white males‖ is used as the concept of
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majority, though many of the ―white males‖ in the class may belong to a variety of cultural
groups. Allow each of them to understand their own uniqueness.
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Then ask group members to introduce other members to the class.
Four Facts
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Ask the students to get into groups and list four statements about themselves, three of which
should be true, and one of which should be false. Also ask them to list below those statements
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the names of the members of their family. (The instructor should do this too, up on the board,
then disclose later to the whole class.)
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Now, each individual should take turns reading her or his statements to their family. As each
person reads their statement, the other people should jot down which numbered statement is
false next to their name.
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Then, take one person at a time, and all of the others should identify which statement they
believe is false and why. After everyone has made their guess, the person who shared the
statements can reveal which is actually false.
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Were the students surprised at some of the facts that people shared? Which? Why?
How good were the students, individually and as a group, at picking the false statement?
What does this tell one about making assumptions and judgments about people?
Were some of the statements given by different people similar? Why?
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Give the following instructions to students to find out how many they got right—―Everyone
stand up. If you got at least one right, stay standing. Two right, stay standing. Three right?
Four fight? Five right? etc.‖ Soon only one or two may remain standing.
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Opening Discussion Tip
What is employment law?
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without the prior written consent of McGraw Hill LLC.
, How the law affects managers, management in general is what will be studied. This is important
for one to know as employees and as potential employers. Now, one may not follow the law, but
one should be aware of the ramifications of one‘s management employment decisions. For
instance, as an employee, one may know that one‘s employer has no right to do something, but
one submits to it anyway to avoid losing one‘s job or having to go to court. As an employer, one
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may know that one‘s actions are not legal according to the letter of the law, but one weighs the
costs and benefits and decides to do it anyway. Simply, one must know the law in order to weigh
the costs!
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There is now a knowledge gap among professionals since most managers and personnel
practitioners have not had formal training in the application of new employments laws to the
workplace. In addition, most lawyers may understand the law as it is applied to a business
relationship, but not to employment relationships.
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Learning Objective One: Describe the balance between the freedom to contract and
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the current regulatory environment for employment.
I. Introduction to the Regulatory Environment
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Lecture Note: Just a tip to get the students to open their eyes a bit to the new ideas that may be
presented in this course. Ask the students to clasp their hands (interlock the fingers). Then ask
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them to look down and see which thumb is on top. Tell them to unlock them and to do it again.
Look down. How many students clasped their hands differently? Probably none or very few.
Now ask them to try to clasp them with the other thumb on top. It feels different, doesn‘t it?
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However, there is no reason in the world why it should feel any differently, except that one is
used to doing it one way and not the other. Why do they think they clasp the one way in the first
place? ―Are you the type of person who goes right back to what is comfortable once you have
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changed for a moment, or are you the type of person who stays with a new idea to see if you like
it, how it feels?‖ The purpose of this exercise is to show students that they should be open to new
ways of looking at things, even if at first they feel a little uncomfortable.
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If an employer wants to hire someone to work every other hour every other week, it should be
allowed to do that, as long as it can locate an employee who wants that type of job. The freedom
to contract is crucial to freedom of the market; an employee may choose to work or not to work
for a given employer, and an employer may choose to hire or not to hire a given applicant.
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It is unlikely that Congress would enact legislation that would require employers to hire certain
individuals or groups of individuals (like a pure quota system) or that would prevent employers
and employees from freely negotiating the responsibilities of a given job. (See Exhibit 1.1,
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Realities about the Regulation of Employment.)
Employers historically have had the right to discharge an employee whenever they wished to do
so. However, Congress has passed employment-related laws when it believes that there is some
imbalance of power between the employee and the employer. For example, Congress has passed
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without the prior written consent of McGraw Hill LLC.
