Criminal Law

·      Primarily made up of statutes passed by Congress and state legislatures

o   Federal criminal code and state criminal code

·     

·      Crime

o   May be a positive or negative act that violates penal law; that is, it is an offense against a state or the federal government

·      Civil Law vs. Criminal Law

o   Civil Law: concerns civil and private rights and remedies

§  Violations: Fines, orders to do or not do something, no jail time

o   Crimes: felonies and misdemeanors

§  Violations: Death penalty, imprisonment, fines, removal of public office, disqualified from owning a firearm, voting

·      Felony

o   A serious crime

o   May be punished by more than a year in prison in many states

o   Listen in classes (Class A, B, C) or in degrees (First degree, second degree. Etc.)

·      Misdemeanors

o   Less serious crimes, usually punished by a fine or a year or less in prison

o   Classified by severity: Class A, B, C

·      Victimless crimes

o   Criminal acts in which no other party is injured

§  Possession of illegal drugs

o   May be classified as misdemeanors or felonies

·      Manslaughter

o   Voluntary or involuntary

o   Unlawful killing committed recklessly or under the influence of severe mental distress

·      White-collar crimes

o   Include nonviolent crimes committed by corporations or individuals

§  Embezzlement, bribery, fraud

·      To be convicted, government must prove beyond a reasonable doubt

o   1. The accused committed the illegal act (actus reus)

o   2. That there was necessary intent or state of mind to commit the act (mens rea)

·      Actus reus

o   A wrongful deed

·      Mens rea

o   Criminal intent

·      Criminal negligence

o   “A degree of carelessness amounting to a culpable disregard of rights and safety of others”

·      Miranda rights

o   Persons accused of a crime, or held in suspicion of a crime, must be informed of their right to remain silent, as provided by the Fifth amendment, their right to be represented by counsel, and must be told that statements that they make can be used as evidence against them.

·      If a crime is not prosecuted within the time set by the statute of limitations, then the state loses the right to bring suit. 

·      Toll

o   Statute of limitations clock stops running under certain circumstances

§  Such as if one has fled the country  (prolonged statute of limitations)

Unlimited statute of limitations when murder is committed. 

·      Affirmative defense

o   Defendant may attempt to show that even if the prosecution’s claims are true, there are other facts, which prevent the claims from constituting the crime charged.

§  Intoxication, insanity

·      Entrapment

o   Law enforcement authorities set up a trap to lure someone into a crime they had no intention of committing. 

Evidence

·      State gathers most of the evidence in a criminal case

o   Must be gathered, handled, and presented properly

o   Called chain of custody

·      Exclusionary rule

o   Evidence gathered improperly may not be used in trial

·      Warrant

o   Issued by a judge or appointed magistrate who, in the name of the state, authorizes an officer to search for and seize any property, often called personal “effects,” that may be evidence of a crime.

·      Probable cause

o   Needed to obtain a warrant

o   Reasonable grounds, based on knowledge to date, to believe that a person should be searched or arrested

·      Grand jury

o   Used to review potential felony cases

o   Determines probably cause

o   Issue indictments

·      Arraignment

o   Formal charging in a court of low of a person accused of a crime

o   Attorney gives the accused a copy of the criminal charges

o   Given in front of a judge or magistrate

o   Defendant may plead guilty, no contest (nolo contendere), or innocent

·      Plea bargain

o   Allows the matter to be settled under supervision of a judge, by having the defendant plead guilty, or plead no contest, in exchange for an agreement by the prosecutor to recommend a lesser punishment, reduce charges, or make some concession to the defendant. 

Discovery

·      In criminal cases, the parties are expected to do their own investigations, disclosing only a subset of what they find to the other side before trial

·      Exculpatory evidence

o   Might show the defendant is not guilty

·      Defendant has no obligation to show the prosecution evidence that says he is guilty 

·      Employee Retirement Income Security Act (ERISA)

o   Federal legislation regulating private pension plans that supplement Social Security

o   Created the Pensions Benefit Guaranty Corporation (PBGC) to “guarantee payment of basic pension benefits earned by nearly 44 million American workers and retirees participating in more than 33,330 private-sector defined benefit pension plans.” 

·      Defined Benefit Plans

o   Plans that provide for the payment of determinable retirement income benefits

o   A plan where the amount of the employee’s retirement income is a promised fixed dollar amount or an amount determined in advance by a benefit formula. 

·      Individual Retirement Accounts (IRAs)

o   Employee gets a present tax break on the invested amount and a continuing income tax break on income earned over the years in the IRA account. 

·      Roth IRA

o   After tax income used to fund account

o   Free from any income tax obligation upon retirement

o   A form of individual retirement account authorized by federal law that allows a taxpayer to contribute after-tax dollars to the account so that earnings are not taxed when withdrawn 

·      Family and Medical Leave Act of 1993 (FMLA)

o   A federal law requiring employers with 50 or more employees to grant employees leave for certain family purposes related to childcare and family health.

o   Allows an employee to take up to 12 weeks’ leave in any 12-month period but does not require that the leave be paid

o   After any leave is taken, the employee must be restored to the same or similar position in the company 

·      Drug testing in the workplace

o   If government agency, testing is subject to the requirements of the US Constitution. 4^th Amendment (“secure in their persons… against unreasonable searches and seizures.”).

o   There has to be reasonable basis for suspecting the employee’s use of drugs, or if drug use is a threat to safety  

o   Private employers have more flexibility, although some states do regulate and restrict private drug testing 

o   Employee Polygraph Protection Act

§  Severely restricted the use of polygraphs.

§  Prohibits employers from (1) requiring employees to take the test (2) asking about the test (3) taking or threatening negative employment based on the results of the test. 

·      Monitoring Job Performance 

o   Current federal law recognizes the right of employers to listen in on telephone conversations to monitor employees’ performance, state laws vary

·      Union 

o   Association of workers formed to bargain collectively with employers over wages, hours, and conditions of employment. 

·      Picketing 

o   Patrolling by strikers or sympathizers, generally at the entrances to a business plant, during a labor dispute

·      Anti-Injunction Act of 1932

o   Federal law that restricts the issuance of injunctions in labor disputes, outlaw yellow dog contracts, and exempts unions from legal attack as monopolies.

Norris la-Guardia Act 

·      Yellow dog contract

o   An employment contract in which a worker agrees not to join a union.

o   Norris-La Guardia Act outlawed them

·      National Labor Relations Act of 1935 (Wagner Act)

o   A federal law that recognizes the right of workers to organize into unions of their own choice, and the duty of employers to bargain collectively with the unions over wages, hours, and conditions of employment. It provides a list of unfair labor practices by management. 

·      Collective Bargaining 

• o   The process of negotiation by representatives of an employer for an employment contract that provides terms and conditions of employment.
• o   Individual employee no longer free to bargain individually with the company when the union has authority

·      Unfair labor practices

o   Certain practices of employers and unions that are prohibited by federal or state law

1. Interference with the union

2. Wrongful domination of union

3. Encouragement or discouragement of unions through discrimination

4. Refusal to bargain

5. Discrimination against any employee seeking protection 

·      Labor-Management Relations Act of 1947 (Taft-Hartley Act)

o   Amended the Wagner Act 

·      Closed shop

o   A place of employment where workers must join a union before they can be hired. Made illegal by the Taft-Hartley Act

·      Secondary Boycotts

o   Occurs when striking workers picket or use other pressure against a neutral third party who supplies or buys from the struck employer 

·      Open Shops

o   A company or department where union membership is not a requirement to get or keep a job.      

·      Union Shops

o   A place of employment where newly hired workers must join the union within 30 days of being hired. 

·      Agency shop

o   A company or department in which all employees in the bargaining unit must pay union dues (or some comparable fee) regardless of whether they are union members

·      Labor-Management Reporting and Disclosure Act of 1959 (Landrum Griffin Act)

o   Prescribes that every local labor organization must elect its officers at least once every three years by secret ballot among the members in good standing

·      Strike

o   A concerted refusal by employees to perform the services for which they were hired, generally in order to gain recognition of a union, or improvements in wages, hours, or conditions of employment.

·      Lockout

o   A shutdown of operations by an employer in response to union demands or to achieve other changes in an employment contract

·      Economic strike 

o   A strike in which workers seek a change in wages, hours, and/or conditions of employment 

·      Strikebreakers

o   Persons hired to take the place of workers who are out on strike. If it is an economic strike, the strikebreakers may be retained as permanent replacements.

·      Unfair labor practice strike 

o   Workers retain full rights to their jobs and must be restored to them when the strike ends

·      Sit-down strike 

o   Where workers retain possession of the employer’s property are illegal

·      Wildcat strike

o   An unlawful strike of union members that takes place without the approval of the union leaders 

Intellectual Property 

·      Intellectual property is created by mental effort, not by physical labor.

o   Often called intangible property because it may be invisible, impossible to hold, and harder to value than the physical property

·      150,00 new trademarks, 600,000 copyrights, 190,000 patents annually

·      Infringement

o   Wrongful, unauthorized use of intellectual property in violation of the owner’s rights is the basis for a tort action

§  Damages may be awarded to the property holder and an injunction against further unauthorized use may be issued 

·      Trademark

o   A commercial symbol – a design, logo, phrase, distinctive mark, name, or word – that a manufacturer prints on its goods so they can be readily identified in the marketplace. 

·      Lanham Act

o   Federal law which enabled common law recognizing the right to protect trademarked property

o   Allows a person to register a symbol with the Patent and Trademark Office in Washington D.C. 

·      Trademark Revision Act

o   Allows nationwide claim to a mark from the moment it is registered, so long as sincere intent exists to use the symbol in commerce.

·      Federal trademark law allows trademarks to be registered if they are distinctive and nonfunctional 

Trademark Registration

·      Applicant not responsible for searching existing trademarks to make sure there is not confusion or infringement with existing marks

o   That is the trademark examiners job

·      Good for ten years, after which it must be renewed 

Classification of Trademarks

·      Generic Marks

·      Arbitrary and fanciful

o   Most favored by the courts because they are inherently distinctive (fanciful), like made-up names such as Exxon or Reebok, or they are names not related to the product (arbitrary), such as Apple for computers

·      Suggestive Trademark

o   Marks hint at the product, such as Chicken of the Sea for canned tuna

o   Due legal protection, but establishing that can be more difficult than if the mark is arbitrary and fanciful

·      Descriptive Trademark 

o   Marks are not favored by the law and must be shown to have acquired customer recognition to be allowed protection. 

·      Generic Marks

o   Words that are common and do not refer to products from a specific producer 

Extent of Coverage

·      Cannot claim too much

·      Infringement 

o   Occurs when a seller causes confusion about the origins of a product by improper use of a trademark

o   Another shoe company produces shoes with Reebok as their name

·      Cybersquatting 

o   Occurs when a trademark is used improperly in a domain name

o  Anticybersquatting Consumer Protection Act (ACPA)

1. Fair use, mentioning in advertising

2. Noncommercial use, such as parody or editorial commentary

3. News reporting or eduction use

·      Counterfeiting

o   Means the copying or imitating of a mark without authority to do so

Private Enforcement

·      Lanham Act allows private parties to obtain search-and-seizure orders to grab counterfeit goods. 

·      Trade Dress

o   A commercial symbol also protected by trademark law and the Lanham Act

o   Concerns the “look and feel” of products and of service establishments

o   “Inherently Distinctive”

o   Must be distinctive and have secondary meaning

o   Roar of a Lion for MGM

·      Secondary Meaning

o   Primary significance of the mark or trade dress is to identify the source of the product, rather than the product itself

o   Not functional; Can have secondary meaning 

·      Service Marks

o   Mottos: “Home of the Whopper” Burger King

·      Certification Mark

o   Any word, symbol, device, or any combination of these that is used, or intended to be used, in commerce to certify regional or other geographic origin.

"Made in Montana" 

·      Collective Mark

o   A trademark or service mark that is used in commerce by members of a cooperative, an association, or other collective group or organization 

·      Trade Name

o   Name of a company or a business

o   Can’t be registered under the Lanham Act, but are protected by common law.

·      Goodwill

o   When firms have created trademark value and have gained the trust of many customers

o   The benefit or advantage of having an established business and secured customers 

·      Copyrights

o   Intangible assets that are held by the author or owner for a certain period of time

·      Copyright Act of 1976

o   Created statutory protection for all copyrightable works

o   Protects an original expression automatically from the time it is fixed in a tangible medium of expression – printed, sung, used in a computer, or whatever from expression takes. 

·      Moral Rights

o   Includes the right of the author of a copyright to have proper attribution of authorship and to prevent unauthorized changes in or destruction of an artist’s work 

·      Fair Use

o   Copyright Act allows use of original material “for purposes such as criticism, comment, new reporting, teaching, scholarship, or research.”

·      Patent

o   Purely statute based 

·      Utility patents

o   Consists most patents

o    Invention must have a “use” and be operative, not just a theory

·      Trade Secrets

o   Tort law protects such information

o   May consist of any formula, pattern, device, or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. 

·      Economic Espionage

o   Economic Espionage Act of 1996

§  Converting a trade secret that is related to or included in a product that is produced for or placed in interstate or foreign commerce to the economic benefit of anyone placed other than the owner 

·      Security

o   It may be a debt of certain forms

o   It may be an equity

o   Provide capital for business operations (the money needed to get a business started)

·      Debt

o   Primarily money borrowed by a corporation

o   Usually a note or bond that can be traded

·      Debt Securities 

o   Bonds that are traded on the securities market 

·      Equity

o   Stocks traded on the New York Stock Exchange and other stock exchanges

·      Equity Financing 

o   The raising of funds through the sale of company stock 

·      Blue Sky Laws

o   State securities

·      Securities Act of 1933

o   Regulates the public offerings of securities, when they are first sole

o   Requires that investors be given material information about new securities and it prevents misrepresentation in the sale of securities

·      Securities Exchange Act of 1934

o   Regulates trading in existing securities and imposes disclosure requirements on corporation that have issued publicly held securities

o   Regulates securities markets and professionals

·      Security and Exchange Commission (SEC)

o   The agency charged with the responsibility for the enforcement and administration of federal securities laws

o   Bipartisan, independent agency with five members appointed by the president for five years. One is appointed chairmen. 

·      Howey Test

o   Test to determine when an investment is a security for the purposes of federal regulation

o   Must contain four basic elements:

§  1. Investment of money

§  2. In a common enterprise

§  3. With an expectation of profits

§  4. Generated by the efforts of persons other than the investors

·      Exempt Securities 

o   Debts issued or guaranteed by a federal, state, or local government.

o   1933 Act also provides an exemption for securities issued by banks, religious and charitable organizations, insurance policies, and annuity contracts. 

·      Material Information

o   All relevant information that an investor would want to know about a company 

·      Disclosure Requirements

o   Fulfilled by filing a registration statement with the SEC

·      Registration statement

o   For a new security statement has two parts:

§  1. Prospectus

§  2. Regulation S-K

·      Prospectus

o   Provides:

§  Security issuer’s finances

§  Purpose

§  Plans for funds

§  Risks

§  Promotes managerial experience and financial compensation

§  Financial statements certified by accountants 

·      Red Herring 

o   First version of the prospectus not yet approved by SEC

o    Red ink or reddish color paper 

·      Regulation S-K

o   Second part of registration statement

o   More info on proposed business and previous financial activity 

·      Underwriter 

o   An investment banker, such as Morgan Stanley- that will market the securities 

·      Exemption from registration

o   Only the initial sale of the securities is exempt from registration

o   The securities are not exempt from other parts of the securities laws.

·      Private placement

o   Used when the exemption are those placing large blocks of securities with institutional investors, most often pensions funds for insurance companies

·      Rule 144A

o   Exempts US and foreign security issuers from registration requirements for the sale of bonds and stocks to institutions with a portfolio of at least $100 million in securities

·      Qualified Institutional Buyers (QIBs)

o   Large institutions where private placements are most common for large security issues

·      Regulation D

o   Explains what qualifies as a private placement exemption

·      Accredited Investors

o   Banks and insurance companies

o   Must have annual income of at least $200,000 or a net of $1 million

·      WKSIs

o   May use free writing prospectus (allows updated information)

·      Shelf registration

o   Securities that once announced and registered may be sold at any time over the next three years. 

·      Securities Exchange

o   New York Stock Exchange

o   Securities must be registered under the 1934 act

·      Over the counter (OTC)

o   Securities must be registered under the 1934 act

·      Publicly-held company

o   Any company that has issued securities that are traded and is subject to reporting requirements

·      Private company

o   A company that has fewer than 500 shareholders and does not allow its securities to be openly traded 

·      Security reports

o   10-K annual report: extensive audited financial statement

o   10-Q reports: unaudited financial infor

o   8-k reports: significant financial developments

·      Regulation FD

o   Regulation Fair Disclosure

o   Creates a more “level playing field”

o   Requires public companies to release material information to the public, rather than to reveal such information selectively

o   Primary purpose is to restrict the traditional practice of firms having executives give private briefings to big investors and favored securities analysts 

·      Proxy

o   Permission given by a shareholder to someone else to vote his shares in the manner he instructs

o   SEC regulations spell out the forms proxies must take

·      Tender Offers

o   When one company offers to take over another

o   Must be registered with the SEC and certain procedures must be followed

o   Can arise from false and misleading info in the registration materials, but most arise from information obtained during later disclosure, such as public statements

·      Misstatements 

o   Include misleading statements and material omission in securities registration material 

·      Rule 10b-5

o   Of the 1934 Act makes it illegal for any person “to use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered on a national securities exchange

o   Provides the basis for bringing forth securities fraud action

o   Used more than any other part of the act 

·      Safe Harbor

o   Gives greater immunity from suit for corporate forecasts that turned out not to be accurate after the fact.

·      Securities Litigation Reform Act of 1995

o   Amended securities laws to protect companies from liability for predictions about profits and the likely success of its products, so long as they are accompanied by “meaningful cautionary statements”

·      Securities Litigation Uniform Standards Act of 1998

o   Requires securities suits involving nationally traded securities to be brought exclusively in federal court under federal law

·      Sarbanes-Oxley Act 2002

o   Requires that the CEO and the CFO of large companies that publicly traded stock personally certify that financial reports made to the SEC comply with SEC rules and that the information in the reports is accurate

o   Knowingly making a misstatement is a criminal offense with up to $5 million and up to 20 years in prison

o   Established Public Company Accounting Oversight Board

·      Insider trading

o   The buying or selling of stock by persons who have access to information affecting the value of the stock that has not yet been revealed to the public

o   Prohibited by Rule 10b-5

·      Insider Trading Sanctions Act 1984

o   Gave the SEC a statutory basis for prosecuting insider trading

o   Was strengthened by the Insider Trading and Securities Fraud Enforcement Act of 1988

·      Insider Trading and Securities Fraud Enforcement Act of 1988

o   Increased the maximum fine to $1 million for persons convicted of violating the law against insider trading and set the max prison term to 10 years per violation.

·      Investment Company Act (ICA) of 1940

o   Gives the SEC control over the structure of investment companies

o   Requires investment companies to register as such with the SEC

·      Investment Company

o   Invests and trades in securities

o   Three types:

§  1. Face-amount certificate companies

§  2. Unit Investment Trusts

§  3. Management Companies 

·      Mutual Funds

o   Most common investment management company

o   AKA open-end company

Trial

·      If a jury can’t come up with a decision, there is a mistrial

·      Double jeopardy 

o   Cant be tried for the same crime twice

White-Collar Crimes

·      Today, generally refer to criminal activity for financial gain

·      Antitrust

o   Price fixing

o   Anti-competitive practices

o   Unfair competition

·      Bankruptcy Fraud

o   When a person or committee hides or lies about assets during bankruptcy proceedings

·      Bribery

o   The offer of or taking money, goods, services, or other things of value to influence official actions or decisions

·      Counterfeiting 

o   Copying of an item without authorization

·      Credit Card Fraud

o   Unauthorized use of a credit card to obtain goods, services, or cash

·      Computer and Internet Fraud

o   Unauthorized use of computers/files; sabotage 

·      Economic Espionage 

o   The theft or misappropriation of valuable business information, such as a trade secret 

·      Embezzlement 

o   When someone is in a position of trust with money or other valued property, and they take it for their own use

·      Environmental Law Violations 

o   Federal and state statutes that provide for the possibility of criminal conviction for environmental harm

·      Financial Fraud

o   Criminal liability for fraud in loans, financial documents, mortgages, and other abuses

·      Government fraud 

o   Laws for the provisions of supplies and construction; farm subsides, public housing, educational programs.

o   Defrauding the government  

·      Healthcare Fraud

o   Problems or over-billing and scams by hospitals, doctors, ambulance services, labs, pharmacies.

·      Insider Trading 

o   Illegal when a person trades a security while in possession of material nonpublic information in violation of a duty to withhold the information or refrain from trading

·      Insurance Fraud 

o   When insurance companies charge higher rates than allowed by state regulators

o   Most by policy holders who lie about the condition of their property to get lower rates or who pad their claims

·      Mail Fraud 

o   Common basis for government to prosecute those involved in some sort of trickery

o   “Having devised or intending to devise any scheme or artifice of fraud”

·      Money Laundering 

o   Hiding the truth about the origins of money

o   Hundreds convicted of money laundering annually by Treasury Department

o   Average prison time is 5 years

·      Racketeer Influenced and Corrupt Organizations (RICO) Act

o   Passed in 1970 to provide an extra weapon against organized crime, such as the Mafia

o   Applies to individuals, businesses, political interest groups, and terrorist organizations as well

o   Allows seizing of defendants assets, preventing transfer of assets, requiring a defendant to post a performance bond.

§  Helps persuade defendant into a plea bargain

o   Triple damages and attorney’s fees paid for.

·      Racketeering

o   A pattern of illegal activity, such as bribery or extortion, which was part of an enterprise controlled by those who engaged in the illegal activity 

·       Securities Fraud

o   Market rigging

o   Theft from accounts of clients of securities firms 

·      Tax Evasion 

o   When a person is indicted for tax fraud, there is a 90% conviction rate

·      Telephone and telemarketing fraud

o   1. Make it seem what they are selling is worth it

o   2. Obtain immediate payment before victim can inspect it

o   3. Create aura of legitimacy 

·      Wire Fraud

o   Any electronic communication involved with fraud

o   Report suspicious transactions

§  Failure to report can be a civil and criminal action 

Anti-money laundering (AML) 

measures are regulations aimed at making it difficult to create a legitimate source of income cover-up.

·      Three goals of AML:

·      Failure to report suspicious transactions can result in criminal or civil penalties

o   Willful violations can lead to criminal penalties 

·      Sentencing Guidelines

o   Aimed to make sentences consistent across the country

o   Supreme Court has held the guidelines are advisory rather than mandatory 

·      Indeterminate Sentencing 

o   Certain Sentencing

§  You do this crime, get a certain amount of sentencing 

·      Right-to-know-Laws

o   Federal and state laws requiring that information about possible exposure to hazardous chemicals be collected and distributed

·      US Jobs switching more to managerial and sales

o   New and more complicated issues

·      Laws are designed:

o   To protect workers under 18 years old

o   Prevent discrimination of age, disability, sex, race

·      Agency

o   Relationship in which, by mutual consent, an employee (the agent) is authorized to represent and bind an employer (the principal) in business dealings with third parties.

·      Agent

o   A person employed by a principal to deal with third parties and make contracts binding the principal to the third parties.

o   Agent is a fiduciary of the principal

·      Principal 

o   The person who empowers the agent to enter contracts on her behalf

·      Fiduciary

o   Someone who has an obligation to act with scrupulous good faith and honesty toward another 

·      Respondeat Superior 

o   Holds employers liable for injuries caused third persons by their employees who were negligent while acting within the scope of their employment

o   Principal is responsible for most torts the agent commits while within to scope of authorized behavior

o   Similar to strict liability in court 

·      Employee

o   A person who agrees by contract to perform work as directed and controlled by an employer in exchange for compensation 

·      Independent contractor

o   A person who is hired to do a specific job, and who retains control over how that job is done.

o   Respondeat Superior does not apply to independent contractors

·      Civil Rights Act of 1964

o   Federal law (specifically title VII) that makes it unlawful for employers of 15 or more persons, engaged in interstate commerce, to discriminate with respect to employment against any individual because of such person’s race, color, religion, sex, or national origin

·      Protected class

o   A classification of persons defined by one or more of these criteria: race, color, gender, national origin, age, or religion

·      Disparate treatment

o   Less favorable treatment on the basis of race, color, religion, gender, age, or national origin.

Role of the Equal Employment Opportunity Commission (EEOC)

·      Power to bring civil actions itself to eliminate violations of the law

·      Title VII charges must generally be filed with the EEOC within 180 days of the alleged discriminatory act.

·      EEOC is the ‘master of its own case’ and can decide to bring a claim for monetary damages in court, even though the individual for whom the EEOC seeks relief would be required to pursue his or her own claim in arbitration. 

Race and Color Discrimination

·      If the requirements for employment operate to exclude minority groups and are unrelated to job performance, the requirements violate Title VII

National Origin Discrimination

·      Under Title VII, it is unlawful to discriminate against any employee or applicant on the basis of national origin

·      Immigration Reform and Control Act of 1986 (IRCA)

o   Prohibits discrimination based on citizenship

·      US Immigration and Naturalization Service (INS)

o   Requires employers to (1) hire only those person authorized to work in the US (2) ask all new employees to show documents (3) complete the INS Employment Eligibility Verification Form

Religious Discrimination

·      Title VII prohibits employers from discriminating on the basis of an employee’s religious beliefs

prima facie

·      Plaintiff must establish four elements of a prima facie case of discrimination

o   1. He is a member of or practices a particular religion

o   2. He is qualified to perform the job at issue

o   3. He has suffered some adverse employment action

o   4. Someone outside the protected class of which he is a member was treated differently 

·      Equal Employment Opportunity Act of 1972 (EEOA) 

o   Dramatically changed the employment law relating to women

o   Employers are forbidden to classify jobs as male or female, and they cannot have separate male and female seniority lists

·      Bona fide occupational qualification (BFOQ)

o   Selection criteria that serve a legitimate business interest, which are justified although they have a disparate impact

·      Sexual Harassment

o   A form of illegal gender discrimination wherein (1) job opportunities, promotions, and the like are given on the basis of sexual favors or (2) the employee is subjected to a work environment where the employee must put up with sexual comments, jokes, or physical contact that is sexually offensive.

o   Two types: 1. Quid pro quo 2. Hostile environment 

·      Quid pro quo

o   Expression used in sexual harassment situations when sexual favors or demands are a term or condition of an individual’s employment, or the basis for employment decisions affecting such individual. 

·      Hostile environment 

o   Conduct by others in the workplace that has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating hostile, or offensive working environment.

o   Except in limited circumstances, the wrongfully accused employee has no legal recourse. 

·      Equal Pay Act of 1963

o   Permits inequality pay on the basis of (1) seniority, (2) merit, (3) quality or quantity of production or (4) any factor other than gender.

·      Comparable Worth

o   The theory that jobs that have equal social and economic value should be paid equally

o   The theory that the same wage or salary should be paid for jobs that have equal societal and economic value based on such factors as required preparation skill, effort, responsibility, and working conditions

o   Has not been accepted in the US courts

·      Age Discrimination in Employment Act of 1967 (ADEA)

o   Federal law that added “advanced age” (over age 40) to attributes listed in the Civil Rights Act of 1964 that may not be used negatively in employment decisions.

o   Applies to employment agencies and unions;

o   Applies to “a person (including a corporation) engaged in an industry affecting commerce who has 20 or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.”

·      Affirmative Action Programs

o   Programs that require that preference in hiring be given to some statutorily protected group

o   Title VII neither requires nor denies affirmative action as a remedy for discriminatory practices 

·      Reverse Discrimination 

o   Label given to the results of affirmative action programs by opponents who claim that such programs discriminate against male and white workers 

·      Americans with Disabilities Act of 1990 (ADA)

o   Federal law that bars discrimination in the employment of capable handicapped persons by both private and public employers, and that requires reasonable accommodations for their special needs.

o   A person has a disability if:

§  1. Have a physical or mental impairment that substantially limits one or more major life activities

§  2. Have a record of such an impairment; or

§  3. Is regarded as having such an impairment 

·      Undue Hardship

o   An action or accommodation that is excessively costly, extensive, substantial, or disruptive, or would fundamentally alter the nature or operation of the business. 

Duty to Follow Lawful instructions

·      An employee is duty bound to obey reasonable orders and to comply with reasonable rules.

·      Right to refuse to perform work that appears unreasonably dangerous. 

Duty of Care

·      “Honest day’s work for an honest day’s pay”

·      Bound to use reasonable skill in performing assigned work, to perform it conscientiously, and to do nothing contrary to the interests of the employer 

Duty of Loyalty 

·      Loyalty is a fundamental duty in an employment relationship

·      Employee has the duty to act to benefit the employer

o   May not act for personal interests or for third parties at the detriment of the employer

·      Any knowledge learned through the employment relationship is confidential 

Employment At Will and Limiting Expectations

·      An employee who quits before the contract ends may be liable for damages but won’t be forced to continue services. 

·      Interference with an economically advantageous relationship

o   A knowing and wrongful interference with the promised performance of another person’s contract. 

·      At-will employment 

o   A term used to indicate that an employment contract may be terminated at any time by either the employee or the employer without any liability (beyond payment for services rendered up to the time of departure or discharge)

·      Just cause

o   An action based on reasonable ground and fair treatment; lawful reasons for taking an action

o   In a contract means that the employer must have a legitimate provable reason to fire or perhaps even discipline any employee 

Federal and State Statutes

·      Federal statutes restrict and employer’s ability to fire at will

·      Many state laws forbid an employer from firing an employee for certain specified public policy reasons, for example where an employee is called for jury service, subpoenaed as a witness at a court or legislative proceeding, or called to serve in the national guard. 

·      Whistleblower

o   A person who makes a disclosure about improper conduct by an organization or organization officer or official 

Implied Contract Theory

·      Oral statements, job evaluations, and other acts may lead to an implied contract

·      Most likely to be successful in cases involving long term employees where the work relationship has existed for 10, 15, and even 20 years. 

Tort theory

·      If firing is done in an abusive manner, an employer’s acts might be found to be either the tort of intentional infliction of emotional distress or defamation. 

Minimum Wages 

·      An employer must withhold federal income taxes (and, in some states, state income taxes) and Social Security taxes and pay them directly to the appropriate government agencies.

·      Special legislation in some states gives and under federal bankruptcy laws gives the employee a preference or priority over the employer’s other creditors

Fair Labor Standards Act of 1938 (FLSA) 

·      set a minimum standard hourly wage for industrial workers engaged in interstate commerce and set the maximum workweek at 40 hours. 

·      Occupational Safety and Health Act of 1970 (OSHA)

o   A federal law to assure safe and healthful working conditions by authorizing enforcement of health and safety standards.

o   Prohibit retaliation against workers who exercise their right to report unsafe working conditions

Fringe Benefits

·      Paid vacations and holidays and paid or subsidized medical and dental insurance are valuable fringe benefits for most employed persons.

·      Most fringe benefits are tax free to the employees and tax-deductible as business expenses to the employers. 

·      Social Security Act of 1935

o   Gives benefits to retirees, dependent survivors of insured persons, and qualified disabled workers and disabled dependents. 

·      Simplified Employee Pension (SEP) Plan

o   Whereby contributions are made to the employee’s individual retirement account (IRA)