WGU D352 Employment and Labor Law
(PROO) 2026 | Exam Prep | Questions
and Answers
Domain 1: Employment Law Foundations & At-Will Doctrine (Q1–Q18)
Q1. Under the employment-at-will doctrine, an employer may terminate an employee:
• A. Only for just cause after progressive discipline
• B. At any time, for any reason that is not prohibited by law
• C. Only after providing 30 days written notice
• D. Only if the employee has signed an arbitration agreement
Correct Answer: B
Rationale: Employment-at-will is the default rule in most U.S. states. Either party may
terminate the relationship at any time, with or without cause, as long as the reason is not illegal
(e.g., discriminatory or retaliatory). Options A, C, and D describe contractual or statutory
limitations that override the default rule.
Q2. An employer fires an employee for serving on a jury. Which exception to employment-at-
will does this violate?
• A. Implied contract exception
• B. Public policy exception
• C. Covenant of good faith and fair dealing exception
• D. Economic realities exception
Correct Answer: B
Rationale: The public policy exception prohibits termination for exercising a statutory right
or performing a legal obligation, such as jury duty, filing a workers‘ compensation claim, or
refusing to commit an illegal act. The implied contract exception involves promises of job
,security, while the covenant of good faith exception applies when termination is motivated by
malice or to deprive the employee of earned benefits.
Q3. An employee handbook states: “Employees will only be terminated for just cause.” Which
exception to employment-at-will is most likely created?
• A. Public policy exception
• B. Implied contract exception
• C. Covenant of good faith and fair dealing exception
• D. Statutory exception
Correct Answer: B
Rationale: Employee handbooks or oral promises can create an implied contract of
continued employment, limiting the employer’s ability to terminate at will. When the
employer’s actions or statements create a reasonable expectation of job security, the implied
contract exception applies.
Q4. The doctrine of respondeat superior makes an employer liable for an employee‘s tortious
conduct when the conduct occurs:
• A. At any time, even on weekends
• B. Within the scope of employment
• C. Only during scheduled work hours
• D. Only if the employee has a history of similar conduct
Correct Answer: B
Rationale: Respondeat superior (”let the master answer“) imposes vicarious liability on
employers for torts committed by employees within the scope of their employment. Conduct
outside the scope—such as a personal frolic or detour—generally does not create employer
liability.
Q5. Which test is used to distinguish an independent contractor from an employee?
, • A. Four-fifths rule
• B. Economic realities test
• C. Strict scrutiny test
• D. Bona fide occupational qualification test
Correct Answer: B
Rationale: The economic realities test examines factors such as the employer’s control over
the means and methods of work, the worker‘s opportunity for profit or loss, and the
permanency of the relationship. The four-fifths rule applies to disparate impact analysis under
discrimination law.
Q6. Stare decisis is a Latin term meaning:
• A. ”Let the decision stand“
• B. ”At first sight“
• C. ”This for that“
• D. ”Let the master answer“
Correct Answer: A
Rationale: Stare decisis is the doctrine requiring courts to follow precedent established by
earlier decisions. This promotes consistency and predictability in the law. ”Let the master
answer“ refers to respondeat superior.
Q7. Which constitutional provision establishes that federal law takes priority over conflicting
state law?
• A. Due Process Clause
• B. Equal Protection Clause
• C. Supremacy Clause
• D. Commerce Clause
Correct Answer: C
, Rationale: The Supremacy Clause of the U.S. Constitution mandates that federal law is the
supreme law of the land and preempts conflicting state laws. The Commerce Clause grants
Congress power to regulate interstate commerce, which is the basis for many federal
employment statutes.
Q8. Which of the following is NOT a recognized exception to employment-at-will?
• A. Public policy exception
• B. Implied contract exception
• C. Economic necessity exception
• D. Covenant of good faith and fair dealing exception
Correct Answer: C
Rationale: The three recognized common law exceptions to employment-at-will are public
policy, implied contract, and covenant of good faith and fair dealing. ”Economic necessity“ is not
a recognized exception; an employer may generally terminate for economic reasons under the
at-will doctrine.
Q9. A manager posts false rumors on social media that a terminated employee is not eligible for
rehire. This is an example of:
• A. Slander
• B. Libel
• C. Negligent hiring
• D. Defamation per se
Correct Answer: B
Rationale: Libel is defamation in written or published form, including social media posts.
Slander is spoken defamation. Defamation per se involves statements that are inherently
damaging (e.g., accusations of criminal conduct), but the question specifies written false
statements.
(PROO) 2026 | Exam Prep | Questions
and Answers
Domain 1: Employment Law Foundations & At-Will Doctrine (Q1–Q18)
Q1. Under the employment-at-will doctrine, an employer may terminate an employee:
• A. Only for just cause after progressive discipline
• B. At any time, for any reason that is not prohibited by law
• C. Only after providing 30 days written notice
• D. Only if the employee has signed an arbitration agreement
Correct Answer: B
Rationale: Employment-at-will is the default rule in most U.S. states. Either party may
terminate the relationship at any time, with or without cause, as long as the reason is not illegal
(e.g., discriminatory or retaliatory). Options A, C, and D describe contractual or statutory
limitations that override the default rule.
Q2. An employer fires an employee for serving on a jury. Which exception to employment-at-
will does this violate?
• A. Implied contract exception
• B. Public policy exception
• C. Covenant of good faith and fair dealing exception
• D. Economic realities exception
Correct Answer: B
Rationale: The public policy exception prohibits termination for exercising a statutory right
or performing a legal obligation, such as jury duty, filing a workers‘ compensation claim, or
refusing to commit an illegal act. The implied contract exception involves promises of job
,security, while the covenant of good faith exception applies when termination is motivated by
malice or to deprive the employee of earned benefits.
Q3. An employee handbook states: “Employees will only be terminated for just cause.” Which
exception to employment-at-will is most likely created?
• A. Public policy exception
• B. Implied contract exception
• C. Covenant of good faith and fair dealing exception
• D. Statutory exception
Correct Answer: B
Rationale: Employee handbooks or oral promises can create an implied contract of
continued employment, limiting the employer’s ability to terminate at will. When the
employer’s actions or statements create a reasonable expectation of job security, the implied
contract exception applies.
Q4. The doctrine of respondeat superior makes an employer liable for an employee‘s tortious
conduct when the conduct occurs:
• A. At any time, even on weekends
• B. Within the scope of employment
• C. Only during scheduled work hours
• D. Only if the employee has a history of similar conduct
Correct Answer: B
Rationale: Respondeat superior (”let the master answer“) imposes vicarious liability on
employers for torts committed by employees within the scope of their employment. Conduct
outside the scope—such as a personal frolic or detour—generally does not create employer
liability.
Q5. Which test is used to distinguish an independent contractor from an employee?
, • A. Four-fifths rule
• B. Economic realities test
• C. Strict scrutiny test
• D. Bona fide occupational qualification test
Correct Answer: B
Rationale: The economic realities test examines factors such as the employer’s control over
the means and methods of work, the worker‘s opportunity for profit or loss, and the
permanency of the relationship. The four-fifths rule applies to disparate impact analysis under
discrimination law.
Q6. Stare decisis is a Latin term meaning:
• A. ”Let the decision stand“
• B. ”At first sight“
• C. ”This for that“
• D. ”Let the master answer“
Correct Answer: A
Rationale: Stare decisis is the doctrine requiring courts to follow precedent established by
earlier decisions. This promotes consistency and predictability in the law. ”Let the master
answer“ refers to respondeat superior.
Q7. Which constitutional provision establishes that federal law takes priority over conflicting
state law?
• A. Due Process Clause
• B. Equal Protection Clause
• C. Supremacy Clause
• D. Commerce Clause
Correct Answer: C
, Rationale: The Supremacy Clause of the U.S. Constitution mandates that federal law is the
supreme law of the land and preempts conflicting state laws. The Commerce Clause grants
Congress power to regulate interstate commerce, which is the basis for many federal
employment statutes.
Q8. Which of the following is NOT a recognized exception to employment-at-will?
• A. Public policy exception
• B. Implied contract exception
• C. Economic necessity exception
• D. Covenant of good faith and fair dealing exception
Correct Answer: C
Rationale: The three recognized common law exceptions to employment-at-will are public
policy, implied contract, and covenant of good faith and fair dealing. ”Economic necessity“ is not
a recognized exception; an employer may generally terminate for economic reasons under the
at-will doctrine.
Q9. A manager posts false rumors on social media that a terminated employee is not eligible for
rehire. This is an example of:
• A. Slander
• B. Libel
• C. Negligent hiring
• D. Defamation per se
Correct Answer: B
Rationale: Libel is defamation in written or published form, including social media posts.
Slander is spoken defamation. Defamation per se involves statements that are inherently
damaging (e.g., accusations of criminal conduct), but the question specifies written false
statements.
