LSB 4423 Exam #1.docx

The foundation principle of US employment law is the presumption that employment is _______ - correct answer at will at-will - correct answer - either party is free to terminate the employment relationship without notice or cause - the default rule in virtually every state - rooted in the notion of freedom of contract - only Montana has a 'for cause' standard Case: Payne v. The Western & Atlantic Railroad Co., 81 Tenn. 507 (1884) - correct answer The employer's ability to terminate the employment relationship is still .... - correct answer limited -an employer can't violate anti-discrimination laws -an employer cannot terminate an employee in retaliation for exercising statutory rights -an employer's ability to terminate may be limited by tort law or by public policy Agreements for a definite term would limit termination of an employment relationship - correct answer The ____ - ______ employment rule contemplates that the parties may negotiate over the term of their relationship - correct answer at-will -contract principles apply to this agreement - contract principles require offer, acceptance, and consideration -the contract does not require identical consideration from both parties If the parties specify a term of employment, the agreement will rebut the at-will employment presumption - correct answer - this is true even if the parties did not expressly state that "cause" is required for termination - the contract must call for a definite term or the at will presumption applies - a contract calling for a specified "annual salary" does not constitute a specified term Promissory Estoppel - correct answer -similar to an implied contract -requires a showing of "detrimental reliance" -requires that the employer made a promise that it knew would be relied upon -the promise must have led the plaintiff to act *courts like the idea of promissory estoppel **employer promises may be enforceable because of promissory estoppel Defining worker status - correct answer -is difficult -courts use a variety of legal tests to determine employee status - tests differ by agency, by court, by state, and sometimes by context -there are three main tests The common Law Agency Test - correct answer the "right to control" forms the heart of the common law agency test The IRS test - correct answer - because it is charged with enforcement of wage withholding, classification of workers is important to the IRS -the IRS originally used 20 factors - the IRS later modified the test by grouping the 20 factors into 3: 1) behavioral control, 2) financial control, and 3) type of relationship The Economic Reality Test - correct answer -focuses on financial considerations -worker status is not based on the work itself, but on the financial reality that accompanies the work -the economic reality test is used to classify workers under the: -Fair Labor standards act -equal pay act of 1963 -FMLA of 1993, and -Employee polygraph protection act of 1988 the entrepreneurial aspect test - correct answer -Case: FedEx Home Delivery v. NLRB, 563 F.3d 492 (DC Cir. 2009)[3] - in the case the court used the common law test but rejected the primacy of the right to control factor -instead, the court looked to the presence of entrepreneurship to determine independent contractor stats The permatemp has become much more common in society - correct answer - a contingent worker is one whose job is temporary, sporadic, or differs in any way from the norms of full-time employment