Business Law Exam 3

Employee at Will

An employee at will is someone who can be fired at any time, for any reason (good, bad, or no reason), as long as it’s not illegal (discrimination, retaliation)

• If you’re an employee at will, it means you don’t have a contract promising job security. Your employer doesn’t need to explain why they’re firing you, and you also might have the right to quit at any time, for any reason

• However, there are limits. Even though they can fire you for almost any reason, they can’t fire you for an illegal reason such as:

  • Discrimination (like firing you for your race, gender, religion, etc.)

  • Retaliation (like firing you because you reported harassment or unsafe working conditions)

Example:

Let’s say Alex works at a retail store and doesn’t have a contract. One day, his manager fires him because “he talks too much.” That might be unfair, but it’s not illegal — so it’s allowed under employment at will.

But if Alex was fired because he’s from a certain country, that would be illegal discrimination, and the employer could get sued.

Most employees are Employees at Will

How can an Employee at Will be fired? 🎀

• For a good reason (ex. poor performance or being late often)

• For a bad reason (ex. the boss just doesn’t like your haircut)

• For no reason at all (ex. “We’re letting you go — no explanation”)

BUT they cannot be fired for an illegal reason, like discrimination or retaliation

What is the NRLA?

The National Labor Relations Act (NRLA) is a federal law that protects employees’ right to join unions and requires employers to bargain fairly with them.

• The NRLA, also called the Wagner Act, was created to give workers the right to form or join unions, without fear of punishment from their employer. It also says that if workers are unionized, the employer must negotiate in good faith (meaning honestly and seriously) about things like pay, hours, and working conditions.

• To enforce this law, the National Labor Relations Board (NLRB) was created. They handle complaints when employers break these rules.

Example:

If a group of factory workers in Ohio decides to form a union, their boss can’t fire them just for doing that. And if the union asks to discuss a new safety policy, the boss has to meet with them and negotiate seriously — they can’t just ignore them.

“Right-to-Work” laws

“Right-to-Work” laws say that workers can’t be forced to join a union or pay union dues, even if there’s a union at their job. These laws vary by state.

⚠Common Misconception:

“Right-to-Work” does NOT mean everyone is guaranteed a job or has job security. It’s about union membership being optional.

Example:

Imagine Maria works at a factory in Virginia (a right-to-work state) where there’s a union. Even though the union negotiates her pay and benefits, Maria can choose not to join the union or pay dues, and still get those benefits.

In California (not a right-to-work state), workers might have to pay agency fees to cover union-negotiated benefits, even if they don’t join the union

What is the Family and Medical Leave Act (FMLA)? Who does it apply to?

The Family and Medical Leave Act (FMLA) is a federal law that gives eligible employees up to 12 weeks of unpaid, job-protected leave per year for certain family or medical reasons.

• The FMLA was created to help workers take time off for major life events without losing their job. The leave is unpaid, but it protects your job while you’re gone and ensures your health benefits continue.

• It covers situations like:

  • Having a baby or adopting a child

  • Caring for a seriously ill family member

  • Recovering from your own serious health condition

Example:

Let’s say Rosa works full-time for a large company and has worked there for over a year. If Rosa gives birth to a child, she can take up to 12 weeks off, unpaid, under the FMLA — and when she comes back, her employer has to give her the same job or an equivalent one.

Who Qualifies? (aka. who does it apply to?):

To be eligible, an employee must:

1. Work for a covered employer (usually private companies with 50+ employees within 75 miles, or public agencies/schools),

2. Have worked for the employer for at least 12 months, and

3. Have worked at least 1,250 hours during the past year.

Employment Law

The set of rules that govern the relationship between employers and employees, including things like wages, discrimination, and workplace rights.

Example:

Sarah works at a company where she’s paid minimum wage. If her employer fails to pay her for overtime hours, Sarah can file a complaint under employment law for violating wage laws.

Contract Law

The set of rules that determine how agreements are made, enforced, and what happens when a promise is broken.

Example:

John signs a contract with a marketing firm to work for 6 months at a set salary. If the marketing firm decides to fire him before the contract is up without any reason, John could sue for breach of contract under contract law because they didn’t fulfill the terms of the agreement

How does employment law apply to Contract Law?

Employment law applies to contract law when promises are made between an employer and employee (like job offers, handbooks, or policies) create a binding agreement — whether written, spoken, or implied — so both sides must follow the terms, or they could face legal consequences.

1. Truth in Hiring

   • If an employer makes a promise during hiring (ex. “You’ll be here at least a year”), that can be treated like a contract, even if it’s oral.

   • This is where contract law (and rules like the Parol Evidence Rule and Statute of Frauds) kick in — those rules decide which promises count in court.

2. Employers May Be Liable

   • If they promise something they can’t keep (ex. job security, promotion, benefits) or fail to disclose important facts (like a plant shutting down), they can be held legally responsible under contract principles.

3. Employee Handbooks = Contracts

   • If a handbook says things like “We only fire for cause” or outlines clear rules, courts might treat that handbook as a contract, especially if the employee relied on it.

4. Covenant of Good Faith and Fair Dealing

   • Even in at-will jobs, some courts add an implied promise that the employer won’t fire the worker in bad faith (ex. firing someone right before their retirement benefits kick in).

Example:

Let’s say Alex is told during hiring, “You’ll have the job for at least a year,” but gets fired after one month with no explanation. If Alex can prove that promise was made, contract law may allow him to sue for breach of contract, even if the job was “at-will.”

Tort Law

The area of law that deals with wrongs or injuries one person causes to another, either on purpose or by accident, that aren’t based on a contract

Example:

If a coworker intentionally spreads a false rumor that you stole money, damaging your reputation, that’s defamation, which is a type of intentional tort under tort law.

What are some examples of intentional torts in the workplace?

An intentional tort in the workplace is when someone deliberately causes harm to another person — not by accident, but on purpose

Examples of Intentional Torts in the Workplace:

1. Assault — a supervisor threatens to hit an employee with a clipboard

2. Battery — a coworker actually punches or pushes another employee

3. False Imprisonment — a manager locks an employee in a room to prevent them from leaving until they confess to something

4. Intentional Infliction of Emotional Distress — a boss yells, insults, and humiliates an employee repeatedly in front of others to cause emotional suffering

5. Defamation — a coworker spreads a false rumor that another employee stole from the company, harming their reputation

6. Invasion of Privacy — an employee reads private emails or records private conversations without permission

If someone at work purposely does something harmful, and it’s not part of a contract issue or accident, it might be an intentional tort.

What is an example of Administrative Law?

Administrative Law is the set of rules and decisions made by government agencies to carry out laws passed by Congress

Example:

The Occupational Safety and Health Administration (OSHA) creates workplace safety rules. If OSHA issues a rule that employers must provide safety goggles on construction sites, that’s administrative law in action.

Employee Privacy

Employee privacy means workers have some rights to keep their personal lives private, especially when they’re off the clock, but those rights can be limited depending on the situation and type of employer.

• Off-Duty Conduct: In many states, your boss can’t punish you for what you do in your personal time (like who you date or what you post online) — unless it affects your job or the company’s reputation

• Drug and Alcohol Testing:

  • Private employers (non-government) can usually test employees for drugs or alcohol

  • Government employers must have a good reason — like visible signs of use or a job where safety is critical (like a bus driver or construction worker)

• Lie Detector Tests:

  • Most employers cannot make you take one, not even suggest it

  • The only exception is if there’s a criminal investigation going on at work (like if money goes missing)

Example:

If you’re a delivery driver and your manager thinks you showed up high, they can require a drug test because your job affects public safety.

But if you post a picture drinking wine on a Saturday night, your employer in most states can’t punish you — unless it violates a company policy or harms the company’s image.

Yes, I see Kelsey and Mike on their cell phones googling either off of Virginia Tech's wifi or their own data. What could be the ramification (consequence) if done at work?

Possible ramifications at work might include:

• Loss of productivity — If they’re not working, the company could see it as slacking off

• Disciplinary action — an employer might give a warning, write-up, or in serious cases, termination — especially if there’s a policy against personal phone use

• Security risk — if they’re using work devices or unsecured wifi, they could accidentally expose sensitive data

Example:

If Kelsey is supposed to be helping customers, but is scrolling on her phone, her manager might give her a warning for not focusing on her duties

You are on a job interview. What can't your interviewer ask you?

During a job interview, there are certain questions an employer cannot legally ask because they violate anti-discrimination laws. These questions typically relate to your personal characteristics that are unrelated to the job or your ability to do it.

1. Your age — “How old are you?”

   Why? Age discrimination is illegal under the Age Discrimination in Employment Act (ADEA)

2. Your marital status or children — “Are you married?” or “Do you have children?”

   Why? These questions are related to family status, which cannot be used as a basis for discrimination

   • An employer may not fire or refuse to hire a woman just because she is pregnant

3. Your race, ethnicity, or national origin — “What is your race?” or “Where are you from?”

   Why? This violates laws against race and national original discrimination (ex. Title VII of the Civil Rights Act)

   • However, they are permitted to inquire if the person is authorized to work in the United States

4. Your religion — “What church do you go to?” or “Do you observe any religious holidays?”

   Why? Religious discrimination is illegal under Title VII of the Civil Rights Act

5. Your disability — “Do you have a disability?”

   Why? This violates the Americans with Disabilities Act (ADA)

6. Transgender and Sexual Preference

   Title VII of the Civil Rights Act says it’s illegal to not hire, fire, or to otherwise discriminate against individuals because of their sexual orientation or gender identity (SOGI)

Example:

If an interviewer asks, “Are you planning to have children soon?” this could be seen as discrimination based on family status, which is illegal. Instead, the employer can ask if you can meet the job requirements (ex. travel, schedule flexibility)

What is an Ethical Dilemma?

An ethical dilemma is a situation where a person or business has to choose between two or more options, and none of the choices clearly feels like the right or wrong thing to do

• It’s like being stuck between a rock and a hard place — you have to make a decision, but each option has pros and cons that affect people, fairness, or honesty. There’s no obvious “right” answer.

Example:

A manager finds out that their best employee has been stealing small amounts of money. The employee is struggling financially and has worked very hard

Dilemma:

• Do they report the theft (doing what’s right legally)?

• Or do they give the employee a second chance out of compassion?

Business entities usually fall within two types of ethics:

1. Shareholder Theory

2. Stakeholder Theory

Shareholder Theory (Milton Friedman’s view)

“The one and only social responsibility of business is to create its profits.”

A business exists mainly to make money for its owners/shareholders

• The idea is: If a company stays profitable and follows the law, it’s doing its job

• Ethics? Don’t break laws or deceive people, but focus on profits

Example:

A company choosing cheaper materials to save money and boost profits = shareholder theory

Stakeholder Theory (Dayton Hudson’s view)

"The business of business is serving society, not just making money."

A business should help society, not just make money.

• That means caring about employees, customers, the environment, and the community.

• Ethics? Think about how your actions affect everyone, not just investors

Example:

A company choosing eco-friendly materials even if they cost more = stakeholder theory

What is ethics? Can an illegal act be ethical? Are some legal acts unethical?

Ethics is the study of what is right and wrong behavior — even if the law says something different (aka. how people ought to act)

• Law = what you’re legally required or allowed to do

• Ethics = what’s morally right or fair, based on society, values, or conscience

Sometimes:

• An illegal act can be ethical

  Example: A doctor breaks the law by sneaking medicine into a country to save lives. It’s illegal, but many would say it’s morally right

• A legal act can be unethical

  Example: A business legally avoids taxes using loopholes while their community struggles. It’s legal, but some would see it as wrong.

Why bother with ethics?

Even though ethical behavior doesn’t always lead to more profits, it’s still important because:

• Unethical companies can lose customers if people get angry and boycott.

• Fair competition helps everyone in society, including businesses.

• People feel better working for or supporting ethical businesses.

It’s about doing the right thing — not just because it might help you make money, but because it prevents harm, earns trust, and avoids backlash

Ethical behavior matters because it protects a company’s reputation, avoids public backlash, and supports a fair economy — even if it doesn’t always increase profits

Example: The CEO of Mylan skyrocketing the prices of the life-saving EpiPen was unethical and caused backlash and boycotting

Two Schools of Ethics:

1. Utilitarian Ethics

2. Deontological Ethics

Utilitarian Ethics

Utilitarian ethics is the idea that the best decision is the one that creates the most good (or happiness) for the most people and the least harm

• It’s like asking: “What choice helps the most people and hurts the fewest?” It doesn’t focus on intentions or rules — just the end result

Example:

A company decides to close one of its three factories to save money and avoid bankruptcy. That one factory’s workers will lose jobs, but keeping the company alive saves hundreds of other jobs and allows the business to keep serving customers. A utilitarian would say this is the right decision because it results in the most overall good.

Deontological Ethics

Deontological ethics says that actions are right or wrong based on intentions and duties, not on the consequences.

• Deontologists believe you should do the right thing because it’s the right thing, not just because it leads to good results. Even if a decision hurts profits or makes people unhappy, it’s still the right thing if it respects people’s dignity and follows moral rules

Example:

Imagine a company refuses to sell customer data to make extra money, even though doing so could boost profits. Why? Because it believes it’s wrong to violate privacy, regardless of how much money could be made.