employment-sunstein 1 - I. Employment Law A. At-Will...

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I. Employment Law A. At-Will employment 1. The current law Clarke v. Atlantic Stevedoring Co . (1908), New York 96 Black Longshoreman hired pursuant to letter asking for 200 men. Despite language indicating they would continue to be hired so long as good workers, they were terminated in favor of hiring white. No K, only an advertisement. No employment K, implied or explicit. “A contract of hiring, indefinite with respect to the term for which the contract shall run , in the absence of allegations that the term of the contract is fixed by statute or custom, is at most a contract terminable at will .” Rooney v. Tyson (1998), New York Court of Appeals (S. Ct. equiv.) U.S. circuit court certified question for this court. “Does an oral contract between a fight trainer and a professional boxer to train the boxer ‘for as long as the boxer fights professionally’ establish a definite duration, or does it constitute employment for indefinite duration within the scope of the at-will rule?” If indefinite – at-will. Court concludes not indefinite. 2. Why an at-will rule? 4 possible types of systems: At-Will At-will w/ exceptions (what we have) For cause as baseline rule Inalienable right to job security -Europe has inalienable, not waiveable. More rigid system, higher unemployment. -Latin America: same as Europe. Benefits for workers is not small, they are significant. Increases unemployment, young workers hurt. Inequality between inside and outsiders (inside – entrenched, outside-can’t get in) -Montana: more job security. Employers wanted it. More predictability, law was a mess. Does Montana have more rigidity like Europe/Latin? No evidence yet. The rule is best justified as a market mimicking rule: Employees wouldn’t insist on it, usually, because they don’t need it. Norms of the labor market prevent arbitrary discharge: 1) why get rid of good employees after finding and training them 2) reputation of employer at stake 3) life cycle model(a theory) : the employee will have built up firm specific human capital, and is costing less than he is worth. Employer would fight like tiger to keep the at-will rule because it would hurt them a lot. I don’t understand why if it is so important that they don’t fire arbitrarily, see above. 1
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To evaluate a for-cause baseline rule we should evaluate the costs: How expensive for employers to contract around it? Not too much. It may provide a wage premium for working at- will. 3. Exceptions to the at-will rule a) Agreements -Explicit agreements, a contract Specific bargaining required for vague promises as binding (i.e., you can stay as long as you’re a good worker). -Employee Handbooks The trend is that employee manuals promise job security are binding(general agreement, about ¾ states) Also, general agreement, handbook is binding, even if issued after starting employment. Specific consideration because of better moral, better work.
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employment-sunstein 1 - I. Employment Law A. At-Will...

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