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The Civil Rights Act of 1964, Title VII, covers which kinds of employers?

1) Employers with 3 employees or more.

2) Employers with 15 employees or more.

3) Employers with 30 employees or more.

4) All employers.
Select the correct answer from the choices above and justify your answer with a specific reference to a location in the book.
Business Law
36 pages Business Law Chapter 51.pdf

Business Law: The Ethical,
Global, and E−Commerce
Environment, 13th Edition

XI. Regulation of Business

© The McGraw−Hill
Companies, 2007

51. Employment Law

chapter 51
estlawn Pediatric Center advertised a job opening for a pediatric nurse practitioner. Richard and Valerie, both of whom are licensed pediatric nurse practitioners and both of whom met the published
qualifications for the job, applied for the position. Westlawn hired Valerie over Richard because
“women are more nurturing.” No verbal agreement was made between Westlawn and Valerie about the duration
of her employment. Valerie performs well at her new job and receives glowing performance reviews.


• If Valerie is injured on the job, under what circumstances must Westlawn compensate her?
• What legal regulations must Westlawn meet with regard to workplace conditions, wages, and benefits?
• What criteria are permissible for employers to use in making hiring, firing, and promotion decisions? Was it
legal for Westlawn to refuse to hire Richard on the basis of a stereotype?
• Does the fact that Valerie is doing a good job mean that she cannot legally be fired?
• Under what circumstances would Westlawn have the right to monitor Valerie’s communications or require a
search or drug test?
• Would it be ethical for Westlawn to monitor its employees’ e-mail without giving them prior notice?

YEARS AGO, IT WAS unusual to see a separate employment law chapter in a business law text. At that
time, the rights, duties, and liabilities accompanying
employment usually were determined by basic
legal institutions such as contract, tort, and agency.
Today, these common law principles still control
employer–employee relations unless displaced by
government regulations or by new judge-made rules
applying specifically to employment. By now, however, such rules and regulations are so numerous that
they touch almost every facet of employment. This
chapter discusses the most important of these modern
legal controls on the employer–employee relation.
Modern American employment law is so vast and
complex a subject that texts designed for lawyers seldom address it in its entirety. Indeed, specialized subjects like labor law and employment discrimination
often get book-length treatment in their own right. This
chapter’s overview of employment law emphasizes
three topics that have attracted much recent attention—

employment discrimination, employee privacy, and
common law claims for wrongful discharge. But no
discussion of employment law is complete without outlining certain basic regulations that significantly affect
the conditions of employment for most Americans.
Figure 1 notes these regulations and briefly states the
functions they perform.

For management tips about challenging personnel
issues, information about employment law topics, and
updates on employment cases, see
Employment Law:;
Employment Law;
and Fair Measures,

Business Law: The Ethical,
Global, and E−Commerce
Environment, 13th Edition

XI. Regulation of Business

© The McGraw−Hill
Companies, 2007

51. Employment Law

Chapter Fifty-One Employment Law


Figure 1 The Ends and Means of Modern Employment Law
Workers' Compensation
Occupational Safety
and Health Act

Protecting the health, safety, and
well-being of workers and their families

Family and Medical
Leave Act
Unemployment Compensation
Protecting wages, pensions,
and benefits

Social Security
Fair Labor Standards Act

Collective bargaining
and union activity

Labor Law
Equal Pay Act
Title VII
Age Discrimination in
Employment Act

Protecting equal

Americans with Disabilities Act
Other federal and state measures
Employee Polygraph Protection Act
Protecting employee

Various restrictions on drug testing,
searches, surveillance, improper use of
records, unfair references

Enhancing job security

Exceptions to employment at will

Legislation Protecting
Employee Health, Safety,
and Well-Being
Workers’ Compensation Nineteenth-century
law made it difficult for employees to recover when they
sued their employer in negligence for on-the-job injuries.1 At that time, employers had an implied assumption of risk defense under which an employee assumed all
the normal and customary risks of his employment simply by taking the job. If an employee’s own carelessness
played some role in his injury, employers often could

avoid negligence liability under the traditional rule that
even a slight degree of contributory negligence is a complete defense. Another employer defense, the fellowservant rule, said that where an employee’s injury
resulted from the negligence of a coemployee (or fellow
servant), the employer was not liable. Finally, employees
sometimes had problems proving the employer’s negligence. State workers’ compensation statutes, which first
appeared early in the 20th century, were a response to all
these problems. Today all 50 states have such systems.2


Chapter 7 discusses negligence law and most of the negligence
defenses noted below.

In addition, various federal statutes regulate on-the-job injuries
suffered by employees of the federal government and other employees
such as railroad workers, seamen, longshoremen, and harbor workers.

Business Law: The Ethical,
Global, and E−Commerce
Environment, 13th Edition


XI. Regulation of Business

51. Employment Law

Part Eleven Regulation of Business

Basic Features Workers’ compensation protects only
employees, and not independent contractors.3 However,
many states exempt casual, agricultural, and domestic
employees, among others. State and local government
employees may be covered by workers’ compensation or
by some alternative state system. Also, states usually exempt certain employers—for example, firms employing
fewer than a stated number of employees (often three).
Where they apply, however, all workers’ compensation systems share certain basic features. They allow injured employees to recover under strict liability, thus
removing any need to prove employer negligence. They
also eliminate the employer’s three traditional defenses:
contributory negligence, assumption of risk, and the
fellow-servant rule. In addition, they make workers’
compensation an employee’s exclusive remedy against
her employer for covered injuries. There are some exceptions to the exclusivity of worker’s compensation, however. In cases in which an employer intentionally injures
an employee, the injured employee can usually sue the
employer outside of worker’s compensation. In some
states, this intentional injury exception has expanded beyond intentional torts to situations in which the employer
did something or maintained a condition in the workplace that the employer knew was substantially certain to
harm the employee. An example of this approach would
be holding an employer responsible outside of worker’s
compensation when the employer knew that an employee
was being sexually harassed but did nothing about it. In
addition, in a number of states, an employee can sue outside of worker’s compensation when the employer was
acting in a dual capacity in relation to the employee. An
example of this would be a case in which an employee is
injured on the job by a defect in a product manufactured
by the employer.
Workers’ compensation basically is a social compromise. Because it involves strict liability and eliminates
the three traditional employer defenses, workers’ compensation greatly increases the probability that an injured
employee will recover. Such recoveries usually include
(1) hospital and medical expenses (including vocational
rehabilitation), (2) disability benefits, (3) specified recoveries for the loss of certain body parts, and (4) death
benefits to survivors and/or dependents. But the amount
recoverable under each category of damages frequently is
less than would be obtained in a negligence suit. Thus, injured employees sometimes deny that they are covered by
workers’ compensation so that they can pursue a tort suit
against their employer instead.


© The McGraw−Hill
Companies, 2007

Chapter 35 defines the terms employee and independent contractor.

Although workers’ compensation is usually an injured
employee’s sole remedy against her employer, she may be
able to sue other parties whose behavior helped cause her
injury. One example is a product liability suit against a
manufacturer who supplies an employer with defective
machinery or raw materials that cause an on-the-job injury.
However, many states immunize coemployees from ordinary tort liability for injuries they inflict on other employees. Complicated questions of contribution, indemnity,
and subrogation can arise where an injured employee is
able to recover against both an employer and a third party.
The Work-Related Injury Requirement Another basic feature of workers’ compensation is that employees
recover only for work-related injuries. To be work-related,
the injury must (1) arise out of the employment, and
(2) happen in the course of the employment. These tests
have been variously interpreted.
The arising-out-of-the-employment test usually requires a sufficiently close relationship between the injury and the nature of the employment. Different states
use different tests to define this relationship. Examples
1. Increased risk. Here, the employee recovers only if
the nature of her job increases her risk of injury above the
risk to which the general public is exposed. Under this
test, a factory worker assaulted by a trespasser probably
would not recover, while a security guard assaulted by the
same trespasser probably would.
2. Positional risk. Under this more liberal test, an injured
employee recovers if her employment caused her to be at
the place and time where her injury occurred. Here, the
factory worker probably would recover. The Dulen case
that follows seems to adopt this test.
The in-the-course-of-the-employment requirement
inquires whether the injury occurred within the time,
place, and circumstances of the employment. Employees
injured off the employer’s premises generally are outside
the course of the employment. For example, injuries suffered while traveling to or from work usually are not
compensable. But an employee may be covered where
the off-the-premises injury occurred while she was performing employment-related duties such as going on a
business trip or running an employment-related errand.
Other work-related injury problems on which courts
have disagreed include mental injuries allegedly arising
from the employment and injuries resulting from employee horseplay. Virtually all states, however, regard intentionally self-inflicted injuries as outside workers’
compensation. Recovery for occupational diseases, on

Business Law: The Ethical,
Global, and E−Commerce
Environment, 13th Edition

XI. Regulation of Business

© The McGraw−Hill
Companies, 2007

51. Employment Law

Chapter Fifty-One Employment Law

the other hand, usually is allowed today. An employee
whose preexisting diseased condition is aggravated by
her employment sometimes recovers as well.
Administration and Funding Workers’ compensation
systems usually are administered by a state agency that
adjudicates workers’ claims and administers the system.
Its decisions on such claims normally are appealable to

Darco Transportation v. Dulen


the state courts. The states fund workers’ compensation
by compelling covered employers to (1) purchase private
insurance, (2) self-insure (e.g., by maintaining a contingency fund), or (3) make payments into a state insurance
fund. Because employers generally pass on the costs of
insurance to their customers, workers’ compensation
tends to spread the economic risk of workplace injuries
throughout society.

922 P.2d 591 (Okla. Sup. Ct. 1996)

Elmer Dulen was injured and his codriver Polly Freeman was killed when a tractor-trailer rig driven by Dulen entered a railroad crossing and was struck by an oncoming train. Both Dulen and Freeman had been hired by Darco Transportation to
transport goods cross-country to San Francisco. On the night of the accident, Dulen stopped his rig behind another truck
when the signal arms at a railroad crossing lowered. The arms malfunctioned and came up before an oncoming train reached
the intersection. The first truck proceeded across the tracks and Dulen followed. While the first truck avoided being hit,
Dulen’s rig was rammed by the train. The protective arms did not relower until Dulen’s semi was on the tracks.
At the scene of the collision a female traffic investigator noticed that Freeman was clad only in a T-shirt. She also observed
that Dulen’s pants were unbuttoned, unzipped, and resting at mid-hip. After Dulen was admitted to the hospital, the investigator questioned Dulen about how the accident had happened. Dulen said, “I was f—ing her and now, oh, my God, I have
killed her.” According to the investigator, Dulen also told her that when the accident occurred, Freeman was sitting in his lap
facing him. However, in later testimony Dulen explained that by his statement at the hospital he meant that he had been living in an intimate relationship with Freeman for five months before the accident and felt responsible for her death because
she was driving with him. He also denied telling the officer that Freeman was sitting in his lap and that they were having sex
when the accident occurred. Other evidence revealed that there was not enough room between the steering wheel and the seat
for two people of Dulen’s and Freeman’s size physically to fit into that space together.
Dulen sought workers’ compensation benefits for what he maintained were on-the-job injuries. After various Oklahoma
courts ruled in Dulen’s favor, Darco appealed to the Supreme Court of Oklahoma.
Opala, Judge

When examining the compensation tribunal’s factual resolutions, this court applies the any-competent-evidence
standard. The trial judge’s findings may not be disturbed
on review if supported by competent proof.
Oklahoma’s jurisprudence has long recognized that a
compensable work-related injury must both: (1) occur in
the course of, and (2) arise out of the worker’s employment. These two distinct elements are not to be understood as synonymous. The term “in the course of
employment” relates to the time, place, or circumstances
under which the injury is sustained. The term “arise out
of employment” contemplates the causal connection between the injury and the risks incident to employment.
We must be mindful that in this case we are applying
workers’ compensation law. The concept of a worker’s
contributory fault, which the compensation statute discarded, must not be resurrected obliquely as a defense
against the employer’s liability.
The Workers’ Compensation Court was faced with the
task of determining if Dulen, when injured, was per-

forming work in furtherance of his master’s business—
i.e., whether he was then “in the course of employment.”
If the trial tribunal tended to believe that Dulen and Freeman were having sex at the critical time, the question to
be decided was whether the claimant’s conduct is to be
deemed horseplay—a complete departure from or abandonment of his employment. This issue concerns itself
solely with the “course of employment” bounds—not
with the risk incident to employment, i.e., the “arising out
of ” element.
Assuming as a fact that when the collision occurred,
Dulen was having sex while also driving the rig, the trial
judge could still find that this servant’s acts constituted no
more than a careless, negligent, or forbidden genre of performance, but did not amount to pure frolic which was tantamount to total abandonment of the master’s business. On
this record, such a finding would not be legally or factually
incorrect. The record contains ample evidence reasonably
supporting the notion that Dulen’s injury was work-related,
and occurred while he was en route to his assigned destination. Above all, uncontroverted is the stubborn fact that

Business Law: The Ethical,
Global, and E−Commerce
Environment, 13th Edition


XI. Regulation of Business

51. Employment Law

© The McGraw−Hill
Companies, 2007

Part Eleven Regulation of Business

Dulen, when injured, occupied his assigned work station—
the driver’s seat behind the steering wheel of Darco’s truck.
The record offers no proof that Dulen had deviated from or
abandoned his master’s mission, transporting goods to San
An injury is compensable if it arises out of the
claimant’s employment—i.e., was caused by a risk to
which the employee was subjected by his work. Any
other notion would impermissibly interject into this
State’s compensation regime concepts of common-law
cause and foreseeability: the legal underpinnings of negligence. The only criterion for compensability is the
statute’s test of a connection-in-fact to the employment.
The record is devoid of any proof that the protective
arms were in good working order. The trial tribunal
found the equipment’s failure was the direct cause of the
claimant’s injuries. At the time of Dulen’s injuries, he
was employed as a Darco truck driver with an assigned
task—transporting goods to the West Coast. This re-

quired his presence on the highways. A causal connection between the act in which Dulen was engaged, when
injured, and his job description is clear. Because the perils of this servant’s travel for his master are co-extensive
with the risks of employment, Dulen’s injuries undeniably arose out of his work.
Two insuperable hurdles absolutely militate against
overturning the trial tribunal’s findings and exonerating
the employer as a matter of law. Assuming Dulen and
Freeman were engaged in sexual intercourse, (1) there is
undisputed proof that, when the collision occurred,
Dulen remained at the steering wheel and hence cannot
be deemed to have then “abandoned” his assigned work
station; and (2) there is competent evidence to support
the trial judge’s finding which ascribes the accident’s
cause, not to copulation-related inattention, but to defective railroad-crossing warning equipment.

The Occupational Safety and Health
Act Although it may stimulate employers to remedy

tion (OSHA) of the Labor Department. It does not preempt state workplace safety regulation, but OSHA must
approve any state regulatory plan.
OSHA can inspect places of employment for violations of the act and its regulations. If an employer is
found to violate the act’s general duty provision or any
specific standard, OSHA issues a written citation.
The main sanctions for violations of the act and the
regulations are various civil penalties. In addition, any
employer who commits a willful violation resulting in
death to an employee may suffer a fine, imprisonment, or
both. Also, the secretary of labor may seek injunctive relief when an employment hazard presents an imminent
danger of death or physical harm that cannot be promptly
eliminated by normal citation procedures.

hazardous working conditions, workers’ compensation
does not directly forbid such conditions. The most important measure directly regulating workplace safety is
the federal Occupational Safety and Health Act of 1970.
The Occupational Safety and Health Act imposes a duty
on employers to provide their employees with a workplace and jobs free from recognized hazards that may
cause death or serious physical harm. Employers are required to comply with many detailed regulations promulgated by the Occupational Safety and Health
Administration (OSHA). One of these regulations, for
example, requires employers to inform employees who
could be exposed to hazardous chemicals in the workplace about the chemicals and to provide employees with
training so that they can effectively protect themselves
from harm. The act also requires employers to report to
the secretary of labor any on-the-job injuries that require
hospitalization. Because information about workplace
dangers provided by employees themselves is important
to the effectiveness of the act, employees who provide
such information are protected from retaliation.
The Occupational Safety and Health Act applies to all
employers engaged in a business affecting interstate
commerce. Exempted, however, are the U.S. government,
the states and their political subdivisions, and certain industries regulated by other federal safety legislation. The
Occupational Safety and Health Act mainly is administered by the Occupational Safety and Health Administra-

Trial court order sustained; Dulen recovers.

The Family and Medical Leave Act

After concluding that proper child-raising, family stability,
and job security require that employees get reasonable
work leave for family and medical reasons, Congress
passed the Family and Medical Leave Act (FMLA) in
1993. In general, the act covers those employed for at
least 12 months, and for 1,250 hours during those 12
months, by an employer employing 50 or more employees. Covered employers include federal, state, and local
government agencies.
Under the FMLA, covered employees are entitled to a
total of 12 workweeks of leave during any 12-month period for one or more of the following reasons: (1) the
birth of a child and the need to care for that child; (2) the

Business Law: The Ethical,
Global, and E−Commerce
Environment, 13th Edition

XI. Regulation of Business

© The McGraw−Hill
Companies, 2007

51. Employment Law

Chapter Fifty-One Employment Law

adoption of a child; (3) the need to care for a spouse,
child, or parent with a serious health condition; and
(4) the employee’s own serious health condition. Usually,
the leave is without pay. Upon the employee’s return from
leave, the employer ordinarily must put her in the same or
an equivalent position and must not deny her any benefits accrued before the leave began.
Employers who deny any of an employee’s FMLA
rights are civilly liable to the affected employee for resulting lost wages or, if no wages were lost, for any other
resulting monetary losses not exceeding 12 weeks’
wages. Employees may also recover an additional equal
amount as liquidated damages, unless the employer acted
in good faith and had reasonable grounds for believing
that it was not violating the act. Like the Fair Labor Standards Act (FLSA), to be discussed later in this chapter,
the FMLA permits civil actions by the secretary of labor,
with any sums recovered distributed to affected employees. In such actions, employees may also obtain equitable
relief, including reinstatement and promotion.

Legislation Protecting Wages,
Pensions, and Benefits
Social Security

Today, the law requires that employers help ensure their employees’ financial security after the employment ends. One example is the federal
social security system. Social security mainly is financed
by the Federal Insurance Contributions Act (FICA). FICA
imposes a flat percentage tax on all employee income below a certain base figure and requires employers to pay a
matching amount. Self-employed people pay a different
rate on a different wage base. FICA revenues finance various forms of financial assistance besides the old-age
benefits that people usually call social security. These include survivors’ benefits to family members of deceased
workers, disability benefits, and medical and hospitalization benefits for the elderly (the medicare system).

Unemployment Compensation

way that the law protects employees after their employment ends is by providing unemployment compensation
for discharged workers. Since 1935, federal law has authorized joint federal–state efforts in this area. Today,
each state administers its own unemployment compensation system under federal guidelines. The system’s costs
are met by subjecting employers to federal and state unemployment compensation taxes.
Unemployment insurance plans vary from state to
state but usually share certain features. States often condition the receipt of benefits on the recipient’s having


worked for a covered employer for a specified time period, and/or having earned a certain minimum income
over such a period. Generally, those who voluntarily quit
work without good cause, are fired for bad conduct, fail
to actively seek suitable new work, or refuse such work
are ineligible for benefits. Benefit levels vary from state
to state, as do the time periods during which benefits can
be received.

ERISA Many employers voluntarily contribute to
their employees’ postemployment income by maintaining pension plans. For years, pension plan abuses such as
arbitrary termination of participation in the plan, arbitrary benefit reduction, and mismanagement of fund assets were not uncommon. The Emp...

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The answer is:The Civil Rights Act of 1964, Title VII, covers which kinds of employers?
2) Employers with 15 employees or more.

Reference:page 1258
basic features of title VII
covered entities

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