Chapter 1

Laws regulating the employment relationship

Evolutionary in nature

Importance of understanding employment law

Agency relationship exists when someone (agent) acts on behalf of another (principal).

Employee is a representative of the employer and acts in its place.

Each has a responsibility to one another

Common-Law Agency TestIRS 20-factor analysis

Economic Realities Test

“A general rule is that you, the payer, have the right to control or direct only the result of the work done by an independent contractor, and not the means and methods of accomplishing the result.”

Source: www.irs.gov

At-will-employment An employment relationship where there

is no contractual obligation to remain in the relationship, either party may terminate the relationship at any time, for any reason as long as the reason is not prohibited by law, such as for discriminatory purposes.

DIFFERS between states – Wisconsin – Violations of Public

policy, constructive discharge, implied contract

Violations of Laws◦ Constitutes wrongful discharge

Violation of Public Policy Constructive Discharge Violation of Implied Contract

#1 – Does Jenna have a basis for unlawful termination?

#2 – Does Mark have a basis for unlawful termination?

#3—Does Emma win—why or why not?

WIS. STAT. § 103.465, which provides: A covenant by an assistant, servant or agent not tocompete with his or her employer or principal during theterm of the employment or agency, or after the

terminationof that employment or agency, within a specified territoryand during a specified time is lawful and enforceable onlyif the restrictions imposed are reasonably necessary for

theprotection of the employer or principal. Any covenant …imposing an unreasonable restraint is illegal, void andunenforceable even as to any part of the covenant orperformance that would be a reasonable restraint.

An orthopedic surgeon signs an employment contract with ABC Clinic which states that, should he sever ties with ABC, he will not be allowed to practice within the county for a period of 18 months.

A – YesB - No

A web site content manager signed an employment contract with EW which states that should she sever ties with EW, she cannot work for a new employer that is in direct competition with EW for one year. When she severed ties with EW, she sued EW stating that the non-compete clause was unreasonable. Do you agree with the employee?◦ A – yes◦ B - No

John Beancounter and many of his fellow work buddies have been tax preparers for H & R Block for a long time. They signed a contract that “prevents them from soliciting or providing certain services to H&R Block customers for two years after termination of their employment with H&R Block, “such period to be extended by any period(s) of violation.” They have all left to start their own tax preparation business together. They sue H & R Block because they believe the non-compete clause is unreasonable. Do you agree?◦ A – Yes◦ B – No