Labor Law

views updated May 21 2018


In Scripture

Two fundamental principles relating to the laws of the hired servant are enjoined in the Pentateuch. Firstly, the master's duty to pay the wages of his servant on time: "The wages of a laborer shall not remain with you until morning"; "You must pay him his wages on the same day, before the sun sets" (Lev. 19:13; Deut. 24:15); and secondly, the servant's right to eat from the produce of the field while he is working: "When you enter your neighbor's vineyard, you may, if you desire, eat your fill of the grapes.… When you find yourself amid your neighbor's standing grain, you may pluck ears with your hand" (Deut. 23:25, 26). So too the liberal pentateuchal laws concerning the Hebrew bondsman served as an important source for the development of labor law in later times. Other scriptural passages, even if not specifically related to the matter of master and servant, have also been relied upon by the scholars in support of labor laws, especially the enjoinder, "For it is to Me that the children of Israel are servants" (Lev. 25:55).

Hired Servant and Independent Contractor

The distinction between a hired servant and an independent contractor is one of principle: Whereas the former is hired for a specific period, the latter is hired for a specific task (Maggid Mishneh, Sekhirut, 9:4; cf. the Roman law distinction between locatio conductio operarum and locatio conductio operis). The time factor in the hire of a servant has the effect of tying him to his work for fixed hours during which he cannot choose not to work, whereas the independent contractor may work as and when it pleases him (Resp. Maharam of Rothenburg, ed. Prague, no. 477). Hence an element of slavery attaches to a hired servant, while a contractor "is not a slave except unto himself" (Rashi, bm 77a).

The Contract of Hired Service

The contractual tie in an agreement for the hire of personal services is effected through one of the recognized modes of *acquisition, such as kinyan sudar. Typically, however, the tie is effected by commencement of the work (bm 76b; Nov. Ramban thereto) or by the master pulling (meshikhah) the servant's tool of trade (R. Tam, Tos. to bm 48a; see also *Contract). When the master is a public body the contract requires no kinyan and a verbal agreement suffices (Mordekhai, bm nos. 457, 458). A service contract is not susceptible to specific performance, i.e., the party in breach cannot be compelled to carry out his undertaking. The master cannot be compelled to employ the servant against his will, since only the master's property (mamon) and not his person becomes subjected in the servant's favor (Resp. Mahari'az no. 15). The servant, on the other hand, cannot be compelled to work against his will, since the law is that a worker may withdraw from the employment even in the middle of the day (bm 10a; see also below); even if his withdrawal should involve irretrievable loss to his master (see below), he will not be compelled to work, but the loss may be recovered out of his property (Ḥazon Ish, bk no. 23:6). This is also the position with an independent contractor, who cannot be compelled to carry out his undertaken task (Mahariḥ to Piskei ha-Rosh, bm 77a). In the circumstances, the tie between the parties to a service contract is a loose one in its legal consequences (tj, bm 6:2), with the result that it became customary for such parties to bind themselves to each other in various ways aimed at precluding the possibility of withdrawal, e.g., by *oath, handshake, or imposition of a fine upon the retracting party.

Personal Nature of the Service Contract

A service contract falls into the category of agreements of a personal nature. Therefore, if the master has engaged the servant to work in his field, he cannot compel him to work in a neighbor's field, even if the work there is lighter (Tosef., bm 7:6). Similarly, the servant is not entitled to substitute another worker for himself if the master should want his particular services (Resp. Maharit, vol. 2, yd no. 50). Generally, however, it will be presumed that the master is not particular about the matter, save as regards a position of a public nature which the holder cannot pass on to another without the consent of the public (Mordekhai, bk no. 108).

The master may change the nature of the servant's work except if the servant has been hired for a specific task, in which case it cannot be changed against the servant's will, whether for lighter or heavier work (Nov. Ramban, bm 77a). If the task for which the servant has been hired is completed before expiry of the hire period, his master may keep him engaged on some other but not heavier labor (Tosef., bm 7:6; bm 77a); in the opinion of some scholars he may be given heavier labor than before but with an increase in remuneration (Maharam of Rothenburg, in: Mordekhai, bm no. 346, Ḥm 335:1; Ramakh, in Shitah Mekubbeẓet, bm 76b). In similar circumstances the servant may not, however, in the absence of prior stipulation, demand that he be retained on some other labor (Tosef., bm 7:6) but only claim the wages of an unemployed worker (sekhar po'el batel) or the full stipulated wage until expiry of the period of his hire (see below).


In the absence of express agreement, it will be presumed that the parties intended a contract of service for remuneration, on the assumption that a person does not work for nothing, and the measure of remuneration will be determined in accordance with local *custom (see *minhag; Mordekhai loc. cit.); in a place where laborers are hired at different rates, remuneration will be according to the lowest, since people generally have in mind the cheapest possible rate (Alfasi to bm 76a).

Obligations of the Parties

It is the servant's duty to do his work in a faithful manner, hence he may not absent himself from work without adequate cause lest he become liable to dismissal as well as loss of remuneration for the period he has not worked. For the same reason he has to work with all his strength (Yad, Sekhirut 13:7) and may not go hungry or otherwise afflict himself, nor engage in any additional work, whether inside or outside his original working hours (Tosef., bm 8:2). If he should do so without his master's authority, the latter may demand a refund of his earnings (Resp. Rashba, vol. 71, no. 1042). The prohibition against additional work is only applicable, apparently, to a servant obliged – by agreement or custom – to work a full day for his master (see below). The servant must furthermore comply with his master's instructions insofar as these do not deviate from their agreement or local custom (Tanna de-Vei Eliyahu Raza 15:5; Resp. Israel of Bruna, no. 242).

The master's main obligation is to pay the servant's wages on time, i.e., at the end of the day or month as the case may be, since "the hire is only payable at the end" (bm 65a), unless otherwise agreed upon by the parties or decreed by custom (Mordekhai, bb, no. 468). The duty to pay the servant's wages on time is a positive command and delay in payment also amounts to transgression of a negative command (see above). Wage delay (halanat sakhar) is constituted when payment has been withheld for more than 12 hours after it is due (bm 111a). The prohibition is not transgressed, nor is the master in default, unless and until the servant has demanded the payment of his wage (Sifra, Kedoshim 2:9–12) and the master has the ready cash to make it (bm 112a), or has chattels which he can sell without loss and fails to do so (Nov. Ritba, bm 111b). Here too the parties may contract out of the law with regard to the time of wage payment (Sif. Deut. 279), and they may also stipulate that the master shall not be in transgression of the prohibition against wage delay if he should fail to pay on time (Sefer Ḥasidim, no. 1066). According to some scholars, wage delay entitles the servant to claim compensation for what he could have earned from his wages if he had been paid on time, but this is prohibited by most scholars as tantamount to interest (Or Zaru'a, bm no. 181).

The servant must be paid in cash and not chattels (bm 118a), although there is an opinion that payment may be made in commodities (foodstuffs) which the servant is in need of (Maharam of Rothenburg, in: Mordekhaibk 1), and the latter may also waive his right to payment in cash. In case of dispute over whether or not the master has made payment of the servant's wages, the servant will be entitled to payment thereof upon delivering an oath – this is a rabbinical enactment in favor of the servant (Shev. 45a). The master is generally not obliged to provide his servant with food, save as otherwise agreed between them or decreed by custom (bm 83a), in which event the master may choose to provide an allowance instead of food (Resp. Maharsham, pt. 3, no. 54). So far as a servant working in the field is concerned, he is entitled to eat from the produce, but only while he is working (see above; bm 87a).

The master may not employ his servant outside lawful working hours, which – in the absence of an agreement between the parties – are determined by local custom (bm 83a; Nov. Ritba thereto). Scripture hints at the ancient custom of regarding a working day as lasting from sunrise until the appearance of the stars (Ps. 104:19–23), and this is known in the Talmud as a workday of a worker – de-oraita (bm 83b).

Period of Service

If not explicitly agreed upon between the parties, the duration of the service period is determined by custom (Divrei Malkiel, pt. 3, no. 151), and in the absence of such this is a matter within the judges' discretion (Ḥazon Ish, bk, sec. 23). Cancellation of the service contract is subject to prior notice within a reasonable time in accordance with local custom and conditions (Ḥazon Ish, loc. cit.). In the case of certain public appointments it was the custom to regard an appointment without a fixed period as one for life (Ḥatam Sofer, Resp. oḤ no. 206).

When the service contract is for a specified period, it will terminate on the date specified without need for any prior notice. In the case of public appointments there is an opinion that the servant cannot be dismissed, notwithstanding stipulation on the duration of the appointment, unless this is in accordance with local custom or an express agreement between the parties (Ḥatam Sofer, Resp. loc. cit.; Ḥemdat Shelomo, oḤ no. 7); another opinion is that the continued employment of a public servant after the specified date for termination of his service must be regarded as an implied agreement to employ him for an additional period equal to that originally agreed upon (Mishpat Ẓedek, vol. 2, no. 77). A public servant who has grown old has the right to avail himself of an assistant (mesayye'a) at the public expense (Resp. Rashba, vol. 1, no. 300). There is also a custom that a public position passes through inheritance to the holder's son, if he is worthy of it, in order that the widow's existence may be secured (Sho'el u-Meshiv, vol. 3, pt. 1, no. 154; Imrei Yosher, vol. 1, no. 169). A service contract may be terminated at any time by mutual consent of the parties. According to some scholars, a formal act, such as the signing of a deed, is required for this purpose (Resp. Maharam of Rothenburg, ed. Prague, no. 77), while others hold that word of mouth alone suffices (Resp. Radbaz, pt. 1, no. 88).

Withdrawal by the Master

Justifiable grounds for the master's withdrawal from the contract are the servant's neglect, i.e., his failure to discharge his duties in a proper manner; his unfitness; and improper conduct on the servant's part, even outside his employment. If on account of the improper discharge of his duties or his unfitness the servant should cause or be likely to cause his master irretrievable loss, the latter may dismiss him without any prior warning (bm 109a). Circumstances amounting to improper conduct on the servant's part and warranting his dismissal – even if not directly related to his employment – include the fact that he is a reputed thief or under suspicion of committing theft (Rema Ḥm 42:6) or an offense against morality (Hai Gaon, in: Sha'arei Teshuvah no. 51).

The master's withdrawal is not justified on the grounds that it is possible for him to find another worker who costs less (bm 76a and Rashi thereto) or a better one (Rosh Resp. no. 104:4), or because of the existence of enmity which is not attributable to the servant; nor is his withdrawal justified on the ground that from the beginning he had no need of the worker's service (bm 76b), or because he has completed his work prior to the termination of the contracted period of employment (bm 77a). In the latter case there is neglect on the master's part since he ought to have foreseen that he would not be in need of the worker's services.

If the master interrupts the employment without justifiable cause, he is liable for the full wages of the servant until the contracted period of service has expired (bm 76b and Rashi thereto). At the same time, however, a worker who sits idle after the master has retracted is only entitled to the remuneration of an "unemployed worker," since it is presumed that the worker himself prefers not to work and to receive less rather than to work and receive his stipulated wage. The wage of an "unemployed worker" is half his stipulated wage (Rashi Resp. no. 239). If the worker is the kind of person to whom idleness is a greater trial than doing his work, the master will be obliged to pay his full wage (bm 77a). Liability for the servant's wage in the event of the master retracting, as described above, is only imposed on the master if the servant is unable to find alternative employment (Nov. Naḥmanides, bm 76b). In the event of the master retracting on account of inevitable accident (see *Ones) affecting either himself or the work, he will not be liable to pay the servant for the period of his idleness, not even the wages due to an unemployed worker, unless the mishap is of a general, statewide nature (bm 77a and Piskei ha-Rosh thereto; Rema Ḥm 321:1).

Compensation on Dismissal or Severance Pay

On dismissing his servant, even after the expiry of the contracted period, the master is obliged to pay him compensation. This law, based on the pentateuchal enjoinder of *ha'anakah (i.e., the grant payable by the master to his Hebrew bound servant), began to evolve in the post-talmudic period and in recent decades has achieved full legal recognition, particularly in the decisions of the rabbinical courts of the State of Israel.

Withdrawal by the Servant

In the event of the servant's withdrawal from the contract in the midst of his employment, it is necessary to distinguish between the case where this will not result in irretrievable loss – i.e., the master can afford a delay in the work until he is able to find another worker on the same terms – and the case where delay in the work will cause the master irretrievable loss. There is a tannaitic dispute concerning the case where the servant's withdrawal does not involve irretrievable loss but the master wishes to avoid delay and immediately hires other workers at a higher wage; the general opinion is that the master must pay the servant for the work already done on a pro rata basis, and R. Dosa holds that the master may deduct from what the servant has so far earned the loss he has incurred through hiring a new worker at a higher wage (bm 76b). The amora Rav ruled that the halakhah followed Dosa in the case of a contractor and the sages in the case of a hired servant (bm 77a). For since a hired servant is to some degree a slave (see above) he may withdraw his labor even in the middle of the day, as it is written (Lev. 25:55): "For unto Me, the children of Israel are servants," and not the servants of servants (bm 10a). In this case too the hired servant may waive his right to withdraw his labor (Zera Emet, vol. 2, yd no. 97).

If the servant's withdrawal involves irretrievable loss, the master will be entitled to hire another worker to complete the work and to deduct from the servant's earnings the wage increment payable to the new worker; in this case it is also permissible for him to "mislead" (lehatot) the servant – i.e., to promise him an increased wage as an inducement to continue the work, yet remain liable only for the wage originally agreed upon (bm 76b). According to the original law, the master was entitled to hire workers against the servant "up to 40 or 50 zuz," i.e., to recoup from the retracting servant several times his stipulated wages; but in order to limit the servant's liability, it was laid down by R. Naḥman that the master might only recoup an amount not exceeding his servant's wages (bm 78a), i.e., wages due to the servant for work done until his withdrawal (Rashi thereto); if the master is in possession of the servant's bundle, he will be able to recoup from it the total amount of the increment. A worker retracting on account of ones does not lose his wages for the period he has worked, even where his withdrawal has resulted in irretrievable loss (bm 77b).

The Servant's Liability to His Master

The servant's liability for pecuniary loss caused to his master is equivalent to that of a *bailee for reward, whether in respect of theft and loss or any other kind of damage (bm 80b, 82b). His liability is greater than that of a tort-feasor, since the latter is only liable in the case of relative ones (which is like avedah, i.e., loss) and exempt as regards absolute ones (which is like theft), while the servant is liable in both cases (Tos. to bk 27b; see also *Torts). The servant is liable for damage resulting from his departure from custom or the terms of his employment (bk 100b; Tosef., bk 10:29), from his failure to take proper care (bk 98b), and from his lack of familiarity with the work (bk 99b). The servant is also liable for damage caused in the course of his work to the chattels of his master, even unintentionally (bk 99b). As regards breakages in the transportation of goods by porters, R. Meir regulated that the servant be exempted from liability upon delivery of an oath that these were not intentionally caused by him (bm 82b). A servant causing his master damage not only has to pay for this, but also forfeits his remuneration (bm 58a).

The sages of the Talmud were at pains to modulate the severity of the servant's liability, and with reference to damage negligently caused by porters Rav decided that the latter should not only be exempt from liability but also entitled to payment of their hire – this in reliance on Proverbs 2:20 and the equitable rule of li-fenim mi-shurat ha-din (bm 83a and Rashi).

The Master's Liability to the Servant

The master's liability for damage suffered by the servant flows from a breach of agreement or custom, or from the general law of tort. Thus a master who burdens his servant to "carry on his shoulder" a heavier load than that agreed upon or customary will be liable for any resulting harm suffered by the latter (Tosef., bm 7:10; Beit ha-Beḥirah, bm 80b).

As for the master's liability to his servant in tort, it will be necessary to distinguish whether the harm suffered by the servant directly is attributable to the master or not. Thus if the master causes harm to the person or property of the servant, e.g., damage suffered by an agent as a result of the sale of his principal's defective goods, the master will be liable therefor (Tashbeẓ, 4:2, 17; see also Resp. Mabit, vol. 2, pt. 2, no. 156); if, however, harm is suffered by the servant within the course of his employment which is not caused by the master, the latter will be exempt from liability for the damage done, whether to the servant's person or property, as happens, for example, when a spark flies from under a forger's hammer and sets alight his heap (Sefer Teshuvot ha-Rashba ha-Meyuḥasot leha-Ramban no. 20). Similarly, the principal is not obliged to ransom his paid agent when he is taken captive en route (Resp. Mabit, vol. 2, pt. 2, no. 156), nor is there any obligation in respect of an agent killed while he is on his master's business but not because of the latter. In the latter case, however, the posekim laid down that the master, because of his connection with the occurrence of such a disaster, should be obliged to take upon himself an expiation and to compensate the heirs of the deceased as a matter of equity (Resp. Maharyu no. 125).

In the State of Israel

Labor legislation in force in the State of Israel is a composite of three statutory sources:

(1) Ottoman: a number of paragraphs dealing with labor law are included under the chapter "Hire" in the Ottoman Civil Code (Mejelle);

(2) Mandatory: in particular the Safety at Work Ordinance (New Version 5730–1970);

(3) Legislation of the Knesset, replacing most of the Mandatory legislation on the subject with original laws, of which the following are the most important: Annual Leave Law, 1952; Hours of Work and Rest Law, 1951; Wage Protection Law, 1958; Apprenticeship Law, 1953; Youth Labor Law, 1953; Employment of Women Law, 1954; National Insurance Law, 1953; Collective Agreements Law, 1957; Settlement of Labor Disputes Law, 1957; Employment Service Law, 1959; Severance Pay Law, 1963; Male and Female Workers (Equal Pay) Law, 1964; Labor Courts Law, 1969. In addition, labor law in Israel has been further interpreted and evolved in the case law precedents of the Supreme Court. These, like the above Knesset laws, reflect the substantial influence of Jewish law, noticeable particularly in the Wage Protection Law, 1958 and Severance Pay Law, 1963 (see Elon, bibl.).

The Labor Courts Law sets up a special judicial hierarchy, at both regional and national levels, for airing disputes between master and servant, without right of appeal to the regular courts. The existence of a special judicial machinery in labor matters is also to be found in the history of Jewish law. In the European Jewish communities of the late Middle Ages, and within the framework of the various artisans' and traders' associations, special courts were elected in accordance with articles approved by the communal rabbis.

[Shillem Warhaftig]

labor law decisions in israel

As stated, the State of Israel has a labor court system with jurisdiction over labor-related matters. Some of the most important labor legislation in the State of Israel, such as the Wage Protection Law, 5718–1958, is based on Jewish law, and the labor courts rely on principles from Jewish law in deciding labor issues brought before them. This article presents several cases brought before the Israeli Labor Courts and the Israel Supreme Court which were adjudicated having consideration for the position of Jewish law.

The Prohibition on Delayed Wage Payments for Contracted Labor and the Distinction between a Sales Contract and a Service Contract (Ḥozei Kablanut). In Zikit v. Eldit, the Israeli Supreme Court (ca 368/77, Zikit v. Eldit, 32(3) pd 487) was required to examine this issue. In that case, a company provided a quantity of cloth for printing patterns on cloth to be used for bathing suits. The printing was defective, and as a result the company that owned the material was injured. The Court was required to decide if the transaction was a sale, in other words whether the printing company sold a product, in which case the provisions of the Sales Law, 5728–1968, would apply; or was the printing company under contract for services (kablanut, hereinafter "contractorship agreement") and as such the Contract for Services Law, 5734–1974 would apply. The court (per Justice Menachem Elon) pointed out that "when we engage in the interpretation of sales and contractor law, enacted by the State, we must first and foremost examine the position of the Jewish law regarding the problems brought before us" (ibid., p. 493).

The Court cited the responsum of Rabbi Aharon Sasson (Resp. Torat Emet, 119), which considered whether the commission of work to a craftsman (in that case – ordering a ketubbah (marriage contract) from a scribe) should fall under sales or contract law principles, which would affect the application of the prohibition against delaying wage payment. The prohibition of delaying the wage payment is not limited to client commissioned work, but also applies to contractorship agreements: "Inasmuch as contractorship is like hiring [a worker] and it obligates him to pay him on time" (Maim., Yad, Sekhirut 11:3).

Rabbi Aharon Sasson did not consider the scribe from whom the ketubbah was ordered a contractor, because "the contractor receives the object from the one who orders the work and prepares accordingly; this does not confer any rights or ownership in the object, and he is therefore referred to as a contractor [one engaged in providing services to a client's object]." In contrast, when the workman also supplies the materials, their agreement may be considered a sales contract and not a contractorship agreement. In such a case, the non-payment is not a delay in the payment of wages, but a debt for which there is an obligation to pay, but the law of delay in payment of wages does not apply (Zikit decision, p. 494).

The court goes on to discuss the responsibility of the hired craftsman to pay for damages caused to an object given to him for repair (Yad, Sekhirut 10:4; Zikit decision pp. 496–497).

Employer's Responsibility to Protect the Well-Being and Safety of His Employees.

Punishing a person who indirectly or accidentally caused another's death to exile in a city of refuge (see *City of Refuge) is not applicable today, yet the responsa literature deals with situations of an employee's or an agent's death while employed or under contract. A talmudic aggadah (Sanh. 95a) relates that King David was punished because his actions, albeit indirectly, resulted in the deaths of the priests of Nov, Doeg, Ahitophel, Saul, and his three sons. David did not perform any active deed to cause these deaths, and the decisors (posekim) infer from this aggadah, by the rule of a fortiori, that an employer whose employee is injured while performing duties, is not liable under tort law, but he is required to atone and repent (kapparah and teshuvah), and is even to give charity to the orphans of the victim or to other indigents (Responsa Mahari Weil, 125; Resp. Rabbi Akiva Eiger, Tanina ed., 3; see *Divine Punishment). Other halakhic decisors distinguished between a paid employee, for whom the employer is not obligated to atone for the bodily injuries, and the unpaid worker (Responsa Ẓemaḥ Ẓedek, 6). Rabbi Ouziel (Resp. Mishpatei Ouziel, 4 – Ḥm, no. 43), rules that indeed by law, when a worker is injured or killed, the client is not liable for his worker's damages or death, but only obligated to atone, and there is no legal recourse for receiving monetary compensation from the employer. However, Rabbi Ouziel emphasizes that in our times, owing to industrial development there are many more dangers for workers and the current situation requires far more caution; "the employer is cautioned by the Torah to do all that is possible to protect his workers from the risk of death or injury, as it is written: 'And you shall make a parapet for your roof that you shall not bring blood upon your house' (Deut. 22:8), which includes any hazard that is likely to harm, such as a dangerous dog and a shaky ladder, etc. (bk 15, and Sh. Ar., Ḥm 327:5). Thus, it is the obligation of the employer or the contractor, to take all precautions to ensure that the work environment and conditions are free of hazard or danger that may cause any sort of disaster." Rabbi Ouziel adds that in our times, when it is accepted practice to insure employees against injury, an employer would be halakhically required to insure his employees.

These statements regarding the employer's responsibility for the safety of his employees, were cited in the decision of the Israeli Supreme Court in the Pinkas case (Crim. A 478/72 Pinkas v. The State of Israel, 27(2) 617, pp. 627–629; per Justice Kister), as inspiration for the criminal liability of an employer who sent his worker to carry out a job in a dangerous and negligent manner as a result of which the worker was killed.

Dismissing an Employee Suspected of Stealing.

Rabbi Moses Isserles, in his glosses on Shulḥan Arukh (Ḥm 421:6), rules that an employer who suspects that his worker may have stolen from him is entitled to dismiss him, provided that he has proven grounds for his suspicions before a court, or if the employer has solid proof of such theft, or if the worker has the reputation of being a thief (Resp. Divrei Malkhiel, iii, 151–152).In the Resp. Divrei Ḥayyim (1, yd, 11), it was held that mere suspicion is not sufficient, and only where there are witnesses to a theft is it possible to dismiss the worker. These rulings indicate that the employer's concerns and suspicions do not constitute sufficient grounds for dismissing a worker; however, when these misgivings are substantiated by evidence, they are grounds for dismissal.

The Regional Labor Court of Tel Aviv Jaffa (lf 32309/98, Yitzchak v. The Aircraft Industries; Judge Tennenbaum) adjudicated a case where a worker was dismissed after being suspected of stealing. The worker filed a claim for the entire amount of his severance pay, and the question of his employer's justification for dismissal was raised. The court based its decision on principles of Jewish law, and examined the degree to which the robbery had to be proved to constitute grounds for dismissal and the extent of his entitlement to severance pay.

Employee Disclosure of Trade Secrets.

Jewish law's approach to business competition is based on the principle that, with the exception of some specific cases, free competition should not be interfered with (see: *Business Ethics).

Nevertheless, even under Jewish law, an employee who during his employ was privy to privileged information and then leaves his employ may not divulge such information, even where his employment contract does not specifically stipulate this; Rav Samuel Wozner states the following (Resp. Shevet ha-Levi, 4:220): "It is clear to me that a worker who works in a place where they work with secret things, or use instruments that are still considered secret, or even in an activity related to an invention, is prohibited from making a copy for himself or for others and this falls into the legal category of stealing, even when there was no special contractual stipulation, because such matters are self-understood and one should be very careful about revealing them."

According to another approach, a worker is permitted to use his employer's trade secrets, provided that he paid the employer for their value; and if he has not paid him the value of the secret he is interested in using, he is forbidden to use it.

The Regional Labor Court in Haifa (Lab. App. 2999/03, Carmel v. Ben Shimon; per Judge Werbener) cited these rulings when adjudicating a case where an employee's former employers requested a court injunction against a competing business to prevent it from employing the said employee, because of their concern that he would disclose their trade secrets.

Firing an Employee When His Term of Employ Has Not Been Extended.

The responsa of Rabbi Moses Feinstein deal with this subject in detail. Rabbi Feinstein holds that even if the employee is hired for only one year in a place where one usually annually renews employment contracts every year, and he continues to work there, even without a renewed contract, it is still not permissible, absent of other grounds, to dismiss him (Resp. Iggerot Moshe, Ḥm 1:76). In another responsum Rabbi Feinstein deals with the question of an employee for whom no extension of his term of employment was established and whether it was permissible to fire him without grounds. Rabbi Feinstein answers that it is not permissible to fire an employee without clear cause, even when the policy at the specific place of employment regarding the hiring of employees for an unlimited period of time is unclear (ibid., 75).

The Regional Labor Court in Tel Aviv-Jaffa (lf 8338/00 Krigsman v. Reshet ha-Ganim shel Agudat Yisrael; per Judge Tannenbaum) dealt with this subject, and quoted extensively from these rulings of Rabbi Feinstein.

The Possibility of Limiting the Employee's Work Hours.

The basic approach of Jewish law to this question is set forth in the Tosefta (bm 8b) which states: "A worker is not permitted to do his work in the night and to hire himself out during the day…." The rationale for this edict is explained by Maimonides (Yad, Sekhirut 13:6; Rema, Ḥm 337:19): "… Such behavior would constitute stealing from the employer, for his [the employee's] strength will give out and his mind will be weakened and he would not do his work with energy."

Teachers and teaching hours have received special treatment in this matter from both the Maharam of Rothenburg in his responsa, and the Rashba (Responsa Maharam of Rothenburg, 667; Resp. Rashba, 7:516). They emphasize that teachers can be prevented from contracting in supplementary work, if such work would hamper their ability to teach in an appropriate manner.

The Talmud (bb 21a), when discussing the community's responsibility to organize an educational system, explicitly limits the number of students allowed for each teacher. Raba rules that one teacher should not teach more than 25 children. When there are more than 25 students – up to 40 – an additional person is seated with the teacher to assist him and when there are more than 40 students, the community must provide two teachers (Yad, Talmud Torah 2:5). Such limitations insure the proper fulfillment of the community's duty to procure enough teachers, for an appropriate, functioning educational system, and are not aimed at limiting the teachers' employment opportunities. However, other community regulations establish limitations and prohibitions regarding the number of students a teacher may accept (regarding these regulations, see Bibliography, Shchipinsky).

In this context, the Regional Labor Court of Tel Aviv-Jaffa (lf 913517/99 Asher v. The State of Israel; per Judge Tannenbaum), was requested to invalidate a provision in the collective labor agreement applicable that limited the number of instruction hours a teacher was permitted to work to 140% of a full-time position.

Dismissing a Worker Who Has Reached Retirement Age.

The basic approach of Jewish law regarding employment in public positions is that a person should not be removed without good cause (Resp. Rashba V. 283). Rabbi Joseph Caro (Sh. Ar., oḤ 53:25) ruled as such regarding a cantor. Rabbi Israel Meir of Radin stated that this ruling applies to all positions, "so that they [the employees] should not suspect that some defect was discovered in them" (Mishnah Berurah, ad loc. subsection 73).

Rabbi Yehiel Michal Epstein deals with the appointment of various community officials, and ruled as follows (Arukhha-Shulḥan, Ḥm 2:333.15):

"… This was the custom in all of the Jewish Diaspora that from his appointment (in the letter of appointment to the Rabbinate) the rabbi is employed for the city's benefit, this was done so that the rabbi would not change his mind [and resign from his position] over the time … but the people of the city can never change their mind, unless some taint was found in him. This is also the law regarding a cantor and a sexton and all kinds of other public appointments – that as long as he is not found wanting, he has a lifetime position. And this is the custom …"

The principle applies not only to those of community related positions, such as a rabbi and a cantor, but also those of any public position; one who holds a position has a presumptive right to it (Rabbi A.I. Kook, Resp. Oraḥ Mishpat, Ḥm, 20).

In the responsa of Rabbi Ezekiel *Landau, there is explicit reference to the chronological age of retirement (Resp. Noda Bi-Yehudah, yd, Tanina ed., 1). Rabbi Landau was asked about the law regarding a ritual slaughterer whose "hands shook," in other words, someone physically incapable of fulfilling his responsibilities. In his response, Rabbi Landau ruled that such a person must be removed from his position, yet he refused to apply this ruling retroactively – i.e., he did not disqualify the meat this ritual slaughterer had slaughtered. In his discussion Rabbi Landau rejects disqualifying shohetim at the fixed age of 80, exclusively on the basis of their having reached that age.

These rulings demonstrate that Jewish law rejects mandatory retirement based exclusively on age. A person's age is only significant to the extent of imposing a duty to examine the employee's functioning at an age at which might be assumed that his age affects his functioning. However, where the retirement policy obligates a person to retire after a specified period of time, that custom mandates one in such a position to leave his job when he reaches that specified time (Resp. Rashba, 5.283).

The Regional Labor Court in Tel Aviv (lf (Tel Aviv) 912492/99 Meor v. The Open University; per Judge Tannenbaum) thus adjudicated in an action filed by an employee who had been dismissed upon reaching the age of 65.

The Obligation to Provide an Employee Work.

The Talmud (bm 77a) establishes that an employer who hires a worker for a fixed period of time, and does not provide him work for part of that period of time, is still obligated to pay him [for the entire period]. The exception to the rule is when the worker, upon accepting the job, knew that circumstances might arise that would prevent the employer from providing him work. In such a case, if in fact the employer failed to provide him work for the entire period, the worker is not entitled to full wages. If the work is terminated during that period and the employer is no longer able to employ him, if he is able to provide him with work, no more difficult than the work for which he was originally employed, the employer should allow the employee to perform such work. If there is no work available, the halakhah depends upon the type of worker: if the worker is accustomed to hard work and the absence of work will weaken his body, not working is tantamount to damage, and the employer must pay him his full wages. If the worker is not such a worker and he enjoys the "holiday," even if it is forced upon him, the employer must only compensate him for his loss of time.

The halakhic literature provides definitions of workers for whom not working causes distress and for those who enjoy being unemployed. Regarding teachers, it was ruled that unemployment is a source of distress (Resp. Rashba attributed to Nahmanides, 1). It was ruled that when a rabbi is hired to deliver Sabbath sermons in the synagogue, which brings him joy and fulfillment, being unemployed distresses him. In contrast, a rabbinical judge or regular judge who rules in matters of ritual law (issur ve-heter) because his work is difficult and exhausting does not enjoy his work (Resp. ha-Rama, 50).

In one unusual case, specific performance of the employment contract was imposed on the employer, such that it obligated him to continue providing work for the employee, and not suffice by paying of his wages while leaving the employee with nothing to do (Resp. Mikhtam le-David, Ḥm, 17; 18th century).

The Israeli National Labor Court considered the question of whether an employer was obligated to pay the full salary (with social benefits) or just the basic salary without these added elements in a case when he told his employee that he would continue to pay him a salary, but that he should stay home and not come to work (dba 4–21/51 The Histadrut v. Tahel, 23 pda 3; per Judge Steve Adler).

The court referred to Jewish law sources cited above and pursuant to the provisions of the Foundations of Law Act, 5740–1980, and dealt with whether and how an employer is required to compensate the employee who is not actively working for him. Based on the aforementioned cases, the Court based its ruling on the tremendous importance placed by Jewish law on the effect of idleness on an employee.

An Individual's Obligation to Earn a Living from His Efforts.

A positive approach to the value of work is found in the earliest sources, i.e., the Bible. The purpose of Adam in the Garden of Eden immediately after his creation is stated as "to work it and keep it [the Garden of Eden]" (Genesis 2:15). The Book of Proverbs expresses praise for the laborer: "He who works his land shall have plenty of bread …" (Proverbs 28:19), "Go to the ant, sluggard; consider her ways and be wise" (Proverbs 6:6). Talmudic literature, refers to labor of the six days of the week as a duty that complements the proscription of working on the Sabbath: "'Six days shall you work' – Rabbi says this is a complementary commandment (to the commandment regarding the prohibition of working on the Sabbath) for Israel; parallel to the positive commandment of the Sabbath, Israel was commanded regarding doing work" (Mekhilta d'Rabbi Simeon bar Yoḥai 20:9). In the continuation of this derashah, extolling the virtue of work, the Tosefta (Kid. 1:11; Kid. 29a) states that the father is obliged to teach his son a trade; Rabbi Judah adds that "he who does not teach his son a trade – in the end, will teach him to be a robber." Notwithstanding, Midrashim also present the approach that work is a default option, and the optimal situation is, "when Israel does the will of God … their work is done by others" (Mekhilta d' Rabbi Ishmael, V'Yikahel, 1; tb Ber. 35b). There are differences of opinion regarding the preferred balance between Torah study and work. Rabbi Ishmael sees the performance of work as an obligation, to preclude a person's dependence on others: "Do with them as is the custom among people." In contrast, Rabbi Simeon bar Yoḥai expresses his concern that engaging in labor would completely marginalize Torah study, and therefore recommends learning Torah and relying on the work being performed by others. The amora Abbaye testifies that those who adopted the path of Rabbi Ishmael "succeeded," and those who adopted the path of Rabbi Simeon bar Yoḥai – "did not succeed" (Ber. ibid.). Many other teachings of tannaim, cited in Avot de-Rabbi Nathan, speak in praise of performing work because it averts poverty, rescues from sin, rescues from boredom, and rescues a person from being suspected by others, etc.

Halakhic literature does not formally adopt the Talmudic opinions regarding the obligation to work and to teach one's son a trade, but there are clear statements in praise of work and disparaging reliance on the kindness of others. Maimonides writes as follows: "…they say 'make your Sabbath a weekday and do not become dependent on others.' And even if a learned and respected person becomes impoverished, he should go and work, even menial labor rather than depend on others. It is preferable to skin dead animals than to tell people: 'I am a very learned man, I am a kohen – support me!' … Among the greatest sages there were woodcutters, loggers, and those who pumped water for gardens, ironworkers and coal choppers who did not ask for support from the public" (Yad, Mattanot Aniyyim 10:18). Maimonides writes the following about the relation between Torah study and work: "Anyone who decides to study Torah and does not engage in labor and is supported by charity, commits a desecration of God's name, and causes dishonor for the Torah, extinguishes the light of religion, causes harm to himself, and precludes his life in the world to come … and they have further commanded and said: 'Love labor and hate the authorities,' and any Torah [study] that is not accompanied by labor is destined to come to naught and to bring about sin, and the end of such a man will be as a thief" (Yad, Talmud Torah 3:10). However, later posekim disagreed with these words of Maimonides. Rabbi Simeon ben Ẓemaḥ Duran (Resp. Tashbeẓ 1,147) states that only in the first generations, in the period of the tannaim and the amoraim, could sages both study Torah and earn their living from labor. In our days, "the generations are less worthy" and this cannot be done, and therefore learned men may rely on the community funds. The statements in praise of labor and in condemnation of laziness were cited by the National Labor Court (ab 9100002/98 Barnea v. The Employment Service; per Judge Rabinowitz), to support its ruling that "one who wishes to be supported from public funds, must first make a reasonable effort to work and to support himself." Accordingly, the court upheld the decision of the Employment Service to deny unemployment compensation to any unemployed person who refuses positions offered to him.

legislation in the state of israel

In addition to the laws mentioned above, a number of new laws that deal with labor law should be mentioned:

The Contract for Services Law, 5744–1974, codified the contractual obligations between one who orders work done and a contractor, including liability for defects and the right to withhold the property that is the object of the work until wage payment has been made.

The Minimum Wage Law, 5747–1987, codified the obligation to pay a specified minimum wage. This law also obligates monetary compensation when lower than the minimum wages were paid, and the criminal liability of the employer who pays less than the minimum wage.

The Prior Notice of Dismissal or Resignation Law, 5761–2001, establishes the obligation of giving prior notice of a prescribed term before terminating a person's employment (and correspondingly the worker's obligation to notify his employer a certain time in advance of his resignation). This law establishes the employer's duty to give an employee prior notice of his/her impending dismissal within a certain prescribed period of time, as well as the employee's duty to give his employer prior notice a certain period of time prior to resigning. The law also provides that an employer dismissing an employee without such prior notice is required to pay the employee an amount equivalent to his regular salary for the period of time prescribed, and that an employee who resigned without prior notice must pay his employer a penalty for the period during which the notice was not given (see *Ha'anakah).

[Menachem Elon (2nd ed.)]


D. Farbstein, Das Recht der unfreien und der freien Arbeiter nach juedisch-talmudischem Recht… (1896); M. Hoffmann, in: Jeschurun, 4 (1917), 571–600 (Germ.); I.S. Zuri, Mishpat ha-Talmud, 5 (1921), 117–22; Gulak, Yesodei, 2 (1922), 180–8; M. Sulzberger, in: jqr, 13 (1922/23), 245–302, 390–459; Ch. W. Reines, Ha-Po'el ba-Mikra u-va-Talmud (1935); idem, in: Israel of Tomorrow, ed. by Leo Jung, 1 (1949), 139–61; idem, in: Judaism, 8 (1959), 329–37; Herzog, Instit, 2 (1939), 167–74; M. Findling, Tehukkat ha-Avodah (1945); et, 1 (19513), 141–6; 3 (1951), 330–5; 6 (1954), 539–42; S. Federbush, Mishpat ha-Melukhah be-Yisrael (1952), 165–84; J.H. Heinemann, in: huca, 25 (1954), 263–325; J. Gross, in: Ha-Peraklit, 16 (1959/60), 72–86, 153–78; H.E. Baker, Legal System of Israel (1968), 182–196; Elon, Mafte'aḥ, 201–3; idem, in: ilr, 4 (1969), 85–89; Sh. Warhaftig, Dinei Avodah ba-Mishpat ha-lvri, 2 vols.(1969); contains bibliography (vol. 2, pp. 1207–10); idem, in: Sinai, 66 (1969/70), 195–9. add. bibliography: M. Elon, Ha-Mishpat ha-Ivri (1988), 1:128, 138, 140, 283, 284, 345, 400, 504, 509, 558, 560f., 563f., 567, 571f., 584, 592, 611, 645, 664, 701, 704, 718, 734, 736, 749ff., 753f., 756, 756, 765, 822, 2:881, 993, 3:1365f., 1367f., 1422; idem, Jewish Law (1994), 1:144, 156, 158, 336, 337, 415; 2:488, 614, 620, 679, 681f., 684f., 689, 703, 719, 732, 755, 798f., 821, 865, 869, 886, 905, 907, 924ff., 928f., 932, 942, 1007; 4:1074, 1201, 5: 1629f., 1631f., 1694; M. Elon and B. Lifshitz, Mafte'ahha-She'elot ve-ha-Teshuvot shel Ḥakhmei Sefarad u-Ẓefon Afrikah (legal digest), 1 (1986), 84–87; B. Lifshitz and E. Shochetman, Mafte'aḥ ha-She'elot ve-ha-Teshuvot shel Ḥakhmei Ashkenaz, Ẓarefat ve-Italyah (legal digest) (1977), 54–59; A. Wahrhaftig, "Ḥozeh Avodah, Mahuto u-Bittulo," pt. 1, in: Teḥumin, 7 (1986), 427–53; pt. 2, Teḥumin, 8 (1987), 203–42; idem, Ha-Hithayyevut (1991), 231–300; M. Ayali, Poalim ve-OmanimMelakhtam u-Ma'amadam be-Sifrut Ḥazal (1987); Y. Shchipinsky, Ha-Takkanot be-Yisrael, vol. D (1993), 282–84; M. Salli, "Ha-Perishah me-Avodah ke-Ḥovat Gil bi-Mekorot ha-Yehadut," in: Sefer Assia, pt. 6, 151; Y. Halevi, "Zekhut ha-Rofeh le-Kabbalat Sekhar bi-Mekorot ha-Yehadut," in; Dinei Israel, 7 (1976), 79–98; A. Steinberg, Enziklopedyah Hilkhatit Refu'it (1994), vol. b, entry: "Zaken," 371–72, 377–79, 390–91; A. Dasberg, "Shevitat Ovedim al pi ha-Halakhah" (bibliographical survey), in: Teḥumin, 5 (1984), 295–302; B. Lifshitz, Oved ve-KablanBein Kinyan le-Vein Hitḥayyevut (1993).

Labor Law

views updated May 29 2018


An area of the law that deals with the rights of employers, employees, and labor organizations.

U.S. labor law covers all facets of the legal relationship between employers, employees, and employee labor unions. Employers' opposition to recognizing employees' rights to organize and bargain collectively with management has resulted in a system of primarily federal laws and regulations that is adversarial in nature. Modern labor law dates from the passage of the wagner act of 1935, also known as the National Labor Relations Act (NLRA) (29 U.S.C.A. §§ 151 et seq.). Congress has passed two major revisions of this act: the taft-hartley act of 1947, also known as the labor management relations act (29 U.S.C.A. §§ 141 et seq.), and the landrum-griffin act of 1959, also known as the Labor Management Reporting and Disclosure Act (29 U.S.C.A. §§ 401 et seq.).

The railroad and airline industries are governed by the Federal Railway Labor Act (45 U.S.C.A. § 151 et seq.), originally passed in 1926 and substantially amended in 1934. Federal employees are covered by the separate Federal Service Labor Management and Employee Relation Act (5 U.S.C.A. §§ 7101 et seq.). Labor law is also made by the national labor relations board (NLRB), an administrative agency that enforces federal labor statutes, and by federal courts when they interpret labor legislation and NLRB decisions. In addition, state and municipal employees are covered by state law.

A basic principle of U.S. labor law is that the supremacy clause of the Constitution authorizes Congress to prohibit states from using their powers to regulate labor relations. The ability of Congress to preempt state labor laws has been defined largely by the U.S. Supreme Court because the NLRA is imprecise about what states can and cannot do. The Court has set out two basic principles concerning preemption: not all state labor laws are preempted by federal statute, and conduct actually protected by the federal statutes is immune from state regulation. For example, vandalism committed by a union organizing campaign may be subject to state criminal and civil sanctions. A strike in an industry subject to the NLRA that is aimed at improving wages cannot be prohibited by the state.

Historical Background

Labor law traces its roots to the early 1800s, when employees who banded together to strike for improved working conditions were branded as criminals. By the mid-nineteenth century, the law changed to recognize the right of workers to organize and conduct collective bargaining with their employers. Employers, however, were not receptive to unions. Between 1842 and 1932, they routinely used injunctions to stop strikes and to frustrate union organizing. The norris-laguardia act (29 U.S.C.A. §§ 101 et seq.) was passed by Congress in 1932 to curb the use of labor injunctions, preventing employers from going through the federal courts to quash unions. The passage of the Wagner Act three years later signaled the beginning of a new era in labor relations and labor law. The legacy of employer-union conflict shaped the new system of government regulation of labor-management relations.

Modern Labor Law

The NLRA is the most important and widely applicable U.S. labor law. Its section 7 (29 U.S.C.A. § 157) guarantees employees "the right to self-organization, to form, join, or assist labor organizations, to bargain collectively, through representatives of their own choosing, and to engage in other concerted activities for … mutual aid or protection." Employees are also entitled to "refrain from any or all such activities." The act prohibits employers and unions from committing "unfair labor practices" that would violate these rights or certain other specified interests of employers and the general public in various circumstances.

Labor law generally addresses one of three different situations: (1) a union attempts to organize the employees of an employer and to get the employer to recognize it as the employees' bargaining representative; (2) a union seeks to negotiate a collective bargaining agreement with an employer; or (3) a union and employer disagree on the interpretation and application of an existing contract between the two. Within these three situations, specific rules have been created to deal with rights of employees and employers.

Organization and Representation of Employees Under the NLRA neither employers nor unions may physically coerce employees or discriminate against them on the job because they do or do not wish to join a union, engage in a peaceful strike or work stoppage, or exercise other organizational rights. Although an employer is forbidden to discharge peaceful strikers, the employer may hire replacement workers to carry on business.

When the employees of a particular company decide to be represented by a union, they usually contact the union's parent association or local division for aid and guidance. The union may solicit membership by holding meetings to discuss how working conditions can be improved, and by distributing leaflets.

The employees, union, or employer, may file with the NLRB a petition to conduct an election to decide whether the union should be the collective bargaining representative. This petition must meet with the support of at least 30 percent of the employees in the bargaining unit named in the petition. Once the petition has been filed, the NLRB must determine whether any obstacles exist to holding the election. If not, the NLRB will attempt to get the union and employer to agree to an election.

If the union and employer agree to an election, the NLRB conducts a secret ballot election to determine whether the majority of the employees in the bargaining unit desire to be represented by the union. During the election campaign, both employer and union may freely express their views about unionization of employees, but neither may resort to threats or bribes. If the union wins the election, the NLRB will certify it as the exclusive bargaining representative of the employees. The union may then be designated an appropriate bargaining unit of a particular category of workers.

A union is generally entitled to picket or patrol with signs reading "Unfair," for up to 30 days at the place of business of an employer it is trying to organize. To picket longer for organizing purposes, the union must file for an NLRB election. If the union then loses the election, it is forbidden to resume such picketing for a year. The U.S. Supreme Court upheld the right to peaceful union picketing in Thornhill v. Alabama, 310 U.S. 88, 60 S. Ct. 736, 84 L. Ed. 1093 (1940).

Negotiation of a Collective Bargaining Agreement Collective bargaining is the process in which an employer and an accredited employee representative negotiate an agreement concerning wages, hours, and other terms and conditions of employment. An employer and a union representing its employees have a mutual obligation under the NLRA to bargain with each other in good faith. The primary goal of collective bargaining is to promote industrial peace between employers and employees. The parties have a duty to try reasonably to accommodate differences and reach common ground, but ultimately they have no obligation to enter into a contract.

The federal mediation and conciliation service or state labor agencies may provide parties with mediators to help them negotiate. Mediators act as neutral facilitators. It is a fundamental part of federal labor policy that unions and management should resolve their disputes through voluntary collective bargaining and not through the imposition of a solution by the government. If a labor dispute becomes serious enough to significantly affect national health or safety, the president has the statutory authority to obtain an 80-day injunction from the federal courts against any strike or lockout. This procedure has been used over three dozen times since 1947, but rarely since the 1970s.

Pressure to Resolve a Contract Dispute When an employer and a union are unable to resolve their differences and negotiate an employment contract, the parties may use different types of pressure to produce an agreement. These types of pressure include boycotts, strikes, the carrying of signs and banners, picketing, and lockouts.

A labor boycott is any type of union action that seeks to reduce or stop public patronage of a business. It is a refusal to purchase from or to handle the products of a particular employer. Employees may legally exert economic pressure on their employer through a boycott, so long as they act peacefully. But a union is forbidden to engage in a secondary boycott. For example, if a union's primary dispute is with a hardware manufacturer, it may not picket or use other methods to get the employees of a hardware store, who are neutral or secondary parties, to stage a strike at the store in order to force it to cease handling the manufacturer's products.

A strike is a concerted refusal of employees to perform work that they have been assigned, in order to force the employer to grant concessions that the employees have demanded. The right of employees to strike is protected by the courts. A lawful strike must be conducted in an orderly manner and may not be used as a shield for violence or crime. Intimidation and coercion in the course of a strike are unlawful. The peaceful carrying of signs and banners advertising a labor dispute is ordinarily a lawful means to publicize employees' grievances against an employer.

Picketing consists of posting one or more union members at the site of a strike or boycott, in order to interfere with a particular employer's business or to influence the public against patronizing that employer. It can be reasonably regulated. Lawful picketing is peaceful and honest. The use of force, intimidation, or coercion on a picket line is not constitutionally protected activity. In addition, employees are not acting within their rights when they seize any part of the employer's property.

A lockout is an employer's refusal to admit employees to the workplace, in order to gain a concession from them. In American Ship Building Co. v. NLRB, 380 U.S. 300, 85 S. Ct. 955, 13 L. Ed. 2d 855 (1965), the U.S. Supreme Court upheld the right of an employer to lock out employees if the intent is to promote the company's bargaining position and not to destroy the collective bargaining process or the union.

With some frequency, lower federal courts and the National Labor Relations Board have upheld lockouts by employers. In Local 702,International Brotherhood of Electrical Workers v. NLRB, 215 F.3d 11 (D.C. Cir. 2000), the U.S. Court of Appeals upheld a ruling by the NLRB finding that an employer's lockout did not violate the NLRA. Employees of the union in the case resorted to "inside game" tactics, where the employees refused to work voluntary overtime and adhered strictly to company rules to such an extent that it slowed the company's productivity. The union began using this strategy during labor negotiations with the company. The company imposed a lockout of the employees in order to facilitate the negotiations and to counter the effects of the union's strategy. The appellate court, in upholding a decision by the NLRB, found that the employer had legitimate and substantial business justifications for the lockout and that the union had not proven that the employer had acted with an improper motive in initiating the lockout.

Unfair Labor Practices

An unfair labor practice is any action or statement by an employer that interferes with, restrains, or coerces employees in their exercise of the right to organize and conduct collective bargaining. Such interference, restraint, or coercion can arise through threats, promises, or offers to employees.

Reinventing the Workplace: Improving Quality, or Creating Company (Sham) Unions?

Foreign competition, technological change, and concerns about declining productivity have led to significant modifications in the way many U.S. businesses manage their affairs. These changes, which have been championed by a long list of management consultants, have appeared under numerous labels, including quality circles and total quality management (TQM). All of these approaches emphasize that the goal of a business is to achieve a high standard of quality in goods manufactured or services provided. To meet this quality goal, businesses have moved away from top-down management, substituting a team approach. Traditional management personnel and line-level workers meet in committees to discuss and resolve issues within the company concerning product, service, and the way work is organized.

The advocates of teamwork and quality circles have hit a legal brick wall in the National Labor Relations Act of 1935 (NLRA) (29 U.S.C.A. § 151 et seq.). Under the NLRA, sections 2(5) and 8(A)(2), employers are forbidden to create employer-dominated company unions. In Electromation, 309 N.L.R.B. 990 (1992), the National Labor Relations Board (NLRB) ruled that Electromation, a nonunion company, could not sponsor an "action committee" because that committee was, under the NLRA provisions, a labor organization. Additional cases have confirmed the NLRB's position on this issue.

Proponents of quality circles and teamwork argue that the NLRA is an antiquated set of laws, based on a period of U.S. history when businesses used every tool at their disposal to subvert unions and union organization. The adversarial posture of labor and management may have made sense in the past, this argument goes, but it is counterproductive in an economy that must adapt quickly to world market forces. The most radical proposal by critics of the NLRB's position on this issue is to abolish the NLRA altogether.

More moderate proponents argue instead for changes in the NLRA to permit committees, teams, and more of what they call workplace democracy. They point out that with the steady decline of union membership and blue-collar jobs, traditional labor-management relations have become irrelevant. They note that white-collar workers, who now dominate the U.S. economy, are less likely to join a labor union. Therefore, worker morale and job satisfaction are better when employees are included in the decision-making process of a business.

Proponents of quality circles also believe that a better educated workforce is capable of making informed decisions about its relations with employers. They assert that the days of the employer's being an absolute sovereign are over. It is more productive to allow nonunion employees to organize within the company based on committees and circles. These workers are entitled to the same type of participatory democracy found in labor unions.

Most proponents would give employees the chance to make up their own mind about their work environment. If a union successfully wins over enough employees to be certified as the legal bargaining agent, that would indicate dissatisfaction with the employer and would be an acceptable outcome. These proponents would object to unions filing complaints with the NLRB over company committees where the employees have rejected union representation in the past. As long as employees want to participate in a company committee or circle, they should be permitted to do so.

Proponents argue that the bar on these types of workplace organizational innovations hurts workers. These innovations give employees more autonomy to plan work schedules, meet deadlines, operate equipment, make repairs, and handle health and safety issues. In the past an employee could suggest a change to management but then had to stand back and observe whether the change took place. In today's workplace an employee wants to implement as well as suggest improvements.

Finally, proponents note that in union-organized companies unions are free to negotiate the participation of employees in teams and quality circles. They suggest that it is unfair to restrict nonunion employees from electing to participate in similar business management ventures.

The U.S. labor movement has resisted vigorously the introduction of employee involvement programs by management in both union and nonunion environments. Labor union leadership views the introduction of employer-sponsored committees as a return to the past and as a way of undercutting the ability of unions to organize white-collar workers.

Opponents point out the sordid history of U.S. labor relations prior to the passage of the NLRA in 1935. Company-sponsored unions were put forward as a way to resolve disputes over wages, hours, and other conditions of employment. Employees believed that these unions acted in good faith to negotiate a contract with management. In reality, these organizations were sham unions, dominated by the employer. The employers would put company spies in them to monitor what was discussed. Employees were either bought off or fired if they proved too effective in their union duties.

Opponents argue that the NRLA is preserving the independence of labor unions. Without its decisions employers of nonunion employees would use TQM, quality circles, and other buzzwords to promote a nonunion status that would place employees at a disadvantage. Employees will quite likely be intimidated in employer-organized groups, and unable to raise or meaningfully discuss certain issues that management does not want to hear. Without a collective bargaining agreement negotiated by a union, opponents maintain, employees will not have job security or promotion protection.

Opponents also question who makes the decisions in these groups. Though the rhetoric suggests empowerment of employees, employee committees are purely advisory, and the employer retains the authority to decide all issues. In addition, because management creates these committees, management can dissolve them at any time. The inequality of power within a nonunion business dictates that the employer can do whatever management wants, regardless of a recommendation by an employee committee.

The NLRA has placed a barrier to new models of business organization. The distrust of labor unions and their difficulty in making inroads with white-collar workers reconfirms to the unions the need for an adversarial posture with management. Those who seek fundamental change in the way U.S. business operates believe that the NLRA must be amended to accommodate a major shift in economic organization.

An unfair labor practice can occur during collective bargaining. In Auciello Iron Works v. NLRB, 517 U.S. 781, 116 S. Ct. 1754, 135 L. Ed. 2d 64 (1996), the U.S. Supreme Court upheld an NLRB ruling that the employer had committed an unfair labor practice. After the union accepted one of the employer's collective bargaining proposals, the employer disavowed the agreement because of good faith doubts about whether the union still commanded a majority of the employees. The Court reasoned that the employer's doubts arose from facts that the employer had known about before its contract offer had been accepted by the union.

Labor laws are not intended to interfere with an employer's normal exercise of discretion in hiring and firing employees. In general, an employer may hire employees based on their individual merit, with no regard to union affiliation. Refusal to hire an applicant owing to affiliation with a labor union is an unfair labor practice.

The motive of an employer in discharging an employee may be a controlling factor in determining whether the discharge is an unfair labor practice. An employer's history of antiunion bias is an extremely important factor in ascertaining the motive for discharge of an employee. An employer may discharge an employee on various grounds without being guilty of an unfair labor practice. Such grounds include misconduct, unlawful activity, disloyalty, and termination of the business operation. In addition, inefficiency, disobedience, or insubordination is proper grounds for dismissal, provided the discharge is not motivated by the employer's reaction to union activity. Firing an employee based on union activity or membership is an unfair labor practice. Furthermore, the filing of unfair labor practice charges or the giving of testimony in a case based on such charges does not warrant dismissal.

In general, an unfair labor practice exists when an employer contributes financial or any other support to a labor organization. An employer must, therefore, remain neutral between competing unions. It is also an unfair labor practice for an employer to dominate or interfere with the formation or administration of any labor organization.

A union commits an unfair labor practice when it causes, or attempts to cause, an employer to hire, discharge, or discriminate against an employee for the purpose of encouraging or discouraging union activity. The same is true when a union restrains or coerces employees in the exercise of their rights to self-organize; to form, join, or assist labor unions; to bargain collectively; or to refrain from any of these activities. The refusal of a labor organization to bargain collectively or to execute a formal document embodying agreement with an employer is another unfair labor practice.

Contract Enforcement and Contract Disputes

Almost every collective bargaining agreement in the United States contains a grievance procedure. In the grievance procedure, the union and the employer try to settle any disputes over the meaning or application of the contract by themselves. If the parties fail, they may invoke arbitration, a procedure that typically calls for referring the issue to an impartial third party for a final and binding determination.

Grievance provisions of a collective bargaining agreement govern the procedure to be followed to settle on-the-job disputes. Typical grievance procedures generally consist of at least three steps: (1) an employee and his or her union steward present their complaint orally to the supervisor, who has the power to settle it; (2) in the event that the matter is not settled at that stage, it is reduced to writing, and the union steward and union officers confer with management; (3) if no agreement is reached, the aggrieved employee may submit the matter to arbitration, which will be binding on all parties.

The arbitration of disputes under a collective bargaining agreement is a matter of contract, and the parties to it may delineate the scope of their arbitration clause. Common grievances settled under arbitration clauses include disputes over seniority rights, employee discipline, pension or welfare benefits, rates of pay, and hours of work. Ordinarily, the issue of whether a strike or lockout is a breach of an agreement is a proper subject for arbitration.

The vast majority of union-employer contract disputes are resolved in a grievance procedure, and most of the rest are disposed of routinely through arbitration. Occasionally, a party will resist arbitration or will refuse to comply with an arbitrator's award. In such a case section 301 of the Taft-Hartley Act authorizes a suit in federal court to enforce the agreement to arbitrate or the arbitrator's award.

The federal courts have enforced a proarbitration policy in labor contracts. If a union strikes over a grievance it could have arbitrated, the employer may secure an injunction against the strike under section 301 of the Taft-Hartley Act, even though ordinarily the Norris-LaGuardia Act prevents the federal courts from enjoining strikes by labor unions.

Regulation of Unions

The Landrum-Griffin Act contains provisions that regulate how labor unions conduct their internal affairs. These provisions seek to prevent union corruption and to guarantee to union members that unions will be run democratically. The act provides a bill of rights for union members, requires certain financial disclosures by unions, prescribes procedures for the election of union officers, and provides civil and criminal remedies for financial abuses by union officers.

Changing Labor-Management Relations

For most of the history of U.S. labormanagement relations, employers and labor unions have seen each other as adversaries. Federal labor law has been shaped by this adversarial relationship, yet shifts in the structure of the U.S. economy have led to more cooperation. In the 1980s unions agreed to givebacks, in which employees agree to reduced wages and benefits in return for job security, particularly in the manufacturing industries. In response, employers have given unions a larger voice in the allocation of jobs and in the work environment itself.

When economic hardships fall on employers, these employers must often negotiate concessions with employees and the unions representing employees in order to save their businesses. After the september 11th attacks in 2001, for instance, many airlines in the United States suffered devastating economic downturns. Many of these airlines were forced to negotiate concessions from unions representing airline employees in order to avoid bankruptcy. For instance, in April 2003, a union representing flight attendants for American Airlines agreed to concessions with the airline that saved the company $340 million. The concessions allowed American to avoid bankruptcy, which some commentators had previously suggested was inevitable.

Since the 1980s, innovations in corporate management that advocate teamwork, quality circles, and total quality management (TQM) have led to legal disputes and questions about the continued vitality of the adversarial model of labor-management relations. Under the NLRA, sections 2(5) and 8(A)(2), employers are prohibited from creating employer-dominated company unions. This prohibition was included in the original NLRA because employers had created sham unions that promised representation for workers but in fact toed the company line.

With the beginning of TQM and quality circles in the late 1980s, some employers have attempted to reinvent the workplace by empowering all levels of workers to help make decisions, instead of delegating this task to a set of managers. The creation of quality circles and employee committees has run afoul of the NLRA provision against employer-created unions. In Electromation, 309 N.L.R.B. 990 (1992), the board held that the company's "action committee" was a labor organization involved with and dominated by the company, in violation of sections 2(5) and 8(A)(2). Electromation was a nonunion company. In E. I. du Pont de Nemours & Co., 311 N.L.R.B. 893 (1993), the board considered identical issues in a union-organized company. The board ruled that a series of safety and fitness committees created by du Pont were illegal under the NLRA. These cases illustrate the skepticism of some unions about the true intentions of management and the difficulty in adjusting to change in some areas of labor law.

further readings

Jasper, Margaret C. 2002. Labor Law. Dobbs Ferry, N.Y.: Oceana.

Lareau, N. Peter, et al. 2003. Labor and Employment Law. Conklin, N.Y.: Matthew Bender.

Squire, Madelyn C. 1993. "Reality or Myth: Participatory Programs and Workplace Democracy—A Proposal for a Different Role for Unions." Stetson Law Review 23.

Wade, David R. 1994. "When Two Worlds Collide: Company Unions and Employee Empowerment in the Aftermath of NLRB v. Electromation and NLRB v. DuPont." Ohio Northern University Law Review 21.


Administrative Agency; Bargaining Agent; Boycott; Employment Law; Federal Mediation and Conciliation Service; Landrum-Griffin Act; Norris-Laguardia Act; Taft-Hartley Act; Unfair Labor Practice.

Labor Law

views updated May 29 2018

Labor Law


The purpose of labor law is to protect the interests of employers and employees in the workplace. Labor laws grant employers and employees the right to engage in certain conduct such as collective bargaining, strikes, and lockouts, in pursuit of their demands.

In the United States the area of labor law is governed by federal and state statutory law, judicial decisions and regulations, and decisions of administrative agencies. The National Labor Relations Act (NLRA), also known as the Wagner Act, enacted by Congress on July 5, 1935, marks the foundation of modern U.S. labor law. The NLRA covers all employers and employees involved in businesses that affect interstate commerce. The NLRA protects workers rights to strike, associate freely with one another, join labor organizations, and bargain collectively without interference. The NLRA also prohibits employers and unions from engaging in unfair labor practices and requires both parties to engage in good-faith negotiations to resolve their disputes.

The NLRA was amended in 1947 by the Taft-Hartley Act (29 U.S.C. § 141 et seq.), which was aimed at reducing the number of industrial disputes and strengthening the power of employers in their dealings with unions. The Taft-Hartley Act was a response to problems that emerged during World War II (19391945), such as closed-shop and union-shop agreements, secondary boycotts, and strikes that often resulted in violence. Under a closed-shop agreement, employees are required to join the union as a precondition of employment. Closed shops are the opposite of open shops, which are characterized by the unlawful refusal to hire persons or give them preference in hiring based on their membership in a union. Union-shop agreements do not require employees to be union members as a precondition of employment, but do require employees to join the union or pay union dues within a set period of time after being hired.

The Taft-Hartley Act outlawed the closed shop in the United States, but permits the union shop in states that have not enacted right-to-work laws. Right-to-work laws are statutes that discourage collective bargaining and prohibit unions from making union membership a condition of employment. Currently, there are twenty-two states that have right-to-work laws, including Florida, Texas, Virginia, North Carolina, Arizona, Georgia, and Nevada. According to the Bureau of Labor Statistics and the U.S. Census Bureau, the share of jobs in the manufacturing sector rose from 25.4 in 1970 to 34.3 in 2000 in right-to-work states, and all right-to-work states registered a net gain in manufacturing payrolls despite the loss of nearly 875,000 manufacturing jobs nationwide during this period. Moreover, from 1978 to 2000, right-to-work states had lower average annual unemployment rates for all but five years. However, in 2000, per capita disposable income was approximately 10 percent higher in unionshop states than in right-to-work states, and both the poverty rate and income inequality remained higher in right-to-work states than in union-shop states.

The National Labor Relations Board (NLRB) was established under the NLRA to hear disputes between employers and employees. The NLRBs purpose is (1) to prevent and remedy unfair labor practices, whether committed by labor organizations or employers, and (2) to establish whether or not certain groups of employees desire labor organization representation for collective-bargaining purposes, and if so, which union. The NLRB is composed of five members whose five-year terms are staggered. There is a long-standing tradition that the board consist of a split in political party affiliation, usually a 3 to 2 split in favor of the presidents party. The president designates the chairman of the NLRB. The NLRBs membership as of 2007 included Robert J. Battista (chairman), Wilma B. Liebman, Peter Carey Schaumber, Dennis P. Walsh, and Peter N. Kirsanow.

Usually, both labor and management are represented by attorneys who file grievances in writing with the NLRB, prepare and submit evidence, and argue their positions in the grievances. In cases where the employer-employee relationship is not governed by the NLRA, that relationship may be governed by other federal statutes such as the Federal Service Labor-Management Relations Act (5 U.S.C. § 7101 et seq.) or the Railway Labor Act (29 U.S.C. § 101). State law may also govern the employer-employee relationship where federal statutes do not apply.

Since 2005, new labor legislation has been enacted in several states seeking to improve standards associated with child labor, drug and alcohol testing, equal employment opportunity, human trafficking, the minimum wage, the prevailing wage, time off, wages paid, and worker privacy, among other areas. Currently, seventeen states and the District of Columbia have a higher minimum-wage rate than the federal minimum-wage rate of $5.15 per hour. Kansas and Ohio are the only two states with a minimumwage rate lower than the federal rate.

The labor movement has been instrumental in the establishment of laws protecting workers rights around the globe. For example, over 90 percent of all nations have some kind of minimum wage law. Eighteen out of twenty-seven members of the European Union have national minimum wages, and the Peoples Republic of China, too, has established a monthly minimum wage for full-time workers and an hourly minimum wage for part-time workers. Moreover, labor-rights advocates in Europe have had success pushing through legislation that strengthens maternity and paternity rights and protects individuals from discrimination on the basis of age, religion, and sexual orientation, as well as gender, race and disability. The 35-hour maximum work week in France and the Working Time Directive in the United Kingdom, which covers working time, rest breaks, and the right to paid annual leave, are two of the most progressive pieces of labor legislation.

With the growth of democracy and capitalism worldwide, labor law will become more important in balancing the interests of employers and employees in the twenty-first century.

SEE ALSO Employment; Labor; Law; Occupational Safety; Regulation; Unions; Wages; Work; Work Week


Gould, William B. 1994. A Primer on American Labor Law. 4th ed. Cambridge, MA: MIT Press.

Labor and Labor Relations. 1994. American Jurisprudence 48 (2nd. ed.) §§ 17. Rochester, NY: Lawyers Cooperative Publishing.

Rifkin, Bernard, and Susan Rifkin. 1979. American Labor Sourcebook. New York: McGraw-Hill.

Wilson, William T. 2002. The Effect of Right-to-Work Laws on Economic Development. A Mackinac Center for Public Policy Report. Midland, MI: Mackinac Center for Public Policy.

Klint W. Alexander

Labor Law

views updated May 29 2018

Labor Law

An area of the law that deals with the rights of employers, employees, and labor organizations.

Whitman v. Department of Transportation

Labor relations involving the federal government and its employees are governed by collective bargaining agreement and federal statutes that impose certain procedures for dealing with employees' grievances. The 1978 Civil Service Reform Act (CSRA), 49 U.S.C.A. §0. 40122(g)(2)(C), provides rules for grievances, but Congress has authorized the Federal Aviation Administration (FAA) to develop its own procedures, which incorporate parts of the CSRA. The FAA implemented the CSRA grievance provision that requires employees to exhaust administrative grievance proceedings before they are allowed to sue in federal court. However, in 1995 Congress amended the CSRA to state that grievance proceedings are the "exclusive administrative procedures" for resolving disputes. The insertion of the word "administrative" into this phrase suggested that employees could sue before exhausting administrative procedures. The Supreme Court, in Whitman v. Department of Transportation, __U.S.__, 126 S.Ct. 2014, __L.Ed.2d __ (2006), decided not to resolve a conflict among the federal circuit courts of appeals, remanding the case to the Ninth Circuit Court of Appeals. However, the Court did give directions to the appeals court that may resolve the conflict.

Terry Whitman was a 13-year air traffic assistant at the Anchorage, Alaska Air Route Traffic Control Center. Federal law requires that the FAA conduct random substance-abuse tests of employees whose jobs include "safety-sensitive functions." FAA regulations provided detailed requirements for the random selection of employees for testing, yet Whitman found that he had been tested 10 times more than two other traffic assistants who had worked as long as he had in the Anchorage center. Whitman tested negatively each time. Whitman first filed a grievance with the Federal Labor Relations Board, which refused to consider it because it was outside the board's jurisdiction. It only dealt with issues relating to an employee's union activity. Whitman then filed a lawsuit in federal court, alleging that the FAA had violated the law governing drug tests and the First Amendment by subjecting him to a disproportionate number of tests.

The Alaska federal district court dismissed Whitman's lawsuit, agreeing with the government that the CSRA governed his grievance and that the CSRA did not expressly confer federal court jurisdiction over such claims. The court stated that his sole remedy was to use the negotiated grievance procedures detailed in the collective bargaining agreement between the FAA and the National Association of Government Employees. Whitman appealed to the Ninth Circuit Court of Appeals, which upheld the district court ruling. Judge Kim Wardlow, writing for the three-judge panel, 382 F.3d 938 (2004), noted that that the FAA Personnel Management System was an "integrated scheme of administrative and judicial review." The FAA System incorporated the grievance provisions of the CSRA, which defined "grievance" to include an employee's complaint "concerning any matter relating to the employment of the employee" and "any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment." Wardlow concluded that this broad definition included the allegations that Whitman had made against the FAA. In addition, the CSRA required all collective bargaining agreements to have negotiated procedures for the resolution of employee grievances. The FAA had negotiated such procedures with Whitman's association, thereby satisfying the statutory requirement.

The Ninth Circuit acknowledged that the 1994 CSRA amendment changed the grievance provision to make it the "exclusive administrative procedures for resolving grievances which fall within its coverage." Moreover, the Eleventh and Federal Circuits had interpreted this amendment to mean that Congress had given federal employees the right to seek a judicial remedy for their grievances. Judge Wardlow stated that the Ninth Circuit precedent went the other way and the law of the circuit barred grievances from federal courts. Apart from precedent, a reading of the amendment demonstrated that it did not expressly grant federal courts jurisdiction; all the amendment did was establish an exclusive administrative remedy. Because the amendment did not confer federal court jurisdiction, Whitman had to press his claims through the grievance process negotiated in the collective bargaining agreement." Whitman also asserted that the his claims about the drug and alcohol testing was not an "employee" grievance but a "prohibited personnel practice." Using this characterization, Whitman would have had to pursue corrective action under the CSRA through the Office of Special Counsel. Though this too was an administrative process, Whitman argued that it was a dead end because the FAA was immune from such an investigation. Therefore, he was entitled to file a federal lawsuit. Judge Wardlow disagreed, finding that the Office of Special Counsel could investigate the FAA System.

The Supreme Court agreed to hear the case to resolve the conflict among the three circuit courts. However, in a unanimous decision, the Court issued a per curiam opinion (one in which no judge is identified as the author), vacating the Ninth Circuit decision and returning it to that circuit for reconsideration based on the Court's ruling. The Court agreed with the Ninth Circuit that the 1994 amendment did not confer jurisdiction on the federal courts but stated that the issue was whether the amendment removed federal court jurisdiction. Before the Court could determine whether the amendment precluded jurisdiction, it needed to "ascertain where Whitman's claims fit within the statutory scheme, as the CSRA provides different treatment for grievances depending on the nature of the claim. The Court of Appeals had failed to do this, as it did not determine if the FAA's actions constituted a "prohibited personnel practice." Therefore, the court sent the case back to the Ninth Circuit to resolve this issue as well as the preclusion issue. The Court also said the appeals court was free to analyze a host of other issues that could help resolve the matter.

Labor Law

views updated Jun 08 2018


An area of the law that deals with the rights of employers, employees, and labor organizations.

New Overtime Pay Law Effective August 2004

The Fair Labor Standards Act (FLSA) 29 U.S.C. §§201 et seq., was enacted in 1938 against the backdrop of the Great Depression. The last significant changes to the implementing regulations were in 1949; in 1975, the minimum salary level was increased to $155 weekly and had not changed since.

In April 2004, the U.S. Department of Labor (DOL) announced sweeping changes to its regulations, the final version being referred to as the new "FairPay" rules, effective August 23, 2004. 29 CFR Part 541. Prior to publishing its final rules, the DOL received approximately 75,280 comments during its 90-day open comment period, from a broad cross-section of the American labor force at all levels.

Clearly, the intention of DOL was to more accurately reflect the contemporary American workplace. However, no sooner had revisions been announced, than national debates began to debate the true impact of the new rules and whether they were likely to increase or reduce the number of workers eligible for overtime pay under the FLSA. For employers also covered by state wage and hour laws, little impact may be experienced if their state laws or regulations are more employee-oriented than the FLSA. In any conflicting provision, employers must follow whatever law or regulation is most favorable to employees.

Under the new law, the most notable change is a guarantee of overtime pay eligibility for all employees earning less than $23,600 annually, or $455 per week (replacing the 1975 minimum of $155 per week). This is now the standard test, and the old "short" and "long" tests are eliminated. Employees earning less than this amount will be classified as "non-exempt" from federal overtime law, i.e., they will be subject to the overtime pay requirement, irrespective of job duties. On the other end of the salary spectrum, and clearly designed to contain abuse, the new regulations now exempt from overtime those employees earning more than $100,000 annually who perform office or non-manual work and "customarily and regularly" perform at least one of the duties of an exempt executive, administrative, or professional employee.

In addition to revamping and adjusting threshold compensation amounts, the DOL also revised and clarified the executive, administrative, and professional duties tests used to determine exempt status. Of key importance in the new regulations are specific job duties, not job titles. This is intended to minimize and/or eliminate unfair workplace practices that have persisted for years, many resulting in protracted litigation.

New Section 541.3(a) provides that exemptions do not apply to manual laborers or other "blue collar" workers who perform work involving repetitive operations with their hands, physical skill, and energy. Essentially, nonmanagement production line workers as well as non-management tradespersons and laborers will be non-affected. New Section 541.3(b) provides that the exemptions do not apply to various public emergency and essential service personnel, such as police officers, firefighters, paramedics, public safety officers, etc.

Other key changes to the regulations address miscellaneous aspects of employee pay. For example, disciplinary deductions of a full workday for serious conduct violations (such as sexual harassment) can now be made without jeopardizing the employee's exempt status. (Previously, employers needed to suspend an employee for a full workweek to avoid jeopardizing that employee's exempt status.)

Another key change is a "safe harbor" provision minimizing an employer's potential liability if improper deductions are taken from an employee's salary. However, the employer must have a clearly communicated policy prohibiting improper salary deductions and a complaint procedure for employees to follow. Additionally, it must make a good faith commitment to comply in the future, as well as reimburse employees for improper salary deductions, in order to retain the exempt status of an employee whose salary had been improperly docked.

The prior requirement that exempt employees devote no more than 20 percent of their work to non-exempt activities is eliminated. Instead, the new "duties tests" for white collar exemptions retain the "discretion and independent judgment" language of the old regulations in determining an employee's exempt status. However, generally speaking, an exempt employee's primary duty (50 percent or more of his or her work time) must be spent on exempt work.

Under 29 C.F.R. §541.105, the new "executive" test requires that employees have the actual authority to hire, fire, or make decisions regarding any other change to employees' status, or have their recommendations given "particular weight." The new "administrative" test under 29 CFR §541.704 retains the old requirement that employees exercise discretion and independent judgment on matters of significance. Finally, the "professional" test (29 CFR §541.301) does not allow an employee to qualify for exempt status based on equivalent training in the military, technical schools, or community colleges However, employees who have substantially the same knowledge and perform substantially the same work as degreed employees may be exempt if they obtain such knowledge through a combination of work experience and intellectual instruction.

The DOL Wage and Hour Division has set up a FairPay Web site (linked from the DOL website) expounding on the new "white collar" rules and providing several "Fact Sheets" to assist Web site visitors. Federal posting of the new overtime law in the workplace is not required.

Labor Law

views updated Jun 27 2018

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