CHAPTER 1
OVERVIEW OF EMPLOYMENT LAW
Heard at the Staff Meeting
U.S. Employment Law is a Fragmented “Work in Progress”
Sources of Employment Law
Substantive Rights under Employment Law
Shero v. Grand Savings Bank
Determining Which Employment Laws Apply
Historical Development of U.S. Employment Law
Procedures for Enforcing Employment Laws
The Changing Workplace: Alternative Dispute Resolution Procedures
,Enforceability of Mandatory Arbitration Agreements
Davis v. O’Melveny & Myers
Remedies for Violations of Employment Laws
EEOC v. Federal Express
The Role of Managers in Legal Compliance
, CASE QUESTIONS
SHERO v. GRAND SAVINGS BANK
161 P.3d 298 (Okla. 2007)
A bank employee became involved in a legal dispute with a city government that was also a
customer of the bank. The bank insisted that the employee abandon his legal action against
the city (the employee was ultimately successful in his Open Records Act claims against the
city). The employee refused to do so and was terminated for that reason. He sued the bank.
1. What was the legal issue? What did the court decide?
The issue was whether an at will employee could prove that he had been wrongfully
terminated in violation of Oklahoma public policy. The Oklahoma Supreme Court
affirmed the lower court’s decision to dismiss the employee’s claim.
2. Why do you think the bank terminated this employee? Do you think the bank had a
good reason for doing so? Legally speaking, does it matter whether they had a good
reason to discharge him?
Presumably, the city was a major customer for the bank and, with or without explicit
pressure from the city, the bank concluded that a suit by one of its employees against the
city would not redound to its business interests. The termination was related to a
legitimate legal dispute with a third party and not to poor job performance or violations
of bank policy. But whether the bank had “good” reasons to terminate the employee is
quite irrelevant to the legal question of whether he was wrongfully terminated. Under
employment at will, the employer does not have to have a good reason for termination. A
termination will be upheld as long as it is not for a specifically illegal reason. The
employee failed to prove that his termination was in violation of public policy.
3. Do you agree with the court’s decision? Why or why not? How far should courts go in
protecting employees from wrongful termination?
This case provides a first opportunity for students to consider and debate the merits of
employment at will.
, DAVIS v. O’MELVENY & MEYERS
485 F.3d 1066 (9th Cir. 2007); cert. denied, 2008 U.S. LEXIS 1213
A law firm adopted and distributed to its employees a new Dispute Resolution Program
(DRP) that required employees to arbitrate employment-related claims. A paralegal at the
firm filed a lawsuit alleging violations of the Fair Labor Standards Act and other statutes.
The district court dismissed her claim and issued an order compelling arbitration in
accordance with the DRP. The paralegal appealed, challenging the enforceability of the
arbitration agreement.
1. What was the legal issue in this case? What did the court of appeals decide?
The legal issue was whether the arbitration agreement was unconscionable, and hence not
enforceable, under California law. Finding the agreement to be unconscionable and the
offending terms to not be severable from the remaining agreement, the appeals court
reversed and remanded.
2. What does it mean for a contract to be “unconscionable”? “Procedurally
unconscionable”? “Substantively unconscionable”?
Agreements are unconscionable when there is “an absence of meaningful choice on the
part of one of the parties together with contract terms which are unreasonably favorable
to the other party.” In order to conclude that an agreement is unconscionable, it is
necessary to show that the agreement is both procedurally and substantively
unconscionable. A procedurally unconscionable agreement is a “contract of adhesion”
drafted by a party with superior bargaining power and presented on a take it or leave it
basis with no opportunity for negotiation or modification of terms. Substantive
unconscionability has to do with the contents of the agreement. Is the agreement so
unduly harsh, oppressive, and one-sided as to shock the conscience?
3. What was the evidence that this agreement was procedurally unconscionable?
Substantively unconscionable?
OVERVIEW OF EMPLOYMENT LAW
Heard at the Staff Meeting
U.S. Employment Law is a Fragmented “Work in Progress”
Sources of Employment Law
Substantive Rights under Employment Law
Shero v. Grand Savings Bank
Determining Which Employment Laws Apply
Historical Development of U.S. Employment Law
Procedures for Enforcing Employment Laws
The Changing Workplace: Alternative Dispute Resolution Procedures
,Enforceability of Mandatory Arbitration Agreements
Davis v. O’Melveny & Myers
Remedies for Violations of Employment Laws
EEOC v. Federal Express
The Role of Managers in Legal Compliance
, CASE QUESTIONS
SHERO v. GRAND SAVINGS BANK
161 P.3d 298 (Okla. 2007)
A bank employee became involved in a legal dispute with a city government that was also a
customer of the bank. The bank insisted that the employee abandon his legal action against
the city (the employee was ultimately successful in his Open Records Act claims against the
city). The employee refused to do so and was terminated for that reason. He sued the bank.
1. What was the legal issue? What did the court decide?
The issue was whether an at will employee could prove that he had been wrongfully
terminated in violation of Oklahoma public policy. The Oklahoma Supreme Court
affirmed the lower court’s decision to dismiss the employee’s claim.
2. Why do you think the bank terminated this employee? Do you think the bank had a
good reason for doing so? Legally speaking, does it matter whether they had a good
reason to discharge him?
Presumably, the city was a major customer for the bank and, with or without explicit
pressure from the city, the bank concluded that a suit by one of its employees against the
city would not redound to its business interests. The termination was related to a
legitimate legal dispute with a third party and not to poor job performance or violations
of bank policy. But whether the bank had “good” reasons to terminate the employee is
quite irrelevant to the legal question of whether he was wrongfully terminated. Under
employment at will, the employer does not have to have a good reason for termination. A
termination will be upheld as long as it is not for a specifically illegal reason. The
employee failed to prove that his termination was in violation of public policy.
3. Do you agree with the court’s decision? Why or why not? How far should courts go in
protecting employees from wrongful termination?
This case provides a first opportunity for students to consider and debate the merits of
employment at will.
, DAVIS v. O’MELVENY & MEYERS
485 F.3d 1066 (9th Cir. 2007); cert. denied, 2008 U.S. LEXIS 1213
A law firm adopted and distributed to its employees a new Dispute Resolution Program
(DRP) that required employees to arbitrate employment-related claims. A paralegal at the
firm filed a lawsuit alleging violations of the Fair Labor Standards Act and other statutes.
The district court dismissed her claim and issued an order compelling arbitration in
accordance with the DRP. The paralegal appealed, challenging the enforceability of the
arbitration agreement.
1. What was the legal issue in this case? What did the court of appeals decide?
The legal issue was whether the arbitration agreement was unconscionable, and hence not
enforceable, under California law. Finding the agreement to be unconscionable and the
offending terms to not be severable from the remaining agreement, the appeals court
reversed and remanded.
2. What does it mean for a contract to be “unconscionable”? “Procedurally
unconscionable”? “Substantively unconscionable”?
Agreements are unconscionable when there is “an absence of meaningful choice on the
part of one of the parties together with contract terms which are unreasonably favorable
to the other party.” In order to conclude that an agreement is unconscionable, it is
necessary to show that the agreement is both procedurally and substantively
unconscionable. A procedurally unconscionable agreement is a “contract of adhesion”
drafted by a party with superior bargaining power and presented on a take it or leave it
basis with no opportunity for negotiation or modification of terms. Substantive
unconscionability has to do with the contents of the agreement. Is the agreement so
unduly harsh, oppressive, and one-sided as to shock the conscience?
3. What was the evidence that this agreement was procedurally unconscionable?
Substantively unconscionable?
