20.2 Labor Law, Wage and Hour Rules & Employee Rights
Key Takeaways
- Labor and employee rights is a separate Part 4 Legal Knowledge area from civil rights, and it covers collective bargaining, wage and hour law, leave, workplace safety, and the at-will doctrine.
- Section 7 of the National Labor Relations Act protects concerted activity for mutual aid or protection, and that protection reaches non-union employees as well as organized workforces.
- The Fair Labor Standards Act requires overtime at one and one-half times the regular rate for hours worked over 40 in a workweek unless a specific exemption applies, and job titles never establish exempt status.
- The Family and Medical Leave Act provides up to 12 weeks of unpaid job-protected leave to employees of covered employers who have worked 12 months and at least 1,250 hours and work at a site with 50 employees within 75 miles.
- Employment at will remains the default rule but is limited by statute, by contract including implied contract from handbooks, and by the public policy exception.
20.2 Labor Law, Wage and Hour Rules & Employee Rights
[!NOTE] NALS PP Exam Blueprint Focus: NALS lists labor and employee rights as its own area of law under Part 4 Legal Knowledge, separate from federal civil rights and employment discrimination. The line between them is useful: discrimination law asks whether the employer treated someone unlawfully because of who they are, while labor and employment law asks what the employer owes every worker regardless of protected status.
The National Labor Relations Act
The NLRA governs private-sector collective activity and is administered by the National Labor Relations Board.
Section 7 rights
Employees have the right to self-organize, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection — and the right to refrain from those activities.
[!TIP] Section 7 protects non-union workplaces too. Two employees discussing their wages together, or a group emailing management about unsafe conditions, are engaged in protected concerted activity even where no union exists. This is why blanket policies forbidding employees to discuss pay are routinely found unlawful.
Unfair labor practices
| Employer unfair labor practices | Union unfair labor practices |
|---|---|
| Interfering with, restraining, or coercing employees in Section 7 rights | Restraining or coercing employees in Section 7 rights |
| Dominating or supporting a labor organization | Causing an employer to discriminate against an employee |
| Discriminating to encourage or discourage union membership | Refusing to bargain in good faith |
| Discriminating against an employee for filing charges or testifying | Engaging in prohibited secondary activity |
| Refusing to bargain collectively in good faith | Charging excessive initiation fees |
The classic employer campaign errors are summarized by the mnemonic TIPS: do not Threaten, Interrogate, Promise benefits, or engage in Surveillance.
Representation
A union demonstrates support through authorization cards, files a petition, and the NLRB conducts a secret-ballot election in an appropriate bargaining unit. A union winning a majority is certified as exclusive representative. Certain supervisory, managerial, confidential, and agricultural employees, and independent contractors, are excluded from the Act's coverage.
Collective bargaining
The duty to bargain in good faith covers mandatory subjects — wages, hours, and other terms and conditions of employment — and includes an obligation to meet at reasonable times and to furnish relevant information. It does not compel agreement or concession. Permissive subjects may be bargained but not insisted upon to impasse, and illegal subjects may not be bargained at all.
A collective bargaining agreement typically contains a recognition clause, a management rights clause, wage and benefit terms, seniority provisions, a grievance and arbitration procedure, and a no-strike, no-lockout clause. Grievance arbitration under the agreement is the ordinary enforcement mechanism, and federal law supplies the substantive rules for suits to enforce collective bargaining agreements.
Right-to-work laws in a number of states prohibit agreements requiring union membership or the payment of fees as a condition of employment. Public-sector labor relations are governed by separate federal and state statutes.
Wage and Hour: The Fair Labor Standards Act
| Requirement | Rule |
|---|---|
| Minimum wage | The federal minimum has been $7.25 per hour since 2009; where a state or local minimum is higher, the higher rate applies |
| Overtime | One and one-half times the regular rate for hours worked over 40 in a workweek |
| Workweek | A fixed, recurring 168-hour period; hours may not be averaged across two weeks |
| Regular rate | Includes nondiscretionary bonuses and shift differentials, not just the base hourly rate |
| Recordkeeping | The employer must keep accurate time and pay records |
| Child labor | Age and hour restrictions, with tighter rules for hazardous occupations |
Exempt classification
The principal white-collar exemptions are executive, administrative, professional, computer, and outside sales. Except for outside sales and certain professionals, an exemption requires satisfying both:
- A salary basis and salary level test — a predetermined salary not subject to reduction for variations in quality or quantity of work, at or above the threshold in the regulations; and
- A duties test specific to the exemption claimed.
[!WARNING] A job title never establishes exempt status. Calling someone an "administrative coordinator" and paying a salary does not make the position exempt. Misclassification is the most common wage and hour exposure, and it produces back overtime, liquidated damages doubling the award, and attorney fees.
Related recurring issues: off-the-clock work, unpaid donning and doffing time, automatic meal-break deductions where the employee actually worked, independent contractor misclassification, and improper tip pooling.
The Equal Pay Act, part of the FLSA, prohibits paying employees of one sex less than the other for equal work requiring equal skill, effort, and responsibility under similar working conditions, subject to defenses of seniority, merit, a system measuring quantity or quality of production, or a factor other than sex.
Leave and Notice Statutes
Family and Medical Leave Act
| Element | Requirement |
|---|---|
| Covered employer | 50 or more employees for 20 or more workweeks in the current or preceding year |
| Eligible employee | Employed 12 months, worked at least 1,250 hours in the preceding 12 months, at a worksite with 50 employees within 75 miles |
| Entitlement | Up to 12 workweeks of unpaid, job-protected leave in a 12-month period |
| Qualifying reasons | Birth and bonding, placement for adoption or foster care, the employee's own serious health condition, care for a spouse, child, or parent with a serious health condition, qualifying exigency arising from military duty |
| Military caregiver leave | Up to 26 workweeks in a single 12-month period |
| Protections | Continued group health benefits; restoration to the same or an equivalent position |
Leave may be taken intermittently or on a reduced schedule where medically necessary. Employers may require medical certification and may designate qualifying absences as FMLA leave.
WARN Act
The Worker Adjustment and Retraining Notification Act requires employers with 100 or more employees to give 60 days advance written notice of a plant closing or mass layoff meeting the statutory thresholds, with limited exceptions for a faltering company, unforeseeable business circumstances, and natural disaster. Several states have their own mini-WARN statutes with lower thresholds and longer notice periods.
Workplace Safety
The Occupational Safety and Health Act requires employers to comply with specific standards and, under the General Duty Clause, to furnish a workplace free from recognized hazards causing or likely to cause death or serious physical harm. OSHA administers inspections, citations, and penalties; employees have the right to request an inspection and are protected from retaliation for doing so. Recordkeeping obligations include maintaining injury and illness logs and reporting serious incidents within specified timeframes.
Employment At Will and Its Limits
The default American rule is that employment of indefinite duration may be terminated by either party at any time for any reason or no reason. Four categories of limitation cut it down substantially:
| Limitation | Examples |
|---|---|
| Statutory | Title VII, ADEA, ADA, FMLA, NLRA, FLSA retaliation, whistleblower statutes, USERRA |
| Express contract | A written employment agreement with a defined term or a for-cause standard; a collective bargaining agreement |
| Implied contract | Handbook language promising progressive discipline or termination only for cause; oral assurances of continued employment |
| Public policy exception | Discharge for refusing to commit an unlawful act, for performing a public duty such as jury service, for exercising a statutory right such as filing a workers' compensation claim, or for reporting illegality |
A minority of jurisdictions also recognize an implied covenant of good faith and fair dealing in the employment relationship.
Handbook drafting is where paralegals most often touch this doctrine. A clear, conspicuous at-will disclaimer, a statement that the handbook is not a contract, and a reservation of the right to modify are the standard protective provisions, and they are undercut by mandatory progressive-discipline language elsewhere in the same document.
Restrictive Covenants
Non-competition agreements are governed by state law and vary enormously; some states refuse to enforce them in the employment context at all. Where enforceable, courts require a legitimate protectable interest, reasonableness in duration, geographic scope, and scope of activity, and consistency with the public interest. Non-solicitation and confidentiality covenants are generally enforced more readily than outright non-competes. Federal and state regulatory activity in this area has been active, so currency verification is essential before advising on enforceability.
Two non-union employees email their department head jointly complaining that scheduling changes have cut their take-home pay, and both are disciplined for the email. Does federal labor law protect them?
An employer pays an office manager a fixed annual salary above the regulatory threshold, gives her the title "Administrative Director," and does not pay overtime for her regular 50-hour weeks. Her duties consist almost entirely of data entry and answering phones under close supervision. Is she exempt?
An employee has worked for a company with 300 employees for eight months, logging 1,400 hours at a site where 120 people work. He requests FMLA leave for his own serious health condition. Is he eligible?