Employment law

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Law that derives from historical interpretations and the reliance upon the application of precedent, that is, judicial interpretations handed down from one court to another. The common law is important in regulating the employment relationship and the activities of unions. The common law contract of employment sets out the rights and duties of employers and employees know historically by the term ‘master and servant.’ Union activities are also often influenced by a part of the common law known as ‘Tort.’ This is used to regulate different forms of civil wrongs, arising from such issues as intimidation, conspiracy to induce a person to breach their contract of employment, economic loss, property damage, trespass, and restraint of trade. Tort law is often used by hospitality employers against unions during industrial disputes as a vehicle for pursuing compensation and cost recovery for economic loss caused by union strike activity. Statute law refers to the mechanism by which government through a parliament or other governmental system enacts legislation that sets out rights and obligations of employers and employees. Generally, statute law overrides common law to the extent of any inconsistencies that may be contained in the latter (Heys, 2001).

In the USA, employment law was originally a portion of the domestic relations law in the days where room and board were part of the compensation for servants and apprentices (Olson, 1997). In 1884, the common law at-will doctrine was established in the Tennessee Supreme Court (Summers, 2000).Within 3 years, the at will doctrine became generally accepted in the American courts. This doctrine allowed for either an employer or employee to terminate at any time whether or not a reason was present. Employers utilized the at will doctrine to their advantage in order to control their employees, especially those in middle and upper level management positions who had a vested interest through company stock and profit sharing (Gleitner & Kleiner, 1997).

Today, this premise exists in all but three states (Florida, Georgia, and Rhode Island). It allows for an employee to be terminated atwill, which is ‘for good cause, bad cause or no cause at all’ (Roehling & Wright, 2004, p. 89; Autor, Donahue III, & Schwab, 2006, p. 211). There are two interesting things to note: (1) employment at will is not a law, but simply a doctrine that is applied if no other employment terms have been mutually agreed upon (Roehling & Wright, 2004) and (2) while the federal laws uphold the rights of certain protected classes of employees such as racial minorities, female employees, older employees over the age of 40, disabled employees, and union members, the state laws protect all workers not already included in the federal laws (Miles, 2000).

Three legal exceptions to the at will premise exist. They are as follows: (1) violation of public policy; (2) breach of an express or implied contract to terminate only for cause; (3) breach of the implied in law covenant of good faith and fair dealing (Gleitner & Kleiner, 1997; Miles, 2000; Tesone, 2005). These will be discussed in greater detail in the wrongful dismissal section.

So, in a global economy, what happens to an employee who works in the USA, but is not a US citizen and an employee who is a US citizen who is employed by an American company abroad? In her research of the laws, Domagalski (2008) stated that both the amendments of Title VII of the 1964 Civil Rights Act and the Americans with Disabilities Act (ADA) included protection to those US citizens who were employed by an American company abroad. However, the 1991 amendment to the Civil Rights Act has been ruled as not applicable abroad. As for those employees working in the USA who are not US citizens, the state laws, which are more stringent, are applicable.


Autor, D. H., Donahue, J. J., III, & Schwab, S. J. (2006). The costs of wrongful discharge laws. The Review of Economics and Statistics, 88(2), 211 231.

Domagalski, T. A. (2008). Employment discrimination and the international workplace: a review of recent US court rulings. Employment Response Rights Journal, 20, 195 204.

Gleitner, C., & Kleiner, B. H. (1997). New developments concerning wrongful constructive termination. Managerial Law, 39(1), 60 66.

Heys, A. (2001). Australian Master Human Resources Guide 2002. Sydney, Australia: CCH Australia Ltd.

Miles, T. J. (2000). Common law exceptions to employment at will and U.S. labor markets. Journal of Law Economics and Organization, 16(1), 74 101.

Olson, W. (1997). The Excuse Factory: How Employment Law is Paralyzing the American Workplace. New York, NY: The Free Press.

Roehling, M. V., & Wright, P. (2004). Organizationally sensible vs. legal centric responses to the eroding employment at will doctrine. Employer Responsibilities and Rights Journal, 16(2), 89 103.

Summers, C. W. (2000). Employment at will in the United States: the divine right of employers. University of Pennsylvania Journal of Labor and Employment Law, 65.

Tesone, D. V. (2005). Human Resource Management in the Hospitality Industry: A Practitioner’s Perspective. Upper Saddle River, NJ: Pearson Prentice Hall.

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