UNIVERSITY OF MISSISSIPPI

SCHOOL OF LAW

EMPLOYER-EMPLOYEE RELATIONS

SPRING 2005

Professor Secunda

FINAL EXAM

Date: May 4, 2005 Time Allowed: 3 Hours, 30 minutes

Instructions

1. This is an open book examination. All outside information and materials are permitted.

2. Please "sign" the following pledge by writing your examination number on the line after the pledge. DO NOT write your name on this examination or on any part of your bluebook or computer exam.

By the act of submitting my examination, I do pledge, on my honor, that I

have neither given nor received any improper assistance and that I will

report any improper assistance given or received by others of which I am

aware.

Exam No. ______________

3. No examinations may leave the examination room during the exam. Return your examination and/or bluebooks after you have finished.

4. The first thirty (30) minutes of the examination is recommended for the purpose of reading over the examination and organizing your thoughts.

GOOD LUCK AND HAVE A GREAT SUMMER!

DO NOT TURN TO THE NEXT PAGE UNTIL INSTRUCTED

THREE QUESTIONS

QUESTION ONE (One Hour; worth 35 points)

Mercer Murray and Donna Duncan are employees (not independent contractors) of Kro-Mart ("KM") retail stores in the city of Ole Miss, State of Oxford. Kro-Mart has 200 employees at this, its only store. None of its employees are under any employment contract, agreement, or handbook.

Mercer works in the meat-cutting department as a meat cutter and earns $10/hr and works generally 40 hours per week. In the last four weeks, however, he has worked 50 hours two of the weeks, and 40 hours two of the weeks. Additionally, in the third week, he earned a $500 performance bonus for exceptional performance. At the end of this four week period, he receives $2300. Not only is he not sure that this amount is proper, but he is also concerned because he is paid only every two months and deductions of $50 are being taken without his consent for charitable projects that Kro-Mart sponsors.

Donna, on the other hand, is the Assistant to the General Manager of Kro-Mart. She is paid a salary of $52,000 per year and is directly responsible for managing the meat-packing operation. Besides supervising Mercer, she also supervises 6 other employees in this capacity. In the last four weeks, Donna has been logging an average of 60 hours a week because of increased demand for meats. Nevertheless, she still receives $4000 for the four week period ($1,000 per week).

Because of Mercer's eccentric ways, Donna has always been concerned that he might be intoxicated or under the influence of some illicit drug. For instance, she has seen him glassy eyed as he cuts deli meat and notices that he fails to wear plastic gloves as mandated by Kro-Mart (there are, however, no federal or state safety standards applicable to meat cutting). Her concern is that Mercer's inattention will lead to his injury or someone else's.

When Mercer is on vacation for a week, Donna decides to require him to report for his annual routine medical examination. As part of that examination, Mercer consents to give a urine sample (although he does not know it is going to be subjected to a drug test). Analysis of his sample finds significant traces of marijuana. Mercer is instantly suspended by Donna. Thereafter, Donna writes a policy (approved by the General Manager) requiring annual regular drug testing as a requirement for all meat cutters. Although all the other employees consent to this testing, Mercer refuses to take the drug test this time and he is fired from KM.

As a result of the circumstances surrounding Mercer's employment, Donna explains to the remaining employees that henceforth all meat-cutting employees must wear gloves while handling meat and also safety goggles. Ron Czarnetsky, one of these meat-cutting employees, fails one day to wear his goggles while cutting meat and is blinded when a piece of pastrami ricochets off the wall and punctures his eye. Donna knows that even though the State of Oxford does not have a separate state health and safety law, she will surely hear from the appropriate federal agency.

Also on the drug use front, Donna decides that testing alone is not nearly enough. Thus, she implements a physical search of her employees and their belongings whenever she feels like it. When one employee, Cary Gililland, objects to the search of her person and purse, she is terminated.

The General Manager of Kro-Mart has now come to you and is concerned about all the potential legal claims, administrative and judicial, that might be brought against Kro-Mart. Please advise her about what potential legal claims might be brought against Kro-Mart as a result of Donna's actions. The General Manager is also worried that she has not been paying Mercer and Donna properly. Please advise her on this basis as well. Make sure you also discuss potential remedies regardless of the way you believe the various claims are likely to be resolved.

QUESTION TWO (One Hour; worth 35 points)

Michael Nowlin designs new computers for Banana Computers ("BC"). Because the computer industry is a highly competitive field, BC requires Michael to sign a Confidentiality Agreement (though no covenant not to compete because they are illegal in the State of Weems where BC is located) agreeing not to disclose BC's proprietary information to anyone, but especially competitor computer companies. In particular, BC has developed a technique for making processors in computers even faster and strictly guards the secrecy of this process.

In order to entice Michael to work for BC and not others, BC offers very generous retirement and health coverage. Under the retirement plan, Michael is eligible to invest up to $1000 per month of his own money in an assortment of diversified investment options and the company will match Michael's investment on a 1:1 basis. Over a year, Michael invests $12,000 of his own money into his pension account and the company adds another $12,000, for a total of $24,000.

Under the health care plan, which is managed and administered on a day-to-day basis by Farish Insurance Company ("FIC"), employees are eligible for up to $100,000 per year of coverage for all psychiatric disorders, including paranoid schizophrenia. This amount of coverage is consistent with the State of Weems mandated benefits law.

While Michael is still an employee, he discovers that he suffers from severe paranoid schizophrenia. Per his own doctor's instructions, Michael asks for increased psychiatric visits from FIC. He is denied that coverage and told by the FIC representative on the phone that his schizophrenia did not sound that severe. To make matters worse, after hearing of Michael's illness, BC decides to lower the coverage for paranoid schizophrenia under its health plan to $5000 per year (which no longer meets the provisions of the State of Weems mandated benefit law).

Later that day, suffering from a severe delusion, Michael runs away from space aliens trying to kill him and suffers major injuries after being hit by a bus. Michael hopes to recover his medical expenses from FIC under a tort theory of law.

Once he recovers from his injuries, Michael sues BC and BC fires him and claims that he has forfeited all of his retirement benefits. The next week Michael starts working for Computer Dynamics ("CD"), BC's chief competitor, as a computer designer. In his new job, Michael will be responsible for designing quicker processors for CD computers. Although he is extremely angry at BC, he promises them that he will never disclose BC's proprietary information to CD. Nevertheless, BC tells Michael that he must quit CD immediately or face legal consequences.

Michael later finds the love of his life, Lisa Lee, who happens to be an employee at BC. CD requests that Michael stop seeing Lisa because it is concerned that BC will learn of its proprietary information through this relationship. When Michael refuses to end the relationship, he is fired by CD.

A. You are a law clerk for the eminent jurist (and expert surfer) Judge M.E. Waterstone. Michael has sued BC, CD, and FIC under a number of legal theories. BC has also counter-sued Michael. Last, the State of Weems has sued FIC. Please describe and analyze these causes of action to Judge Waterstone in a bench memo. Make sure you also discuss potential remedies regardless of the way you believe the various claims are likely to be resolved.

B. After Michael is fired from CD, will he be eligible for unemployment compensation? If so, how will the amount of his benefits be determined?

QUESTION THREE (One Hour; worth 30 points)

Comment critically on the following statement:

"American employment law in the last thirty years has significantly titled in favor of employers and corporate interests."

In your answer, you should discuss the following: What is the current state of the law in two major areas of employment law we have discussed this semester? Do you favor changing or retaining these present legal approaches? What arguments support your positions, and what is your response to the best argument that could be mustered against your positions? Integrate cases, statutes, and policy arguments in supporting your answer.