First Case Analysis

ELR/HSAD 610 Fall 2021

Due in D2L Assignments by 11:30 PM on October 24

You are the in-house legal counsel for ELR Incorporated (hereafter ELR), a corporation that makes its money by investing in other companies and helping them to become more profitable. ELR has just made a substantial investment in a national hotel chain - Roche Hotels (hereafter Roche) - that has existed for more than 50 years and has always maintained its Good Hotel Keeping Seal of Approval (a respected hotel industry certification). As part of its analysis of its newest investment, ELR has discovered a variety of unresolved legal matters that have arisen as a result of questionable management and employment practices by Roche. You are being asked to analyze the handling of several matters that have raised these types of concerns. Since the company has hotels in every state, the company is looking for a general overview of the issues raised by each of the matters as well as a discussion of the varieties of approaches utilized by the states in their handling of such employment matters. ELR Incorporated is thinking that a more centralized approach to employment practices needs to be adopted. It wants an overview of the possible responses to the issues raised in these cases.The cases will eventually be resolved in the localities involved, but for now your job is just to provide general instruction as to how the corporate office might improve the company's human resources practices generally to avoid these types of situations. Each of the following issues occurs at a hotel owned by the chain, and because the chain (prior to the investment by ELR) believed in the empowerment of local managers there has been little coordination of human resources decisions by the higher levels of Roche Hotels.

One issue involves one of the chain's smaller hotels, the MicroRoche. Due to its relatively small size, the manager of the MicroRoche, Chelsea Cheapskate, has been trying to save on personnel costs by making use of contingent workers.One of her innovations was to contract out some of the cleaning of the hotel's rooms during the peak tourist season to the Miralles family. The MicroRoche is now under investigation by the Department of Labor for possible violation of the Fair Labor Standards Act. Chelsea has assured Roche's upper management that there is no problem because she pays this large immigrant family based on the number of rooms cleaned in a week (she splits the profit from each room with the family and permits them to keep the tips). She has an arrangement with the husband and wife that clearly designates them as independent contractors and they appear happy with the arrangement. She comments that it is cute how they have all four of their children, ranging from 9-15 in age, running from room to room helping with the work. She notes that they buy their own feather dusters and cleaning gloves but otherwise use MicroRoche supplies. She expresses confidence that the DOL investigators will vindicate the arrangement once their investigation reveals that she keeps no employment records on the Miralles' work and just "lets them do their thing." Once the peak season is over each year, they move on to another area that has a peak demand at that later time, only to return at the same time the next year (to MicroRoche) in repetition of the cycle. She is confident that the DOL will agree that there is no way that these seasonal workers meet the definition of "employee" for purposes of the FLSA.

Another hotel in the chain, RochePacific, has been threatened with a lawsuit over its recent dismissal of Pierre Pepe, an employee brought in six weeks earlier from the east coast to serve as its head chef.He was hired away from a similar position he had held with Hilton Hotels for twenty years. His performance was exemplary, but the corporate accounting office had done a review of the RochePacific's performance and found that it could substantially increase its profit margin by contracting out all aspects of its food preparation. He was dismissed because his position was eliminated. Pepe is one month into a very expensive one-year apartment lease and is unlikely to land a comparable position and salary without relocating.RochePacific has assured the corporate office that the chef was hired in such a manner that he had no reasonable expectation that his hiring was for anything other than for an indefinite term and employment-at-will. His attorney has argued otherwise in an angry letter, noting the loss of his previous twenty-year employment, his very expensive lease obligation, the relocation of his family from the east coast, and also statements by RochePacific's general manager, Tom Smith, that the chef should be able to "retire to a nice beach-front home" in another twenty years if he agreed to accept the offer from RochePacific. The attorney also pointed out that RochePacific's employment manual, which was issued to the chef during the new employee orientation program and states "RochePacific appreciates that it is our employees who make us a success. It is our firm commitment to reward and return the loyalty of our employees. Turnover is harmful to everyone, so we are committed to the development of a committed workforce. RochePacific believes in positive reinforcement and strives to adhere to a discipline/dismissal policy that is limited to good cause shown." Smith assures the corporate office that none of these points argued by the Pepe's attorney are of any concern because there is a sentence at the end of the third full paragraph in chapter five of the ten chapter employment manual that states "Nothing herein is intended to create a contractual employment right for the employee and the employee acknowledges that this remains employment for an indefinite term and subject to at-will dismissal. RochePacific reserves the right to modify any part of this manual at any time."

The third and final case for your consideration involves the dismissal of Jim Johnson who was the laundry manager for the large RocheExpress hotel. Johnson detected bed bugs while overseeing the laundry several months ago and reported this to corporate management after RocheExpress ignored his concerns that something needed to be done about this. Corporate management instructed him to keep this information to himself as there were several large conventions scheduled, stating that RocheExpress could not afford the possible loss of so much business. Johnson reported this anonymously to the folks at Good Hotel Keeping Seal of Approval and also to the local Board of Health. The Good Hotel Keeping Seal of Approval is a private accreditation agency that is viewed as the most prominent source of industry standards. The local Board of Health has an ordinance that makes it illegal for a hotel to knowingly fail to report a finding of bed bugs to the Board. RocheExpress fired Johnson immediately upon receiving notice from both entities that inspectors would be paying RocheExpress a visit.The general manager of RocheExpress, Roger Ryan, knew immediately that Johnson was the source of the information relayed to these outside entities. He had immediately stormed into the laundry, cursing and swearing while muttering Johnson's name. He called an emergency meeting of all laundry staff and asked Johnson to stand next to him while he addressed the group of about fifteen employees. Among other things, he repeatedly said, while pointing at Johnson, "Take a good look. This is what a rat looks like. This vermin is who you have to blame if we have to shut down this hotel and you lose your jobs." Ryan concluded his tirade in front of the employees by telling Johnson "You're fired, now get the hell out of here and don't ever show your face again because I can't even stand to look at you."

Your assignment, as corporate legal counsel, is to draft a memorandum discussing each of these matters and the issues they raise. Management wants to learn as much as possible about the various legal approaches to these matters from around the country, so it is more important that you thoroughly discuss the issues than whether you arrive at the "one right answer" to the scenario. Please use the cases covered in Parts I and II from the casebook's Table of Contents to justify and support your commentary. See the discussion of this in the Legal Writing Assignment. Cases and materials from notes and other chapter materials may be used to complete your analysis. An example of how to incorporate the discussion of cases into your writing is found, among other places, in page 44's last full paragraph.Note that the caption of the case is italicized, followed by the rest of the citation in normal font. Also note how, once the full citation for the case is given, subsequent reference to the case is made by use of an italicized and abbreviated version of the caption, e.g., "The Alden court opined that..."When you use a case to support your argument, you need to provide a full citation when you first mention the case and you need to provide a brief discussion of the facts of that case, and the court's holding and reasoning. Once you have done that, you should then discuss the way the facts of the case you have cited are similar to the scenario you are applying them to and how that is instructive of how the scenario should be handled based on the court's treatment of that previous case. Please try to discuss as many issues as you can identify in the scenario by discussing the cases and materials we have covered to this point in class.

This assignment is intended to be your own work and you must adhere to the academic integrity policy. This assignment is specifically limited to the materials covered in the casebook and the statutory supplement and materials from other sources will not be graded. Be sure to proofread your paper before you submit it.

Reference: Employment Law

Cases and materials

sixth edition

Steven L. Willborn

Stewart J. Schwab

John F. Burton Jr

Gillian L. L. Lester