Which of the following is true about "seniority rules"?

Josh’s headmaster fought to keep him, but his hands were tied; under the state’s strict "last in, first out" seniority rules, enshrined in statute, the most recent recruits had to be fired first, regardless of ability.

British-born Oliver Hart and Finland’s Bengt Holmstrom won the Nobel Economics Prize on Monday for work that addresses a host of questions from how best to reward executives to whether schools and prisons should be privately owned. Their findings on contract theory have implications in such areas as corporate governance, bankruptcy legislation and political constitutions.