You are on page 1of 33

CHAPTER 7:

EMPLOYMENT LAW
Copyright 2005 South-Western. All rights reserved.

Critical Strategic Issue


Significant impact on cost structure
Establishment & maintenance of internal
mechanisms
Violations can result in significant penalties

Makes sense to be an equal opportunity


employer
Avoid penalties for violations
Hire most qualified applicant for job or to promote
most qualified individual
Copyright 2005 South-Western. All rights reserved.

12

Federal Anti-Discrimination Laws

Civil Rights Act of 1866


Gave all citizens right to enter into contracts
No remedies for unjust treatment were
provided

Civil Rights Act of 1871


Gave individuals right to sue if they felt they
had been deprived of rights under 1866 Act

Copyright 2005 South-Western. All rights reserved.

13

Federal Anti-Discrimination Laws


Equal Pay Act (1963)
Prohibits wage discrimination based on gender for
jobs that require equal skill, effort, & responsibility &
are performed under similar working conditions
Exceptions to equal pay
Bona fide seniority systems
Quality of job performance (i.e., merit-based pay
systems)
Quantity of output (i.e., piece-rate pay systems)
Factors (contingencies) other than sex (gender)
Copyright 2005 South-Western. All rights reserved.

14

Federal Anti-Discrimination Laws


Civil Rights Act (1964) - Title VII
Title VII prohibits discrimination in employment based on
race, color, religion, sex, & national origin
Covers conditions of employment: hiring, firing, promotion,
transfer, compensation, & admission to training
Applies to all private employers with 15 or more employees,
state & local governments, educational institutions,
employment agencies, & unions
Established & Equal Employment Opportunity Commission
(EEOC) to oversee & enforce Title VII & all other federal
labor laws
Copyright 2005 South-Western. All rights reserved.

15

Federal Anti-Discrimination Laws


Age Discrimination Act (1967)
Prohibits employment discrimination against
employees age 40 or older
Prohibits setting of mandatory retirement ages
except in cases of public safety (e.g., airline pilots)
Amended 1990 by Older Workers Protection Act
which prohibits discrimination in provision of
benefits & required signing of age discrimination
waivers at layoff
Covers all employers including federal government
Copyright 2005 South-Western. All rights reserved.

16

Federal Anti-Discrimination Laws


Rehabilitation Act (1973)
Prohibited discrimination by federal (but not private)
contractors against handicapped applicants or employees
Definition of handicapped individuals
Persons with physical or mental impairment that substantially
limits one or more major life activities
Persons with history or record of such impairment
Persons regarded as having such an impairment

Handicapped individuals must be otherwise qualified to


perform (with reasonable accommodation) essential
functions of job (e.g., no blind bus drivers)

Copyright 2005 South-Western. All rights reserved.

17

Federal Anti-Discrimination Laws


Pregnancy Discrimination Act (1978)
Prohibits employers from discriminating against pregnant
employees by requiring pregnancy be treated as any other
medical disability
Does not require reinstatement of returning employee to
same job
Does not allow employer to determine dates of leave
Employer cannot refuse to hire or promote on basis of
pregnancy
Employer cannot provide health plans that do not cover
pregnancy
Copyright 2005 South-Western. All rights reserved.

18

Federal Anti-Discrimination Laws


American With Disabilities Act (1990)
Prohibits all employers with 15 or more employees from
discriminating against disabled persons
Courts have issued ambiguous & conflicting rulings on
medical conditions, major life activities, & what
constitutes disability. Decisions made on a case-by-case
basis
Determination of reasonable accommodation
Cost of accommodation & resources of employer
Nature of job & workplace safety issues
Any relevant collective bargaining provisions

Copyright 2005 South-Western. All rights reserved.

19

Federal Anti-Discrimination Laws


Californias A.B. 2222
Significantly less restrictive requirements for
employees to show disability
No limits to damages
Burden of proof shifted from employee to employer
Relevance: California law is often harbinger of laws
adopted elsewhere

Copyright 2005 South-Western. All rights reserved.

110

Federal Anti-Discrimination Laws


Civil Rights Act (1991)
Extended Title VII coverage to federal employees
Allows litigants to sue for compensatory & punitive
damages
Requires heavier burden of proof on part of
employers in rebutting claims of discrimination
Provided extraterritorial enforcement of federal
labor laws in protecting U.S. employees on
overseas assignments
Copyright 2005 South-Western. All rights reserved.

111

Federal Anti-Discrimination Laws


Family & Medical Leave Act (1992)
Requires employers to provide up to 12 weeks of unpaid
leave for birth, adoption, or serious illness of a child, family
member, or employee during a 12 month period
Act only covers organizations with fifty or more employees
Employee must have been employed minimum of 25 hours
per week or 1,250 hours yearly
Employees in top 10% of employers salary ranges not
covered
Employer required to continue employees group health
coverage during leave
Employee must be allowed to return to same/equivalent job
Copyright 2005 South-Western. All rights reserved.

112

Exhibit 7-1

EEOC Complaint
Process

Copyright 2005 South-Western. All rights reserved.

113

EEOC Enforcement of Federal Law


Burden of proof initially falls on complainant
(employee) to demonstrate
Disparate treatment in deliberate discrimination of protected
class individual or
Disparate (adverse) impact as result of application of
standard or treatment applied to all individuals that results in
differential outcomes or consequences for protected groups;
usually demonstrated statistically using four-fifths rule
Four-fifths rule states that if selection rate for protected class
is not 80% of selection rate for majority class then a prima
facie case of adverse impact is established.
Copyright 2005 South-Western. All rights reserved.

114

EEOC Enforcement of Federal Law


Employers rebutting discrimination case:
Must demonstrate job-relatedness of any criteria utilized in
selection process
Can claim bona fide occupational qualification (BFOQ) that
requires employee to possess particular personal
characteristic or be member of particular group
Can use of bona fide seniority system not set up to
intentionally discriminate against protected class
Can claim business necessity; that selection criteria are
essential for safe & efficient operations of firm

Copyright 2005 South-Western. All rights reserved.

115

EEOC Enforcement of Federal Law


Voluntary mediation program
Designed to be fair, impartial, & unbiased
By refusing mediation, employers may force
employee to go to court
Litigation
Is time-consuming & expensive for employer &
employee
Is disruptive to employers workplace
May result in hard feelings toward employer

Copyright 2005 South-Western. All rights reserved.

116

Affirmative Action
Affirmative Action Plans
Require organizations to develop, implement, & maintain
program to make special efforts to insure workforce is
representative of the society where business operates
Required for organizations with 100 or employees and with
$50,000 or more in federal contracts
Filed with Department of Labor & monitored by Office of
Federal Contract Compliance
Considered temporary measures to correct underutilization
of certain protected classes

Copyright 2005 South-Western. All rights reserved.

117

Affirmative Action
Four separate sections
Utilization analysis
Employer identifies employees by gender, race, ethnicity,
religion, physical ability, & any other protected class

Availability analysis
Examines availability for employment of all protected classes
in immediate recruiting vicinity

Identification of problem areas


Employer notes over- & under-utilization of certain groups

Narrative statement of corrective action


Detailed plans with timetables

Copyright 2005 South-Western. All rights reserved.

118

Sexual Harassment
Supreme Court rulings
Meritor Savings Bank
Sexual harassment is form of sexual discrimination
under Title VII

Oncale v. Sundowner Offshore Services


Same-sex harassment is actionable under Title VII

Sexual harassment is an individuals clear


rejection of offensive & inappropriate
(unwelcome) advance
Copyright 2005 South-Western. All rights reserved.

119

Forms of Sexual Harassment


Quid pro quo
Promise or use of work-related benefits or threats to bargain
with or coerce individual for sexual favors

Hostile working environment


Presence (perceived or actual) of offensive or threatening
environment

Harassment standards used by court


Reasonable woman test
Pattern of behavior (frequency & pervasiveness) or isolated
event/act of individual
Response of organization to complaint
Copyright 2005 South-Western. All rights reserved.

120

Exhibit 7-3

Problems & Challenges in Managing Sexual Harassment

Copyright 2005 South-Western. All rights reserved.

121

Guidelines for Managing Sexual Harassment

Investigate all allegations; ignorance not a defense


Conduct thorough & prompt investigation
Ensure investigator is unbiased & objective
Ensure no retaliation takes place
Treat accused employee fairly
Have both parties sign written statements to prevent fact
from changing
Take prompt action & equate consequences with behavior
Have clear, defined process for investigation, apply
consistently, document everything

Copyright 2005 South-Western. All rights reserved.

122

Sexual Harassment
Complications abroad
Many cultures do not acknowledge sexual
harassment as workplace or societal problem,
creating ethical dilemmas
Courts place responsibility on complainants to
inform harassers that advances or behaviors are
unwelcome
Burden rests with employer of establishing,
communicating, & implementing clear policy

Copyright 2005 South-Western. All rights reserved.

123

Reading 7.1

Responding to the Supreme Court


Sutton v. United Airlines, Inc.
Addressed for first time whether court should
consider effect of measures that mitigated an
individuals impairment
Corrected impairment does not substantially limit
major life activity
Statute requires individualized inquiry into effects
of impairment on persons life

Copyright 2005 South-Western. All rights reserved.

124

Reading 7.1

Responding to the Supreme Court


Murphy v. United Parcel Service, Inc.
Hypertension did not substantially limit major life
activity because it was controlled with medication
His impairment did not exclude him from wide range
of other mechanic jobs, so he was not disabled in
major life activity of working
UPS did not consider him unable to perform a class
of jobs, just one specific job

Copyright 2005 South-Western. All rights reserved.

125

Reading 7.1

Responding to the Supreme Court

Albertsons, Inc. v. Kirkingburg


Mitigation measures can include those
undertaken by bodys own system in
response to impairment
Employer was entitled to rely on minimum
safety standards

Copyright 2005 South-Western. All rights reserved.

126

Reading 7.1

Responding to the Supreme Court


Toyota v. Williams (2002)
Phrase major life activity means only those basic
activities of central importance to most peoples
daily lives, rather than any work-related tasks
But other cases have sided with employee
EEOCs recently amended guidelines now take
mitigative measures into account

Copyright 2005 South-Western. All rights reserved.

127

Reading 7.1

Responding to the Supreme Court


Discriminating against fully mitigated
individuals
Cases suggest that company is now allowed to
reject applicant or terminate current employee
whenever it is uncomfortable with corrected
disability
Recent Supreme Court decisions make disability
questions in employment more complex rather than
less so

Copyright 2005 South-Western. All rights reserved.

128

Reading 7.1

Responding to the Supreme Court


Role of HR manager
Whether HR manager is principally representative of
management to handle employee problems or
advocate of employee concerns to management not
always clear
HR is usually where employees initially file
complaints of behaviors that violate Title VII rights
Managers role in developing & managing internal
grievance policy requires a delicate balancing act

Copyright 2005 South-Western. All rights reserved.

129

Reading 7.1

Responding to the Supreme Court


Anti-retaliation provision prohibits manager
from any employee advocacy whatsoever
Burden falls on individual employees to
challenge management & file own claims
EEOC is forced to assume advocacy role,
opening floodgates of litigation

Copyright 2005 South-Western. All rights reserved.

130

Reading 7.2

Dual Loyalty Dilemma for HR Managers


Strong incentive for employers who
unlawfully discriminate to resolve matters
in-house quickly & quietly
Title VIIs remedies for aggrieved plaintiffs
far inferior to those in other federal antidiscrimination laws
Civil Rights Act of 1991 added
compensatory & punitive damages as well
as opportunity for jury trials
Copyright 2005 South-Western. All rights reserved.

131

Reading 7.3

In Defense of Preference
Gap between educational performance of blacks
& whites has persisted & deepened
Gulf exists between educational & occupational
status of blacks & whites, encompassing
Wealth
Residential segregation
Social relationships

Banning preference would be bad for country


Preference is no final answer
Elimination of preference is no final answer
Copyright 2005 South-Western. All rights reserved.

132

Reading 7.3

In Defense of Preference
We are two nations
One nation cannot be excluded from institutions that confer
access to positions of greatest prestige & power
Both nations must participate in society to some degree

Many difficult issues remain

What kind?
To what extent?
How long?
Imposed by whom?
By what decision-making process?

Copyright 2005 South-Western. All rights reserved.

133

You might also like