Assignment 1: HR Management
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A couple of years ago, fourteen members of the Wisconsin Senate simply disappeared. Actually, they were in neighboring Illinois, where they were camped out in cheap (well, inexpensive) motel rooms in an effort to avoid the long arm of the law—not a law that they had violated, but rather one that they didn’t want passed. All fourteen were Democrats, and they were trying to buy time to marshal public sentiment against a bill that would severely limit the rights of Wisconsin public-sector employees to bargain collectively with state and local government bodies. As long as they were absent from the state, the Senate could not—or so they thought—convene enough members to hold a vote on the bill. About a month later, though, the nineteen Republican members of the Senate maneuvered the bill onto the agenda and passed it by a vote of 181.
The new law limited public-sector unions to bargaining only on the issue of base pay. It also pegged raises to the Consumer
Price Index, an inflation-measurement tool, unless voters approve higher increases. Other provisions further curtailed union activity by making the payment of union dues voluntary and prohibiting the state from collecting dues through members’ paychecks. State workers were forced to increase contributions to their pensions to 5.8 percent of their salaries and double, to 12.6 percent, contribu- tions to their health-care plans. The overall effect of the new mea- sures was a cut in take-home pay of about 8 percent.
The Wisconsin law does not apply to private-sector unions, but today’s unionized work force includes a much greater percent- age of public employees than it did 35 years ago, when about 25 percent of workers in both sectors belonged to unions. Today, the union membership rate for public workers has grown and is substantially higher than the declining rate for private-sector
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Learning Objectives After studying this chapter, you should be able to:
2-1 Describe the legal context of human resource management
2-2 Identify key laws that prohibit discrimination in the workplace and discuss equal employment opportunity
2-3 Discuss legal issues in compensation, labor relations, and other areas in human resource management
2-4 Discuss the importance to an organization of evaluating its legal compliance“ If you don’t have collective bargaining, the best you can hope for is collective begging.”—Missouri union official1
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ColleCtive Bargaining or ColleCtive Begging?
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24 Part 1: An Overview of Human Resource Management
Like other organizations, government agencies like the State of Wisconsin must adhere to the laws and regulations that govern its employment practices. In general, organizations try to follow such laws and regulations for several reasons. One is an inherent commitment in most organizations to ethical and socially responsible behavior. Another is to avoid the direct costs and bad publicity that might result from law- suits brought against the organization if those laws and regu- lations are broken. But as the opening case illustrates, these laws and regulations occasionally change or are reinterpreted by the courts. As we will see, failure to follow the law, even because of a well- intentioned misunderstanding, can be enormously costly to an organization.
As we noted in Chapter 1, the proliferation of laws and regulations affecting employment practices in the 1960s and 1970s was a key reason for the emergence of human resource management (HRM) as a vital orga- nizational function. Managing within the complex legal environment that affects human resource (HR) practices requires a full understanding of that legal environment and the ability to ensure that others within the organi- zation also understand it.3 This chap- ter is devoted to helping you under- stand the legal environment of human resource management. First, we establish the legal context of HRM and then focus on perhaps the most important area of this legal context—equal employment opportunity—and review several key court cases that have established the law in this area. Subsequent sections introduce legal issues in com- pensation and labor relations. Various emerging legal issues are also introduced and discussed. Finally, we summarize how many of today’s organizations evaluate their legal compliance.
2-1 tHe legal ConteXt oF HUMan reSoUrCe ManageMent The legal context of human resource management is shaped by different forces. The catalyst for modifying or enhancing the legal context may be legislative initiative, social change, or judicial rulings. Governmental bod- ies pass laws that affect human resource practices, for
example, and the courts interpret those laws as they apply to spe- cific circumstances and situations. Thus, the regulatory environment itself is quite complex and affects different areas within the HRM process.4
2-1a The Regulatory Environment of Human Resource Management The legal and regulatory environ- ment of human resource man- agement in the United States emerges as a result of a three- step process. First is the actual creation of new regulation. This regulation can come in the form
of new laws or statutes passed by national, state, or local government bodies; however, most start at the national level. State and local regulations are more likely to extend or modify national regulations than create new ones. In addition, as we will see later, the president of the United States can also create regulations that apply to specific situations. Finally, court decisions, especially decisions by the Supreme Court of the United States, ©
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workers—36.2 percent to 6.9 percent. Remember, however, that the total public-sector labor force is much smaller than the total private-sector labor force—a fact which makes all the more strik- ing the recent Bureau of Labor Statistics announcement that, for the first time ever, public-sector union employees outnumber private-sector union employees (7.6 million to 7.1 million). In short, with the collapse of union presence in the private-sector, whatever strength organized labor has left depends on the endurance of public-sector unions.
Proponents of the new Wisconsin law see it as an efficient means of closing budget deficits faced by the state’s financially strapped cities, counties, and school districts. Opponents, however, point out that budgetary problems in states all across the country are among the financial repercussions of the recession, which has decimated revenues from income and sales taxes. In Texas, for example, one
public-union official claimed that the state suffers from a budget deficit of $26 billion even though state law already prohibits collec- tive bargaining for teachers and most other public workers.
Many critics of the Wisconsin measure also see it as a thinly veiled effort to curb or destroy public unions. “It’s pretty much [an] evisceration of collective bargaining,” says Ohio State University law professor James Brudney; and, as a union official in Missouri puts it, “If you don’t have collective bargaining, the best you can hope for is collective begging.”2
tHinK it over 1. What is your personal opinion of the Wisconsin law? 2. Do you think it would be feasible to extend a law such as the
one passed in Wisconsin to private-sector unions? Why or why not?
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Chapter 2: The Legal Environment 25
set precedence and so also play a major role in establish- ing the regulatory environment.
There are also numerous instances where court decisions have narrowed definitions of some laws and have reduced the ability of plaintiffs to bring charges under other laws. As a result, in some cases, activists have called for new laws to reestablish the original intent of a law that has been altered by various court decisions. Indeed, for instance, the Civil Rights Act of 1991 was passed to reestablish certain provi- sions of the original Civil Rights Act passed in 1964 (we dis- cuss these laws later).
The second step in the regulation process is the enforcement of these regulations. Occasionally, the laws themselves provide for enforcement through the creation of special agencies or other forms of regulatory groups. (We will discuss one important agency, the Equal Employment Opportunity Commission, later in the chapter.) In other situations, enforcement might be assigned to an existing agency such as the Department of Labor. The court system also interprets laws that the government passes and provides another vehicle for enforcement. To be effective, an enforc- ing agency must have an appropriate degree of power. The ability to levy fines or bring lawsuits against firms that vio- late the law are among the most powerful tools provided to the various agencies charged with enforcing HR regulations.
The third step in the regulation process is the actual practice and implementation of those regulations in organi- zations. In other words, organizations and managers must implement and follow the guidelines that the government has passed and that the courts and regulatory agencies attempt to enforce. In many cases, following regulations is a logical and straightforward process. In some cases, however, a regulation may be unintentionally ambiguous
or be interpreted by the courts in different ways over time. Regardless of the clarity of the regulation, the actual pro- cess of implementing and demonstrating adherence to it may take an extended period of time. Thus, organiza- tions are sometimes put in the difficult position of figur- ing out how to follow a particular regulation or needing an extended period to fully comply.
2-2 eQUal eMPloYMent oPPortUnitY Regulations exist in almost every aspect of the employment relationship. As illustrated in Figure 2.1, equal employment opportunity intended to protect individuals from illegal discrimination is the most fundamental and far-reaching area of the legal regulation of human resource manage- ment. Indeed, in one way or another, almost every law and statute governing employment relationships is essentially attempting to ensure equal employment opportunity. Such opportunity, however, has been interpreted to include protection that goes beyond ensuring that a person has a fair chance at being hired for a job for which the person is qualified. As also illustrated in Figure 2.1, this protection extends to preventing illegal discrimination against current employees with regard to performance appraisal, pay, pro- motion opportunities, and various other dimensions of the employment relationship. In addition, several related legal issues warrant separate discussion as well.
Some managers assume that the legal regulation of HRM is a relatively recent phenomenon. In reality, how- ever, concerns about equal opportunity can be traced back
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26 Part 1: An Overview of Human Resource Management
to the Thirteenth Amendment passed in 1865 to abolish slavery and the Fourteenth Amendment passed in 1868 to provide equal protection for all citizens of the United States. The Reconstruction Civil Rights Acts of 1866 and 1871 further extended protection offered to people under the Thirteenth and Fourteenth Amendments, and together with those amendments, these laws still form the basis for present-day federal court actions that involve the payment of compensatory and punitive damages.5
2-2a Discrimination and Equal Employment Opportunity The basic goal of all equal employment opportunity regula- tion is to protect people from unfair or inappropriate dis- crimination in the workplace.6 However, most laws passed to eliminate discrimination do not explicitly define the term itself. It is also instructive to note that discrimination per se is not illegal. Organizations routinely “discriminate”
between effective and ineffective employees in how they are treated. As long as the basis for this discrimination is purely job-related, however, such an action is legal and appropriate when based on performance or seniority and applied objec- tively and consistently. Problems arise, though, when dif- ferentiation between people is not job related; the resulting discrimination is illegal. Various court decisions and basic inferences about the language of various laws suggest that illegal discrimination is the result of behaviors or actions by
an organization or managers within an organization that cause members of a pro- tected class to be unfairly differentiated from oth- ers. (We discuss protected classes later in this chapter.)
Although numerous laws deal with different aspects of equal employment opportunity, the Civil Rights Act of 1964 clearly signaled the beginning of a new legislative era in American business. The act grew out of the growing atmosphere of protest for equal rights in the early 1960s and contains several sections called titles that deal with differ- ent areas of application of the Civil Rights Act. Our discus- sion will focus on Title VII, which deals with work settings under the heading of Equal Employment Opportunity.
Title vii of the Civil Rights Act of 1964 The most significant single piece of legislation specifically affecting the legal context for human resource management to date has been Title VII of the Civil Rights Act of 1964. Congress passed the Civil Rights Act and President Lyndon Johnson signed it into law in 1964 as a way to ensure that equal opportunities would be available to everyone. Title VII of the act states that it is illegal for an employer to fail or
refuse to hire, to discharge any individual, or to discrimi- nate in any other way against any individual with respect to any aspect of the employment relationship on the basis of that individual’s race, color, religious beliefs, sex, or national origin.
The law applies to all components of the employment relationship, including compensation, employment terms, working conditions, and various other privileges of employ- ment. Title VII applies to all organizations with fifteen or more employees working 20 or more weeks a year and that are involved in interstate commerce. In addition, it also applies to state and local governments, employment agencies, and labor organizations. Title VII also created the Equal Employment Opportunity Commission (EEOC) to enforce the various provisions of the law (we discuss the EEOC later in this chapter). Under Title VII, as interpreted by the courts, several
illegal discrimination results from behaviors or actions by
an organization or managers within an organization
that cause members of a protected class to be unfairly
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Protection from discrimi- nation in performance
appraisal, subsequent job placements, training and
development opportunities, career and promotion opportunities, and all
other dimensions of work in the organization
Current employees
Prospective employees
Protection from discrimination in
selection, initial job placement, and initial
compensation
Fig 2.1 Legal Regulation of Human Resource Management
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The reconstruction Civil rights Acts of 1866 and 1871 further extended protection offered to people under
the Thirteenth and Fourteenth Amendments.
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Chapter 2: The Legal Environment 27
Disparate treatment discrimination exists when individuals in similar situations are treated differently based on the individual’s race, color, religion, sex, national origin, age, or disability status.
A bona fide occupational qualification (BFOQ) states that a condition like race, sex, or other personal characteristic legitimately affects a person’s ability to perform the job, and therefore can be used as a legal requirement for selection.
A business necessity is a practice that is important for the safe and efficient operation of the business.
types of illegal discrimination are outlawed. These types are discussed next and are illustrated in Figure 2.2.
Disparate treatment Disparate treatment discrimi- nation exists when individuals in similar situations are treated differently and when the differential treatment is
based on the individual’s race, color, religion, sex, national origin, age, or disability status. For example, if two people with the same qualifications for the job apply for a pro- motion and the organization uses one individual’s race or national origin to decide which employee to promote, then the individual not promoted is a victim of disparate treat- ment discrimination. To prove discrimination in this situ-
ation, an individual filing a charge must d e m o n s t r a t e t h a t there was a discrimi- natory motive; that is, the individual must prove that the organi- zation considered the individual’s protected class status when mak- ing the decision.
One circumstance in which organizations can legitimately treat members of different groups differently is when there exists a bona fide occupational
qualification (BFOQ) for performing a particular job. This means that some personal characteristic such as age legitimately affects a person’s ability to perform the job. For example, a producer casting a new play or movie can legally refuse to hire an older person to play a role that is expressly written for a young person. Few legitimate BFOQs exist, however. For example, a local bar cannot
Under Title vii of the Civil rights Act, it is illegal for an employer to fail or refuse to hire or to discharge any individual or to in any other way discriminate
against any individual with respect to any aspect of the employment relationship on the basis of that individual’s
race, color, religious beliefs, sex, or national origin.
Forms of illegal
discrimination
Retaliation
Disparate impact
Disparate treatment
Pattern or practice
Fig 2.2 Forms of Illegal Discrimination
hire only young and attractive people as servers based on the argument that their customers prefer young and attractive servers. In fact, customer or client preference can never be the basis of a BFOQ. As we shall see, this situation can become quite complex.
To claim a BFOQ excep- tion, the organization must be able to demonstrate that hir- ing on the basis of the charac- teristic in question (e.g., age) is a business necessity; that is, the organization must be able to prove that the practice is important for the safe and efficient operation of the busi- ness. But what if customers at a casino would prefer female card dealers or if customers at an automobile dealership pre- fer male salespeople? These customers might go elsewhere if these preferences were not satisfied, and those decisions could surely hurt the business involved. In general, neither D
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28 Part 1: An Overview of Human Resource Management
Disparate impact discrimination occurs when
an apparently neutral employment practice
disproportionately excludes a protected group from
employment opportunities.
The four-fifths rule suggests that disparate impact exists if a selection criterion (such
as a test score) results in a selection rate for a protected
class that is less than four- fifths (80 percent) of that for
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case would qualify as a BFOQ, but reality is rarely this simple.
The case of Diaz v. Pan American World Airways, for example, was filed after Celio Diaz (a male) applied for the job of flight attendant with Pan American Airlines (Pan Am).7 He was rejected because Pan Am had a pol- icy of hiring only women for this position (as did many airlines in 1971). Diaz filed suit for discrimination, but Pan Am argued that gender was a BFOQ for the job of flight attendant. This argument was based on Pan Am’s own experience with male and female flight atten- dants and on the fact that Pan Am’s customers over- whelmingly preferred to be served by female attendants. A lower court accepted the airlines’ argument that “an airline cabin represents a unique [and stressful] envi- ronment in which an air carrier is required to take account of the special psychological needs of its passen- gers. Those needs are better attended to by females.”8 The appeals court reversed that decision, however, cit- ing that Pan Am’s data on the relative effectiveness of male and female flight attendants was not compelling and that customer preference was not relevant because no evidence existed that hiring male flight attendants would substantially affect the business performance of the airlines. But, while this may seem clear, Asian res- taurants are allowed to hire only Asian waiters because they add to the authenticity of the dining experience, and establishments such as Hooters are allowed to hire only attractive female waitresses because they are really selling the experience rather than the food; thus, these are considered business necessities.
Disparate impact A second form of discrimination is disparate impact discrimination that occurs when an appar- ently neutral employment practice disproportionately excludes a protected group from employment opportuni- ties. This argument is the most common for charges of dis- crimination brought under the Civil Rights Act. Examples include a rule that, in order to maintain cleanliness in a food service organization, no employee can have hair covering his or her ears (which will affect female applicants more than male applicants), or a rule that, in order to reach
items on a high shelf, all employees must be at least 6 feet tall (which will also affect female applicants more severely, as well as applicants from certain ethnic groups). Note that even if an organi- zation instituted these rules with no intention of dis- criminating against anyone, the intent to discriminate is irrelevant, and these would both be cases of disparate impact. Furthermore, any
real concerns could be dealt with by rules that employees wear hairnets or use stepladders, respectively.
One of the first instances in which disparate impact was defined involved a landmark legal case, Griggs v. Duke Power. Following passage of Title VII, Duke Power initiated a new selection system that required new employees to have either a high school education or a minimum cutoff score on two specific personality tests. Griggs, a black male, filed a lawsuit against Duke Power after he was denied employment based on these criteria. His argument was that neither criterion was a necessary qualification for performing the work he was seeking. After his attorneys demonstrated that those criteria disproportionately affected blacks and that the company had no documentation to support the validity of the criteria, the courts ruled that the firm had to change its selection criteria on the basis of disparate impact.9
The important criterion in this situation is that the consequences of the employment practice are discrimina- tory, and thus the practice in question has disparate (some- times referred to as adverse) impact. In fact, if a plaintiff can establish what is called a prima facie case of discrimination, the company is considered to be at fault unless it can dem- onstrate another legal basis for the decision.10 This finding doesn’t mean that the company automatically loses the case, but it does mean that the burden of proof rests with the com- pany to defend itself rather than with the plaintiff trying to prove discrimination. Therefore, it is extremely important to understand how one establishes a prima facie case.
Several avenues can be used to establish a prima facie case, but the most common approach relies on the so-called four-fifths rule. Specifically, the courts have ruled that dis- parate impact exists if a selection criterion (such as a test score) results in a selection rate for a protected class that is less than four-fifths (80 percent) than that for the majority group. For example, assume that an organization is consid- ering 100 white applicants and 100 Hispanic applicants for the same job. If an employment test used to select among
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Chapter 2: The Legal Environment 29
Geographical comparisons involve comparing the characteristics of the potential pool of qualified applicants for a job (focusing on characteristics such as race, ethnicity, and gender) with those same characteristics of the present employees in the job.
The McDonnell-Douglas test is used as the basis for establishing a prima facie case of disparate impact discrimination.
Pattern or practice discrimination is similar to disparate treatment but occurs on a classwide basis.
these applicants results in 60 white applicants (60 percent) being hired, but only 30 Hispanic applicants (30 percent) being hired, then disparate impact is likely to be ruled because Hispanics are being hired at a rate that is less than four-fifths than that of whites. At this point, the organi- zation using the test would be required to prove that its differential selection rate of whites versus Hispanics could be justified (the basis for this justification will be explained below).
But demonstrating that an organization’s policies have violated the four-fifths rule can sometimes be com- plicated. In the case of Ward’s Cove Packing v. Antonio, the defendant, a salmon cannery in Alaska, had two dis- tinct types of jobs for which people were hired.11 Cannery jobs were seen as skilled (administrative and engineering) while noncannery jobs were viewed as unskilled. The plaintiff’s attorneys argued that because the noncannery jobs were predominantly filled by Filipino and Native Alaskans and the cannery jobs were held predominantly by whites, the company had violated the four-fifths rule and had therefore established a prima facie case for dis- parate impact. The defendant did not dispute the sta- tistics but argued that the policies in place did not lead to apparent disparate impact and therefore there was no prima facie case. The Supreme Court agreed with the defendant, ruling that the statistical proof alone was not sufficient for establishing a prima facie case. Therefore, the burden of proof did not shift to the defendant but rested with the employee involved. Ward’s Cove won the case. In addition to illustrating the problems with estab- lishing a violation of the four-fifths rule, the Ward’s Cove case was also widely seen as dealing a major blow to the enforcement of the Civil Rights Act of 1964—a topic to which we will return shortly.
A plaintiff might be able to demonstrate dispa- rate impact by relying on so-called geographical com- parisons. These involve comparing the characteristics of the potential pool of qualified applicants for a job (focusing on characteristics such as race, ethnicity, and gender) with those same characteristics of cur- rent employees in the job. Thus, if the potential pool of qualified applicants in the labor market for the job of bank teller is 50 percent African American, then a bank hiring from that market should have approximately 50 percent African American tellers. Failure to achieve this degree of representation is considered a basis for a prima facie case of disparate impact discrimination. This comparison requires a clear understanding of the labor market from which the organization typically recruits employees for this job because different jobs within the same organization might draw on different “relevant” labor markets with different characteristics. For instance, a university might rely on a national labor market for new faculty members, a regional labor mar- ket for professional staff employees, and a local labor market for custodial and food-service employees. It is
also important to note that the definition of the “poten- tial pool of qualified applicants” draws heavily on census data for the area.
Finally, the McDonnell-Douglas test, named for a Supreme Court ruling in McDonnell-Douglas v. Green, is another basis for establishing a prima facie case.12 Four steps are part of the McDonnell-Douglas test:
1. The applicant is a member of a protected class (see below).
2. The applicant was qualified for the job for which he or she applied.
3. The individual was turned down for the job. 4. The company continued to seek other applicants with
the same qualifications.
Pattern or practice discrimination The third kind of discrimination that can be identified is pattern or prac- tice discrimination. This form of disparate treatment occurs on a classwide or systemic basis. Although an individual can bring charges of practice discrimination, the question is whether the organization engages in a pattern or practice of discrimination against all members of a protected class instead of against one partic- ular member. Title VII of the 1964 Civil Rights Act gives the attorney general of the United States express pow- ers to bring lawsuits against organizations thought to be guilty of pattern or practice discrimination. Specifically, Section 707 of Title VII states that such a lawsuit can be brought if there is rea- sonable cause to believe that an employer is engaging in pattern or practice discrimi- nation. A good example of
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30 Part 1: An Overview of Human Resource Management
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pattern or practice discrimination allegedly occurred several years ago at Shoney’s, a popular family-oriented restaurant chain with operations and locations throughout the South. A former assistant manager at the firm alleged that she was told by her supervisor to use a pencil to color in the “o” in the Shoney’s logo printed on its employment application blanks for all African American applicants. The presumed intent of this coding scheme was to eliminate all those appli- cants from further consideration.13
To demonstrate pattern or practice discrimination, the plaintiff must prove that the organization intended to dis- criminate against a particular class of individuals. A critical issue in practice or pattern discrimination lawsuits is the defi- nition of a statistical comparison group or a definition of the relevant labor market. A labor market consists of workers who have the skills needed to perform the work and who are within a reasonable commuting distance from the organiza- tion. The definition of labor market is a major issue in resolv- ing lawsuits brought under pattern or practice dis- crimination suits.
Retaliation A final form of discrimination that has become more prevalent in recent years is retaliation. Retaliation refers to an organi- zation taking some action against an employee who has opposed an illegal employment practice or has filed suit against the company for illegal discrimination. Retaliation is expressly forbidden by Title VII of the Civil Rights Act, but several Supreme Court decisions have made it much less clear exactly how this protection might work.
In 2011, the Supreme Court, noting the sharp rise in claims filed with the EEOC by employees who allege retaliation for filing discrimination charges, handed down an important ruling that expanded protection against this type of retaliation. In Thompson v. North American Stainless Steel, the Court ruled unanimously that an employee could collect monetary awards from an employer for retaliating against her for her sexual harassment claim, broadening protection under the 1964 CRA. What made the case more interesting is that the company didn’t fire the woman who filed the charges, but did fire her husband, and the ruling stipulated that he was covered against retaliation as well.
But, two years later, the Court handed down another ruling (this time 5-4) that seemed to make it more diffi- cult for someone to bring suit over retaliation. In Texas Southwestern Medical Center v. Nassar the Court ruled that, in order for an employee to successfully sue for discrimina- tion, the employee had to prove that “but-for” that retali- ation the person would have suffered no penalty. In other words, even if retaliation were part of the motivation for an
action, the case would be successful only if retaliation were the only (or primary) motivation for the action.
This most recent decision seems to place such a seri- ous burden of proof requirement upon the person claiming retaliation that few would be able to pursue such a com- plaint. It will be interesting to see if Congress reacts by passing additional legislation, but this seems unlikely given the gridlock in Congress. Thus, worker protection against retaliation seems to be compromised.
Employer defense Our discussion so far has focused on the types of illegal discrimination and the ways in which a plaintiff can establish a case of discrimination. As noted ear- lier, however, once a prima facie case has been established, the burden of proof shifts to the defendant; that is, the defendant has to provide evidence for nondiscriminatory bases for the decisions made. Therefore, it is critical to understand that just because a prima facie case has been established, the defen-
dant (typically the company) will not necessarily be found liable. The company can defend itself by providing evidence that the selection decision (or employment decision of any type) was based on criteria that are job
related. In other words, the defendant (usu-
ally an organiza- tion) must be able
to prove that decisions were made so that the persons most likely to be selected (or promoted or to receive a pay raise) are those who are most likely to perform best on the job (or who have already performed best on the job). This situation is also referred to as validation of the practice in question. In Chapter 7, we will discuss how one validates a selection technique and therefore establishes that it is job related. Many of these issues are also based on the court ruling in the Albermarle Paper Company case, which is also discussed in Chapter 7.
2-2b Protected Classes in the Workforce Now we turn our attention to what the term protected classes means in practice. Many of the discriminatory prac- tices described earlier stemmed from stereotypes, beliefs, or prejudice about classes of individuals. For example, com- mon stereotypes at one time were that African American employees were less dependable than white employees, that disabled individuals could not be productive employ- ees, and that certain jobs were inappropriate for women or people who were overweight. Relying on these stereotypes, organizations routinely discriminated against African Americans, disabled people, women, and overweight indi- viduals. Although such blatant cases of discrimination are now rare, it is clear that stereotypes persevere and discrimi- nation continues, even if it is more subtle.
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To combat this past discrimination, various laws have been passed to protect different classes or categories of indi- viduals. Although it varies from law to law, a protected class consists of all individuals who share one or more common characteristics as indicated by that law. The most common character- istics used to define pro- tected classes include race, color, religion, gender, age, national origin, disability status, and status as a mili- tary veteran. As we will see, some laws pertain to sev- eral protected classes, while others pertain to a single protected class. Class defi- nition generally involves first specifying the basis of distinction and then specifying which degree or category of that dis- tinction is protected. For example, a law may pro- hibit discrimination on the basis of gender—a basis of distinction—and then define the protected class as females. This distinc- tion does not mean that an organization can discriminate against men, of course, and in some cases men could even be considered members of a pro- tected class. But the law was almost certainly passed on the assumption that most gender-based discrimination has been directed against women and thus it is women who need to be protected in the future.
At the same time, an important issue is to what extent an organization can give preferential treatment to members of a protected class. Although exceptions can be made in certain circumstances, by and large the intent of most equal employ- ment opportunity legislation is to provide fair and equitable treatment for everyone, as opposed to stipulating preferential treatment for members of a protected class.14 This interpre- tation becomes a bit complicated, though, and can result in charges of reverse discrimination, our next topic.
2-2c Affirmative Action and Reverse Discrimination When charges of illegal discrimination have been sup- ported, courts sometimes impose remedies that try to reverse the effects of past discrimination. Most frequently, these remedies have taken the form of some type of affirma- tive action. (As we shall see below, some organizations are
also required to file affirmative action plans even without charges of illegal discrimination.) Affirmative action refers to positive steps taken by an organization to seek quali-
fied employees from underrepresented groups in the workforce. When affir- mative action is part of a remedy in
a discrimination case, the plan takes on additional urgency and the steps
are somewhat clearer. Three ele- ments make up any affirmative
action program. The first element is called
the utilization analysis and is a comparison of the racial, sex, and ethnic composition of the employer’s workforce compared to that of the available labor supply. For each group of jobs, the organization needs to iden- tify the percentage of its work- force with that characteristic (i.e., African American, female, etc.) and identify the percentage of workers in the relevant labor market with that characteristic. If the percentage in the employ- er’s workforce is considerably less than the percentage in the external labor supply, then that minority group is characterized as being underutilized. Much of this analysis takes place as part of the discrimination case, if one is involved, and the affected groups are defined by the spe- cifics of the case.
The second part of an affirmative action plan is the development of goals and timetables for achieving bal- ance in the workforce concerning those characteristics, especially where underuti- lization exists. Goals and timetables generally specify the percentage of protected classes of employees that the organization seeks to have in each group and the targeted date by which that percentage should be attained, but these are much more flexible than quotas, which are illegal (except in rare cases when these have been imposed by courts). The idea underlying goals and timetables is that if no discriminatory hiring
A protected class consists of all individuals who share one or more common characteristic as indicated by that law.
Affirmative action represents a set of steps, taken by an organization, to actively seek qualified applicants from groups underrepresented in the workforce.
A utilization analysis is a comparison of the racial, sex, and ethnic composition of the employer’s workforce compared to that of the available labor supply.
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America’s diversity is diminished
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against people just because
they are black, Hispanic, Asian, Jewish, muslim, or gay, we still
must overcome.” —Ron Kind,
American lawyer and Congressman (D-Wisconsin)
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32 Part 1: An Overview of Human Resource Management
practices exist, then underutilization should be eliminated over time.
The third part of the affirmative action program is the development of a list of action steps. These steps specify what the organization will do to work toward attaining its goals to reduce underutilization. Common action steps include increased communi- cation of job openings to underrepresented groups, recruiting at schools that predominantly cater to a particular protected class, participating in pro- grams designed to improve employment opportuni- ties for underemployed groups, and taking all steps to remove inappropriate barriers to employment. In some cases, this third part might also include preferential hiring; that is, given two equally quali- fied applicants for a job, the organization would be required to hire the member of the underrepresented group in every case until its goals and targets are met.
In the late 1990s, the courts began to impose many more restrictions on what was acceptable (or required) in the way of preferential hiring and quo- tas. We will discuss representative relevant court decisions shortly, but the impetus for some of these decisions was the concern that affirmative action could in some cases appear to be a form of reverse discrimination, or a practice that has a disparate impact on members of nonprotected classes. Thus, charges of reverse discrimination typically stem from the belief by white males that they have suffered because of pref- erential treatment given to other groups.
The two most famous court cases in this area help to illustrate how complicated this issue can be. In one case, Allan Bakke, a white male, applied to medical school at the University of California Davis but was denied admission.15 At issue was the fact that the university had set aside 16 of its 100 seats for an incoming class for minority students to promote diversity and affirmative action at the school. Bakke’s attorneys argued that he was not necessarily more qualified than those admitted for the 84 “white” openings, but that he was more qualified than those admitted to the 16 openings set aside for minorities. Because the school had imposed this system on its own (to correct past injustice), the Court ruled that this “set-aside” program constituted reverse discrimination because it clearly favored one race over another and ruled in favor of Bakke.
In another case, Brian Weber, also a white male, applied for a temporary training program that would lead to a higher-paying skilled job at a Kaiser Aluminum facility.16 He was not admitted into the program; he then sued because he claimed that African American appli- cants with less seniority were admitted into the program strictly because of their race. In fact, Kaiser and United Steelworkers had agreed to a contract whereby 50 per- cent of the openings for these programs would be reserved for African Americans in an attempt to address the fact that African Americans had been systematically excluded from these programs in the past. The Supreme Court found in favor of Kaiser and the union, acknowledging
that a collective-bargaining agreement such as this one was binding and was a reasonable means of addressing past discrimination.
Given these two legal decisions, one might question the current status of reverse-discrimination cases. In fact, it is by no means clear. Within the space of a few years, the Supreme Court:
■■ ruled against an organization giving preferential treat- ment to minority workers during a layoff;17
■■ ruled in support of temporary preferential hiring and promotion practices as part of a settlement of a lawsuit ;18
■■ ruled in support of the establishment of quotas as a remedy for past discrimination;19 and
■■ ruled that any form of affirmative action is inherently discriminatory and could be used only as a temporary measure.20
It would appear that the future of affirmative action is unclear, suggesting that the courts will be leaning more toward interpretations in line with reverse discrimination in the future.
Indeed, the concept of affirmative action is increas- ingly being called into question. In 1996, for instance, a circuit court judge ruled that a goal of increasing student diversity at the University of Texas was not sufficient grounds for giving preference to racial minorities in terms of admission or financial aid.21 In 1998, California voters ratified a proposition called the California Civil Rights Initiative, which outlawed any preferential treatment on the basis of race, gender, color, ethnicity, or national origin for all public employment, education, and con- tracting activities. However, in 2003 the Supreme Court ruled that the University of Michigan could use diversity as one of several factors in making its admissions deci- sions, although it disallowed explicit rules that awarded extra points to underrepresented groups in the student population.
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Chapter 2: The Legal Environment 33
In a more recent case (Ricci v. Stefano, 2009), the Supreme Court ruled that the city of New Haven, Connecticut, violated the rights of a group of white fire- fighters when they decided to discard the results of a recent promotion exam that was shown to have disparate impact. The city developed and validated this test and administered it to group of candidates. Based on the test scores and cor- responding job openings, no non-white firefighters would be promoted. This caused the city to throw out the results of the test and to order a new exam. The white firefighters subsequently sued the city for reverse discrimination. The city of New Haven argued that the test did not really mea- sure what was needed to be successful as a lieutenant, but the Supreme Court, in a 5–4 decision, ruled that if the city did not believe the test measured the right thing it should not have been used and that the decision to throw out the results was simply a reaction to “racial statistics.”
Finally, in an even more recent case discussed earlier, the Court revisited the University of Texas’ affirmative action plan in the case of Fisher v. University of Texas. The Court still allowed that race-preference affirmative action plans might be acceptable, but in a 7-1 decision ruled that any such plan had to be based on the goal of furthering the benefits of educational diversity for everyone. This meant that any such plan would be closely scrutinized to weigh the benefits to the minority as well as the costs to the majority.
2-2d Sexual Harassment at Work One final area of coverage for the Civil Rights Act that is critical to the human resource manager is sexual harass- ment. This area is particu- larly important in this con- text because much of the liti- gation and the organization’s liability in these cases depend on the initial responses to charges of sexual harass- ment, and these responses are typically the responsi- bility of someone in human resources. Sexual harass- ment is defined by the EEOC as unwelcome sexual advances in the work environment. If the conduct is indeed unwelcome and occurs with sufficient frequency to create an abusive work environment, the employer is responsible for chang- ing the environment by warning, reprimanding, or perhaps firing the harasser.22
The courts have ruled that there are two types of sexual harassment and have defined both types. One type of sex- ual harassment is quid pro quo harassment. In this case, the harasser offers to exchange something of value for sexual favors. For example, a male supervisor might tell or imply to a female subordinate that he will recommend her for pro- motion or provide her with a salary increase, but only if she sleeps with him. Although this type of situation definitely
occurs, organizations generally have no problem in under- standing that it is illegal and in knowing how to respond.
But a more subtle (and probably more common) type of sexual harassment is the creation of a hostile work environ- ment, and this situation is not always so easy to define. For example, a group of male employees who continually make off-color jokes and lewd comments and perhaps decorate the work environment with inappropriate photographs may create a hostile work environment for a female col- league to the point where she is uncomfortable working in that job setting. Most experts would agree that this situation constitutes sexual harassment. But the situation becomes more complicated if an employee walks by a col- league’s workstation and sees a suggestive website or photo on their computer screen.
In Meritor Savings Bank v. Vinson, the Supreme Court noted that a hos tile work environment constitutes sexual harassment, even if the employee did not suffer any economic penalties or was not threatened with any such penalties.23 In Harris v. Forklift Systems, the Court ruled that the plaintiff did not have to suffer substantial mental distress to receive a jury settlement.24 Hence, it is critical that organizations monitor the situation and be alert for these instances because, as noted, it is the organization’s responsibility for dealing with this sort of problem.25
Therefore, the human resource manager must play a major role in investigating any hint of sexual harassment in the organization. The manager cannot simply wait for an employee to complain. Although the Court had ruled in the case of Scott v. Sears Roebuck26 that the employer
was not liable for the sex- ual harassment because
the plaintiff did not complain to supervi- sors, the ruling in the Meritor case makes it much more difficult for the organization to avoid liability by claiming ignorance (although this liabil- ity is not automatic). This responsibility
is further complicated by the fact that, although most sexual harassment cases involve men harass- ing women, there are, of course, many other situa- tions of sexual harassment that can be identified. Females can harass men, and in the case of Oncale v. Sundowner the Supreme Court ruled unanimously that a male oil rigger who
Quid pro quo harassment is sexual harassment in which the harasser offers to exchange something of value for sexual favors.
A hostile work environment is one that produces sexual harassment because of a climate or culture that is punitive toward people of a different gender.
“Sexual harassment is complex, subtle, and highly subjective.”
—Kathie Lee Gifford, American television host
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34 Part 1: An Overview of Human Resource Management
claimed to be harassed by his co-workers and supervi- sor on an offshore oil rig was indeed the victim of sexual harassment.29 Several recent cases involving same-sex harassment have focused new attention on this form of sexual harassment.30 Regardless of the pattern, however,
the same rules apply: Sexual harassment is illegal, and it is the organization’s responsibility to control it.
In 2011, everyone in the United States was reminded of exactly how troubling charges of sexual harassment can be. Herman Cain, a retired executive running for the
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HR in the 21st Century Recent research shows that more than 30 percent of female workers
in the United States have been harassed at work, virtually all of them by men. Forty-three percent identified the male harasser as a supervisor, 27 percent as an employee senior to them, and 19 percent as a coworker at the same level. In 2012 (the last year for which there are complete data), nearly 13,000 charges of sexual harassment were filed with the U.S. Equal Employment Opportunity Commission (EEOC), 84 percent of them by women.
Why does sexual harassment (mostly of women) occur in the workplace? “Power,” says researcher Debbie Dougherty, who conducted a study in conjunction with a large midwestern health-care organization. “It was the common answer. It came up repeatedly,” says Dougherty, a specialist in communications and power in organizations. She also found that men and women understand the idea of power differently, and that difference in understanding, she reports, may play an important part in the persistence of harassing behavior in the workplace:
■ For most men, power is something that belongs to superiors— managers and supervisors—who can harass because they possess the power to do so. By definition, a male coworker cannot harass a female coworker who is at the same level because he doesn’t possess sufficient power over her.
■ Women, on the other hand, see power as something that can be introduced into a relationship as it develops; it’s something more than the mere formal authority built into the superior’s job description. Harassment can be initiated by anyone who is able to create the perception of power.
According to Dougherty, gender differences in the perception of power may account, at least in part, for gender differences in perceptions of behavior. “If a man,” she suggests, “thinks that
sexual harassment only comes from a supervisor, he may feel free to make sexual comments to a female coworker,” reasoning that because he holds no power over her, she won’t perceive the behavior as harassment. She, however, probably regards power as something that can be sought and gained in a relationship and may therefore “see the sexual comments as a quest for power and label it as sexual harassment.”
The findings of another recent study tend to support Dougherty’s conclusions. Researchers from the University of Minnesota discovered that women in supervisory positions were 137 percent more likely to be harassed than women in nonsupervisory roles. Although many of the harassers were men in superior positions, a large number were coworkers in equivalent positions. It would seem, then, that male coworkers felt free to behave in a harassing manner because they believed that their female targets would not perceive their behavior as efforts to exert power. As Dougherty predicts, however, they were wrong: The women perceived the harassing behaviors as power plays. “This study,” says researcher Heather McLaughlin, “provides the strongest evidence to date supporting the theory that sexual harassment is less about sexual desire than about control and domination… . Male coworkers … and supervisors seem to be using harassment as an equalizer against women in power.” 28
Think iT Over 1. In light of the research discussed in this case, in your opinion
how should sexual harassment be punished? 2. What legal protection, if any, should exist to protect an
innocent individual from false charges of sexual harassment?
“Male coworkers … and supervisors seem
to be using harassment as an equalizer against
women in power.” —Heather McLaughlin, researcher 27
The Role of Power in Sexual Harassment
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Chapter 2: The Legal Environment 35
Republican presidential nomination, found his popularity growing when rumors began coming to light about past sexual harassment. Mr. Cain denied all wrongdoing but, as several women stood up to claim they were harassed by him, and evidence of payments to some of these women came to light, it became more difficult for him to remain a viable candidate.
Finally, while still denying any wrongdoing, Mr. Cain suspended his candidacy after discussing matters with his wife. Finally, a recent Supreme Court decision appears to make it more difficult for an employee to successfully bring suit for harassment. In Vance v. Ball State the Court ruled that only someone with the power to hire and fire should be considered a supervisor in a case involving discrimina- tion. The clear effect of this ruling is to make it much more difficult to bring charges against a co-worker for sexually or racially motivated harassment. It will be interesting to see if this ruling really does reduce harassment charges at work.
2-2e Other Equal Employment Opportunity Legislation In addition to the Civil Rights Act of 1964, a large body of supporting legal regulation has also been created in an effort to provide equal employment opportunity for various protected classes of individuals. Although the 1964 act is probably the best known and most influential piece of legislation in this area, a new civil rights act was passed in 1991 and numerous other laws deal with differ- ent aspects of equal employment or are concerned with specific areas of work; these are discussed in this section. Some of them apply only to federal contractors, and these are discussed separately, while others apply more widely. We will discuss each one briefly here and again in the chapters where they are most relevant.
The Lilly Ledbetter Fair Pay Act of 2009 The Equal Pay Act clearly outlaws differential pay for male and female employees doing essentially the same job. But, in 2007 the U.S. Supreme Court ruled against Lilly Ledbetter, overturning a lower court finding in her favor. Ms. Ledbetter was a production supervisor at Goodyear for many years, but came to realize that she was being paid 40 percent less than the lowest paid male supervisor. She sued in 1998 and, when her case finally came up for trial a jury found that she had suffered from sex discrimination in her compensation and awarded her $3 million in back pay (this was reduced to $300,000 in accordance to a dam- ages cap). But Goodyear appealed to the Supreme Court, where the company acknowledged that Ms. Ledbetter had been discriminated against BUT that the discrimination took place more than 180 days before the charges were filed. Thus, the case could not be raised because there was a 180 day limitation as part of the law. Goodyear further- more argued that the 180 day limitation began when the discriminatory decision was actually made, rather than beginning when the employee received a paycheck. The
Supreme Court agreed with Goodyear and took away Ms. Ledbetter’s award. In a dissenting opinion, Judge Ginsburg pointed out that, after this decision, any firm, even admit- ting it was guilty of discrimination, would be free from suit if the discrimination occurred more than six months earlier. The new law corrected this and states that the clock for limitation begins with each paycheck—making it easier for employees to bring charges of discrimination. The new law also applies the same time table to cases involving age dis- crimination or discrimination based on disability.31
The Equal Pay Act of 1963 The Equal Pay Act of 1963 requires that organizations provide the same pay to men and women who are doing equal work. The law defines equality in terms of skill, responsibility, effort, and working conditions. Thus, an organization cannot pay a man more than it pays a woman for the same job on the grounds that, say, the male employee needs the money more because his wife is sick and is incurring large medical bills. Similarly, organizations cannot circumvent the law by using different job titles for essentially the same work: If the work is essen- tially the same, then the pay should be the same as well. The law does allow for pay differences when there are legitimate,
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provide men and women who are doing equal work the same pay.
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36 Part 1: An Overview of Human Resource Management
job-related reasons for pay differences such as difference in seniority or merit.32
The Age Discrimination and Employment Act The Age Discrimination and Employment Act (ADEA) was passed in 1967 and amended in 1986. The ADEA prohibits discrimination against employees 40 years of age and older. The ADEA is similar to Title VII of the 1964 Civil Rights Act in terms of both its major pro- visions and the procedures that are followed in pursuing a case of discrimination. Like Title VII, enforcement of the ADEA is the responsibility of the Equal Employment Opportunity Commission.
The ADEA was felt to be necessary because of a dis- quieting trend in some organizations in the early 1960s. Specifically, these firms were beginning to discriminate
against older employees when they had to lay people off or otherwise scale back their workforce. By targeting older workers—who tended to have higher pay because of their seniority and experience with the firm—companies were substantially cutting their labor costs. In addition, there was some feeling that organizations were also discriminating against older workers in their hiring decisions. The specific concern here was that organizations would not hire people in their forties or fifties because (1) they would have to pay those individuals more based on their experience and salary history and (2) they would have a shorter potential career with the organization. Consequently, some organiza- tions were found guilty of giving preferential treatment to younger workers over older workers. These concerns have been raised again as firms deal with the economic down- turn by reducing the size of their workforce. It is vital that firms that are downsizing be aware of the implications of this legislation and ensure that their efforts are not differ- entially affecting older workers.
Mandatory retirement ages is the other area in which the ADEA has generated a fair amount of controversy. The Supreme Court has indicated that an agency or an organization may require mandatory retirement at a given age only if an organization could demonstrate the inabil- ity of persons beyond a certain age to perform a given job safely. But, in several decisions, the Court has indicated that it will interpret this BFOQ exception very narrowly. In fact, in Johnson v. Mayor and City of Baltimore, the Court ruled that not even a federal statute requiring firefighters to retire at age 55 would qualify as an exception to the law.33
As the workforce continues to age, the number of age-discrimination complaints seems to be growing rap- idly.34 Statistics released by the EEOC, for instance, indi- cate that age-discrimination complaints increased from 19,000 in 2007 to more than 24,000 in 2008; they are now almost as common as race-discrimination complaints (the most common type of complaint filed with the EEOC). Thus, it is interesting to note that the Supreme Court recently ruled that in age-discrimination cases it is up to the worker to prove that age was the decisive factor in a decision made by the employer—even if there is evi- dence that age played some role in the decision (Gross v. FBL Financial Services 08-441, in June 2009). By making it more difficult to file these so-called mixed motive cases in ADEA charges, the Court has essentially made it much more difficult to demonstrate age discrimination. Leaders
in Congress soon began working on a revised ADEA to deal with this issue, but that new legislation is a long way from becoming law.
The Pregnancy Discrimination Act of 1979 As its name suggests, the Pregnancy Discrimination Act of 1979 was passed to protect pregnant women from dis- crimination in the workplace. The law requires that the pregnant woman be treated like any other employee in the workplace. Therefore, the act specifies that a woman cannot be refused a job or promotion, fired, or otherwise
The Age Discrimination and Employment Act (or ADEA) prohibits discrimination against
employees age forty and older.
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The Civil rights Act of 1991 makes it easier for
individuals who feel they have been discriminated
against to take legal action against organizations and provides for the
payment of compensatory and punitive damages in cases of discrimination
under Title vii.
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The Americans with Disabilities Act of 1990 (or ADA) prohibits discrimination based on disability and all aspects of the
employment relationship such as job application procedures, hiring, firing, promotion, compensation, and training, as well as other employment activities such as advertising, recruiting, tenure, layoffs, and leave and fringe benefits.
discriminated against simply because she is pregnant (or has had an abortion). She also cannot be forced to leave employment with the organization as long as she is physi- cally able to work. A doctor in Pennsylvania was recently fired by her employer (a clinic) after missing several days of work because of pregnancy-related complications. She filed suit under this act, while the clinic countersued using other laws as a basis.35
The Civil Rights Act of 1991 The Civil Rights Act of 1991 was passed as a direct amendment of Title VII of the Civil Rights Act of 1964. During the 25 years fol- lowing the passage of the original act, the U.S. Supreme Court handed down several rulings that helped define how the Civil Rights Act would be administered. But in the course of its 1989 Supreme Court session, several decisions were handed down that many people felt seriously limited the viability of the Civil Rights Act of 1964.36 In response to this development, the Civil Rights Act of 1991 was passed essentially to restore the force of the original act. Although some new aspects of the law were introduced as part of the Civil Rights Act of 1991, the primary purpose of this new law was to make it easier for individuals who feel they have been discriminated against to take legal action against
organizations. As a result, this law also reinforced the idea that a firm must remain within the limits of the law when engaging in various human resource management practices.
Specifically, the Civil Rights Act of 1991 prohibits dis- crimination on the job and makes it easier for the burden of proof to shift to employers (to demonstrate that they did not discriminate). It also reinforces the illegality of making hiring, firing, or promotion decisions on the basis of race, gender, color, religion, or national origin; it also includes the Glass Ceiling Act, which established a commission to investigate practices that limited the access of protected class members (especially women) to the top levels of management in organizations. For the first time, the act provides the potential payment of compensatory and puni- tive damages in cases of discrimination under Title VII. Although the law limited the amount of punitive damages that could be paid to no more than nine times the amount of compensatory damages, it also allowed juries rather than federal judges to hear these cases.
This law also makes it possible for employees of U.S. companies working in foreign countries to bring suit against those companies for violation of the Civil Rights Act. The only exception to this provision is the situation in which a country has laws that specifically contradict some aspect of the Civil Rights Act. For example, Muslim countries often have laws limiting the rights of women. Foreign companies with operations in such countries would almost certainly be required to abide by local laws. As a result, a female employee of a U.S. company working in such a setting would not be directly protected under the Civil Rights Act. However, her employer would still need to inform her fully of the kinds of discriminatory practices she might face as a result of transferring to the foreign site and then ensure that when this particular foreign assignment was completed, her career opportunities would not have been compromised in any way.37
The Americans with Disabilities Act of 1990 The Americans with Disabilities Act of 1990 (ADA) is another piece of equal employment legislation that has greatly affected human resource management. The ADA was passed in response to growing criticisms and concerns about employment opportunities denied to people with
various disabilities. For example, one survey found that of 12.2 million Americans not working because of disabili- ties, 8.2 million would have preferred to work. Similarly, another survey found that almost 80 percent of all manag- ers surveyed found the overall performance of their dis- abled workers to be good to excellent. In response to these trends and pressures, the ADA was passed to protect indi- viduals with disabilities from being discriminated against in the workplace.38
Specifically, the ADA prohibits discrimination based on disability in all aspects of the employment relationship such as job application procedures, hiring, firing, promotion, compensation, and training, as well as other employment activities such as advertising, recruiting, tenure, layoffs, leave, and benefits. In addition, the ADA also requires that organizations make reasonable accommodations for disabled employees as long as they do not pose an undue burden on the organization. The act initially went into effect in 1992 and covered employers with twenty-five or
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38 Part 1: An Overview of Human Resource Management
more employees. It was expanded in July 1994 to cover employers with fifteen or more employees.
The ADA defines a disability as (1) a mental or physi- cal impairment that limits one or more major life activities, (2) a record of having such an impairment, or (3) being regarded as having such an impairment. Clearly included within the domain of the ADA are individuals with dis- abilities such as blindness, deafness, paralysis, and similar disabilities. In addition, the ADA covers employees with cancer, a history of mental illness, or a history of heart dis- ease. Finally, the act also covers employees regarded as hav- ing a disability, such as individuals who are disfigured or who for some other reason an employer feels will prompt a negative reaction from others. In addition, the ADA cov-
ers mental and psychological disorders such as mental retardation, emotional or mental illness (including depres- sion), and learning disabilities.
On the other hand, individuals with substance-abuse problems, obesity, and similar non–work-related charac- teristics may not be covered by the ADA.39 But because the ADA defines disabilities in terms of limitations on life activities, myriad cases continue to be filed. For example, in recent years workers have attempted to claim protec- tion under the ADA on the basis of ailments ranging from alcoholism to dental problems! These activities have led some critics to question whether the ADA is being abused by workers rather than protecting their rights.40
In fact, the definition of a disability and what con- stitutes a “reasonable accommodation” pose the greatest potential problems for the HR manager. Individuals who are confined to wheelchairs, visually impaired, or have sim- ilar physical disabilities are usually quite easy to identify, but many employees may suffer from “invisible” disabilities that might include physical problems (e.g., someone need- ing dialysis) as well as psychological problems (e.g., acute anxiety) and learning disabilities (e.g., dyslexia). It is not always obvious who among a group of employees is actually eligible for protection under the ADA.41
One area of coverage where the courts and the EEOC (the agency charged with the administration of the ADA) have taken a fairly clear position deals with AIDS and HIV in the workplace. Both AIDS and HIV are considered disabilities under the ADA, and employers cannot legally require an HIV test or any other medical examination as a condition for making an offer of employment. In addition,
organizations must maintain confidentiality of all medi- cal records, they should strive to educate co-workers about AIDS, and they must accommodate or try to accommodate AIDS victims.
In addition, the reasonable accommodation stipulation adds considerable complexity to the job of human resource manager and other executives in organizations. Clearly, for example, organizations must provide ramps and automatic door-opening systems to accommodate individuals con- fined to a wheelchair.
At the same time, however, providing accommoda- tions for other disabilities may be more complex. If an applicant for a job takes an employment test, fails the test (and so is not offered employment), and then indicates that
he or she has a learning disability (for example) that makes it difficult to take paper-and-pencil tests, the applicant probably can demand an accommodation. Specifically, the organization would likely be required either to find a dif- ferent way to administer the test or provide the applicant with additional time to take the test a second time before making a final decision. Likewise, an existing employee diagnosed with a psychological disorder may be able to request on-site psychological support.
Recently, another issue involved with granting accom- modations has been identified.42 The nature of many accommodations granted to employees is such that other employees who are not disabled and not requesting an accommodation are unlikely to be envious or resentful about the accommodation. But this is not the case for all requested accommodations. For example, a woman claimed that having every Friday off was the only accommodation that would help to reduce her stress at work.43 What if the organization granted her that accommodation? Surely other employees would wonder why they could not have Fridays off, especially since stress is not typically a visible disability. This situation would lead to resentment and potentially to other problems. Therefore, although the ADA does not consider co-worker reactions as relevant to determining whether or not an accommodation is reasonable, the knowl- edgeable human resource manager will at least think about how others might react to an accommodation when trying to deal with the legal requests of employees with disabilities.
But a series of court decisions have worked to actually narrow the protection offered by the ADA.44 For example, in 1999 the U.S. Supreme Court ruled that individuals who
The ADA Amendments Act (or ADAAA) of 2008 broadens the protection offered to persons with disabilities at work by
defining certain disabilities as “presumptive,” thus negating several court cases that had ruled certain persons having disabilities as not qualifying for coverage under the ADA.
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Chapter 2: The Legal Environment 39
can correct or overcome their disabilities through medication or other means are not protected by the ADA. Similarly, in 1999 (Sutton v. United Airlines), the Court ruled that a person suffering from heart disease who was taking medica- tion to control that heart disease was not covered by the ADA. In 2002, in Toyota Motor Manufacturing Company, Kentucky Inc, v. Williams, the Court ruled that, for persons to be disabled, they had to have conditions that precluded them from doing activities central to one’s daily life. Thus, they ruled that Ella Williams was not disabled, even though her carpal tunnel syndrome and tendinitis prevented her from performing the assembly-line job she was transferred to because she was able to attend to her personal hygiene.
In an attempt to return to the original intent of the ADA, in September 2008, President Bush signed into law the new Americans with Disabilities Amendments Act (ADAAA). In June 2009, the EEOC finally voted on a set of guidelines to be used with the new law. The new guide- lines broaden the definition of disability for the ADA, countering recent court decisions that have tended to nar- row the definition of disability for cases brought forward (which was the original impetus for the law). For example, the changes would include specifying major life activities to include walking, seeing, bending, reading, and concentrat- ing. The new guidelines also include a list of presumptive disabilities that will always meet the definition of disability under the AADA, including blindness, deafness, cancer, multiple sclerosis, limb loss, and HIV and AIDS. Also, under the new guidelines, persons will be “regarded as hav- ing a disability” if they can show that they have been dis- criminated against because of real or perceived disabilities.
The Family and Medical Leave Act of 1993 The Family and Medical Leave Act of 1993 was passed in part to remedy weaknesses in the Pregnancy Discrimination Act of 1979. The law requires employers with more than fifty employees to provide as many as 12 weeks of unpaid leave for employees (1) after the birth or adoption of a child; (2) to care for a seriously ill child, spouse, or parent; or (3) if the employee is seriously ill. The organization must also provide the employee with the same or comparable job on the employee’s return.45
The law also requires the organization to pay the health-care coverage of the employee during the leave. However, the employer can require the employee to
reimburse these health-care premiums if the employee fails to return to work after the absence. Organizations are also allowed to exclude certain key employees from coverage (specifically defined as the highest paid 10 per- cent), on the grounds that granting leave to these individ- uals would grant serious economic harm to the organiza- tion. The law also does not apply to employees who have not worked an average of 25 hours a week in the previous 12 months.46 The FMLA was also amended in 2009 with the passage of the Supporting Military Families Act, which man- dates emergency leave for all covered active-duty members.
Regulations for federal contractors In addition to the various laws described above, numerous other regu- lations apply only to federal contractors. Note, however, that the definition of a federal contractor is quite broad. For instance, all banks (that participate in the U.S. Federal Reserve system) and most universities (that have federal research grants or that accept federal loans for their stu- dents) would qualify as federal contractors.
Executive Order 11246 was issued by President Lyndon Johnson, who believed that Title VII of the 1964 Civil Rights Act was not comprehensive enough. This order prohibits discrimination based on race, color, reli- gion, sex, or national origin for organizations that are fed- eral contractors and subcontractors, and it requires writ- ten affirmative action plans from those organizations with contracts greater than $50,000.
Executive Order 11478 was issued by President Richard Nixon and required the federal government to base all of its own employment policies on merit and fitness and specifies that race, color, sex, religion, and national origin should not be considered. The executive order also extends to all contractors and subcontractors doing $10,000 or more worth of business with the federal government. These exec- utive orders are enforced by the Office of Federal Contract Compliance Procedures (OFCCP), which is discussed later.
The Vocational Rehabilitation Act of 1973 requires that executive agencies and subcontractors and contractors of the federal government receiving more than $2,500 a year from the government engage in affirmative action for disabled individuals. This act is administered by the Department of Labor. Finally, the Vietnam Era Veterans’ Readjustment Act of 1974 requires that federal contractors and subcontrac- tors take affirmative action toward employing Vietnam-era
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the birth or adoption of a child; to care for a seriously ill child, spouse, or parent; or if the employee is seriously ill.
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40 Part 1: An Overview of Human Resource Management
veterans. Vietnam-era veterans are specifically defined as those serving as members of the U.S. armed forces between August 5, 1964, and May 7, 1975. This act is enforced through the OFCCP.
Discrimination on the Basis of Sexual Orientation Sexual orientation discrimination refers to being treated differently because of one’s real or perceived sexual orientation—whether gay, lesbian, bisexual, or hetero- sexual. There is no federal law that prohibits discrimination on the basis of sexual orientation. Although federal employ- ees are protected against such discrimination, any attempt to pass a law regarding all employees has failed.
Several states, however, do have laws against this type of discrimination. California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, and
Wisconsin, as well as the District of Columbia, all have laws prohibiting discrimination on the basis of sexual orientation for both public- and private-sector jobs. In addition, many city and county ordinances are dealing with this issue.
Recent Supreme Court decisions dealing with same-sex marriage, discussed in Chapter 1, may signal some changes in the situation—most critically in the case of Windsor v. U.S. regarding the Defense of Marriage Act (DOMA). In that case, Edith Windsor was the major beneficiary and executor of the estate of her late wife, Thea Clara Spyer. The IRS told her that she owed over $350,000 in estate taxes because she could not inherit the way a spouse could in a traditional marriage (she would have paid nothing if she had been married to a man), citing the provision of DOMA as the basis for their decision. DOMA, signed into law in 1996 by Bill Clinton, states that, for the purposes of deciding who receives federal benefits, marriage is defined as only between a man and a woman. The Supreme Court in a 5-4 decision ruled that DOMA placed an unfair burden on same-sex married couples and made a subset of state- sanctioned marriages unequal.
This decision does not make same-sex marriages legal anywhere other than in those states that have determined it so. It is also not clear if it would require a state that did not recognize same-sex marriages to recognize the married status of a couple married in a state where such marriages were legal. What the decision did do is ensure that same-sex
couples married in states where this is legal would be enti- tled to all the federal benefits that opposite-sex couples are afforded. Although much is still not clear, it seems as though pension rights and insurance benefits are two areas where this decision will have a significant impact upon HRM departments.
Currently, same-sex marriages are recognized in thirteen states, plus the District of Columbia, and same-sex partner- ships and unions are allowed in ten more states, but thirty- five states still limit marriage to opposite-sex couples (New Mexico has no laws regarding same-sex marriages but recog- nizes out of state marriages). It will be interesting to see the real impact of this decision over time. It is clear that public opinion has swung (slightly) in favor of recognizing same-sex marriages, and the Supreme Court decisions open the door to more states recognizing these marriages, and perhaps to federal equal rights protection on the basis of sexual orienta- tion. We will discuss this final implication later in Chapter 9.
2-2f Enforcing Equal Employment Opportunity The enforcement of equal opportunity legislation generally is handled by two agencies. As noted earlier, one agency is the Equal Employment Opportunity Commission, and the other is the Office of Federal Contract Compliance Procedures. The EEOC is a division of the Department of Justice. It was created by Title VII of the 1964 Civil Rights Act and today is given specific responsibility for enforc- ing Title VII, the Equal Pay Act, and the Americans with
The vocational rehabilitation Act of 1973 requires that executive agencies and subcontractors and contractors of the federal government receiving
more than $2,500 a year from the government engage in affirmative action for disabled individuals.
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Executive order 11478 requires the federal
government to base all of its own employment policies on merit and
fitness and specifies that race, color, sex, religion,
and national origin should not be considered.
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Disabilities Act. The EEOC has three major functions: (1) investigating and resolving complaints about alleged discrimination, (2) gathering information regarding employ- ment patterns and trends in U.S. businesses, and (3) issuing information about new employment guidelines as they become relevant.
The first function is illustrated in Figure 2.3, which depicts the basic steps that an individual who thinks she has been discriminated against in a promotion decision might follow to get her complaint addressed. In general, if an individual believes that she or he has been discriminated against, the first step in reaching a resolution is to file a com- plaint with the EEOC or a corresponding state agency. The
individual has 180 days from the date of the incident to file the complaint. The EEOC will dismiss out of hand almost all complaints that exceed the 180-day time frame for fil- ing. After the complaint has been filed, the EEOC assumes responsibility for investigating the claim itself. The EEOC can take as many as 60 days to investigate a complaint. If the EEOC either finds that the complaint is not valid or does not complete the investigation within a 60-day period, then the individual has the right to sue in a federal court.
If the EEOC believes that discrimination has occurred, then its representative will first try to negotiate a reconcili- ation between the two parties without taking the case to court. Occasionally, the EEOC may enter into a consent
EEOC litigates case in federal court
Agreement is carried out and case is dropped
Agency states that there is probable cause to believe
that employer violated Title VII EEO agency drops case
Agency seeks conciliation agreement acceptable to all
parties (out-of-court-settlement)
Yes
No Yes
Case dropped
No Yes
Does Claim Have Merit?
No
Is Case Important and Is Agency Likely to Win?
Does Conciliation Succeed?
Amy can file a private lawsuit against employer
Amy Jones believes she has been discriminated against at work. She was passed over for a promotion to supervisor, and believes it was because she was a woman, rather than because she was unqualified. Specifically, all candidates for promotion must be approved by their immediate supervisor, and most of these supervisors are older white men who have been heard to say that women should not be promoted. In fact, almost no women have been promoted to supervisor in this organization. What can Amy do?
sTeP 1: Amy files a complaint with her local or state EEO agency. sTeP 2: Local/state EEO agency agrees to investigate Amy’s claim on behalf of EEOC, and
the agency contacts Amy’s employer to determine whether the claim has any merit.
Fig 2.3 Investigating and Resolving a Discrimination Complaint ©
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decree with the discriminating organization. This consent decree is essentially an agreement between the EEOC and the organization stipulating that the organization will cease certain discriminatory practices and perhaps implement new affirmative action procedures to rectify its history of discrimination.
On the other hand, if the EEOC cannot reach an agree- ment with the organization, then two courses of action may be pursued. First, the EEOC can issue a right-to-sue letter to the victim; the letter simply certifies that the agency has investigated the complaint and found potential validity in the victim’s allegations. Essentially, that course of action involves the EEOC giving its blessings to the individual to file suit on his or her own behalf. Alternatively, in certain limited cases, the EEOC itself may assist the victim in bringing suit in fed- eral court. In either event, however, the lawsuit must be filed in federal court within 300 days of the alleged discriminatory act. The courts strictly follow this guideline, and many valid complaints have lost standing in court because lawsuits were
not filed on time. As already noted, the EEOC has recently become backlogged with complaints stemming primarily from the passage of the newer civil rights act. One recent court case that involved the implementation of a discrimina- tory seniority system was settled in such a way that it helped provide the grounds for amending Title VII to provide exceptions to the 300-day deadline for filing a lawsuit. In recent years, the EEOC has been working to better prioritize its caseload, giving the highest priority to cases that appear to have the potential for widespread or classwide effects.47
The second important function of the EEOC is to monitor the hiring practices of organizations. Every year, all organizations that employ 100 or more individuals must file a report with the EEOC that summarizes the number of women and minorities that the organization employs in nine different job categories. The EEOC tracks these reports to identify potential patterns of discrimination that it can then potentially address through class-action lawsuits.
Amy
Yes No
Company
Does the Current System of Promotion Result in Fewer Qualified
Women Being Promoted?
Amy wins case and may well be entitled to damages
Amy loses case
Defendant argues that Amy was not promoted for a nondiscriminatory reason
Amy argues that this reason is a pretext and that the real reason was discrimination
Who Has the More Compelling Arguments
and Evidence?
Amy loses case
Prima facie case established; burden of proof shifts to
defendant who must state legitimate nondiscriminatory
reasons for decision
Prima facie case not established; Amy must prove some type of
intent to discriminate
Once the case goes to court, and assuming that Amy and EEOC believe they have a case of disparate impact, the process goes through several more crucial steps.
sTeP 1: Amy tries to establish a prima facie case of discrimination.
Fig 2.3 (Continued)
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The third function of the EEOC is to develop and issue guidelines that help organizations determine whether their decisions are violations of the law enforced by the EEOC. These guidelines themselves are not laws, but the courts have generally given them great weight when hear- ing employment-discrimination cases. One of the most important set of guidelines is the uniform guidelines on employee-selection procedures developed jointly by the EEOC, U.S. Department of Labor, U.S. Department of Justice, and U.S. Civil Service Commission. These guide- lines summarize how organizations should develop and administer selection systems to avoid violating Title VII. The EEOC also frequently uses the Federal Register to issue new guidelines and opinions regarding employment practices that result from newly passed laws.48 This was the case discussed earlier relating to the new ADAAA.49
The other agency primarily charged with monitoring equal employment opportunity legislation is the Office of Federal Contract Compliance Procedures. The OFCCP is responsible for enforcing the executive orders that cover companies doing business with the federal government. Recall from our earlier discussion that businesses with con- tracts of more than $50,000 cannot discriminate based on race, color, religious beliefs, national origin, or gender, and they must have a written affirmative action plan on file.50
The OFCCP conducts yearly audits of government contractors to ensure that they have been actively pursuing their affirmative action goals. These audits involve examining a company’s affirmative action plan and conducting on-site visits to determine how individual employees perceive the company’s affirmative action policies. If the OFCCP finds that its contractors or subcontractors are not complying with the relevant executive orders, then it may notify the EEOC, advise the Department of Justice to institute criminal proceedings, or request that the labor secretary cancel or suspend contracts with that organization. This latter step is the OFCCP’s most important weapon because it has a clear and immediate effect on an organization’s revenue stream.
The EEOC and the OFCCP are the two primary regu- latory agencies for enforcing equal employment legislation, but it is important to recognize that other agencies and com- ponents of our government system also come into play. The Departments of Labor and Justice, for example, are both heavily involved in the enforcement of equal employment opportunity legislation. The U.S. Civil Service Commission is also actively involved for government organizations where civil-service jobs exist. The U.S. judicial systems reflected by our courts also play an important role in enforcing all human resource management legislation.
2-3 otHer areaS oF HUMan reSoUrCe regUlation As noted earlier, most employment regulations are designed to provide equal employment opportunity, but some legis- lation goes beyond that and really deals more substantively
with other issues. We will only touch on these different areas of legislation here and then discuss them in more detail when we discuss the content area involved. So, for example, we begin with a discussion of legislation dealing with compensation and benefits and then discuss these laws in more detail in Chapter 9.
2-3a Legal Perspectives on Compensation and Benefits The most basic and yet far-reaching law dealing with com- pensation at work is the Fair Labor Standards Act. The Fair Labor Standards Act (FLSA), passed in 1938, established a minimum hourly wage for jobs. The rationale for this legislation was to ensure that everyone who works would receive an income sufficient to meet basic needs. The first minimum wage was $0.25 an hour but, as shown in Table 2.1, the minimum wage has been raised many times in the decades
Table 2.1 Minimum Wage History Effective Date Minimum Wage ($)
1938 0.25
1939 0.30
1945 0.40
1950 0.75
1956 1.00
1961 1.15
1963 1.25
1967 1.40
1968 1.60
1974 2.00
1975 2.10
1976 2.30
1978 2.65
1979 2.90
1980 3.10
1981 3.35
1990 3.80
1991 4.25
1996 4.75
1997 5.15
2007 5.85
2008 6.55
2009 7.25
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since as the law has been amended. The most recent change came in 2007, when then President Bush signed into a law a staged increase that brought the minimum wage to $7.25 an hour as of July 2009.51 States are allowed to have a minimum wage that is above the federal level. Several states adjust their minimum wage annually, based on inflation or the consumer price index. In 2012, Washington became the first state in the country to raise its minimum wage above $9.00 (it is $9.04 per hour).
The FSLA also established, for the first time, the work- week in the United States as 40 hours per week. It further specified that all full-time employees must be paid at a rate of one and a half times their normal hourly rate for each hour of work beyond 40 hours in a week. Note, however, that the law makes no provision for daily work time. Thus, a normal workday might be considered 8 hours, but an employer is actually free to schedule, say, 10 or 12 hours in a single day without paying overtime as long as the weekly total does not exceed 40 hours. The FLSA also includes child labor provi- sions, which provide protection for persons 18 years of age and younger. These protections include keeping minors from working on extremely dangerous jobs and limiting the num- ber of hours that persons younger than 16 can work.
Another important piece of legislation that affects compensation is the Employee Retirement Income Security Act of 1974 (ERISA). This law was passed to pro- tect employee investments in their pensions and to ensure that employees would be able to receive at least some pen- sion benefits at the time of retirement or even termina- tion. ERISA does not mean that an employee must receive a pension; it is meant only to protect any pension benefits to which the employee is entitled. (This topic will be dis- cussed in somewhat more detail in Chapter 9.) ERISA was passed in part because some organizations had abused their pension plans in their efforts to control costs or to channel money inappropriately to other uses within the organiza- tion and in part because of corruption.
Two other emerging legal perspectives on compensa- tion and benefits involve minimum benefits coverage and executive compensation. A few years ago, publicity about the poor benefits Walmart provides some of its employees, for example, led the Maryland General Assembly to pass a bill requiring employers with more than 10,000 workers to spend at least 8 percent of their payroll on benefits or else pay into a fund for the uninsured. At the time the bill was passed (in early 2006) Walmart was the only company to be affected. Moreover, several other states are exploring similar
legislation. On another front, the Securities and Exchange Commission (SEC) is also developing new guidelines that will require companies to divulge more complete and detailed information about their executive-compensation packages.52
One of the major agenda items first tackled by President Obama was health care. Congress worked throughout 2009 in an attempt to pass legislation that would call for major reforms of health care in the United States. The Health Care Reform Bill passed in 2010 focused on benefits for employees who were not already covered by employer pro- grams. The notion that employers who did not provide health care coverage would be required to pay a fine was part of the “Affordable Care for America Act”53 proposed by the Democrats in 2009. The final bill did not include the much-debated “public option” but there is still debate about the constitutionality of the entire bill. During the 2012 Republican primaries, several candidates labeled the bill as “socialist,” and the Republican Party platform includes a plank designed to kill the entire legislation. But the Supreme Court ruled, in June of 2012,54 that President Obama’s Health Care Bill was indeed constitutional, including the provision that companies either provide health insurance for their employees or pay a tax to help provide health care benefits for the unemployed. Other aspects of the bill were deemed unconstitutional, however, and so it will still take some time before we really know the complete implications of this legis- lation. We will discuss these regulations further in Chapter 9.
2-3b Legal Perspectives on Labor Relations The National Labor Relations Act, or Wagner Act, was passed in 1935 in an effort to control and legislate collec- tive bargaining between organizations and labor unions. Before 1935, the legal system in the United States was generally considered hostile to labor unions. The Wagner Act was passed in an effort to provide some sense of balance in the power relationship between organizations and unions. The Wagner Act describes the process through which labor unions can be formed and the requirements faced by organizations in dealing with those labor unions.
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The Wagner Act served to triple union membership in the United States and granted labor unions significant power in their relationships with organizations.
Following a series of crippling strikes, however, the U.S. government concluded that the Wagner Act had actu- ally shifted too much power to labor unions. As a result, businesses had been placed at a significant disadvantage. To correct this imbalance, Congress subsequently passed the Labor Management Relations Act (Taft-Hartley Act)
in 1947 and the Landrum-Griffin Act in 1959. Both of these acts regulate union actions and their internal affairs in a way that puts them on an equal footing with management and organizations. The Taft-Hartley Act also created the National Labor Relations Board (NLRB), which was charged with enforcement of the act.
Although the basic issues of unionization and col- lective bargaining have become pretty well established, some legal issues have emerged in this area. The Taft- Hartley Act guarantees these rights but also guarantees that these unions should be independent. This issue has come up in two fairly recent cases. More important for the future, in both these cases, the company involved was setting up autonomous work teams that were empowered to make cer- tain decisions about employees. In Electromation v. NLRB,55 the NLRB ruled that the company’s “action committees,” which were formed to deal with employee working condi- tions and were staffed by employees, actually constituted a threat to the union already in place in the company. These action committees, which the NLRB ruled were dominated by management, were seen as an alternative way to deal with problems concerning working conditions and could allow the company to circumvent the union and the collective- bargaining process. As such, the company was found in violation of the Taft Hartley Act. In a similar case, E.I. Du Pont de Nemours v. NLRB,56 the board ruled that Du Pont’s safety committees were essentially employer-dominated labor organizations and thus were in violation of the Taft Hartley Act.
Recently, a new amendment was proposed for the Taft-Hartley Act. We will discuss this proposed change, along with these other labor relations laws, in Chapter 11. It is worth noting that the Employee Free Choice Act, also known as the Union Relief Act of 2009, would change the way in which unions become certified as bargaining agents in companies, eliminating the secret ballot vote that now exists. Although President Obama is said to support this bill,57 it will have to be re-introduced in 2012 if it is to
pass. The National Labor Relations Board, however, did approve new election guidelines that would streamline the union certification process, but they are not as sweeping as the proposed bill.
2-3c Employee Safety and Health Employees also have the right to work in safe and healthy environments, and these rights continue to be important in organizations. The Occupational Saf ety and Health Act of 1970 (OSHA) is the single most comprehensive piece of legislation regarding worker safety and health in organiza- tions. OSHA granted the federal government the power to establish and enforce occupational safety and health standards for all places of employment directly affecting interstate commerce. The Department of Labor was given power to apply OSHA standards and enforce its provi- sions. The Department of Health was given responsibility for conducting research to determine the criteria for spe- cific operations or occupations and for training employers to comply with the act itself. OSHA also makes provisions through which individual states can substitute their own safety and health standards for those suggested by the fed- eral government.
The basic premise of OSHA (also known as the general duty clause) is that each employer has an obligation to fur- nish each employee with a place of employment that is free from hazards that can cause death or physical harm. OSHA is generally enforced through inspections of the workplace
The Employee retirement income Security Act of 1974 (EriSA) guarantees a basic minimum benefit that employees could expect to be paid at retirement.
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o The Labor management relations Act (or Taft-Hartley Act) curtailed and limited union powers and regulates union actions and their internal affairs in a way that puts them on equal footing with management and organizations.
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46 Part 1: An Overview of Human Resource Management
by OSHA inspectors, and fines can be imposed on violators. We will deal with these issues in more detail in Chapter 12.
2-3d Drugs in the Workplace The Drug-Free Workplace Act of 1988 was passed to reduce the use of illegal drugs in the workplace. This law applies primarily to government employees and federal con- tractors, but it also extends to organizations regu- lated by the Department of Transportation and the Nuclear Regulatory Commission. Thus, long- haul truck drivers and work- ers at most nuclear reactors are subject to these regula- tions. The actual regula- tions themselves are aimed at establishing a drug-free workplace and include the requirement, in some cases, for regular drug testing.
Concerns over the prob- lems of drug use at work have also led many other compa- nies not covered by this law to establish drug-testing programs of their own. In fact, drug testing is becoming quite widespread, even though there is little hard evidence addressing the effectiveness of these programs.58
The issue for the current discussion is whether these testing programs constitute an invasion of employee privacy. Many opponents of drug-testing programs argue that drug testing is clearly appropriate in cases in which there is some “reason- able” basis for suspected drug use, but not otherwise. Others argue that organizations that test for drug use often do not test for alcohol use which, although not illegal, can cause prob- lems on the job. Of course, what makes the privacy issues here even more salient is the method generally used to test for drugs on the job. Urinalysis (by far the most common method) is extremely invasive and has been known to result in a fair num- ber of false-positive tests (i.e., employees are incorrectly identi- fied as drug users). As a result, several alternatives have begun to appear in organizations, including testing an employee’s indi- vidual hairs.59 Perhaps these new technologies will reduce some
of the concerns over drug testing while providing employers the protection they deserve from drug use on the job.
2-3e Plant Closings and Employee Rights The Worker Adjustment and Retraining Notification (WARN) Act of 1988 stipulates that an organization with at least 100 employees must provide notice at least 60 days
in advance of plans to close a facility or lay off 50 or more employees. The penalty for failing to comply is equal to 1 day’s pay (plus benefits) for each employee for each day that notice should have been given. An organization that closes a plant without any warning and lays off 1,000 employees would be liable for 60 days of pay and benefits for those 1,000 employees, which could translate into a sub- stantial amount of money. The act also provides for warnings about pending reductions in work hours
but generally applies only to private employers. There are exceptions to the WARN requirements; those exceptions are related to unforeseeable business circumstances such as a strike at a major employer or a government-enforced shut- down.60 The events of September 11, 2001, represent one such exception to this law.
2-3f Privacy issues at Work In recent years, issues of privacy have become more impor- tant to Americans, so it is not surprising that privacy at work has also become more important. The history of legislation dealing with privacy at work, however, actually goes back several years. The Privacy Act of 1974 applies directly to federal employees only, but it has served as the impetus for several state laws. Basically, this legislation allows employ- ees to review their personnel files periodically to ensure that the information contained in them is accurate. Before
The Landrum-Griffin Act focused on eliminating various unethical, illegal, and undemocratic
practices within unions themselves.
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this privacy legislation, managers could place almost any information they pleased in a personnel file, certain that only other managers could see those files.
But the larger concerns with privacy these days relate to potential invasions of employee privacy by organizations. For
example, organizations generally reserve the right to moni- tor the e-mail correspondence of employees. Presumably, employees should be using company e-mail only for com- pany business, so this practice may not be a problem, but it does mean that employees who receive unsolicited e-mails from suspect vendors (such as pornographic Web sites) may also have that information shared with their employers.
Late in 2009, Congress passed a law deal- ing with a different type of privacy. The Genetic Information Nondiscrimination Act (GINA) prohibits employers from collecting any genetic information about their employees, including information about family history of disease. This would mean that such information could not be obtained even during a medical examination, although there is some recognition that such infor- mation could be obtained “inadvertently” in some cases. One of the more interesting challenges posed by this new legislation is that some infor- mation about family medical history is often collected as part of determining whether or not a person requires an accommodation under the
ADA. Such practices are now illegal, and it is not clear what effect this will have on the enforcement of the ADA.
The PATRIOT Act was passed shortly after the ter- rorist attacks on September 11, 2001, to help the United States more effectively battle terrorism worldwide. Many of the act’s provisions expand the rights of the govern- ment or law enforcement agencies to collect information about and pursue potential terrorists. Some major provi- sions include those that allow law enforcement agencies to use surveillance to gather information related to a full range of terrorist crimes; those that allow law enforcement agencies to carry out investigations of potential terrorists without having to inform the targets of those investiga- tions; and those that allow law enforcement agencies to obtain search warrants any place a terrorist activity might occur. Congress passed a 4-year extension to the act in 2011, modifying some powers but not seriously changing the law.
In Summer 2013, however, several developments sug- gested that the trade-off between security and privacy in the United States was undergoing a new level of scru- tiny. Over the course of the previous year, various sources
revealed the full extent of surveillance being carried out by the government. Many citizens had long accepted the idea that certain persons suspected of terrorist activities
Chapter 2: The Legal Environment 47
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The occupational Safety and Health Act of 1970 (or oSHA) grants the federal government the power
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of plans to close a facility or lay off 50 or more employees.
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Heather Jennings worked as a customer service representative for Verizon and was paid on an hourly basis. However, she was told that she needed to be at her workstation 10 to 15 minutes before her shift officially started in order to log into her computer, open databases, and get her equipment adjusted so she could start work precisely on time. All other employees in her department were given the same instructions.
Jeffrey Allen was a sergeant in the Chicago police department. He left work each day at 5:00 p.m. but continued to receive doz-
ens of text messages, emails, and calls on his department-issued Blackberry until 10:00 p.m. or so each day. Allen felt compelled to respond to each contact, sometimes taking a few minutes, other times an hour or more. No one at his precinct told him he had to do this, but he felt subtle pressure to do so.
For years, Omar Belazi, a former RadioShack store manager, logged 65-hour workweeks, and stayed late to clean the store’s rest- rooms and vacuum the floor. He also felt pressured to work all week- end each week to help meet the store’s sales goals. Regardless of the
ManagerS in naMe onlY
outside the United States might be under surveillance, but it became clear that American citizens were also being subjected to surveillance under some circumstances. It also became clear that data concerning phone calls both to and from individuals on some “watch list” were being collected and stored, although the government indi- cated that no identifying information would be collected. Furthermore, there was some indication that unmanned drones were being used for domestic surveillance. In gen- eral, it became clear that assumptions about privacy in the United States were no longer valid. In fact, in July 2013, the U.S. Congress came close to revoking some powers that had been granted to various security agencies. The bill to restrict those powers was defeated, but it was a strong signal that there would be much more discus- sion about privacy rights being sacrificed in the name of national security.
2-4 evalUating legal CoMPlianCe Given the clear and obvious importance as well as the complexities associated with the legal environment of human resource management, it is critically important that organizations comply with the laws and regulations
that govern human resource management practices to the best of their ability. The assurance of compliance can best be done through a three-step process. The first step is to ensure that managers clearly understand the laws that gov- ern every aspect of human resource management. In other words, all managers must understand and be intimately familiar with the various laws that restrict and govern their behavior vis-à-vis their employees.
Second, managers should rely on their own legal and human resource staff to answer questions and review pro- cedures periodically. Almost all larger organizations have a legal staff consisting of professionals trained in vari- ous areas of the legal environment of business. A human resource manager or other manager with a legal question regarding a particular employment issue or practice is well advised to consult the firm’s attorney about the legality of that particular action.
And third, organizations may also find it useful to engage occasionally in external legal audits of their human resource management procedures. This audit might involve contracting with an outside law firm to review the organi- zation’s HRM systems and practices to ensure that they comply with all appropriate laws and regulations. Such an external audit will, of course, be expensive and somewhat intrusive into the organization’s daily routine. When prop- erly conducted, however, external audits can keep an orga- nization out of trouble.
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The Genetic information nondiscrimination Act (GinA) of 2009 prohibits employers from obtaining
genetic information about employees.
48 Part 1: An Overview of Human Resource Management
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Chapter 2: The Legal Environment 49
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■ Rip out the chapter review card located at the end of the book.
■ Review the valuable study tools located online at www.cengagebrain.com
■ Review the Key Terms flashcards.
■ Download audio and visual summaries to review on the go.
■ Complete practice quizzes to prepare for the test.
■ Watch the chapter video for a real-life example of key concepts.
hours he worked, however, he received the same monthly salary. Belazi gradu- ally tired of the long hours, extra work, and stress, and he left RadioShack.
Each of these cases has some- thing in common: what an employer can expect of its employees in rela- tion to what it pays them. They have also each been the subject of a law- suit. At the heart of the argument is a decades-old law that mandates overtime payments for hourly oper- ating employees who work more than 40 hours a week but allows firms to pay salaries to profession- als regardless of how many hours they work. The Fair Labor Standards Act (as discussed in this chapter) specifically exempts those in executive, administrative, or professional jobs from overtime payments.
But because so many jobs have shifted from manufacturing settings to service settings, and because the nature of so many jobs has changed, the lines between different kinds of work have blurred. That is, when someone works on an assembly line it’s pretty simple to step up to the line and start work, and the tasks themselves are clearly defined. Service jobs, though, often have more subjective “boundaries” and may require more start- up time.
Heather Jennings acknowledges that she is an hourly worker, but lodged complaints in order to get paid for the extra 10 to 15 minutes she spends each day getting ready to work. Jeffrey Allen, meanwhile, has filed grievances and wants overtime for the extra hours he works each eve- ning. RadioShack eventually settled a lawsuit filed by 1,300 current and former California store managers for $29.9 million. In similar fashion Oracle recently paid $35 million to 1,666 workers who claimed they were mis- classified. And Walmart was recently fined $4.8 million for denying overtime pay to employees working in store
vision centers who were classified as managers but were expected to work extra hours performing nonmanagerial jobs.61
CASE QuESTiOnS 1. From a management perspective, what are the key issues in this
case? 2. How might you respond if your employer (current or future)
directly or indirectly requires you to work extra hours with no additional compensation?
3. What might you as a manager do to ensure your employees never feel compelled to work “off the clock?”
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