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Chapter4LegalConstructionoftheEmploymentEnvironment.pptxEmployment Law for Business
Chapter 4
Legal Construction of the Employment Environment
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Learning Objectives 1
Explain why employers should be concerned about ensuring protections for equal opportunity during recruitment, in particular.
Describe how the recruitment environment is regulated, by both statutes and common law.
Describe the employer’s opportunities during the information-gathering process to learn as much as possible about hiring the most effective workers.
Explain how the employer might be liable under the theory of negligent hiring.
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Learning Objectives 2
Identify the circumstances under which an employer may be responsible for an employee’s compelled self-publication, thus liable for defamation.
Explain the difference between testing for eligibility and testing for ineligibility and provide examples of each.
Identify the key benefits of performance appraisal structures, as well as their areas of potential pitfalls.
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Evolution of the Employment Relationship
Sourcing and managing the employee assets of a firm requires knowledge and care - to maximize their contributions and avoid mistakes that can be expensive or worse.
law generally gives leeway in making employment decisions, as ‘discrimination’ among possibilities is how the best candidates are chosen.
only a few limitations on that discretion are imposed for example, by outlawing choices made on particular ‘status factors’ that compromise bedrock values like equal employment opportunities.
Other exceptions, for example, to ‘at-will’ employment capture actions in which other policies override employer interests or are otherwise unfair to workers.
Chapter traces evolution of the employment relationship – from sourcing through hiring, evaluation and eventual termination – to identify duties and potential pitfalls where careless management raises the risk of negative consequences.
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Recruitment 1
First step in the evolution of the employment relationship.
Practices are particularly susceptible to discrimination claims.
Federal statutory regulation of recruitment.
Title VII of the Civil Rights Act of 19 64.
Age Discrimination in Employment Act of 19 67.
Immigration Reform and Control Act of 19 86.
Vocational Rehabilitation Act of 19 73 and the Americans with Disabilities Act of 19 90.
Note: many states have similar laws, that may also extend applicant protections.
Common law prohibitions: Misrepresentations and Fraud.
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Application to Recruitment Practices
Advertisements – placement and exclusionary wording.
Scenario 1.
Word-of-mouth recruiting – common practice but take care to manage applicant pool (for example, 7th Circuit cases demonstrate risk).
Promoting from within – design process for broad access.
Venue recruiting – applicant pool issues (for example, vol. fire fighters case).
‘Walk-in’ applicants – processes to manage pool of unsolicited resumes.
Neutral solicitation – exclusionary wording (‘busboy’, ‘maid’).
Note: AI-assisted screening useful but does not insulate employer from discrimination risk (inherited or ‘learned’ biases ).
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Information Gathering and Selection 1
Application phase: form is source of information for screening-out applicants based on job requirements. Bias risk abounds in unmanaged systems of review.
Few Prohibited Qs: re: disabilities, specific health risks, workers comp history (A D A).
Limited pandemic exception, per E E O C guidance (2020).
Monitor all questions for relevance, current need-to-know, discriminatory potential (for example, avoid age, sex, religion, ethnicity). See Exhibit 4.4,
wide state law variations.
Take care in wording of questions (for example, ‘maiden’ versus ‘any other’ name).
Recognize/correct for unconscious bias - anonymize for review, where practical.
The interview.
Training critical, standardization of inquiries and evaluation desirable.
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Information Gathering and Selection 2
Interviews phase, where risks are similar to initial application process. Training critical, standardization of inquiries and evaluation desirable.
Untrained, seemingly innocuous comments can be risky.
Process effects: monitor for systemic bias.
Four areas of particular concern.
Procedures that may discourage protected group candidates.
Interviewer team characteristics send message re bias.
Training of interviewers for sensitivity to bias potential in questioning.
Evaluation of outcomes: standardization of process and objectivity of selection criteria.
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Information Gathering and Selection 3
Background or reference checks. (see Exhibit 4.6 Checklist)
Misrepresentation of academic credentials and work experience on résumés is rampant.
Remote interviews: potential real-time coaching, impersonation.
Background checks: Get needed permissions per federal and state laws, verify candidate information from Application and interview.
References: Ask those references to provide name of someone else who has worked alongside the candidate as a peer.
Potential referrer liability → trend away from useful information source. Limited immunity for good-faith references in some states.
Recognize Negligent Hiring risk (see next slide).
Note potential impacts and coverages of local, state ‘Ban-the-Box’ laws.
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Grounds for Negligent Hiring Claim
Exhibit 4.5: Grounds for Negligent Hiring Claim.
| Negligent hiring | To state a claim for negligent hiring, the plaintiff must show: The existence of an employer–employee relationship. The employee’s incompetence or inappropriateness for the position assumed. The employer’s actual or constructive knowledge of such incompetence or inappropriateness, or the employer’s ability. That the employee’s act or omission caused the plaintiff’s injuries. That the employer’s negligence in hiring or retaining the employee was the proximate cause of the plaintiff’s injuries (that is, on investigation, the employer could have discovered the relevant information and prevented the incident from occurring). |
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Employer Liability and Protection 1
See Exhibit 4.8 Employer Strategies.
Reference checks – Employers may be held liable for negligent misrepresentation based on misleading statements made in employment references.
No duty to provide; consider (and train to) policy Not to provide them.
Alternative to seek release of claims from former employee – but complete coverage and administrative burden issues.
Compelled self-publication: Occurs in some states when an ex-employee is forced to repeat the reason for her or his termination.
Gives the ex-employee the basis for a claim for defamation.
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Employer Liability and Protection 2
Exhibit 4.9: Tips for Employer Protection.
So how does the employer protect itself?
Precaution.
| During the interview process | Obtain releases from all applicants allowing the employer to check on previous employment. Request that all applicants obtain copies of their personnel files from previous employers. |
| Before a position is offered to the candidate | Investigate the employment record, including all gaps, missing data, and positions held. Review educational records carefully. Contact the institutions listed to verify their existence, the years attended, the course of study, and, most important, actual graduation with degree. Check references, especially when several are reluctant to speak. This may be viewed as a warning beacon that they do not have much good to say or have no desire to support the candidate. (On the other hand, ensure that this unwillingness is not the result of a bad relationship with the person. Allow the candidate the opportunity to explain.) |
| After the candidate is hired | Maintain clear, consistent policies relating to employment decisions. Follow up on the implementation and enforcement of these policies. |
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Documentation of Failure-to-Hire
Internal documentation not legally required but is recommended.
Demonstrates hiring process system.
Record may refresh memories, provide evidence if decision-maker unavailable.
Provides statistical data for self-monitoring or defense.
External disclosure to former applicant, employee or third parties not required and of dubious value.
Risks defamation (third parties) or compelled self-disclosure (applicant, former employee) claims.
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Management Tips
When sourcing, cast wide net and monitor for bias.
Beware interviewer statements regarding position that may mislead interviewees.
Monitor demographics of candidate pools, especially in relatively passive sourcing situations (word-of-mouth, promotion from within). Analyze postings and application forms for accuracy, wording neutrality and need-to-know (at this process stage).
Train interviewers and consider standardizing Qs and evaluations.
Background checks important to gain and act-on properly acquired information.
Consider References Provision policy: its risks, burdens, rewards and training requirements.
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Testing in the Employment Environment 1
Pre-employment testing.
Eligibility Tests to find the best individual for a position (for example, I Q, stamina, necessary skills, aptitudes).
Ineligibility Tests to ensure that the individual is free from problems that would prevent her or him from performing the position’s functions. (substance abuse, polygraph, H I V).
Note: Individual privacy rights.
Courts do a balancing test to determine the legality of ineligibility testing to protect individual employee privacy rights.
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Testing in the Employment Environment 2
Exhibit 4.11: Balancing the Interests in the Testing Debate.
Employer’s interest in securing a problem-free and substance-free workplace.
Balancing interests in the testing debate
Employee’s privacy rights and protections against self-incrimination.
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Legality of Eligibility Testing 1
Eligibility testing: Tests conducted to ensure the capability and qualification of a potential employee.
To be legally validated, an employer must show that the eligibility test is:
Job-related.
Consistent with business necessity (Disparate Impact defense).
Job analysis data: Information about nature of work and the knowledge, skills, and abilities required to perform the work.
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Legality of Eligibility Testing 2
Validation: Evidence that shows that a test evaluates what it says it evaluates.
Strategies to validate tests, per E E O C Uniform Guidelines on Employee Selection.
Criterion-related validation – for example, simulated exercise.
Content validation – for example, job analysis to I D critical tasks.
Construct validity – tests to measure psychological characteristics, must be job-related and well-defined.
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Legality of Eligibility Testing 3
Integrity and Personality Tests.
Psychological tests are used by high percentage of large companies. Attention-to-detail has a strong correlation to on-the-job behavior.
Integrity, personality testing are trending. Quality varies widely, as do usefulness and defensibility of use (esp. ADA concerns).
Physical Ability Tests, usually simulations keyed to job description. Job-relatedness is key, especially rel. to Disparate Impact exposure.
Medical Tests, general and specific to job: timing key.
Exhibit 4.12: Timing of Testing Processes.
Conditional offer of employment
Background check, drug test, and all other nonmedical testing
Confidential medical testing is then permitted
Employment
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Legality of Ineligibility Testing 1
Portions of state constitutions, state statutes, and local laws establish private-sector requirements for workplace testing.
Drug and Alcohol Tests.
Economic and human costs of substance abuse in the workplace enormous and affect productivity, injuries, turnover, etc.
70% of big companies use drug tests on more than 40% of jobs.
Costs vary from $30 to 200/test, privacy concerns, applicant reluctance, changing societal attitudes.
General cost/benefit analysis statistics unclear – consider risk in context of the work. See Exhibit 4-14.
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Legality of Ineligibility Testing 2
Federal and state laws vary widely as to underlying legality of use, and drug-testing requirements.
Successful employer plans incorporate:
(1) a written drug policy that has been drafted after input from employees,
(2) a supervisory training program,
(3) an employee education and awareness program.
(4) access to an employee assistance program, and
(5) a drug-testing program, where appropriate.
Cases re suspicionless testing: National Treasury Employees Union v. Von Raab. (yes, re safety-sensitive positions), but Chandler v. Miller (no, re general fitness for public office).
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Legality of Ineligibility Testing 3
Drug Testing and ‘Legal’ Marijuana Use.
Laws in transition as societal norms on marijuana evolve.
Per 2022, 37 states allow medicinal uses, 21 states include recreational uses.
States vary as to continuing viability of testing and consequences. Some differentiate prescribed medical from recreational use.
Americans with Disabilities Act implications.
Re medicinal uses, drug may be considered treatment of qualifying disability; its continuing use may qualify as a reasonable accommodation.
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Polygraphs 1
Polygraph: ‘Lie-detecting’ device that measures biological reactions in individuals when questioned.
Rate and depth of respiration, Cardiovascular activity, Perspiration.
Accuracy concerns re both false negatives (‘duper’s delight’) and positives (‘Othello effect’ - actually regarding his faithful accused wife Desdemona).
Accuracy rates range 50 to 90 percent. (flipping a coin = 50%).
Per Employee Polygraph Protection Act, employers cannot:
Require or cause any employee to take any lie detector test.
Use, accept, refer to, or inquire about the results of any lie detector test of any job applicant or current employee.
Discharge, discipline, etc. any prospective or current employee who refuses to take or submit to a lie detector test or who fails such a test.
With a few employer exemptions and exceptions (see Exhibit 4.15).
27 states concur and may be more strict in protecting employees.
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Genetic Tests 1
Title II of the Genetic Information Non-Discrimination Act of 2008 (G I N A).
Prohibits the use of genetic information in making employment decisions.
Restricts employers from requesting, requiring, or purchasing genetic information.
Strictly limits the disclosure of genetic information (but see Exhibit 4.16 re narrow exceptions).
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Genetic Tests 2
G I N A:
Does not apply to employers who have fewer than 15 employers.
Does not cover people in the military.
However, 38 states concur with ban, by statute.
Genetic irregularities may be considered protected disabilities under the Americans with Disabilities and Vocational Rehabilitation Act.
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Unique Considerations of HIV/AIDS Testing
Individualized assessment required.
ADA limits pre-employment inquiry, testing – employer may ask or require related testing only if:
Positive H I V status poses Direct Threat (see chapter 13).
Inquiry, test made post-offer.
Same inquiry, test made of/on all applicants in same job category.
Note: E E O C regs use phlebotomist example as not meeting Direct Threat standard for exclusion from consideration. Most occupations do not qualify under that standard.
Note 2: employer duty to hold any + H I V/AIDS data confidential.
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Management Considerations: Testing
Three possible corporate approaches for testing employees for ineligibility.
Employer may establish mandatory testing - for drug or alcohol use or some other form of ineligibility.
Employer may implement ‘probable cause’ testing, where an employer tests employees only if there is suspicion of ineligibility.
Some employers may implement random testing.
Strategic decision considering cost/benefit, corporate culture and local laws that may restrict use. Regardless of choice, policy must be clear and clearly communicated, evenly applied and quality assured.
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Performance Appraisals, Evaluation, and Discipline Systems 1
Performance appraisal (P A s): Periodic assessment of an employee’s performance – essence of management.
The purpose of performance appraisals.
Identify performance characteristics employer hopes employee will accentuate.
Identify opportunities for improvement via training, attention. Discourage performance characteristics not in keeping with the organization’s objectives.
Potential for discriminatory effect depends on the manner in which the appraisal is conducted.
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Performance Appraisals, Evaluation, and Discipline Systems 2
Realities about performance evaluations.
Employers might be liable for giving a negative reference even when based on valid P A. (Note general cautions re references)
Employers need not lower standards or qualifications to accommodate employee’s or applicant’s needs.
Performance appraisal systems should maximize reliance on objective measures.
Performance incentive systems recognize outstanding performance and leadership.
Legal challenges are found mostly in the areas of implementation, monitoring, and accountability.
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Legal Implications of PA Systems
Disparate Impact.
Four-fifths rule: Minority group must perform at least 80 percent (four-fifths) as well as the majority group under a screening device or the test is shown to have a disparate impact on the minority group.
Subject to Business Necessity defense (see Chapter 2).
Objective criteria important to counter discrimination claims.
Disparate Treatment (per McDonnell Douglas framework).
Requires application of uniform evaluation criteria – see Hopkins case.
Scenario 3.
Defamation: risk heightened if PA given broad circulation, esp. to 3rd Parties.
PAs Considerations under ADA: uniform standards, but recognizing ‘essential functions’ and ‘reasonable accommodations’ (see Chap 13).
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Management Tips: Performance Appraisals
Implement and Maintain proper documentation of performance appraisals.
Train supervisors on nonbiased reporting and evaluations, uniform, objective measures preferred.
Take precautions against inappropriate disclosures.
Evaluate performance frequently, systematically, uniformly and as stated in the employee manual or other materials.
Sirikorn thamniyom/Shutterstock
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Discipline 1
Employment at-will, but “Just cause” disciplinary approach bolsters any needed defenses v. discrimination claims.
How is “just cause” determined? See Exhibit 4.19 Tests.
Due process.
Adequate evidence.
Appropriateness of penalty/progressive discipline.
Documentation(!) assures employees of adequate feedback and helps avoid lawsuits.
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Discipline 2
Exhibit 4.19: The Seven Tests of Just Cause.
Did the employer give to the employee forewarning of the possible or probable disciplinary consequences of the employee’s conduct?
Was the employer’s rule or managerial order reasonably related to the orderly, efficient, and safe operation of the business?
Did the employer, before issuing discipline, make an effort to discover whether the employee violated or disobeyed a rule or order of management?
Was the employer’s investigation conducted fairly and objectively?
At the investigation, did the employer obtain substantial evidence or proof that the employee was guilty as charged?
Has the employer applied its rules, orders, and penalties evenhandedly and without discrimination?
Was the degree of discipline administered by the employer reasonable given (a) the seriousness of the employee’s proven offense and (b) the record of the employee’s service?
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Chapter Summary 1
Even in at-will circumstances, employers must take care to provide equal opportunities and avoid exceptions to at-will treatment.
Ethic of non-discrimination must pervade entire hiring process, from sourcing through to engagement.
Hiring to a well-drafted job description is effective protection against discrimination claims. Actual job should conform to description.
Sourcing should seek diverse candidate pool. Application and interview processes must be developed with care.
Avoid negligent hiring concerns via analysis of critical criteria, background checks and references, if available.
Carefully consider whether to provide references and train personnel to policy.
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Chapter Summary 2
Eligibility and Ineligibility Testing should be uniformly performed in the context of the position, based on validated tests.
Performance Appraisals are a better as a management process than as a separate event. Expectations should be clear, well-communicated and uniformly applied to employees’ performance. Objective measures preferred to reduce bias risk. Publication should be limited to those who need-to-know.
Just-cause discipline processes with progressive discipline should be implemented to serve fairness and performance improvement goals.
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