HRM Case

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Chapter 3: The Legal Environment and Diversity Management

The Legal Environment for HRM: Protecting Your Organization

A primary responsibility of an HR manager is to assist in avoiding any discriminatory situations that can create legal, ethical, or social problems with employees, former employees, communities, or other stakeholders.

WHY IS IT IMPORTANT TO UNDERSTAND LEGAL AND SAFETY ISSUES?

To provide important guidance for treating employees fairly and helping organizations comply with laws.

Complying with the law saves the organization money—money they would have to spend to fight legal accusations or to try to repair damaged reputations.

Example: Appearing in LA Times (April 1992)

State Farm to Pay Women $157 Million for Job Bias : Courts: Total damages against insurance firm may exceed $200 million. Award is record for civil rights case.

More than 800 women claimed they were denied jobs as agents with State Farm because of their sex

The settlement is the climax of a 13-year legal battle

Each woman will get at least $150,000, and the average will be about $193,000

Example: Appearing in Wall Street Journal (2000)

Coke Agrees to Pay $192.5 Million To Settle a Racial Bias Suit by Employees

The four plaintiffs who filed the lawsuit, alleged wide disparities in pay, promotions, and performance evaluations

These four plaintiff will each receive an award of no more than $300,000. Approximately 2,000 current and former Coke employees qualify for the settlement and will receive an average of $40,000 each

$20 million paid in lawyer fees.

Cost to Coke includes $113 million in cash, $43.5 million to adjust salaries of African-American employees during the next 10 years and $36 million to implement various diversity initiatives and oversight of the company's employment practices.

Coke will donate $50 million to its Coca-Cola Foundation for community programs.

Discrimination Versus Illegal Discrimination

Discrimination

In HR, discrimination is making distinctions among people.

Illegal Discrimination

Making distinctions that harm people by inappropriately using a individual’s membership in a protected class as a basis for an employment decision.

A User’s Guide to Managing People: The OUCH Test

To maintain fairness and equity whenever contemplating any employment action, use the following guideline:

Objective: Fact-based and quantifiable

Uniform in Application: Apply the same “tests” in the same ways

Consistent in Effect: Ensure results aren’t significantly different for different groups

Has Job Relatedness: Action must relate to the essential job functions

The Four-Fifths Rule

Used by federal courts, the Department of Labor, and the EEOC to determine whether disparate impact exists in an employment test.

See Exhibit 3-2 on next slide (page 58 in the book)

The Four-Fifths Rule

Rule explained – if the selection rate for any group is less than the 4/5ths or 80% of the selection rate for the majority group, there may be potential disparate impact.

The Four-Fifths Rule

Exhibit 3-3: Major EEO Laws in Chronological Order

Law	Description
Equal Pay Act of 1963	Requires that women be paid equal to men if they are doing the same work
Title VII of the Civil Rights Act of 1964	Prohibits discrimination on the basis of race, color, religion, sex, or national origin in all areas of the employment relationship
Age Discrimination in Employment Act of 1967	Prohibits age discrimination against people 40 years of age or older and restricts mandatory retirement
Vietnam Era Veterans Readjustment Assistance Act of 1974	Prohibits discrimination against Vietnam veterans by all employers with federal contracts or subcontracts of $100,000 or more. Also requires that affirmative action be taken.
Pregnancy Discrimination Act of 1978	Prohibits discrimination against women affected by pregnancy, childbirth, or related medical conditions

Exhibit 3-3: Major EEO Laws in Chronological Order (Continued)

Law	Description
Americans with Disabilities Act of 1990	Strengthened the Rehabilitation Act of 1973 to require employers to provide “reasonable accommodations” to allow disabled employees to work
Civil Rights Act of 1991	Strengthened civil rights by providing for possible compensatory and punitive damages for discrimination
Uniformed Services Employment and Reemployment Rights Act (USERRA) of 1994	Ensures the civilian reemployment rights of military members who were called away from their regular (nonmilitary) jobs by US government orders

Exhibit 3-3: Major EEO Laws in Chronological Order (Continued)

Law	Description
Veterans Benefits Improvement Act of 2004	Amends USERRA to extend health care coverage while away on duty, and requires employers to post a notice of benefits, duties, and rights of reemployment
Genetic Information Nondiscrimination Act of 2008	Prohibits the use of genetic information in employment, prohibits intentional acquisition of same, and imposes confidentiality requirements
Lilly Ledbetter Fair Pay Act of 2009	Amends the 1964 CRA to extend the period of time in which an employee is allowed to file a lawsuit over pay discrimination

Equal Pay Act of 1963

Requires women who do the same job as men (“equal skill, effort, and responsibility, and performed under similar working conditions”) in the same organization to receive the same pay.

Pay differences that result from differences in seniority, merit, quantity or quality of production, or any factor other than sex (e.g., shift differentials, training programs) are legally allowable.

Title VII of the Civil Rights Act of 1964

This act was passed by Congress and signed into law as a result of the civil rights movement of the 1960s, which sought to end racial discrimination.

The part of the act that specifically applies to equal opportunity in employment is Title VII.

Title VII of the Civil Rights Act of 1964

Illegal for an employer to fail or refuse to hire, discharge, or otherwise discriminate against any individuals with respect to compensation, terms, conditions, or privileges of employment, due to race, color, religion, sex, or national origin;

Or to limit, segregate, or classify employees or applicants in any way that deprives them of employment opportunities or otherwise adversely affects their employment status due to race, color, religion, sex, or national origin.

Title VII of the Civil Rights Act of 1964 (CRA)

Applies to organizations involved in interstate commerce with 15 or more employees who work 20+ weeks a year.

Introduced important concepts:

Disparate treatment

Disparate (a.k.a. Adverse) impact

Pattern or practice

Bona fide occupational qualification (BFOQ)

Business necessity

Job relatedness

Types of Discrimination Addressed by Title VII

Disparate (Adverse) Treatment

When an employee is intentionally treated differently based on his/her membership in a protected class.

Disparate (Adverse) Impact

When an officially neutral employment practice disproportionately and unintentionally excludes members of a protected group.

Pattern or Practice

When an employer engages in actions over time that intentionally deny the rights provided by Title VII to a member of a protected class.

Why do veterans have preference for certain jobs?

Here is why…

The federal government and virtually all of the states grant some form of employment preference to veterans.

Veterans' preference laws have traditionally been justified as measures designed to reward veterans for the sacrifice of military service, to ease the transition from military to civilian life, to encourage patriotic service, and to attract loyal and well-disciplined people to civil service occupations.

However, as a result of long-standing federal statutes, regulations, and policies that have excluded women or sharply limited women's eligibility to serve in the armed forces and also of the fact that women have never been subjected to a military draft, only a very small percentage of veterans are women and, consequently, veterans' preference statutes operate overwhelmingly to the advantage of men.

Despite their potential for adversely affecting the employment opportunities of women, veterans' preferences accorded pursuant to statute are not subject to challenge under Title VII by virtue of the exception provided in Section 712 of the Act.

That section states: Nothing contained in this title shall be construed to repeal or modify any Federal, State, territorial, or local law creating special rights or preference for veterans.

Bona fide occupational qualification (BFOQ)

What is a Bona Fide Occupational Qualification?

It is an exemption from the charges of Disparate Treatment.

a BFOQ usually applies to gender—and in some cases religion—and means that it is reasonable to assume that only a person with that particular characteristic can do the job.

Understanding BFOQ

Bona Fide Occupational Qualification

Is a legal BFOQ

Is NOT a legal BFOQ

1. ____ For the job of modeling women’s clothing, applicants must be female?

2. ____ For the job of loading packages onto trucks to be delivered, applicants must be able to lift 35 lbs.

Understanding BFOQ

Bona Fide Occupational Qualification

Is a legal BFOQ

Is NOT a legal BFOQ

3. ____ For the job of teaching business at a Catholic college, applicants must be practicing Catholics.

4. ____ For the job of attendant in a men’s locker facility at a gym, applicants must be male. Must be heterosexual?

Pattern or Practice Landmark Lawsuit

Paving the way for fair treatment.

The Alabama state troopers long symbolized systematic oppression in the South and, as late as 1972, remained an all-white institution.

Exhibit 3-4: Organizational Defenses to Illegal Discrimination Charges

Exhibit 3-5: Caps on Compensatory and Punitive Damages by Employer Size

The Age Discrimination in Employment Act of 1967 (ADEA)

Prohibits discrimination against employees age 40 or older in organizations that have 20 or more workers.

Age discrimination gets harder to prove

A 2009 Supreme Court case, Gross v. FBL Financial Services, Inc., raised the bar for proving age discrimination. Instead of merely showing that age was a contributing factor in an employer’s decision to fire or demote them, or to refuse to hire them in the first place, plaintiffs now have to come up with convincing evidence that age was the only factor.

Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA)

Employers with federal contracts or subcontracts of $100,000 or more must provide equal opportunity and affirmative action for Vietnam era veterans, special disabled veterans, and veterans who served on active duty during a war, campaign, or expedition.

Pregnancy Discrimination Act of 1978 (PDA)

Under Title VII, this act requires employers to treat pregnant women the same as they treat any employee with a medical condition with respect to employment-related purposes.

Pregnancy is not unlike any other form of disability.

Americans With Disabilities Act (ADA) of 1990 as Amended in 2008

Prohibits discrimination based on disability. Requires employers to make “reasonable accommodation” to individuals with disability, if they are otherwise qualified to perform the “essential functions” of the job, unless it imposes an “undue hardship” on the organization.

Civil Rights Act of 1991

Corrects major omissions of the 1964 CRA and overturns several U.S. court decisions.

Allows compensatory and punitive damage when intentional or reckless discrimination is proven.

Prohibits “discriminatory use,” also called race-norming, of test scores.

The Uniformed Services Employment and Reemployment Rights Act of 1994

Ensures civilian reemployment rights of military members who were called away from their nonmilitary jobs by U.S. government orders.

The Veterans’ Benefits Improvement Act of 2004 (VBIA)

Extends employers’ requirement to maintain health care coverage for up to 2 years for employees serving on active duty and requires employers to post a notice of benefits, duties, and rights under USERRA/VBIA.

Title II of the Genetic Information Nondiscrimination Act of 2008

Prohibits use of genetic information in employment and intentional acquisition of genetic information about applicants and employees and imposes strict confidentiality requirements.

Title II of the Genetic Information Nondiscrimination Act of 2008

Enacted to prevent employers from using results of genetic tests to discriminate against applicants and employees when their test results indicate they may contract a certain disease or disorder in the future.

More about genetic testing

Yes to testing: reduce incidence of occupational disease, help employers avoid placing employees in high-risk environments, individual, organization, and society benefit of testing, employers have a right to protect their interests

No to testing: screening violates workers rights and increases racial and ethnic discrimination

Lilly Ledbetter Fair Pay Act of 2009 (LLFPA)

Extends period of time in which an employee is allowed to file a compensation discrimination lawsuit to within 180 days after “any application” of a discriminatory compensation decision.

This includes every time an individual is paid as long as the discrimination is continuing.

Example: Ledbetter Case

• Herster v. Bd. of Supervisors of La. State Univ. In early 2009 Margaret Herster and her husband both sought employment at Louisiana State University. Herster’s husband obtained a position as an assistant professor at the University’s law school, and Herster obtained a position with University’s School of Art. Herster met several times with her supervisor to discuss her responsibilities and the fact that she was paid a lower salary despite performing duties typically assigned to persons in higher-paid tenure track positions. She was informed that her lower salary reflected her supervisor’s belief that she was a “trailing spouse” who had just pursued a job at the University because of her husband’s employment there.

Example: Ledbetter Case

In December of 2010, Herster was finally promoted to a Professional-in-Residence position and given a raise, but was excluded from seeking a joint-tenure track position in which she was interested. Instead a male candidate was hired for that position, at a higher salary than Herster received in any position at the University. Herster’s position required a similar work load and set of responsibilities as the joint-tenure track position given to her male colleague. Herster filed a lawsuit alleging both pay discrimination and retaliation claims against the University. The University tried to have Hester’s pay discrimination claims dismissed by arguing that they were timebarred. The court disagreed, holding that Herster’s claim that she was paid less than a male counterpart for similar work was timely based on the Ledbetter Act.6

Source: 6 Herster v. Bd. of Supervisors of La. State Univ., No. 13–139–JJB, 2013 WL 2422893 (M.D. La. June 3, 2013).

Equal Employment Opportunity Commission (EEOC)

A major part of Title VII was creation of the Equal Employment Opportunity Commission (EEOC).

The EEOC is a federal agency in charge of administrative and judicial enforcement of federal civil rights laws.

An individual who feels that he or she has been the victim of employment discrimination can file a complaint with the EEOC. EEOC will then investigate the claim.

Equal Employment Opportunity Commission (EEOC)

EEOC Enforcement Areas

Title VII of the Civil Rights Act

Age

Disability

Equal Pay

Religion

Color

Sex and sexual harassment

Retaliation

The Equal Employment Opportunity Commission (EEOC)

Investigates and resolves discrimination complaints through either conciliation (mediation) or litigation.

Gathers and compiles statistical information on such complaints.

Provides education and outreach programs on what constitutes illegal discrimination.

All employees who work in the United States or its territories are protected by EEOC laws.

Employee Rights Under EEOC: U.S. Citizens Outside the U.S.

U.S. citizens employed outside the U.S. by a U.S. employer or a foreign company controlled by a U.S. employer are protected by Title VII, ADEA, and ADA unless adherence violates a law of the country where the workplace is located.

When U.S. citizens are employed by a foreign company in a country other than the United States, the laws of that country apply.

Employee Rights Under EEOC

To bring discrimination complaints against an employer by filing a complaint with the EEOC

To participate in an EEOC investigation, hearing, or other proceeding without threat of retaliation

Rights related to arbitration and settlement of the complaint

To sue the employer directly

Employer Prohibitions

Employers are prohibited from:

retaliating against employees who participate in an EEOC action.

creating a hostile work environment that results in the employee quitting or resigning from the company because continued employment becomes intolerable (constructive discharge)

Who has the burden of proof in a discrimination case?

Plaintiff bears the initial burden of proving his prima facie case.

“The burden then must shift to the employer to articulate some legitimate, nondiscriminatory reason for the employee’s rejection.”

“[t]he ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.”

Source: Moore B. S. (2012), Shifting the Burden: Genuine Disputes and Employment Discrimination Standards of Proof

Employer Rights Defense against charges

BFOQ – job requires very specific characteristics

Business necessity – applies to business values/purpose that define job

Job relatedness – test is needed to determine essential job performance

EEOC Outcomes

88,778 charges of workplace discrimination received in 2014

167 suits filed in federal court

144 suits resolved in federal court

Winning! .0016%

Why so low a rate of settled federal cases?

Some cases settled out of court

Investigations found insufficient evidence to support the charge

Example of case won by the EEOC in 2015 for Failure to provide a reasonable accommodation

Mississippi HomeCare of Picayune to Pay $100,000 to Settle EEOC Disability Discrimination Suit

EEOC brought suit on behalf of Kristy Sones, a former Mississippi HomeCare employee, who suffered an epileptic seizure while working at the facility. Returning to work following her seizure, Sones requested an accommodation to help her perform certain job-related computer tasks--tasks she was having difficulty completing because of the temporary side effects of her seizure medication. The lawsuit alleges that Mississippi HomeCare ignored Sones' request, failed to engage in an interactive process to discuss reasonable accommodations, and provided no accommodation. Mississippi HomeCare then terminated Sones less than a month after her request for an accommodation.

Affirmative Action

A series of policies, programs, and initiatives designed to give preference in the hiring of individuals in protected groups in certain circumstances as an attempt to mitigate past discriminatory practices.

The argument

In favor…

Way to ensure diversity in schools/workplace

Helps disadvantaged groups

Way to compensate for years of oppression

Against …

Reverse discrimination

Put race as dominant factor in admissions/hiring, not merit

Enforces stereotypes

Different races/ethnicities does not necessarily mean diversity of opinion

Diversity in the Workforce

Diversity is the existence of differences.

Organizations are embracing diversity as it provides both opportunities and challenges.

Diversity fosters creativity and innovation through divergent thinking, so to exclude qualified people because they are “different” is counterproductive to business success.

Exhibit 3-6: Equal Employment Opportunity, Affirmative Action, and Diversity

Topic	Governance	Concept
EEO	Federal (and state) law	Narrow, specific requirements and prohibitions
Affirmative Action	Executive orders, federal court orders, or voluntary	Policies that broadly define situations in which actions should be taken to balance a workforce with its surroundings
Diversity	Organizational voluntary policies	No legal requirement; designed to better serve a more diverse customer base

Executive order: federal contractors who receive more then 10,000 per year by executive order must maintain an affirmative action program

Federal Court Orders for AA Programs

Organizations must comply with a federal court order to create an affirmative action program to correct past discriminatory practices.

Reverse Discrimination

Discrimination against members of a majority group, generally resulting from affirmative action policies.

How the EEOC Defines Sexual Harassment

“Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitutes sexual harassment when submission to or rejection of this conduct explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment.”

Two Kinds of Sexual Harassment

Quid pro quo

Literally “this for that”

some type of benefit or punishment is made contingent upon the employee submitting to sexual advances

Hostile work environment

someone’s behavior at work creates an environment that is sexual in nature and that makes it difficult for someone of a particular sex to work in that environment

What Constitutes Sexual Harassment

The work situation must include the following characteristics:

Plaintiff is a member of a protected class

Harassment was based on sex

Person was subject to unwelcome sexual advances or

Harassment was sufficiently severe enough to alter the terms, conditions, or privileges of employment

What Constitutes Sexual Harassment

In order for the organization to be considered for liability, two critical conditions must exist:

Plaintiff did not solicit or incite the advances

Harassment was undesirable and was severe enough to alter the terms, conditions, and privileges of employment

Exhibit 3-7: Reducing Organizational Risks From Sexual Harassment Lawsuits

Develop a policy statement.

Communicate the policy by training all employees.

Develop a mechanism for reporting sexual harassment.

Ensure that just cause procedures are followed.

Carry out prompt disciplinary action against those who commit sexual harassment.

More companies insure against employee harassment

Feature aired 8/29/2016 on Marketplace Morning report

https://ssl.marketplace.org/node/158672/player/popout

https://ssl.marketplace.org/2016/08/08/world/insurance-against-claims-sexual-harassment-companies-are-buying-it

Religious Discrimination

Employers need to make reasonable accommodation of employees’ religion-based requests that are not in keeping with the normal workday practices of the organization, unless the requests prevent the employee from carrying out the essential functions of his/her job or create an undue hardship.

What are some common religious accommodations sought in the workplace?

an employee needs an exception to the company's dress and grooming code for a religious practice, e.g., Pentecostal Christian woman who does not wear pants or short skirts; a Muslim woman who wears a religious headscarf (hijab); or a Jewish man who wears a skullcap (yarmulke).

a Catholic employee needs a schedule change so that he can attend church services on Good Friday;

an atheist needs to be excused from the religious invocation offered at the beginning of staff meetings;

a Christian pharmacy employee needs to be excused from filling birth control prescriptions , or a Jehovah's Witness seeks to change job tasks at a factory so that he will not have to work on producing war weapons;

Source EEOC

Trends and Issues in HRM

Federal agencies are becoming more active in pursuing discrimination claims.

Claims under American Disabilities Act (ADA) have increased significantly over the last several years.