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The Legal Environment

Chapter 2. The Legal Environment. Chapter 1 Objectives. After studying this chapter, you should be able to:. Describe the legal context of HRM Identify key laws that prohibit discrimination in the workplace and discuss equal employment opportunity

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The Legal Environment

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  1. Chapter 2 The Legal Environment

  2. Chapter 1 Objectives After studying this chapter, you should be able to: Describe the legal context of HRM Identify key laws that prohibit discrimination in the workplace and discuss equal employment opportunity Discuss legal issues in compensation, labor relations, and other areas in HRM Discuss the importance to an organization of evaluating its legal compliance

  3. Why is Understanding the Legal Environment so Important? • It is the right thing to do… • Helps to understand the limitations of the HR and Legal departments • Facilitate a fair and humane environment • Can limit potential liability • Avoid creating a negative image for a company • Affects competitive advantage

  4. Dynamic legal landscape Complexity of laws: 3 Step Process Challenges to Legal Compliance

  5. Equal Employment Opportunity Laws Equal Pay Act 1963 • Requires that male and female workers receive equal pay for work requiring equal skill, effort and responsibility, and performed under similar working conditions • Challenges: • Determining whether 2 employees are doing same job • Exceptions: • Merit Pay • Varying quality/quality of work • Seniority plans • Geographic regions

  6. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 • General Provisions: • Prohibits discrimination based upon a person’s race, color, religion, sex or national origin • Theory of Protected Class - group of people who have suffered discrimination in the past and who are given special protection by the judicial system: • African Americans • Asian Americans • Latinos • Native Americans • Women

  7. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Two Types of Illegal Discrimination

  8. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Disparate Impact Important Cases: • Griggs v. Duke Power Company: Supreme Court case in which the plaintiff argued that his employer’s requirement that coal handlers be high school graduates was unfairly discriminatory. In finding for the plaintiff, the Court ruled that discrimination need not be overt to be illegal, that employment practices must be related to job performance, and that the burden of proof is on the employer to show that hiring standards are job related. • Discrimination by the employer need not be overt; employer’s intent is irrelevant. • An employment practice must be job related and valid if it has an unequal impact on members of a protected class. • The burden of proof is on the employer to show that the employment practice is job related.

  9. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Disparate Impact Important Cases (Cont.): • Albemarle Paper Company v. Moody: Reaffirmed the idea that any test used in the selection process or in promotion decisions must be validated if it is found that its use has had an adverse impact on women and minorities • If an employer uses a test to screen candidates, then the job’s specific duties and responsibilities must be carefully analyzed and documented • The performance standards for employees on the job in question should be clear and unambiguous • Test must be a valid predictor of job performance, burden on employer • EEOC (now federal) guidelines on validation are to be used for validating employment practices

  10. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Discrimination and the courts: • The plaintiff (employee) must establish a prima facie case of discrimination. • To establish a prima facie case, the plaintiff must present evidence that makes the employer’s actions appear discriminatory. • When a plaintiff establishes a prima facie case, the burden shifts to the employer to rebut the case by presenting evidence that justifies the fairness of its actions.

  11. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Establishing a Prima Facie Case of Intentional Discrimination: • Restricted company policy: Plaintiff proves that the company has a formal policy that restricts the selection of a protected group. • Discriminatory remarks: Plaintiff must produce evidence that certain biased remarks were made by the employer regarding the protected group. • McDonnell-Douglas test

  12. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Establishing a Prima Facie Case of Intentional Discrimination: • McDonnell-Douglas test: • Used to infer the presence of discriminatory intent when more direct evidence of discrimination is lacking. • Requires the plaintiff to show that he or she: • Belongs to the protected group in question. • Has applied for and is qualified for the job for which the employer was seeking applicants. • Was rejected. • After rejection, the position remained open or was filled by someone who was not a member of that protected group.

  13. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Rebutting a Prima Facie Case of Intentional Discrimination: • Restricted company policy • When the employer has a policy that excludes an entire protected group, it uses the BFOQ defense. • BFOQ refers to "bona fide occupational qualification.” • The employer argues that it purposely discriminated against all members of a group for reasons including all or nearly all, authenticity, propriety, or safety. • Discriminatory remarks: Requires the employer to argue that the remarks were not very derogatory or that the person who made the remarks had no influence on the hiring decision.

  14. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Rebutting a Prima Facie Case of Intentional Discrimination: • The McDonnell-Douglas test • Employer must present evidence showing that its employment decision was based on legitimate, nondiscriminatory reasons. • The plaintiff could still win the case if they prove that the reason offered by the employer was merely a pretext or an excuse; the “real” reason for the action was discrimination.

  15. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Establishing a Prima Facie Case of Unintentional Discrimination: • The four-fifths rule: • Helps determine whether between-group differences in hiring rates are large enough to be important. • Is calculated by comparing the hiring rate of the “disadvantaged” protected group with the rate of the “advantaged” group. • A prima facie case of discrimination is established when the hiring rate of the former group is less than four-fifths of the latter group.

  16. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Establishing a Prima Facie Case of Unintentional Discrimination (Example):

  17. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Rebutting a Prima Facie Case of Unintentional Discrimination: • The four-fifths rule • A firm must demonstrate that the procedure in question is a business necessity. • According to the CRA of 1991, when several selection devices are used, only those causing the disparate impact must be justified. • The exception to this rule occurs when the elements of a respondent’s decision-making process are not capable of separation for analysis; the decision-making process may be analyzed as one employment practice.

  18. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) • Title VII has been interpreted to prohibit sexual harassment: • Harassment on the basis of sex that has the purpose or effect of substantially interfering with a person’s work performance or creating an intimidating, hostile, or offensive work environment • Employers have an affirmative duty to maintain workplaces free of sexual harassment and intimidation

  19. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) • Definition of sexual harassment: • Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that takes place under any of the following conditions: • Submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment. • Submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual. • Such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive work environment.

  20. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) • 2 types of sexual harassment: • Quid pro quo: • Occurs when “submission to or rejection of sexual conduct is used as a basis for employment decisions” • Involves a tangible or economic consequence, such as a demotion or loss of pay

  21. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) • 2 types of sexual harassment: • Hostile Work Environment: • Occurs when unwelcome sexual conduct has the purpose or effect of unreasonably interfering with job performance or creating an intimidating, hostile, or offensive working environment • Dirty jokes, vulgar slang, nude pictures, swearing, and personal ridicule and insult constitute sexual harassment when an employee finds them offensive. • Courts use a “reasonable person” test for hostile environment

  22. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) • 2 types of sexual harassment: • In a quid pro quo case it is not necessary for the employee to have suffered a tangible job action to win the case. • The employer (in its defense) must show that it took reasonable care to prevent and promptly correct any sexually harassing behavior and that the employee unreasonably failed to take advantage of the employer’s policy.

  23. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) • Recent Supreme Court Cases: • Employer is liable for actions of supervisors if they do not know about it (should have known) • Groups of employees have sued for hostile environment • Same sex harassment

  24. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Prevention of Sexual Harassment:

  25. Equal Employment Opportunity Laws Title VII Civil Rights Act of 1964 (Cont.) Prevention of Sexual Harassment (Cont):

  26. Equal Employment Opportunity Laws Age Discrimination in Employment Act 1967 • The act prohibiting arbitrary age discrimination and specifically protecting individuals over 40 years old • Majority of complaints come from terminated workers • Amendment to ADEA – Older Workers’ Protection Act of 1990: • Illegal for employers to discriminate by providing benefits to employees based on age

  27. Equal Employment Opportunity Laws Pregnancy Discrimination Act 1978 • A Title VII amendment that prohibits sex discrimination based on “pregnancy, childbirth, or related medical conditions.” • An employer must treat pregnancy and childbirth like any other medical condition • Must include pregnancy related conditions in benefit plan if other conditions are allowed

  28. Equal Employment Opportunity Laws Civil Rights Act 1991

  29. Equal Employment Opportunity Laws Other EEO Laws • Immigration Reform and Control Act of 1986 • Genetic Information Nondiscrimination Act (2009)

  30. Equal Employment Opportunity Laws Americans With Disabilities Act 1990 Forbids Employment Discrimination Against

  31. Equal Employment Opportunity Laws Americans With Disabilities Act 1990 (Cont.) Individual with a Disability = A person with a physical or mental impairment that substantially affects one or more major life activities

  32. Equal Employment Opportunity Laws Americans With Disabilities Act 1990 (Cont.) Essential Functions = Job duties that each person in a certain position must do or be able to do to be an effective employee vs. marginal functions

  33. Equal Employment Opportunity Laws Americans With Disabilities Act 1990 (Cont.) Reasonable Accommodation = If the individual can’t perform the job as currently structured, the employer must make a “reasonable accommodation” unless doing so would present an “undue hardship.”

  34. Equal Employment Opportunity Laws Family Medical Leave Act (FMLA) of 1993

  35. Equal Employment Opportunity Laws The Equal Employment Opportunity Commission (EEOC) • Consists of five members appointed by the President with the advice and consent of the Senate • Each member serves a five-year term • The EEOC has a staff of thousands to assist it in administering the Civil Rights law in employment settings • EEOC may file discrimination charges and go to court on behalf of aggrieved individuals.

  36. Affirmative Action Plans • Affirmative action programs aim to redress past discrimination against protected classes and correct racial and gender imbalances in the workforce. • It attempts to accomplish this aim through initiatives that are ‘‘color-conscious.’’ • Executive Order 11246 made it mandatory for all government contractors and sub-contractors, voluntary for others

  37. Affirmative Action Plans (Cont.)

  38. Affirmative Action Plans – Cont. • Utilization analysis • A statistical procedure that compares the percentage of each protected group for each job category within the organization to that in the available labor market. • If the organizational percentage is less than the labor market percentage, the group is classified as being “underutilized.”

  39. Affirmative Action Plans – Cont. • Affirmative action plan (AAP) • Affirmative action plans target the underutilized protected groups. • An AAP is a written statement that specifies how the organization plans to increase the utilization of targeted groups. • The AAP consists of three elements – goals, timetables, and action steps. • An AAP practice sometimes involves the use of preferential treatment.

  40. Affirmative Action Plans – Cont. • The Office of Federal Contract Compliance Programs (OFCCP): • Carries out Executive Order 11246 • Similar to EEOC except: • Monitors compliance with regulations • Great enforcement power

  41. Affirmative Action Plans – Cont. Conflicting strategies for fair employment

  42. Compensation Fair Labor Standards Act (FLSA) Employee Retirement Income Security Act of 1974 (ERISA) Labor Relations National Labor Relations Act or Wagner Act Taft-Hartley Act Landrum-Griffin Act Legal Issues in EmploymentOther Laws

  43. Employee Rights Occupational Safety and Health Act of 1970 (OSHA) Privacy Act of 1974 Drug-Free Workplace Act of 1988 Worker Adjustment and Retraining Notification (WARN) Act of 1988 Legal Issues in EmploymentOther Laws

  44. Ensure that managers clearly understand the laws that govern all aspects of HRM Have organization legal and HR staff answer questions Organizations should engage in periodic external legal audits of their HRM procedures Legal Issues in EmploymentEvaluating Legal Compliance

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