BSAD 310 Spring 2017 - CH 3

Chapter 3: The Legal

Environment and Diversity

Management

Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.

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.

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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.

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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

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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

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Exhibit 3-3: Major EEO Laws in Chronological OrderLaw 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

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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


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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


Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications. 10

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

• 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.


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.

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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.


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.


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.


The Equal Employment Opportunity Commission

(EEOC)• Investigates and resolves discrimination

complaints through either conciliation 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

• 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


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.


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)


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.


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


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.


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.


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.


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.


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.