Paul L. Schumann, Ph.D.
Professor of Management
MGMT 440: Human Resource Management
© 2008 by Paul L. Schumann. All rights reserved.
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Outline
 Definition of Employment Discrimination
 Protected Characteristics
 Major US Federal Laws
 Affirmative Action
 Proving Illegal Discrimination
 Remedies
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Definition
 Employment discrimination: to make an employment
decision, not on the basis of legitimate job-related
factors, but rather on the basis of false stereotypes and
prejudices
 Any employment decision
 Fail to use job-relevant factors, such as:


Essential job qualifications
Job performance
 Instead, use false stereotypes and prejudices
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Protected Characteristics
 US Federal Laws: race, color, religion, sex, national
origin, age (if 40 or older), and disability
 Minnesota Law: race, color, creed, religion, national origin,
sex, marital status, public assistance status, local
commission membership or activities, disability, sexual
orientation, & age
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Major US Federal Laws
 Equal Pay Act of 1963
 Civil Rights Act of 1964 (CRA) Title VII
 Amended by Civil Rights Act of 1991
 Age Discrimination in Employment Act of 1967
(ADEA)
 Americans with Disabilities Act of 1990 (ADA)
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Equal Pay Act
 Forbids: sex discrimination in pay when the employees
perform essentially the same job in the same
establishment
 Examples of legal pay differences for men & women
doing the same job:



Pay based on seniority and man & woman have different
seniority
Pay based on job performance and man & woman have
different job performances
Any factor other than the sex of the employees
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Civil Rights Act Title VII
 Forbids: any kind of employment discrimination based
on a protected characteristic
 Protected characteristics: race, color, religion, sex, &
national origin
 Administered: Equal Employment Opportunity
Commission (EEOC)
 http://www.eeoc.gov/
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Civil Rights Act Title VII (more)
 Additional examples of prohibited sex discrimination:
 Discrimination based on pregnancy
 Harassment based on sex (sexual harassment)


Quid pro quo sexual harassment
Hostile environment sexual harassment, defined by:
 Frequency of discriminatory conduct
 Severity of discriminatory conduct
 Physically threatening vs. mere offensive utterance
 Unreasonably interferes with victim’s job performance
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Civil Rights Act Title VII (more)
 Sexual harassment (more)

Employer (company) liability for harassment by a supervisor:
 If there are adverse tangible job consequences, then the
employer is liable unless it can prove a non-discriminatory
reason for the adverse tangible job consequence
 If no adverse tangible job consequences, then the employer
can defend itself if:
 The employer exercised reasonable care to prevent and to
promptly correct the harassing behavior, AND
 The alleged victim unreasonably failed to use the employer’s
procedures
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Civil Rights Act Title VII (more)
 Sexual harassment (more)

Employer (company) liability for harassment by a co-worker:
 Did the employer know, or should the employer have known,
about the behavior?
 Did the employer take immediate and effective corrective steps
when the behavior was discovered?
 Same ideas for racial harassment, color harassment,
religious harassment, national origin harassment, age
harassment, or disability harassment
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Age Discrimination in Employment
Act (ADEA)
 Forbids: employment discrimination based on age for
individuals who are 40 or older
 Mandatory retirement at a particular age?
 Administered: Equal Employment Opportunity
Commission (EEOC)
 http://www.eeoc.gov/
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Americans with Disabilities Act
(ADA)
 Forbids: employment discrimination based on
disability
 Definition of disability: something that substantially
limits one or more major life activities, considering:



Nature and severity of impairment
Duration of impairment
Expected long-term impact
 Administered: Equal Employment Opportunity
Commission (EEOC)
 http://www.eeoc.gov/
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ADA (more)
 Requires: employers must make reasonable
accommodations that are not an undue hardship to
the organization for people with disabilities
 To decide reasonable accommodation:




Nature of the job: the essential job duties
Cost of the accommodation
Size of the organization (impact of cost)
Other factors (e.g., union contract)
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Affirmative Action Plans (AAP)
 When?
 Voluntary AAP
 Court ordered AAP
 Required AAP

Company sells to the US government (government contractor)
 Executive Orders 11246 & 11375 require companies with federal
contracts to develop affirmative action plans (AAPs)
 Enforced by the Office of Federal Contract Compliance
Programs (OFCCP)

http://www.dol.gov/esa/ofccp/
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AAP (more)
 AAPs have 4 parts:
 Utilization analysis
 Availability analysis
 Identification of problem areas
 Corrective actions (with goals and timetables)
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Proving Illegal Discrimination
 Selection Ratios (SR) play an important role
 SR Overall = # hired / # applicants


SR Men Overall = # men hired / # men applicants
SR Women Overall = # women hired / # women applicants
 SR Hurdle = # pass hurdle / # start hurdle


SR Men Interview = # men pass interview / # men
interviewed
SR Women Interview = # women pass interview / # women
interviewed
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Proving Illegal Discrimination
 3 steps in the court case:
 Prima facie case

Plaintiff presents evidence consistent with illegal employment
discrimination
 Employer’s rebuttal

Company presents its defense
 Plaintiff’s rebuttal

Plaintiff presents evidence that casts doubt on the company’s
defense
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Prima Facie Case
 Plaintiff presents evidence of:
 Disparate treatment: different policies or practices
 Adverse impact (disparate impact): same policies or
practices, but different effects


T-test for equal Selection Ratios (SR)
80% (4/5ths) Rule:
 Calculate the SR for each group
 SRs Overall & SRs for each hurdle in the hiring process
 For each, find the largest SR and compute 80% of that SR
 If the SR of any other group is less, then there’s evidence of
adverse impact for that hurdle or overall
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Example of 80% Rule
#
Applicants
White
Latino
Black
100
50
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#
Hired
Selection
Ratio
60
60/100 =
60%
25
25/50 =
50%
5
5/15 =
33.33%
 Highest SR Overall = 60% (Whites)
 80% of highest SR = .80 × 60% = 48% (this becomes the floor)
 If the SR of any group is less than 48%, then evidence of adverse impact
 Evidence of adverse impact against Blacks, but not Latinos
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Example of 80% Rule
White
Black
#
Applicants
103
51
# Pass
Test
SR
Test
# Pass
Interview*
74
25
6
10
SR
Interview
#
Hired
SR
Overall
6
10
*Only interviewed applicants who had passed the test.
 Conclusions:
 Test: evidence of adverse impact against Blacks
 Interview: evidence of adverse impact against Whites
 Overall: evidence of adverse impact against Whites
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Employer’s Rebuttal
 Company presents evidence for its defense:
 Bona fide occupational qualification (BFOQ)

Show that a particular religion, sex, or national origin (not
race or color) is itself a legitimate job qualification
 Essence of the business
 Essential job qualifications
 Job relatedness or business necessity

Show that the challenged practice is related to the job
 Example: an employment test has adverse impact; show that
the test is valid (test scores are strongly correlated with job
performance)
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Employer’s Rebuttal (more)
 Bona fide seniority system
 Legal affirmative action


Specific, credible evidence of past discrimination:
Conspicuous imbalance
Narrowly tailor the affirmative action remedy:
 Goal: match qualified percentages (eliminate the imbalance)
 Temporary
 Must not unduly trammel the majority (can’t be an absolute
bar to the majority group)
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Proving Illegal Discrimination
 3 steps in the court case:
 Prima facie case

Plaintiff presents evidence consistent with illegal employment
discrimination
 Employer’s rebuttal

Company presents its defense
 Plaintiff’s rebuttal

Plaintiff presents evidence that casts doubt on the company’s
defense
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Remedies
 If employer guilty, court can order:
 Injunction
 Remedial actions (e.g., reinstatement)
 Compensatory damages
 Punitive damages: disparate treatment cases only &
amount limited by caps
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Outline
 Definition of Employment Discrimination
 Protected Characteristics
 Major US Federal Laws
 Affirmative Action
 Proving Illegal Discrimination
 Remedies
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