Chapter 4
Legal Construction of
the Employment
Environment
McGraw-Hill/Irwin
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
 Explain why employers might 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
worker
4-2
Learning Objectives
 Explain how the employer might be liable under
the theory of negligent hiring
 Identify the circumstances under which an
employer may be responsible for an employee’s
compelled self-publication, thus liable for
defamation
4-3
Learning Objectives
 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
4-4
Evolution of the Employment
Relationship
 Recruitment of appropriate candidates
 Hiring
 Testing
 Performance appraisals
4-5
Recruitment
 First step in the evolution of the employment
relationship
 Federal statutory regulation of recruitment
 Title VII of the Civil Rights Act of 1964
 Age Discrimination in Employment Act of 1967
 Immigration Reform and Control Act of 1986
 Vocational Rehabilitation Act of 1973 and the
Americans with Disabilities Act of 1990
4-6
Recruitment
 State employment law regulation
 Common law recruitment violations
 Fraud
 Misrepresentation
 Material facts
4-7
Application of Regulation to
Recruitment Practices
 Advertisements
 Word-of-mouth recruiting
 Promoting from within
 Venue recruiting
 Walk-in applicants
 Neutral solicitation
4-8
Information Gathering and Selection
 The application phase
 The interview
 Background or reference check
 Negligent hiring
4-9
Exhibit 4.60 – Grounds for Negligent
Hiring Claim
4-10
Exhibit 4.8 - Where Do Employers Get
Their Info?
4-11
Exhibit 4.9 – Content on Candidates’ Web
Sites Leading Employers Not to Hire
4-12
Employer Liability and Protection
 Reference checks – potential liability for
providing references
 Compelled self-publication: Occurs when an exemployee is forced to repeat the reason for her or his
termination
 “After-acquired evidence” in defense in wrongful
termination suits
 Documentation of failure to hire
4-13
Exhibit 4.13 – Balancing the Interests in
the Testing Debate
4-14
Testing in the Employment
Environment
 Preemployment testing
 Tests to find the best individual for a position
 Tests to ensure that the individual is free from
problems that would prevent her or him from
performing the position’s functions
 Individual privacy
 Testing is illegal when the invasion of privacy is
“substantially and highly offensive to the reasonable
person”
4-15
Legality of Eligibility Testing
 Eligibility testing: Tests conducted to ensure
capability and qualification of potential employee
 To be legally validated, an employer must show
that the eligibility test is:
 Job-related
 Consistent with business necessity
 Job analysis data: Information about nature of
work and skills required to perform the work
4-16
Legality of Eligibility Testing
 Validation: Evidence that shows that a test
evaluates precisely what it claims to evaluate
 Test validity
 Criterion-related validation
 Content validation
 Construct validation
4-17
Legality of Eligibility Testing
 Integrity and Personality Tests
 Used by 40 percent of Fortune 100 companies
 Conscientiousness

job performance
 basic intelligence testing is one of the best predictors
of job performance across all jobs
 Physical Ability Tests
 Medical Tests
4-18
Legality of Ineligibility Testing
 Why testing is required?
 Reduce workplace injury or to provide a safer working
environment
 Predict employee performance or deter poor
performance
 Reduce the employer’s financial responsibility to the
worker’s compensation system
4-19
Polygraphs
 Polygraph: A lie-detecting device that measures
biological reactions in individuals when
questioned
 A polygraph measures
 Rate and depth of respiration
 Cardiovascular activity
 Perspiration
 Accuracy rates range from 50 to 90 percent
4-20
Polygraphs
 Federal Employee Polygraph Protection Act
(EPPA)
 33 states have statutes prohibiting or restricting
the use of polygraphs in making employment
decisions
4-21
Drug and Alcohol Tests
 Drug-Free Workplace Act of 1988
 Only applies to federal employees
 Some private sector firms use the act’s guidelines
 Immunoassay test
 Radioimmunoassay of hair
 Drug-Free Workplace Act of 1998
4-22
Genetic Tests
 Genetic Information Non-Discrimination Act
 Issues
 Employers may discriminate based on the potential
for a debilitating disease
 Employees may not want to know results
 Genetic testing is not perfect
 Genetic irregularities may be considered protected
disabilities under the Americans with Disabilities and
Vocational Rehabilitation Act
4-23
Unique Considerations of HIV/AIDS
Testing
 Why is it inappropriate?
 For the test to be justified, it must serve a legitimate
business purpose
 The test reports only the subject’s status as of several
weeks or months in the past
 HIV-positive employee may be protected under
 Federal Vocational Rehabilitation Act
 Americans with Disabilities Act
4-24
Management Considerations: Testing
 A workplace substance abuse program should
incorporate
 A written abuse policy
 A supervisory training program
 An employee education and awareness program
 Access to an employee assistance program
 A drug testing program, where appropriate
4-25
Management Considerations: Testing
 Corporate approaches
 Mandatory testing
 “Probable cause” testing
 Random testing
4-26
Performance Appraisals, Evaluation,
and Discipline Schemes
 Performance appraisal: A periodic assessment
of an employee’s performance
 The purpose of performance appraisals
 To identify those characteristics the employer hopes
the employee will accentuate
 To dissuade the employee from exhibiting
characteristics not in keeping with the organization’s
objectives
 The potential for discriminatory effect
4-27
Performance Appraisals, Evaluation,
and Discipline Schemes
 Realities about performance evaluations
 Employer might be liable for negative references
 No need to lower its standards or qualifications to
accommodate employee’s or applicant’s needs
 Objective measures for appraisal can be used
 Performance incentive systems can be effective
 Legal challenges found mostly in the areas of
implementation, monitoring and accountability
4-28
Legal Implications of Performance
Appraisal Systems
 Disparate impact
 Four-fifths rule
 Validation
 Disparate treatment
 Employees rated subject to different criteria
4-29
Legal Implications of Performance
Appraisal Systems
 Defamation
 False information/evaluation
 Negligent performance evaluations
 Negligence in conducting a performance evaluation
4-30
Discipline
 “Just cause” disciplinary approach
 How is “just cause” determined?
 Due process
 Adequate evidence
 Appropriateness of penalty
 Documentation
 Progressive discipline
4-31
Management Tips
 Maintain proper documentation of performance
appraisals
 Train supervisors on non-biased reporting and
evaluations
 Take precautions against inappropriate
disclosures
 Conduct appraisals as and when stated in the
employee manual or other materials
4-32