Managing Human Resources
(Legal Aspects)
Chapter 7
June 14, 2012
Learning Objectives
LO 1 Summarize EEO laws that influence human
resources management
LO 2 Discuss how companies use human resources
management to gain competitive advantage
LO 3 Give reasons why companies recruit both
internally and externally for new hires
LO 4 Identify various methods for selecting new
employees
LO 5 Evaluate the importance of spending on training
and development
7-2
Learning Objectives (cont.)
LO6 Explain alternatives for who appraises an
employee’s performance
LO 7 Describe the fundamental aspects of a reward
system
7-3
Human Resource Management
• Definition
• Highest single cost
• Very heavily regulated
– But then again, not
“Lombardi treats us all alike, like dogs”
Approach to HRM
• Legal context
– EEO
• Individual systems/functions/whatever
Basic Definitions
• Equal employment opportunity (EEO)
• Affirmative action (AA)
– Past
– Future
• Quotas
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2000
2002
Nat Or.
ADEA
2004
ADA
2006
Racial
Religion
2008
Gender
2010
Why?
• Power imbalance
• Disrupt status quo
• Truth, justice, and the American Way!
Why?
• Smart business
– Avoid lawsuits
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Georgia Car Dealership to Pay $140,000 for Racial Harassment of Black Manager 1/14/10
Monterey Gourmet Foods Sued for Sexual Harassment and Retaliation 1/13/10
Giumarra Vineyards Sued by EEOC for Sexual Harassment/Retaliation Against Farm Workers 1/13/10
EEOC Sues Asia Pacific Hotels for Sexual Harassment 1/12/10
West Texas Cap Maker Settles EEOC Sexual Harassment Suit 1/11/10
Sims Chevrolet To Pay $85,000 To Settle EEOC Suit For Racial Discrimination/Retaliation 1/8/10
Montgomery Restaurant Pays $16,500 to Settle EEOC Pregnancy Discrimination Suit 1/8/10
Saks Fifth Avenue Settles EEOC Disability Discrimination Suit 1/7/10
Ralph Schomp Automotive T Pay $1.5 Million To Settle EEOC Sex/Age Bias Lawsuit 1/7/10
EEOC Sues K-Designers for Sex Discrimination & Retaliation Against Female Sales Mgr 1/6/10
Sentry Credit Settles EEOC Disability Bias Suit 1/6/10
Job Bias Charges Approach Record High in Fiscal Year 2009, EEOC Reports 1/6/10
Riverstone Residential / Realty Settles EEOC Disability Discrimination Lawsuit 1/5/10
Vanguard Group to Pay $300,000 to Settle EEOC Suit Alleging Racial Bias in Hiring 1/5/10
EEOC Obtains $110,000 in Settlement of Sexual Harassment Case with Las Vegas Car Dealership 1/4/10
EEOC Sues American Laser Centers for Sexual Harassment and Retaliation 1/4/10
Merchant State Bank to Pay $50,000 for Disability Bias 1/4/10
EEOC Sues Sparks Steak House for Male-On-Male Sexual Harassment, Retaliation 12/31/09
Race, LLC / Studsvik to Pay $650,000 to Settle EEOC Racial Harassment & Retaliation Suit 12/31/09
Rock Concrete Construction Corp. To Pay $31,000 To Settle EEOC Retaliation Suit 12/30/09
Why?
• Smart business
– Avoid lawsuits
– Enhances reputation and image as an employer
• Enhances hiring quality
• Enhances organizational performance
Why?
• Smart business
– Reinforces an ethical culture
Major Regulatory Documents
• Constitution
– 5th amendment
– 14th amendment
• Federal legislation
• Executive orders
• Uniform Guidelines for Employee Selection
4 sets of employee-related laws
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Union-mgt
Employee protection
Compensation and benefits
EEO
Civil Rights Act of 1964
(Title VII)
• Basic fairness
• Coverage
– => 15 employees
– Unions
– Employment agencies
– Govt functioning as employer
– Higher education
Title VII
• Protected characteristics
– Race
– Color
Title VII
• Protected characteristics
– Race
– Color
– Religion
• Reasonable accommodation
• Cost as defense
First Amendment
• “Congress shall make no law respecting an
establishment of religion, or prohibiting the
free exercise thereof; or abridging the
freedom of speech, or of the press; or the
right of the people peaceably to assemble,
and to petition the Government for a redress
of grievances.”
Title VII
• Protected characteristics
– Gender
• Pregnancy
• Sexual stereotyping
• Sexual harassment
– Quid pro quo
– Hostile work environment (“reasonable person”)
• Not sexual orientation
Title VII
• Protected characteristics
– National origin
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Accent discrimination
English fluency
English-only rules
National dress
Protected Characteristics
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Race
Color
Religion
Gender
National origin
Reverse
Discrimination
Forms of Unlawful Discrimination
• Disparate treatment
– prima facie
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•
•
•
Belongs to a minority
Applied and was qualified
Rejected
Open
Forms of Unlawful Discrimination
• Disparate treatment
– Employer defenses
• BFOQ (Bona fide occupational qualification)
Forms of Unlawful Discrimination
• Disparate treatment
– Employer defenses
• BFOQ
– NEVER RACE
• Business necessity/job related
Forms of Unlawful Discrimination
• Disparate treatment
– Employer defenses
• BFOQ
– NEVER RACE
• Business necessity/job related
• Preferential treatment
• Not covered
– Religious organizations
– National security
Forms of Unlawful Discrimination
• Disparate treatment – heed well!
– Mixed motive
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Inexperience
Lack of appropriate degree
Poor interviews
Poor test performance
Poor references
Hispanic female >40 (motivating factor???)
Forms of Unlawful Discrimination
• Disparate (adverse) impact – prima facie
– 80% rule
80% Rule
Selection Ratio (SR)
Caucasians
Hispanics
AfricanAmericans
Asians
Standard of
Comparison
193/344 = 56%
40/49 = 82%
110/209 = 53%
62/89 = 70%
82% * 80% = 66%
80% Rule
Selection Ratio (SR)
Caucasians
Hispanics
AfricanAmericans
Asians
Standard of
Comparison
193/344 = 56%
40/49 = 82%
110/209 = 53%
62/89 = 70%
82% * 80% = 66%
80% Rule
Selection Ratio (SR)
Caucasians
Hispanics
AfricanAmericans
Asians
Standard of
Comparison
193/344 = 56%
40/49 = 82%
110/209 = 53%
62/89 = 70%
82% * 80% = 66%
80% Rule
Selection Ratio (SR)
Caucasians
Hispanics
AfricanAmericans
Asians
Standard of
Comparison
193/344 = 56%
40/49 = 82%
110/209 = 53%
62/89 = 70%
82% * 80% = 66%
Forms of unlawful discrimination
•
•
•
•
Disparate treatment
Disparate (adverse) impact
Prima facie
Employer defenses
Americans with Disabilities Act (ADA)
• Definition
– Have
– Once had
– Is regarded as having
• Employer obligations
– Essential functions
– Reasonable accommodation
– Undue hardship
Americans with Disabilities Act (ADA)
• Special issues
– Obesity
– Genetic discrimination
– Addiction
– Mental impairment
Age Discrimination in Employment Act
(ADEA)
• => 40 yrs old
• Jury trials
• BFOQ
Family and Medical Leave Act
• Coverage
– => 50 employees
– 12 weeks leave
• Birth, adoption, care
Equal Pay Act
• Substantially equal
– Skill
– Effort
– Responsibility
– Working conditions
Equal Pay Act
• Unequal but fair
– Merit
– Quality/quantity of output
– Seniority
– Any factor other than gender
Equal Pay Act
• Unequal but fair?
– Shorter hours
– Extended periods out of workforce
– Lower paying jobs – why????
EEOC
• Complaint process
– Call (not official complaint)
– Visit field office or file formal signed letter
– No more than 180 days
– Employer notified
– EEOC rep visits
– Conciliation process
– May/may not sue
• Right-to-sue letter
“Special” Employees
• Legal to work
– I-9
“Special” Employees
• Legal to work
– I-9
– E-verify
“Special” Employees
• Legal to work
– I-9
– E-verify
– “green card”
FedEx Employee?
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•
Yep
Nope
Yep
Nope
Maybe
“Special” Employees
• Independent contractor
– Who controls their work?
– Who do they work for?
– How long will they work for you?
– Do they have “skin” in the game?
“Special” Employees
• “…an at-will employee may be
discharged for good cause, no cause,
or even a morally wrong cause.”
Smith v. American Greeting
“Special” Employees
• 3 exceptions
– Implied contract
“Special” Employees
• 3 exceptions
– Implied contract
• Company handbook
Sample Statement
• The Company does not offer tenured or guaranteed
employment. Either the Company or the employee
can terminate the employment relationship at any
time, with or without cause, with or without notice.
This is called Employment At Will.
• This employment at will relationship exists
regardless of any other written statements or
policies contained in this Handbook or any other
Company documents or any verbal statement to the
contrary.
“Special” Employees
• 3 exceptions
– Implied contract
• Company handbook
• “Fraudulent Recruiting”
“Special” Employees
• 3 exceptions
– Implied contract
• Company handbook
• “Fraudulent Recruiting”
– Against public policy
– Implied covenant of good faith and fair dealing