chapter 3 mgmt 2103.pptx

University of Arkansas College of Business, Department of Management Dr. Elizabeth Miller Chapter 3: The Legal Environment: Equal Employment Opportunity & Safety HR managers must understand legal requirements of managing employees in the U.S. to effectively manage people within the boundaries of the...

University of Arkansas College of Business, Department of Management Dr. Elizabeth Miller Chapter 3: The Legal Environment: Equal Employment Opportunity & Safety HR managers must understand legal requirements of managing employees in the U.S. to effectively manage people within the boundaries of the law, and to ensure that legally and ethically sound employment decisions are made. It also reduces exposure to potential criminal and civil liabilities, risks of reputational damage, and decreased profitability. Why does the legal environment matter for HR managers? Government Regulation of Equal Employment Opportunity: Protected Classes + Individuals of a minority race, color, gender, religion, age, national origin, those with disabilities, pregnant women, etc… who are covered by federal laws on equal employment opportunity + It is difficult to compose a true, definitive list of protected classes. Typically, if individuals receive legal protection because of their membership in a particular group, then we can broadly define the group as a protected class. The government’s attempt to ensure that all individuals have an equal chance for employment, regardless of race, color, religion, sex, age, disability, or national origin Equal Employment Opportunity Summarized in table 3.1 in textbook: Summary of Major EEO Laws and Regulations Federal Legal System Note: this lecture will not address state laws indepth, but rest assured they are very important – and more volatile It is equally important for HR managers to understand state laws (and how they differ if the organization operates in multiple states/jurisdictions) Title VII of the Civil Rights Act Occupational Health & Safety Act Employment Retirement Income Security Act Age Discrimination in Employment Act Americans With Disabilities Act of 1990 Civil Rights Act of 1991 Legislative Branch Executive Branch President and executive branch agencies (usually regulatory agencies) President can propose bills (and set the policy agenda) + Depends on balance of power in Congress President can veto laws, which then must be passed by 2/3 vote in both congressional houses President is responsible for enforcing the laws through the agencies or DOJ + Also related to congressional appropriations – if say, OSHA, isn’t funded, then OSHA do inspections and cite/punish violations + DOJ is over the for example Equal Employment Opportunity Commission, Issue executive orders Influence Supreme Court & appoint judges in the federal judiciary (subject to legislative branch approval) + Attorney General’s office an argue for certain outcomes in Supreme Court cases Judicial Branch Federal Court System 1st: U.S. District Courts & quasi-administrative agencies + Hears cases involving alleged violation of federal laws. 2nd: U.S. Court of Appeals 3rd: Supreme Court: final court of appeals; decisions binding + Can only be overturned legislatively NLRB: National Labor Relati ons Board Constitutional Amendments 13th Amendment (1865): Abolished slavery and involuntary servitude, except as punishment for a crime; enforced by courts 14th amendment (1866, amended 1871) : Provides equal protection for all citizens and requires due process in state action; enforced by courts + Forbids states from taking life, liberty, property without due process of the law + Prevents states from denying equal protection of the laws Only applies to state actions, not private organizations Congressional Legislation Grants all citizens the right to make, perform, modify, and terminate contracts and enjoy all benefits, terms, and conditions of the contractual relationship; enforced by the courts + Section 1982: granted all persons the same property rights as white citizens + Section 1981: granted right to enter into and enforce contracts Grants individuals the right to make and enforce employment contracts; right to sue in federal court for deprivation of a civil right—allows plaintiff to recover both compensatory and punitive damages. Reconstruction Civil Rights Acts (1866 & 1871) Equal Pay Act of 196 3 Requires that men and women performing equal jobs receive equal pay + Outlaws discrimination in pay, benefits, and pension based on gender Equal = Skill, effort, responsibility, and working conditions. Differences allowable when the differences are from factors other than sex Applies to employers engaged in interstate commerce and enforced by the EEOC Title VII of the Civil Rights Amendment of 1 964 Forbids discrimination based on race, color, religion, sex, or national origin Established the Equal Employment Opportunity Commissi on (EEOC) to enforce its provisions Direct result of the civil rights movement of the early 1960s Applies to employers with 15 or more employees working 20 or more weeks per year, labor unions, and Prohibits discrimination in employment against individuals aged 40 and older. Applies to employers with 15 or more employees working 20 or more weeks per year, labor unions, employment agencies, federal government. Older employees tend to be more vulnerable during layoffs Examples: + Excluding older workers from important work activities. + Selecting younger job applicants over older, better-qualified candidates. + Pressuring older employees into taking early retirement. + Reducing the job duties and responsibilities of older employees. + Terminating older employees through downsizing. Age Discrimination in Employment Act of 1967 Rehabilitation Act of 1973 Requires affirmative action in the employment of individuals with disabilities. Covers government agencies, federal contractors and subcontractors with contracts exceeding $2,500; enforced by the Office of Federal Compliance Programs (OFCCP) Written to encourage employers to hired workers with disabilities Pregnancy Discrimination Act of 19 78 Prohibits discrimination based on pregnancy, childbirth, or related medical conditions Amendment to Title VII of the Civil Rights Act Can’t refuse to hire pregnant people, must treat pregnancy as a temporary disability, requires health insurance to cover pregnancy same as other health conditions, pregnancyrelated benefits can’t be limited to married workers, must provide same benefits on leave for pregnancy and nonpregnancy reasons Applies to employers with more than 15 employees; enforced by Americans With Disabilities Act of 1990 Prohibits discrimination against individuals with disabilities in all employment practices such as job application procedures, hiring, firing, compensation, promotions, training, advertising, recruitment, tenure, layoff, leave, fringe benefits. Defines disability as: a physical or mental impairment that substantially limits one or more major life activities, a record of having such an impairment, or being regarded as having such an impairment. Americans With Disabilities Amendment Act of 2009 States that disability should be broadly construed and not demand extensive analysis. Disability defined along 3 prongs: + A physical or mental impairment that “substantially limits one or more major life activities” + A record or history of such an impairment + Being “regarded as” having a disability, whether you have one or not Applies to employers with more than 15 employees; enforced by EEOC Civil Rights Act of 1991 Prohibits discrimination same as Title VII, plus applies to Section 1981 of employment discrimination cases; enforced by EEOC Provides right to trial by jury on discrimination claims Expanded rights of women to sue and collect compensatory and punitive damages for sexual discrimination or harassment Compensatory damages: future pecuniary loss, emotional pain, suffering, and loss of enjoyment of life. Punitive damages: meant to discourage employers from discrimination by providing payments to plaintiff beyond the actual damages suffered. Adds financial incentive for compliance Family Medical Leave Act Passed in 1993 with bipartisan support under the Clinton administration + Workers in the United States have used the FMLA more than 315 million times + However, more than 40% of the workforce is not eligible for leave under FMLA The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to: Twelve workweeks of leave in a 12-month period for: + the birth of a child and to care for the newborn child within one year of birth; + the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement; + to care for the employee’s spouse, child, or parent who has a serious health condition; + a serious health condition that makes the employee unable to perform the essential functions of his or her job; + any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;” or Twenty-six work weeks of leave during a single 12-month period to care for a covered servicemember with a serious injury or illness if the eligible employee is the servicemember’s spouse, son, daughter, parent, or next of kin (military caregiver leave). FMLA applies to Public agencies, including local, State, and Federal employers, and local education agencies (schools); and Private sector employers who employ 50 or more employees for at least 20 workweeks in the current or preceding calendar year. Executive Orders: Directives issued and amended unilaterally by the president. Do not require congressional approval but they have the force of law. EXECUTIVE ORDER 11346 EXECUTIVE ORDER 11478 Signed by LBJ Signed by Nixon Requires affirmative action in the hiring of women and minorities Requires federal government to base employment policies on merit and fitness, not race, color, sex, religion, or national origin Applies to federal subcontractors with contracts greater than $10,000; enforced by OFCCP Federal contractors and subcontractors with contracts greater than $10,000; enforced by U.S. Office of Personnel Management (OPM) Enforcement of Equal Employment Opportunity Executive branch is most responsible for enforcing EEO laws passed by legislative branch & executive orders Two major agencies: EEOC and Office of Federal Contract Compliance Progr ams Equal Employment Opportunity Commission Three major responsibilities Investigation and resolution: Workers must file a complaint with EEOC or similar state agency within 180 days of the incident; after 180 days dismissed immediately Amended with Lilly Ledbetter Fair Pay Act EEOC has 60 days to investigate; if they don’t find complaint valid or don’t investigate in 60 days then the complainant can sue in federal court If EEOC finds discrimination took place they will attempt to provide reconciliation outside the court system. + Sometimes they enter into a consent decree: agreement between the agency and organization that the organization will cease discriminatory practices and possibly institute affirmative action practices to rectify history of discrimination. If EEOC and the organization can’t come to an agreement, they will issue a “right to sue” letter to the complainant or aid victim in bringing suit in federal court. Information Gathering: Organizations with 100 or more employees must file a report (EEO-1) with the EEOC that provides the number of women and visible minorities employed in nine different job categories. EEOC analyzes these reports to identify patterns of discrimination that can be attacked through class-action suits. Issuance of guidelines: Issue guidelines to help employers determine when their decisions are violations of laws enforced by the EEOC. They are not laws themselves, but the courts give great deference to them. + Example: Uniform Guidelines on Employee Selection Procedures: + Employment decisions that cause adverse impact that employer can’t justify by showing it’s job related + Can be based on hiring, pay rate, least-favored group less than 80% hiring or pay rate of most-favored group Office of Federal Contract Compliance Programs (OFCCP): agency responsible for enforcing executive orders that cover companies doing business with the federal government. Businesses with contracts more than $50,000 cannot discriminate in employment based on race, color, religion, national origin, or sex, and must have a written affirmative action plan on file. Plans have 3 basic components: + Utilization analysis: Compare race, sex, ethnicity composition of an employer’s workforce with the available labor supply. + Goals and timetables: Part of the affirmative action plan that specifies the percentage of women and minorities that employer seeks to have in each job group and the date by which that percentage is to be attained—not to be viewed as quotas. Goals and timetables are more flexible, requiring that the company identify goals and take steps toward those goals. + Action steps: Part of the affirmative action plan that specifies what an employer plans to do to reduce underutilization of protected groups. The CEO must communicate to the entire organization that the company is committed to reducing underutilization and all levels of management must be involved in the planning process. OFCCP annually audits government contractors to ensure they are actively pursuing the goals in their affirmative action plans. If OFCCP finds noncompliance, they may notify the EEOC, advise the DOJ to institute criminal proceedings, cancel or suspend contracts, and forbid from bidding on future contracts (debarment). Types of Discrimination Complicated and multifaceted issue. Difficult to determine Three main theories described by legal scholars: disparate treatment, disparate impact, and reasonable accommodation. + Disparate treatment + Disparate impact + Reasonable accommodation First: Disparate Treatment A theory of discrimination based on different treatment given to individuals because of their race, color, religion, sex, national origin, age, or disability status. If people with the same qualifications for a job apply and the employer decides whom to hire based on race (for example), then the non-hired person is the victim of disparate treatment. The plaintiff must prove there was discriminatory motive—the intention to discriminate. + Example: hiring of men with school-aged children but not women with school-aged children. + Checking references for racial and ethnic minorities but not for white applicants. + Asking about marital status for women but not men. + Being treated differently and intent to be treated differently How would a disparate treatment court case proceed? First, the plaintiff has the burden of proving the defendant has committed an illegal act. Must meet the prima facie burden: + Prima facie: accepted as correct until proved otherwise + Plaintiff belongs to a protected group. + The plaintiff applied for and was qualified for the job. + Despite possessing the qualifications, the plaintiff was rejected. + After the plaintiff was rejected, the position remained open and the employer continued to seek applicants with similar qualifications, or the position was filled by someone with similar qualifications. With this, the court is trying to rule out obvious reasons for rejecting the plaintiff’s claim. Then, the defendant’s rebuttal After plaintiff makes prima facie case for discrimination, burden shifts to defendant. + Burden differs depending on how the prima facie case is presented. If the plaintiff… Presents only circumstantial evidence (no formal policy, no direct evidence, discriminatory intent inferred), the defendant must produce a legitimate, non-discriminatory reason. Presents direct evidence (formal policy of discrimination), they will often use the bona fide occupational qualification defense (BFOQ). BFOQ: a job qualification based on race, sex, religion, and so on that an employer asserts is a necessary qualification for the job. Then, the plaintiff’s rebuttal If defendant provides legitimate, nondiscriminatory reason for employment decision, burden shifts to plaintiff. Now plaintiff must show reason(s) offered by defendant are not the reason for the decision but rather a pretext or excuse for the actual discriminatory decision. Mixed motive case: defendant acknowledges some discriminatory motive existed but argues same hiring decision would have been reached even without the discriminatory motive. Disparate treatment and LGBT discrimination: Supreme Court decisions achieved that Title VII or CRA applies to discrimination against LGBTQ and trans folks because they are bound up with sex. Second: Disparate Impact When a facially neutral employment practice disproportionately excludes a protected group from employment opportunities. Intent is irrelevant; what’s important is that the consequences of the employment practice are discriminatory Look at “Evidence Based HR” box about job application research that identifies applicants' race (same for rental applications, families) In these cases, plaintiff must make the prima facie case by showing that the employment practice in question disproportionately affects a protected group relative to the group with the highest hiring rate. Here we get the four-fifths rule: A rule that states that an employment test has disparate impact if the hiring rate for a minority group is less than four-fifths, or 80%, of the hiring rate for the majority group. Standard deviation rule: used to analyze employment tests to determine disparate impact; it uses the difference between the expected representation for minority groups and the actual representation to determine whether the difference between the two is greater than would occur by change (aka random error) Standard Deviation Rule Defendant and Plaintiff Rebuttal Defendant’s Rebuttal + According to CRA 1991, once the plaintiff makes prima facie case, then burden of proof shifts to defendant who must show the employment practice is a “business necessity” Business necessity: practice bears a relationship with some legitimate employer goal Plaintiff’s Rebuttal + If the employer shows that the employment practice is the result of some business necessity, then the plaintiff’s last resort is to argue that other employment practices could sufficiently meet the employer’s goal without adverse impact. If a plaintiff can demonstrate that the selection tests other than the one used by the employer exists, do not have adverse impact, and correlate with job performance as highly as the employer’s test, then the defendant can be found guilty of discrimination + Standardized tests of cognitive ability are difficult for plaintiffs to rebut Griggs vs Duke Power Co. Students for Fair Admissions, Inc. v. President and Fellows of Harvard College Students for Fair Admissions vs. University of North Carolina Third (less used): Reasonable Accommodation Making facilities readily accessible to and usable by individuals with disabilities. Places a special obligation on employers to affirmatively do something to accommodate an individual’s disability or religion. + In cases of religions discrimination, an employee’s burden is to demonstrate a legitimate religious belief and provide the employer with notice of the need to accommodate the religious practice, and that adverse consequences occurred due to the employer’s failure to accommodate. In such cases, the employer’s major defense is to assert that to accommodate the employee would require undue hardship. How to accommodate? + Adjust work schedules + Provide alternative testing dates for applicants + Altering dress code and grooming requirements Tyson Center for Faith and Spirituality in the Workplace + Course MGMT 4633: Faith, Spirituality and the Workplace Disability and Accommodation: Under disability claims, a plaintiff must show they are a qualified applicant with a disability and that an adverse action was taken by a covered entity. An employer’s defense then depends on whether the decision was made without regard to the disability or in light of the disability. + The problem is if it’s made in light of the disability: then the question is could the worker perform adequately with a reasonable accommodation. Three potential defenses: Job relatedness or necessity of job function Could the applicant perform the job with a reasonable accommodation? + Undue hardship: accommodation is difficult or expensive + Disabled worker could pose a threat of safety or health to other workers or themselves Examples of Reasonable Accommodations Ramps, elevators Eliminating marginal tasks and shifting to other employees, redesigning job procedures, altering work schedules Reassign disabled employees to a job with functions they could perform Provide alternative testing formats, like readers, additional time, interpreters, technology, bringing a service dog to work Most accommodations are inexpensive 69% cost nothing; 29% cost less than $1k; only 3% cost more than $1k US labor market will be more diverse: 85% of new entrants to US labor force over the next decade will be women, visible minorities, women who are visible minorities Sexual Harassment Two basic forms of sexual harassment: Quid pro quo: when some kind of benefit or punishment is made contingent upon the employee submitting (or not submitting) to sexual advances Hostile work environment: when someone’s behavior in the workplace creates an environment that makes it difficult for someone of a particular sex to work. + Examples: Men running their fingers through women’s hair, suggestive remarks, physical assault touching intimate body parts, pictures of naked women in the workplace, using sexually explicit language, using sexist jokes or innuendos, unwanted sexual advances How to deal with sexual harassment in the workplace? It’s an issue when individuals are treated differently based on sex. Men can also be victims; in most of these cases the perpetrator is another man. Three critical issues: + (1) Plaintiff cannot have invited or incited the advances; courts tend to assuming that sexual advances do not belong in the workplace + (2) Is the harassment severe enough to alter the terms, conditions, and privileges of employment? Many courts use the “reasonable woman” standard: would a reasonable woman, faced with the same situation, react similarly. + (3) Is the organization liable for the actions of its employees? Did the employer know about the harassment? Did the employer act to stop the harassment? How to deal with sexual harassment in the workplace? (con’t) Sexual harassment lawsuits are costly How to stop it on the level of the organization: + Develop a policy statement that makes it clear that sexual harassment will not be tolerated in the workplace + All employees will be trained to identify inappropriate workplace behavior + Develop a mechanism for reporting sexual harassment that encourages people to speak out + Management prepared to take prompt disciplinary action against those who commit sexual harassment and appropriate action to protect victims of such harassment. Affirmative Action and ‘Reverse Discrimination’ (Bias) To eliminate discrimination in the workplace, many organizations have implemented affirmative action policies. This was conceived as a way of making extra effort to attract employees from underrepresented groups on college campuses, advertising in publications whose audiences are underrepresented groups, and providing educational training and opportunities to members of underrepresented groups Many organizations have used quota-like hiring practices to ensure their workforce mirrors the local labor market; sometimes voluntarily, sometimes enforced by the EEOC. Sometimes white and/or male workers have fought back against these policies alleging reverse discrimination (the term reverse discrimination is problematic – why?) Overall, this is a contentious issue that will only become more contentious… + How will we deal with it? I don’t know. But it’s up to us to figure it out. Employee Safety Regulated by state and federal government Employers need to go well beyond the letter of the law and embrace the spirit of the law Occupational Health and Safety Act of 1970 (OSHA): + Most comprehensive piece of workplace safety legislation + Authorized federal government to establish and enforce occupational and health standards for all places of employment engaging in interstate commerce. + Responsibility for inspecting, applying standards, and levying fines assigned to DOL + DHHS conducts research to determining criteria for specific operations or occupations, training for employers to comply with OSHA. Research conducted by National Institute for Occupational Safety and Health (NIOSH) Employee Rights Under OSHA: Each employer has a general duty to furnish each employee a place of employment free from recognized health hazards that cause or are likely to cause serious physical harm or death—this is the general duty clause. Risk and Hazards Regulators cannot anticipate all possible hazards and risks that could occur in the workplace Hazard: anything that could cause harm Risk: The chance (probability) that the hazard could cause harm and how serious that harm could be. General duty clause requires employers to be constantly alert for potential sources of harm in the workplace and to correct them. How many people die or are inj ured work each year in the U 5,190 fatalat injures in 2021 according to nited States? BLS + 14.2 people per day die at work in the United States 2,607,900 injuries and illnesses in 2021 according to BLS + 7,144.9 people per day injured or made ill at work in the United States Michael Schuls, 16, died becoming pinned under machinery on a conveyor belt at a Wisconsin saw mill June 29 Duvan Tomas Perez, Guatemalan immingrant, 16 years old, killed at a Mississippi Mar-Jac Poultry plant becoming trapped in equipment on a conveyor belt July 14 Will Hampton, 16, died June 8 becoming pinned between a tractor trailer rig and trailer at a Missouri landfill 31 kids found working graveyard shifts doing sanitation work at JBS Foods in Nebraska OSHA Workpl ace Poster Follow a tight script: + Compliance officer shows up unannounced OSHA Inspections Inspection has 4 major components: + Reviewer employers record of deaths, injuries, and workplace related illnesses Required of all firms with 11 or more full or part-time employees + Compliance officer accompanied by representative of the employer or employees for a walkaround of the premises + Then they can conduct employee interviews; at this time anyone aware of a workplace violation can bring it to the attention of the compliance officer. + Lastly, compliance officer discusses findings with employer, noting any violations. Employer is given a reasonable time frame to correct violations + If the violation is an imminent danger the officer may through the DOL seek a restraining order from US District Court to compel the employer to correct the problem immediately. Citations and Penalties Citations: specifies exact practice or act that violates OSHA regulations. + Employer required to post citation in a prominent place near the location of the violation, even if the employer plans to contest it + Nonserious violations have penalties up to $7k for each incident but can be adjusted downward if there is no prior history or employer has made good faith effort to comply. + Serious, willful, repeated violations can be fined up to $70k per incident + Fines aren’t leveled against employees, they are leveled at the employer + Aforementioned actions are civil cases. Criminal penalties can also be assessed for willful violations that result in the death of a worker. Fines as high as $20k and imprisonment + Criminal charges can be levied for falsifying records subject to OSHA inspection or anyone who gives advanced notice of OSHA inspection Industrial Accidents Many industrial accidents are the product behaviors, not unsafe working conditions. OSHA does not regulate employee behavior, need to be convinced of the importance of safety standards. of unsafe Because workers following Therefore, employers should create safety awareness programs to instill symbolic and substantive changes in the organization's cultural emphasis on safety in the workplace.. Three components of a Safety Awareness Program First step: Identifying and communicating hazards Job hazard analysis technique: breakdown of each job into basic elements each of which is rated for its potential for injury or harm Technic of operations review (TOR): studying past accidents to determine what element of the job task led to the accident Reach group consensus on the single, systematic failure that contributed to the incident as well as other contributing factors. Three components of a Safety Awareness Program Second step: + Reinforcing safe practices + Communicating risk: 2 audiences Young and inexperienced workers: 40% of all accidents happen to workers aged 20-29 and 48% of accidents happen on the first year of the job Experienced workers: need to be reminded so they don’t become complacent. 20% of fatal falls are workers aged 55-65 + One common technique is a safety incentive program: HR can look at data and research to see what is most effective + Lower Back Disabilities (LBD) and eye injuries are most common + 1,000 eye injuries a day + 25% workdays lost to LBD Three components of a Safety Awareness Program Third step: + Cultural differences make this difficult (especially around gender, masculinity, race, ethnicity, age and power in the workplace) + Policies can be interpreted differently based on cultural differences US: individualistic, controloriented, management to ensure safety Argentina: collectivist culture makes safety everyone’s concern At-Will Presumption At-Will Presumption: employers can only dismiss employees for cause Employment-at-Will: allows employers to dismiss employees at any time, for any reason, except an illegal one, for no reason without incurring legal liability. Likewise, an employee is free to leave a job at any time for any or no reason with no adverse legal consequences Exceptions: + Refusing to perform an act that state law + Reporting a violation of state law + Engaging in acts that are of public interest (joining National Guard or performing jury duty) + Exercising a statutory right (filing a claim under state workers’ compensation law)