Managing Human Resources (Legal Aspects)

Chapter 7June 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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Nat Or. ADEA ADA Racial Religion Gender

Why?

• Power imbalance• Disrupt status quo• Truth, justice, and the American Way!

Why?• Smart business

– Avoid lawsuits

•

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

• 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

• Accent discrimination• English fluency• English-only rules• National dress

Protected Characteristics

• Race• Color• Religion• Gender• National origin

Reverse Discrimination

Forms of Unlawful Discrimination

• Disparate treatment – prima facie

• 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

• 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% RuleSelection Ratio (SR) Standard of

Comparison

Caucasians 193/344 = 56%

Hispanics 40/49 = 82% 82% * 80% = 66%

African-Americans

110/209 = 53%

Asians 62/89 = 70%

80% RuleSelection Ratio (SR) Standard of

Comparison

Caucasians 193/344 = 56%

Hispanics 40/49 = 82% 82% * 80% = 66%

African-Americans

110/209 = 53%

Asians 62/89 = 70%

80% RuleSelection Ratio (SR) Standard of

Comparison

Caucasians 193/344 = 56%

Hispanics 40/49 = 82% 82% * 80% = 66%

African-Americans

110/209 = 53%

Asians 62/89 = 70%

80% RuleSelection Ratio (SR) Standard of

Comparison

Caucasians 193/344 = 56%

Hispanics 40/49 = 82% 82% * 80% = 66%

African-Americans

110/209 = 53%

Asians 62/89 = 70%

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?

• 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