Mgt.legal environment

Prepared by Joseph B. Mosca, Monmouth University & Marla M. Kameny, Baton Rouge
© 2012 South-Western, Cengage Learning, Inc. Community College
All rights reserved. PowerPoint Presentation Design by Charlie Cook, The University of West Alabama

Learning Objectives
After studying this chapter, you should be able to:

1. Describe the legal context of HRM
2. Identify key laws that prohibit discrimination in the
workplace and discuss equal employment opportunity
3. Discuss legal issues in compensation, labor relations,
and other areas in HRM
4. Discuss the importance to an organization of evaluating
its legal compliance

© 2012 South-Western, Cengage Learning, Inc. All rights reserved. 2–2

The Regulatory Environment of HRM

• Regulation can come in the form of new
laws or statutes passed by national, state,
or local government bodies.
• Most regulations start at the national level.
• State and local regulations are more likely
to extend or modify national regulations
rather than create new ones.


Legal Regulation of Human Resource Management


Types of
Discrimination
• Illegal Discrimination
 Results from behaviors or actions by an
organization or managers that cause
protected class members to be unfairly
differentiated from others
• Disparate Treatment
 When the differential treatment of individuals
is based race, color, religion, sex, national
origin, age, or disability status.


• Example of disparate treatment:
If two people with the same qualifications
for the job apply for a promotion and the
organization uses one individual’s
religious beliefs or gender to decide which
employee to promote.


• A bona fide occupational qualification
states that a condition like race, sex or
other personal characteristic legitimately
affects a person’s ability to perform the job
and therefore can be used as a legal
requirement for selection


• Disparate impact – discrimination occurs
when an apparently neutral employment
practice disproportionaltely excludes a
protected group from employment
opportunities
• Ex. For health reasons, for restaurant
business, no one who had hair long
enough to cover his/her ears would be
hired to handle food


Forms of Illegal Discrimination


Title VII of the Civil Rights Act of 1964
• It is illegal for an employer to fail or refuse
to hire or to discharge any individual or to
discriminate in any other way against any
individual with respect to any aspect of the
employment relationship on the basis of
that individual’s race, color, religious
beliefs, sex, or national origin.


Bona Fide Occupational Qualification (BFOQ)
• BFOQ
 A condition (e.g., age, sex, or other personal
characteristic) that legitimately affects a
person’s ability to perform a job
• Business Necessity
 Is a practice that is important for the safe and
efficient operation of the business, thus is a
permissible BFOQ.
 Indicates an employment practice shown to
be related to successful job performance.


Diaz v.
Pan American

• Cello Diaz was denied employment
because Pan Am had a hiring policy of
hiring only women flight attendants
 Courts cited that Pan Am’s data on relative
effectiveness of male and female flight
attendants was not compelling
 No evidence existed to prevent males from
being employed as flight attendants.


Disparate Impact

• Occurs when an apparently neutral employment
practice disproportionately excludes a protected
group from employment opportunities
• Four-fifths Rule
 Suggests that disparate impact exists if a selection
criterion results in a selection rate for a protected
class that is less than four-fifths (80 percent) of that
for the majority group


Disparate Impact
(cont’d)
• Geographical Comparisons
 Compares the characteristics of the potential pool of
qualified applicants for a job (focusing on
characteristics such as race, ethnicity, and gender)
with those same characteristics of the present
employees in the job.
 Example: potential pool of qualified applicants in the
labor market is 50 percent African American, then a
bank hiring from that market should have
approximately 50 African American tellers


Disparate Impact
(cont’d)

• McDonnell-Douglas Test
 A basis for establishing a prima facie case of
disparate impact discrimination
 Four steps:
 Applicant is a member of a protected class.
 Applicant was qualified.
 Applicant was turned down.
 Firm continued to seek other applicants with the
same qualifications.


Disparate Impact
(cont’d)

• Pattern or Practice Discrimination
 A form of disparate treatment that occurs on
a class-wide basis
• Protected Class
 All individuals who share one or more
common personal characteristics (e.g., race)
as indicated by a specific law


Affirmative Action and
Reverse Discrimination
• Affirmative Action
 Steps taken by an organization to seek
qualified applicants from groups
underrepresented in the workforce
• Utilization Analysis
 A comparison of the race, sex, and ethnic
composition of the employer’s workforce to
that of the available labor supply


• Utilization analysis for each group of jobs,
the organization needs to idenfity the
percentage of its workforce with that
characteristic( ex. African american,
female, etc.) and identify the percentage
of workers in the relevant labor market
with that characteristic.


• “Affirmative action is an effort to develop a
systematic approach to open the doors of
education, employment, and business
development opportunities to qualified
individuals who happen to be members of
groups that have experienced long-
standing and persistent discrimination.”
• -Bill Clinton, Forty-second U.S.
President,1993-2001


Sexual Harassment at Work

• Quid pro Quo
 The harasser offers to exchange something
of value for sexual favors.
• Hostile Work Environment
 The climate or culture of a firm is punitive
toward people of a different gender.


Beyond the Book:
Policy of Acme Electronics Corporation
Corporate policy is that all employees have the right to work in an
environment free of discrimination. One form of discrimination is sexual
harassment. Corporate policy concerning sexual harassment is as
follows:
Any employee found engaging in sexual harassment will be
subject to:
Official reprimands that will be placed in the employee’s
permanent personnel file
Suspension from work without pay
Demotion to a lower-paying job assignment
Discharge from the company
Other appropriate action
(Continued on next slide)

Beyond the Book:
Policy of Acme Electronics Corporation
No supervisor shall explicitly or implicitly threaten that a subordinate’s refusal to
submit to sexual advances will result in adverse effects on the worker’s
employment, pay promotions, assigned duties, or any other condition of
employment. Acme employees are prohibited from engaging in behavior of a
sexual nature that would create an offensive, unpleasant, or otherwise hostile
work environment, e.g., telling jokes of a sexual nature, offensive flirtations,
sexual advances or propositions, comments concerning the bodies of members
of the opposite sex, or using sexually explicit words that might be considered
offensive.

Acme Corporation encourages any employee who feels he/she has been the
victim of sexual harassment to report the incident to his/her supervisor or to
Bob Farrow, chair of the EEO Compliance Committee (456-2534, Room 423 in
the Personnel office). The incident will be investigated, and corrective action
will be taken if appropriate. Acme management is committed to eliminating this
type of behavior from our company and will take every step necessary to
protect individuals from it.

Legislation
• Equal Pay Act of 1963
• Age Discrimination and Employment Act (ADEA)
• Pregnancy Discrimination Act of 1979
• Civil Rights Act of 1991
• Americans with Disabilities Act of 1990
• Vietnam Era Veteran’s Readjustment Act
• Vocational Rehabilitation Act


Legislation (cont’d)
• Civil Rights Act of 1991
 Makes it easier for individuals who feel they
have been discriminated against to take
legal action against organizations
 Provides for punitive damages
in cases of discrimination
under Title VII


• Americans with Disabilities Act of 1990
 Prohibits discrimination based on disability in
all aspects of the employment relationship
such as job application procedures, hiring,
firing, promotion, compensation, and training,
as well as other employment activities such
as advertising, recruiting, tenure, layoffs,
leave, and fringe benefits
• ADA Amendments Act of 2008


Beyond the Book:
ADA of 1990
 Individuals attempting to prove disability status cannot
merely submit a medical diagnosis of an impairment.
 The act does not cover:
 Homosexuality or bisexuality
 Gender Identity disorders not resulting from physical
impairment or other sexual behavior disorders
 Compulsive gambling, kleptomania, or pyromania
 Psychoactive substance use disorders resulting from
current illegal use of drugs
 Current illegal use of drugs


• Family and Medical Leave Act of 1993
 Requires employers with more than fifty employees
to provide up to twelve weeks of unpaid leave for
employees:
 after the birth or adoption of a child
 to care for a seriously ill child, spouse, or parent
 to care for the employee’s own serious illness


• Executive Order 11246
 Prohibits discrimination against protected groups by
federal contractors; requires written affirmative action
plans from those with contracts greater than $50,000
• Executive Order 11478
 Required federal government to be nondiscriminatory
in its employment practices.
 Extends to all contractors with federal contracts worth
$10,000 or more.


Investigating and Resolving
a Discrimination Complaint

MARY SMITH believes she has been
discriminated against at work. She was
passed over for a promotion to
supervisor, and believes it was because
she was a woman, rather than because
she was unqualified. Specifically, all
candidates for promotion must be
approved by their immediate supervisor,
and most of these supervisors are older
white men who have been heard to say
that women should not be promoted. In
fact, almost no women have been
promoted to supervisor in this
organization. What can Mary do?
STEP 1: Mary files a complaint with her
local or state EEO agency.
STEP 2: Local/state EEO agency
agrees to investigate Mary’s
claim on behalf of EEOC, and
the agency contacts Mary’s
employer to determine whether
the claim has any merit.


(cont’d)
Investigating and Resolving
a Discrimination Complaint

Once the case goes to court, and
assuming that Mary and EEOC believe
they have a case of disparate impact,
the process goes through several more
crucial steps.
STEP 1: Mary tries to establish a prima
facie case of discrimination.


Legal Issues in Employment

• Compensation
 Fair Labor Standards Act (FLSA)
 Employee Retirement Income Security Act of
1974 (ERISA)
• Labor Relations
 National Labor Relations Act or Wagner Act
 Taft-Hartley Act
 Landrum-Griffin Act


Legal Issues in Employment

• Employee Rights
 Occupational Safety and Health Act of 1970
(OSHA)
 Privacy Act of 1974
 Drug-Free Workplace Act of 1988
 Worker Adjustment and Retraining
Notification (WARN) Act of 1988


Beyond the Book:
Employee Termination
 An employer can not terminate an employee for:
 Refusing to commit perjury in court on the
employer’s behalf.
 Cooperating with a government agency in the
investigation of a charge or giving testimony.
 Refusing to violate a professional code of conduct.
 Reporting OSHA infractions.
 Refusing to support a law or a political candidate
favored by the employer.
 Complying with summons to jury duty.


Privacy Issues at Work

• The Patriot Act
• Genetic Information
Nondiscrimination Act
(GINA) of 2009


Privacy Issues at Work

• Evaluating Legal Compliance
 Ensure that managers clearly understand
the laws that govern all aspects of HRM
 Have organization legal and HR staff
answer questions
 Organizations should engage in periodic
external legal audits of their HRM procedures


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