Chapter 3 - The Legal Environment and Diversity Management

The Legal environment for HRM and a user’s guide to managing people.

This chapter explores some of the laws HR managers have to follow and the importance of diversity within an organization.

One of the most important definitions when it comes to diversity is discrimination, which is the act of making distinctions among people. Discrimination is something that occurs by HR managers during selection, however it’s illegal discrimination that should not be allowed. Illegal discrimination is making distinctions that harm people and that are based on those people’s membership in a protected class.

The OUCH test

The OUCH test is a rule of thumb used whenever you are contemplating any employment action, to maintain fairness and equity for all your employees or applicants. This test should be used when someone is contemplating any action that concerns employees.

Objective

Acions can be considered objective or subjective. Something that is considered objective, is based on facts. Something that is concerned subjective is based on an emotional state, not on cognitive knowledge.

Uniform application is considered an action that is being applied uniformly. When asking an applicant to perform a test, it is important to create the exact same testing circumstances, as much as you can control them.

Consistent in effect

The Department of Labor and the Equal Employment Opportunity Commission (EEOC) has given the Four-Fifths Rule, which is a test used by various federal courts, the Department of Labor, and the EEOC to determine whether disparate impact exists in an employment test. If the selection ratio for any group is less than four-fifths (e.g. Asian males) of the selection rate for the majority group (e.g. white males) in an employment action, then it constitutes evidence of a potential disparate impact.

Reverse discrimination is discrimination against the majority employee group based on a legally protected factor, such as race or religion.

Job relatedness refers to the fact if the action performed is directly related to the primary aspects of the job in question.

Major Employment Laws

Equal Pay Act of 1963 (EPA)

The Equal Pay Act is considered an equal employment opportunity (EEO). This act requires the same payment for women as men, where they perform the same job within an organization. The job should identify equal in terms of skill, effort, responsibility and the same working conditions.

In case the pay differences because of a difference in seniority, merit, quantity or quality of production, or any factor other than sex (e.g. training programs), then those differences are legally allowed.

Title VII of the Civil Rights Act of 1964 (CRA)

This act can be considered one of the most significant pieces of legislation regulating the EEO. It virtually changed the way of doing business for every organization in the US. The act states it’s illegal to:

“1. To fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or priviliges of employment, because of such invidual’s race, color, religion, sex or national origin; or

2. to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex or national origin.”

Some important concepts introduced during the CRA of 1964 are the following:

• Disparate treatment
• Disparate (also called adverse) impact
• Routine or practice
• Bona fide occupational qualification (BFOQ)
• Business requirement
• Job relatedness

TYPES OF DISCRIMINATION.

The 1964 CRA described three types of discrimination. In addition to the three types, religious discrimination and sexual harassment have been identified by federal courts as fourth and fifth type of discrimination.

Disparate (adverse) Treatment exists when individuals in similar situations are intentionally treated differently, and this treatment is based on an individual’s membership in a protected class. Disparate treatment is generally illegal, unless the employer can prove that there was a “bona fide occupational qualification” that caused to intentionally disallow members of a protected group from applying to the job.

Disparate (adverse) impact occurs when an officially neutral employment practice disproportionately excludes the members of a protected group; it is generally considered to be unintentional, but intent is irrelevant. To identify discrimination under disparate treatment, there has to be intentional discrimination. For disparate discrimination, intent is not relevant.

Pattern or practice occurs when a person or group engages in a sequence of actions over a significant period of time that is intended to deny the rights provided by the Title VII of the 1964 CRA to a member of a protected class.

ORGANIZATIONAL DEFENSES AGAINST DISCRIMINATION CHARGES.

The organization does have ways to defend itself against charges of illegal discrimination. The defend can be performed by showing either that there was a need for a particular characteristic qualification for a specific job or that there was a requirement that the business does certain things in order to remain viable and profitable.

The first defense is a bona fide occupational qualification (BFOQ), a qualification that is absolutely required in order for an individual to be able to successfully do a particular job. In this case the quality for the qualification must be mandatory.

A business necessity exists when a particular practice is necessary for the safe and efficient operation of the business and when there is a specific business purpose for applying a particular standard that may, be discriminatory. A business necessity defense is applied in cases to proof it was needed for a safe and efficient operation and that a specific business purpose exists to apply a paricular standard that may, be discriminatory.

Job relatedness exists when a test for employment is a legitimate measure of an individual’s ability to do the essential functions of a job. For job relatedness to act as a defense against a charge of discrimination, the organization’s action first has to be a business necessity, and then the employer must be able to show that the performed test for employment action was a legitimate measure of an individual’s ability to do the job.

Americans with Disabilities Act of 1990 (ADA)

The first major law dealing with discrimination against disabled individuals was the Rehabilitation Act of 1973.

A disability is considered 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. Conditions such as obesitas and left-handedness are not considered disabilities.

An organization is required to make reasonable accomodations to physical or mental limitations of an individual with a disability who was otherwise qualified to perform the “essential functions” of the job, unless it would imply an “undue hardship” on the organization’s operation.

A reasonable accomodation is an accomodation made by an employer to allow someone who is disabled but otherwise qualified to do the essential functions of a job to be able to perform that job. Usually, reasonable accomodation is inexpensive and easy to implement.

When finding accomodations, it is also essential to establish the difference between “essential” and “marginal” job functions. Essential functions are the fundamental duties of the position. A function can be considered essential if it meets the following criteria:

1. The function is something that is done routinely and frequently in the job.
2. The function is done only on occasion, but it is an important part of the job.
3. The function may never be performed by the employee; but if necessary, it’s critical that it will be performed correctly.

Marginal job functions are those that may be performed on the job but don't need to be performed by all holders of the job.

Employers are, according to the ADA not required to make every job disability friendly. They are:

• Not required to make reasonable accomodations if the applicant or employee does not request it;
• Not required to make reasonable accomodation if applicants don’t meet required qualifications for a job;
• Not required to lower quality standards or provide personal use items such as glasses or hearing aids to make reasonable accomodations; and
• Not required to make reasonable accomodation if doing so would be an undue hardship.

An undue hardship exists when the level of difficulty for an organization to provide accomodations, determined by looking at the nature and cost of the accomodation and the overall financial resources of the facility, becomes a significant burden on the organization.

Civil Rights Act 1991

The Civil Rights Act of 1991 was enacted as an amendment designed to correct a few major omissions of the 1964 CRA as well as to overturn several US Court decisions. Compensatory damages are monetary damages awarded by the court that compensate the injured person for losses. Such losses can include future pecuniary loss, emotional pain, suffering and loss of enjoyment of life.

Punitive damages are monetary damages awarded by the court that are designed to punish an injuring party that has intentionally, inflicted harm on others. These damages are meant to discourage employers from intentionally discriminating.

Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)

USERRA was passed to ensure the civilian reemployment rights of military members who were called away from their regular jobs by US government orders. There is no minimum number of employees required for coverage by USERRA. All employers must, however, comply with the law.

Title II of the Genetic Information Nondiscrimination Act of 2008

Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA) “prohibits the use of genetic information in employment, prohibits the intentional acquisition of genetic information about applicants and employees, and imposes strict confidentiality requirements.”

Immigration laws relating to employment and Equal Opportunity

The employment of immigrants are ruled by a series of federal laws. The two major laws in this area are the Immigration and Nationality Act of 1952 (INA) and the Immigration Reform and Control Act of 1986 (IRCA).

Equal Employment Opportunity Commission (EEOC)

The various federal equal employment opportunity (EEO) laws are enforced by the Equal Employment opportunity Commission (EEOC). This is a federal agency which has significant power over employers in the process of investigating complaints of illegal discrimination.

The EEOC has three significant responsibilities:

1. "investigating and resoving discrimination complaints through conciliation or litigation,
2.  gathering and compiling statistical information on such complaints, and
3.  running education and outreach programs on what constitutes illegal discrimination.”

If discrimination has been identified by the EEOC, it will attempt to provide reconciliation between the parties. If an agreement cannot be made, there are two options:

1. “The agency may aid the allaged victim in bringing suit in federal court.
2. It can issue a “right-to-sue” letter to the alleged victim.” A right-to-sue is a notice from the EEOC, issued if it elects not to prosecute an individual discrimination complaint within the agency, that gives the recipient the right to go directly to the courts with the complaint.

Employer rights

Retaliation is a situation where the organization takes an “adverse employment action” against an employee because the employee brought discrimination charges against the organization or supported someone who brought the discrimination charges against the company.

An adverse employment action is any action such as frings, demotions, schedule reductions, or changes that would harm the individual employee.

Constructive discharge exists when an employee is put under such extreme pressure by management that continued employment becomes intolerable and, as a result, the employee quits, or resigns from the organization.

EEO, Affirmative Action and Diversity, what’s the difference?

Affirmative action is a series of policies, programs, and initiatives that have been instituted by various entities within both government and the private sector that are designed to prefer hiring of individuals from protected groups in certain circumstances, in an attempt to mitigate past discrimination.

If a company is a contractor to the federal government and receives more than $10,000 a year they are required by presedential order (Executive Order 1124) to maintain an affirmative action program. There are exemptions to this rule as well.

Diversity in the workforce

Diversity is simply the existence of differences—in HRM, it deals with different types of people in an organization. Diversity provides both opportunities and challenges.

Diversity is necessary because as the white population continues to shrink and minority populations grow, interacting with a wide selection of customers and suppliers increases sales, revenues and profits. Embracing diversity therefore, creates business opportunities.

The primary advantages of a diverse workforce is to stimulate and provide more creative and innovative solutions to organizational problems.

Creativitiy is a basic ability to think in unique and different ways and apply those thought processes to existing problems.

Innovation is the act of creating useful processes or products based on creative thought processes.

Divergent thinking is the ability to find many possible solutions to a particular problem, including unique, interested, untested solutions.

One of the challenges of diversity is conflict. There exists functional conflict as well as dysfunctional conflict.

Functional conflict is how organizations go through the process of creating new things. Dysfunctional conflict  occurs when conflict gets to the point where creativity is stiffled and almost all work becomes either difficult or impossible.

Cohesiveness is an intent and desire for group members to stick together in their actions.

Sexual Harassment: A special type of discrimination

Types of sexual harassment

Quid pro quo harassment is harassment that occurs when some type of benefit or punishment is made contingent upon the employee submitting to sexual advances.

A hostile work environment is a very specific legal term in HRM meaning harassment that occurs when someone’s behavior at work creates an environment that is sexual in nature and that makes it difficult for someone of a particular sex to work in that environment.

A reasonable person is the average person who would look at the situation and its intensity to determine whether the accused perosn was wrong in their actions.

To qualify as sexual harassment in court, a ‘’prima facie’’ (it looking like sexual harassment from a reasonable person’s perspective) has to be shown by the plaintiff. To qualify as prima facie case of sexual harasment the following characteristics must be included:

1. The plaintiff is a member of a protected class;
2. The harassment was based on sex;
3. The person was subject to unwanted sexual advances; or
4. The harassment was severe enough to alter the terms, conditions, or priviliges of employment.

In order for a organization to be considered for liability, two critical conditions must exist:

1. The plaintiff did not invite or incite the advances.
2. The harassment was undesirable and severe enough to alter the terms, conditions, and priviliges of employment.