HUMAN RESOURCE MANAGEMENT LEGAL

ISSUES
LO 15-5
Identify the legal issues involved
with human resource
management.

The proliferation of laws and regulations affecting employment practices in

the 1960s was a major reason for the emergence of human resource
management as an important organization function. Managing in this
complex regulatory environment requires expertise in labor laws, as well as
skills in helping other managers comply with those laws. The major legal and
regulatory issues involving the management of retail employees are (1) equal
employment opportunity, (2) compensation, (3) labor relations, (4) employee
safety and health, (5) sexual harassment, and (6) employee privacy.

Equal Employment Opportunity

The basic goal of equal employment opportunity regulations is to protect
employees from unfair discrimination in the workplace. Illegal
discrimination refers to the actions of a company or its managers that result
in members of a protected class being treated unfairly and differently from
others. A protected class is a group of individuals who share a common
characteristic as defined by the law. Companies cannot treat employees
differently simply on the basis of their race, color, religion, sex,
national origin, age, or disability status. There is a very limited set Page 421
of circumstances in which employees can be treated differently.
For example, it is illegal for a restaurant to hire young, attractive servers
because that is what its customers prefer. Such discrimination must be
absolutely necessary, not simply preferred.44
Title VII of the Civil Rights Act prohibits discrimination on the basis of
race, national origin, gender, or religion in company personnel practices.
Discrimination is specifically prohibited in the following human resource
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decisions: recruitment, hiring, firing, layoffs, discipline, promotion,
compensation, and access to training. The expansion of this act in 1972 led to
the creation of the Equal Employment Opportunity Commission (EEOC),
which allows employees to sue employers that violate the law. Several major
retailers have been successfully sued because they discriminated in hiring and
promoting minorities and women.

Compensation
The Fair Labor Standards Act of 1938 set minimum wages, maximum
hours, child labor standards, and overtime-pay provisions. Enforcement of
this law is particularly important to retailers because they hire many low-
wage employees and teenagers and ask their employees to work long hours.
The Equal Pay Act, now enforced by the EEOC, prohibits unequal pay
for men and women who perform equal work or work of comparable worth.
Equal work means that the jobs require the same skills, effort, and
responsibility and are performed in the same working environment.
Comparable worth implies that men and women who perform different jobs
of equal worth should be compensated the same. Differences in compensation
are legal when compensation is determined by a seniority system, an
incentive compensation plan, or market demand.

Labor Relations
Labor relations laws describe the process by which unions can be formed
and the ways in which companies must deal with the unions. They precisely
indicate how negotiations with unions must take place and what the parties
can and cannot do. Walmart has vigorously challenged attempts by unions to
represent its employees. Supermarket chains, in contrast, are typically
unionized and, therefore, believe they have a labor cost disadvantage that
makes it difficult for them to compete effectively with Walmart.

Employee Safety and Health

The basic premise of health and safety laws is that the employer is obligated
to provide each employee with an environment that is free of hazards that are
likely to cause death or serious injury. Compliance officers from the

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Occupational Safety and Health Administration (OSHA) conduct inspections
to ensure that employers are providing such an environment for their
workers. OSHA even gets involved in ensuring the safety of customers in
stores.45 For instance, it provides guidance to retailers on how to control
crowds on Black Friday, the busy shopping day after Thanksgiving. The
guidelines include using a bullhorn to manage crowds, setting up barricades
or rope lines, and clearing the entrances of shopping carts and other
potentially dangerous obstacles.

Sexual Harassment
Sexual harassment includes unwelcome sexual advances, requests for sexual
favors, and other inappropriate verbal or physical conduct. Harassment is not
confined to requests for sexual favors in exchange for job considerations such
as a raise or promotion. Simply creating a hostile work environment can be
considered sexual harassment. For example, actions considered sexual
harassment include lewd comments, joking, and graffiti, as well as showing
obscene photographs, staring at a coworker in a sexual manner, alleging that
an employee got rewards by engaging in sexual acts, and commenting on an
employee’s moral reputation.
Customers can engage in sexual harassment as much as
supervisors and coworkers. For example, if a male customer is Page 422
harassing a female server in a restaurant and the restaurant
manager knows about it and does nothing to stop the harassment, the
employer can be held responsible for that sexual harassment.

Employee Privacy
Employees’ privacy protection is very limited. For example, employers can
monitor e-mail and telephone communications, search an employee’s
workspace and handbag, and require drug testing. However, employers
cannot discriminate among employees when undertaking these activities
unless they have a strong suspicion that specific employees are acting
inappropriately.

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