The Legal Environment

CHAPTER 3

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 Legal Regulation of HRM

Prospective Employees

Protection from discrimination in selection,

initial job placement, and initial
compensation

Current Employees

Protection from discrimination in performance appraisal,

subsequent job placement, training and development
opportunities, career and promotion opportunities, and all
other dimensions of work in the organization

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 The Regulatory Environment of HRM
 Creation of national, state, and local regulations
 New laws and statutes enacted at the national level are

adopted or extended by state and local government bodies.

 Enforcement of regulations
 The regulatory process is carried out through existing or

special agencies, regulatory groups, and the court system.

Fines and lawsuits are used as enforcement tools.

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 The Regulatory Environment of HRM
 Practice and implementation of regulations
 Organizations and managers must put into practice and

adhere to the guidelines and regulations that the courts and

regulatory agencies attempt to enforce. Compliance with
the regulatory process can be hindered by the ambiguity
and differing interpretations of the intent of new
regulations.

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 Equal Employment Opportunity
 Thirteenth Amendment (1865)
 Abolished slavery.

 Fourteenth Amendment (1868)

 Required the government to follow

due process and prohibited the individual

states (but not private employers) from
denying equal protection to their residents.
 Reconstruction Civil Rights Acts (1866 and 1871)
 Extended protection offered to people under 13th and 14th

Amendments. Granted the same property rights to all

citizens and established the right of individuals to sue in
federal court if deprived of their civil rights.

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 Forms of Illegal Discrimination

Disparate
Disparate Disparate
Disparate
impact
impact treatment
treatment

Forms
Formsof of
illegal
illegal
discrimination
discrimination
Pattern
Patternoror
Retaliation
Retaliation practice
practice

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 Protected Classes in the Workforce
 Protected Class
 Classes or categories of individuals who share

one or more common characteristics as defined

by the various laws enacted to protect against
employment discrimination.
 Race, color, religion, gender, age, national origin,

disability, and military veteran status are class

definitions that distinguish groups specifically
protected from discrimination.

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 Discrimination and Equal Employment Opportunity
Disparate Treatment Employers cannot consciously treat
Discrimination protected class individuals differently
from others.

Bona Fide Occupational Employers must prove that a

Qualification discriminatory employment
(BFOQ) preference is a business necessity.

Disparate (Adverse) The effect of an apparently neutral

Impact employment practice that results in
the disproportionate selection of the
majority group over protected class
candidates.

Four-fifths Rule Disparate impact exists when the

selection rate for protected class
candidates is less than four-fifths
(80%) of the selection rate for the
majority group.
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 Equal Employment Opportunity Legislation

Civil Rights Act Prohibits discrimination on the

(Title VII) 1964 basis of race, color, religion, sex,
national origin; created the EEOC

Executive Orders 11246, Prohibits discrimination by federal

11478 contractors; requires AA plans

Equal Pay Act 1963 Requires equal pay for equal work
(men and women)

Age Discrimination and Protects persons over 40 years of

Employment Act 1967 age from discrimination

Vocational Rehabilitation Requires affirmative employment

Act 1973 for disabled by federal contractors

Vietnam Era Veterans’ Requires affirmative employment

Readjustment Act 1974 for veterans by federal contractors

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 Equal Employment Opportunity Legislation

Pregnancy Discrimination Requires equal treatment of

Act 1978 pregnant women in the workplace;
preserves job rights after leave

Civil Rights Act 1991 Provides compensatory and

punitive damages for intentional
discrimination; covers overseas
employees of U.S. companies

Americans with Disabilities Prohibits discrimination against

Act (ADA) 1990 disabled persons (physical and
mental); requires reasonable
accommodation of disability

Family and Medical Leave Provides up to 12 weeks of unpaid

Act 1993 leave for infant care and illness;
protects employment rights and
benefits during leave

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 Enforcing Equal Employment Opportunity

Charge Filed
Copy to Deferred
Employer to State
EEOC Investigation

Dismiss Charge Reasonable Cause Settlement

Individual Conciliation No Filing

Files Suit (180 days)
w/o EEOC Individual
Files Suit
Consent Decree Unsuccessful

Federal District Court

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 Investigating and Resolving a Discrimination Complaint

Does Claim Have Merit?

No Yes

Agency finds probable cause that

EEO agency drops case
employer violated Title VII

Party can file a private Agency seeks conciliation

lawsuit against employer agreement (out-of-court settlement)

Is Case Important and No Does Conciliation Succeed?

Is Agency Likely to Win?

No Yes Yes

Case is EEOC litigates case Agreement is carried

dropped in federal court out and case is dropped

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 Discrimination Case in Court

Prima facie case

established; burden of proof
Does the Current System of
shifts to defendant to prove Yes Promotion Result in Fewer Qualified
innocence Women Being Promoted?

Defendant argues that plaintiff was not No

promoted for a nondiscriminatory reason

Prima facie case not established;

Plaintiff argues that this reason is a pretext plaintiff must prove some type of
and that the real reason was discrimination intent to discriminate

Does the Judge/Jury Is There Evidence of Some

No
Believe Plaintiff? Intent to Discriminate?

No Yes Yes No

Plaintiff Plaintiff wins case and may Plaintiff

loses case be entitled to damages loses case
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 Affirmative Action Plans

Utilization Develop Goals Develop List of

Analysis and Timetables Action Steps
comparing of non-quota specifying how
employer’s flexible goals for the organization
workforce matching internal will make efforts
composition conditions to the to reduce under-
to available external labor utilization of
labor supply market protected classes

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 Legal Issues in Compensation

Fair Labor Standards Act Established minimum wage and 40-

(FLSA) 1938 hour work week; overtime paid at 1½
normal wage after 40 hours

Non-exempt employees FLSA provisions apply primarily to

non-exempt employees who work on
an hourly basis

Exempt employees Executive, professional,

administrative, and outside sales
employees paid on a non-hourly
basis are exempted from FLSA
regulations on compensation

Employee Retirement ERISA provides protection for

Income Security Act 1974 employee pension benefit funds

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 Legal Issues in Labor Relations
 National Labor Relations Act (1935)
 Sought to counter the power of organizations by

establishing the rights of workers to organize and setting up

the process for electing representative unions with which
employers must bargain.
 Taft-Hartley Act (1947)
 Rebalanced the labor relations power relationship by

requiring the same labor relations obligations for labor as

for management.
 Landrum-Griffin Act (1959)
 Regulated the internal affairs of unions to ensure their

honest and democratic operation.

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 Employee Safety and Health
 Occupational Safety and Health Act (1970)
 OSHA was passed as comprehensive legislation that

focused on worker safety and health in the workplace.

 The act granted the federal government the power to

establish and enforce occupational safety and health

standards for businesses in interstate commerce.
 OSHA is premised on the General Duty Clause that every

employer has an obligation to provide a safe working

environment.
 OSHA compliance officers conduct unannounced

workplace inspections and can issue citations and impose

fines for violations of the Act.

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 Emerging Areas of Discrimination Law
 Employees with disabilities
 Definition of what constitutes a disability is constantly

changing and expanding:

 an impairment that limits major life activities
 having a record of impairment
 being regarded as having a disability
 includes both physical and psychological impairments
 Reasonable accommodation
 The question of “reasonable accommodation”

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 Emerging Areas of Discrimination Law
 AIDS
 Considered a disability against which employers may not

discriminate in any employment-related matter

 Coworker education and accommodation of the individual

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 Sexual Harassment

Unwelcome sexual
advances in the work
Definition of environment occurring
Sexual with sufficient frequency
Harassment to create an abusive work
environment.

The harasser offers to

Quid Pro Quo exchange something of
Harassment value for sexual favors
from the harassed.

An employee feels
Hostile Work uncomfortable or sexually
Environment harassed by conditions in
the work environment.

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 Employment-at-Will
 Employment-at-will is based on the premise that
both employer and employee have the mutual right
to terminate an employment relationship at any time,
for any reason, and without advance notice.
 Wrongful discharge suits arise from employees’
beliefs that an employer did not afford them due
process or have good cause to fire them.
 In other instances, employers’ use of employment-
at-will to discharge employees is modified by
 an implied contract that promises continued employment.

 employees’ exercising their legal rights.

 an employer’s failure to deal with employees in good faith.

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 Ethics and Human Resource Management

Definition of A person’s beliefs about what is right

Ethics or wrong and what is good and bad

Ethics are formed from the societal

Ethics and context in which an individual exists.
the law What is legal is not always ethical.

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 Evaluating Legal Compliance

Step 1 Step 2 Step 3

Have Organizations Conduct external
managers should rely on legal audits of the
develop a their own legal organization’s
clear and HR staffs to human resource
understanding answer questions procedures for
of the laws and review compliance with
that govern procedures. laws and
HRM. regulations.

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