THE LEGAL ENVIRONMENT OF BUSINESS A Critical Thinking Approach Fourth Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne Nancy K. Kubasek Bartley A. Brennan M. Neil Browne Ch © 2006 Prentice Hall

Ch THE LEGAL ENVIRONMENT OF BUSINESS CHAPTER 20 Employment Discrimination

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Employment-at-Will Doctrine rooted in industrial, capitalist economy Employer’s right to terminate At any time For any reason For no reason Even for a ‘bad’ reason

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Employment-at-Will Employee’s right to terminate provides a nominal ‘balance’ Realistically, however, the doctrine favors employers Nonstatutory limitations on employer: Contract: express or implied Public policy Implied covenant of good faith and fair dealing

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Employment-at-Will A common law doctrine Varies considerably from state to state NOTE: Employment-at-will is the ‘default’ starting point for analysis of any U.S. case

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Constitutional Provisions Inadequate to prevent unequal treatment under variable state laws Antidiscrimination: Fifth, Thirteenth, Fourteenth, Amendments

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Civil Rights Acts of 1866 and 1871 Effectuates Thirteenth Amendment Applied to race Court free to craft damages No administrative procedures

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Equal Pay Act of 1963 Amended the FLSA Establishes ‘equal pay for equal work’ Equal work: skill, effort, responsibility, conditions Establishment: one or more Defenses: seniority, merit, output, other Remedies: back pay, attorney fees

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1991 Prohibits discrimination in terms and conditions of employment Protected classes: Race, color, religion, sex, or national origin

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Application of Title VII 15 or more employees 20 weeks Interstate commerce Employer broadly defined

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Employment Discrimination Cases Disparate Treatment Defendant discriminates overtly against all members of protected class Disparate Impact Defendant’s apparently nondiscriminatory practices result in a disproportionately heavy impact on protected class

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Employment Discrimination Cases Harassment cases Quid pro quo: sexual favors demanded by superior in exchange for job benefits Hostile environment: conduct that creates an abusive work environment for member of protected class Test: ‘reasonable person’ test

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Settled Issues Company may be liable for discriminatory acts of employee Defendant not liable for every comment or act of minimal nature and degree Plaintiff need not show severe psychological harm Plaintiff may recover even when no detrimental job consequences are present Same sex harassment is actionable

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Defenses Merit Seniority systems Bona fide occupational qualification

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Protected Classes Race and color National origin ReligionSex Pregnancy Discrimination Act

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Remedies Back pay for up to two years Remedial seniority Compensatory and punitive damages Attorneys’ fees

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Age Discrimination in Employment Act of 1967 Applies to workers age 40 or older Firm of 20 or more employees Otherwise qualified for job Termination raises interference of discrimination

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS ADEA Defenses Legitimate, nondiscriminatory basis for termination Burden of proof is on plaintiff to show evidence by preponderance BFOQ defense Executive exemption After-acquired evidence

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS ADEA Enforcement and Remedies File charges with EEOC or state agency Private action Liquidated damages: back pay for two years Compensatory, punitive damages may be available

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Rehabilitation Act of 1973 Protects handicapped workers against employment discrimination Handicap is defined term: “major life activities” standard Applies only to federal government and employers with federal contracts

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Americans with Disabilities Act of 1991 Applies to employers with 15 or more workers Requires “reasonable accommodation” “Otherwise qualified” workers protected Current drug or alcohol abusers not protected Mental disabilities especially difficult area

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS ADA Enforcement and Remedies Follows Title VII and EEOC approach Remedies include: reinstatement; back pay; injunction; compensatory and punitive damages in some cases Fines up to $100,000

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Affirmative Action Intended to correct effects of past discrimination Recently attacked on the theory of reverse discrimination Challenged in major lawsuits in the areas of school admissions, employment, contracting EEOC guidelines provide help for employers

© 2006 Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS Global Dimensions Extraterritorial application of U.S. laws limited U.S. citizens, working overseas for U.S. corporations are covered by Title VII, ADA, ADEA Issue: What is a U.S. company? EEOC: several factors to be considered