1. LEGAL ISSUES IN HUMAN RESOURCE MANAGEMENT
Set-up: Prior to this lecture, students should have read the summary materials
on legal issues affecting HRM. Also, they should be directed to the following
websites, which provide up-to-date information on legal issues affecting HRM:
Equal Employment Opportunity Commission --
Americans with Disabilities Act --
U.S. Department of Labor – http//:
Note: One of the key goals of HRM is to effectively manage the flow of employees to and from the organization (Ferris, Hochwarter, Buckley, Harrell-Cook, & Frink, 1999). Students of HRM are familiar with the major HRM functions: staffing, training and development, and appraisal. These functions should provide a framework and reference point for discussion throughout this learning module.
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2. Session 1
Open the floor to discussion. Ask students what they think are important legal cases in U.S. history. These cases might not have a readily apparent connection to HRM (e.g., Brown v Board of Education or the McDonald’s spilled coffee case). Then ask students about any famous cases they can think of that involved HR or employment issues.
Question: Why is being familiar with legal issues important for an HR generalist or HR specialist?
Answer: Because much of what HR professionals do involves compliance, litigation avoidance and ensuring that the rights of employees are not violated.
Discussion point: There is a difference between incivility and illegality. There is a difference between being unkind or insensitive (especially if it occurs one time) and being discriminatory within the legal definition of the term. An important consideration is whether there was type of adverse employment action (e.g., being passed up for a promotion, being fired).
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3. PURPOSE
The purpose of this module is to introduce students to common legal issues faced by HR professionals.
Much of what HR professionals do involves legal compliance, litigation avoidance and ensuring that employee rights are not violated. It is important for the HR professional to have an understanding of these issues.
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4. EMPLOYMENT DISCRIMINATION
U.S. employees have legal protections against employment discrimination at the state and federal levels. These protections come from laws (statutes) and from court cases.
Protections at the state level vary from state to state. Even some municipalities have laws (ordinances) that protect employees from discrimination.
Question: What is the difference between case law and statutory law?
Answer: Case law, also called judicial precedent, is made by courts, but statutory law is made by the legislative branch.
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5. EEOC
In the U.S., the Equal Employment Opportunity Commission (EEOC) is the main enforcer of employee civil rights.
Each year, the EEOC receives thousands of complaints from employees alleging employment discrimination.
Employees have 180 days from the date of an adverse employment action to file a complaint with the EEOC.
A large number of discrimination claims relate to selection practices (e.g., hiring, internal promotions).
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6. EEOC The complaint can be dismissed as unfounded.
Once the EEOC receives a complaint, one of three outcomes may occur:
The complaint can be dismissed as unfounded.
If the complaint passes the initial review, the EEOC can either:
Have its own attorneys handle the case; or
Issue the complainant a Right-to-Sue letter.
If the EEOC issues a right-to-sue letter, the employee must hire his/her own attorney to litigate the case.
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7. PROTECTED CLASSES
Protected class: To receive employment discrimination protection under federal legislation, an employee must be a member of a class of individuals intended to receive protection. Generally, protected classes are age, race, gender, religion, color, national origin, disability and ethnicity.
Sexual orientation is not a protected class under federal law, but there are states (such as California and New York) and local municipalities (e.g., San Francisco, Philadelphia) that prohibit discrimination based on sexual orientation.
Discuss with students that discrimination based on race can include, among other things:
Discrimination against a minority member by a majority member.
Discrimination against a majority member by a minority.
Discrimination by a member of one race against a member of the same race (e.g., an Asian-American discriminating against an Asian-American because she is Asian-American).
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8. FEDERAL LAWS Civil Rights Act of 1886 (Section 1981)
Prohibits discrimination on the basis of race, color, national origin, ethnicity.
Equal Pay Act of 1963
Requires employers to pay employees equal pay for equal work regardless of gender.
Civil Rights Act of 1964 (Title VII)
Prohibits discrimination based on race, color, religion, sex (gender), or national origin.
Age Discrimination in Employment Act of 1967
Outlaws discrimination in employment against individuals over 40.
Rehabilitation Act of 1973
Prohibits employment discrimination against individuals with disabilities.
Remind students that employees normally have 180 days from the date of an adverse employment action to file a complaint with the EEOC.
In most discrimination cases, the plaintiff must show that he or she was subjected to an adverse employment action by his or her employer. Adverse employment actions can include firing; demotion; refusal to hire; or even giving the employee less-desirable job assignments or a smaller office because that employee is a member of a protected class.
The ADEA protects individuals who are over 40 years of age from age discrimination. A person who is younger than 40 does not have any protection against age discrimination. For example, a 22-year-old can be discriminated against for being too young and the employer would not be subject to any sanctions.
Another important point about the ADEA is that the relative age of two individuals who are over 40 is important. For example, it would violate the ADEA for an employer to hire a 42-year-old individual as opposed to a 57-year-old simply because the employer thinks that the 57-year-old is too old. Just because the person who is hired is over 40 does not mean that the employer did not violate the ADEA by discriminating against the 57-year-old.
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9. FEDERAL LAWS Pregnancy Discrimination Act of 1975
Prohibits discrimination based on pregnancy and childbirth.
Uniformed Services Employment and Reemployment Rights Act (USERRA) of 1994
Grants employees who have served in the military the right to be reinstated to their employment without losing benefits.
Americans with Disabilities Act (ADA) of 1990
Prohibits discrimination against employees and job candidates with disabilities and requires employers to make reasonable accommodations unless they impose an undue hardship on the employer.
For more on the ADA, see the SHRM Learning Module on the FMLA and ADA. Also, see the SHRM Case Study, The Case of the Rock Concert Wreck.
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10. FEDERAL LAWS Civil Rights Act of 1991
Expanded legal protections to employees; allows for punitive damages.
Family and Medical Leave Act (FMLA) of 1993
Permits 12 weeks of unpaid leave for medical or family reasons.
For more on the FMLA, see the SHRM Learning Module on the FMLA and ADA. Also, see the SHRM Case Study, The Case of the Rock Concert Wreck.
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11. Theories of Employment Discrimination
Under Title VII, there are two main theories of employment discrimination:
Disparate treatment: Under this theory, it is alleged that the employer intentionally discriminated against an employee (or group of employees) because of his/her race, color, religion, gender, or national origin.
Disparate impact: Under this theory, it is alleged that the employer’s human resource practices systematically exclude members of a protected class.
In a disparate treatment case, the plaintiff must establish a prima facie case in which she/he must prove that:
The plaintiff was a member of a protected class under Title VII; and
She/he was denied an available benefit or position for which the plaintiff was qualified.
If the plaintiff provides sufficient evidence to establish both, the burden shifts to the employer to show that there was a legitimate, nondiscriminatory reason (e.g., the employee was a poor performer) for the employer’s action. If the employer provides evidence that there was a legitimate, nondiscriminatory reason for the action, in order to prevail, the plaintiff must establish that the employer’s reason was simply a pretext (i.e., the employer was lying and that the real basis for its actions was discriminatory). This burden-shifting procedure was set forth by the U.S. Supreme Court in McDonnell Douglas Corp. v Green, 411 U.S. 792 (1973).
To establish disparate impact, plaintiffs normally use statistics. Employers can overcome allegations of disparate impact by showing that their selection practices are job-related and a business necessity.
Disparate impact cases often involve employer selection practices (including selection tests) but they can also involve other practices such as promotions and layoffs.
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12. Sexual Harassment
Under Title VII, sexual harassment is a form of sex (gender) discrimination.
There are two types of sexual harassment:
Quid Pro Quo (Latin for “this for that”): This type of sexual harassment occurs when a supervisor or other authority conveys to a subordinate (through either words or actions) that he/she must engage in sexual conduct in order to advance or to not receive poor treatment.
Sexual harassment is an important issue for employers. Specifically, employers are the most likely to lose when this type of discrimination charge is raised.
Employers can minimize the risk of a sexual harassment charge by enacting a variety of measures:
Adopt a zero-tolerance policy prohibiting sexual harassment.
Require sexual harassment training.
Appoint an ombudsman (who is not an immediate supervisor or manager) to whom employees can report sexual harassment.
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13. Sexual Harassment
Hostile Work Environment: This type of sexual harassment occurs when an individual is subjected to the unwelcome and offensive behavior of others in the workplace. This may include offensive language, jokes, gestures, glaring, or displaying offensive images. This type of harassment typically comes from co-workers.
In Oncale v Sundowner Offshore Services, Inc., 523 U.S. 75 (1998), the U.S. Supreme Court ruled that Title VII also prohibits same-sex harassment.
Courts have ruled that a hostile work environment can occur from a one-time intensive experience (e.g., a battery), or from pervasive (but less intensive) and repetitive behaviors.
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14. Retaliation
Title VII of the Civil Rights Act makes it unlawful for an employer to retaliate against an employee by taking an adverse employment action against a covered individual for engaging in any protected activity.
Protected activities include such actions as filing a discrimination complaint, threatening to file a discrimination complaint or picketing to protest discrimination.
According to the EEOC, a protected activity is
opposition to a practice believed to be unlawful discrimination; or
participation in an employment discrimination proceeding.
Opposition is informing an employer that you believe he/she is engaging in prohibited discrimination. Opposition is protected from retaliation as long as it is based on a reasonable, good-faith belief that the alleged practice violates anti-discrimination law and the manner of the opposition is reasonable.
Examples of protected opposition include:
Complaining to anyone about alleged discrimination against oneself or others.
Threatening to file a charge of discrimination.
Picketing in opposition to discrimination.
Refusing to obey an order reasonably believed to be discriminatory.
Examples of activities that are NOT protected opposition include:
Actions that interfere with job performance so as to render the employee ineffective.
Unlawful activities, such as acts or threats of violence.
Participation means taking part in an employment discrimination proceeding. Participation is a protected activity even if the proceeding involved claims that ultimately were found to be invalid. Examples of participation include:
Filing a charge of employment discrimination.
Cooperating with an internal investigation of alleged discriminatory practices.
Serving as a witness in an EEO investigation or litigation.
A protected activity can also include requesting a reasonable accommodation based on religion or disability.
The above information was retrieved directly from the EEOC website ( last visited 4/13/08.
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15. Employment At Will vs. Due Process
Most U.S. employees are employees at will. Under employment at will, an employee can be discharged for any non-discriminatory reason at any time.
However, some employees are due process employees. Due process employees are generally unionized and/or civil servants. This category of employee can be disciplined (including discharge) only for cause.
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16. Affirmative Action
Affirmative action programs are implemented as a means to remedy past discrimination.
Some employers have adopted these programs voluntarily and others have been required to adopt them by the EEOC or court order. Some employers might be required to have an affirmative action program because they are federal contractors (Executive Order 11246). However, quota systems are unlawful because they have been found to violate Title VII.
Discuss Grutter v Bollinger, 539 U.S. 306 (2003), in which the U.S. Supreme Court found that although the University of Michigan could not automatically award points to applicants on the basis of minority status, it could consider race when considering applicants for the purpose of having a more diverse student body.
Quotas involve fixed numbers or percentages. Goals, however, are more flexible, and have been found to be permissible.
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17. Employment Discrimination Defenses
The following are some defenses an employer can use to defend Title VII cases:
Bona fide occupational qualification (BFOQ)
Seniority
Merit
Employee misconduct
Valid selection test
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18. U.S. Supreme Court Cases
McDonnell Douglas Corp. v Green, 411 U.S. 792 (1973): Established the burden-shifting standard for disparate treatment cases.
Meritor Savings Bank v Vinson, 477 U.S. 51 (1986): A hostile work environment due to sexual harassment is a type of sexual discrimination.
Sutton v United Airlines, 527 U.S. 471 (1999): Minor illness/ailments are not disabilities as defined under the Americans with Disabilities Act.
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19. Employment Discrimination Review and Wrap-Up
Many employment discrimination issues we discussed directly relate to the selection and staffing functions of the organization. However, employment discrimination can be found in other types of HR practices.
What laws prevent discrimination in training and development, compensation and appraisal?
Take the self-assessment quiz.
Question: What laws prevent discrimination in training and development, compensation and appraisal?
Answer: Title VII of the Civil Rights Act clearly prohibits discrimination when it comes to training and development, compensation, and appraisal. The Older Workers Benefit Protection Act of 1990 (OWBPA) amended the ADEA to specifically prohibit employers from denying benefits to older employees. ERISA also prevents employers from limiting the benefits that an employee can accrue based on the employee’s advanced age.
The Equal Pay Act prevents employers from paying a member of one gender more than a person of another gender for the same work. However, remember that the Equal Pay Act is not a comparable worth statute like the long-proposed (but never passed) Equal Rights Amendment. If it were, then employers would have to pay the same wages for different jobs that require the same amount of skill and education (say, an administrative assistant and a customer service representative).
Discussion: Women are paid on average less than 80 percent of what men earn. Do you think that this is due to discrimination or are other factors typically involved?
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20. Session 2
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21. OTHER HR-RELATED LEGAL ISSUES
Compliance
Safety
Military Leave
Labor Relations
Employee Privacy
Negligent Hiring
Negligent Retention
Negligent Referral
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22. Compliance Recordkeeping
Employers must keep records on employees for a variety of reasons, including compensation (e.g., payroll records), appraisals (past performance evaluations), and safety training.
Employers with more than 100 employees are required to file an annual report (EEO-1) that provides a numerical count of their employees by job category and by ethnicity, race and gender.
The EEO-1 must be submitted to both the EEOC and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).
Employers required to file the EEO-1 report:
(1) All employers with 100 or more employees.
(2) All federal government contractors and first-tier subcontractors with 50 or more employees and a contract amounting to $50,000 or more.
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23. Safety
In 1970, the U.S. Congress passed the Occupational Safety and Health Act. The purpose of this law is to help both employers and employees reduce on-the-job death and injury.
The law is administered by the Occupational Safety and Health Administration (OSHA), a division of the U.S. Department of Labor.
For more about OSHA, you can find the “All About OSHA” manual on the OSHA website at (last visited April 12, 2008).
OSHA issues standards for a wide variety of workplace hazards, including:
• Toxic substances
• Harmful physical agents
• Electrical hazards
• Fall hazards
• Trenching hazards
• Hazardous waste
• Infectious diseases
• Fire and explosion hazards
• Dangerous atmospheres
• Machine hazards
• Confined spaces
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24. Safety
OSHA provides both guidelines (optional) and standards (required) for employers.
Employers can be subject to both scheduled and random inspections by OSHA.
Employers are required to report to OSHA within 8 hours of learning about any on-the-job death or on-the-job injury requiring the hospitalization of three or more employees.
Note that many states and municipalities have employee protection statutes and ordinances.
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25. Workplace Violence
Employers have a responsibility to make the workplace as safe as possible. Part of this responsibility includes taking steps to prevent workplace violence. The employer who fails to do so is subject to possible liability.
For more on preventing workplace violence, please see the OSHA workplace violence fact sheet, available online at:
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26. Workplace Violence
Some steps employers can take to reduce workplace violence include:
Monitoring and security measures (e.g., security guards, surveillance cameras, identification badges, password-controlled entry).
Establishing a zero-tolerance policy on workplace violence.
Offering employee training on workplace violence avoidance and alternative dispute resolution tactics.
Establishing a zero-tolerance policy about being on the jobsite or performing work duties while under the influence of illegal drugs or alcohol.
For more on preventing workplace violence, please see the OSHA workplace violence fact sheet, available online at
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27. Military Leave
Uniformed Services Employment and Reemployment Rights Act (USERRA) (38 U.S.C. 4301) provides reemployment rights for veterans and members of the National Guard and Reserve following qualifying military service.
This law also prohibits employer discrimination based on current or past military service or based on one’s intent to join the military.
§ 38 U.S.C Discrimination against persons who serve in the uniformed services and acts of reprisal prohibited
(a) A person who is a member of, applies to be a member of, performs, has performed, applies to perform, or has an obligation to perform service in a uniformed service shall not be denied initial employment, reemployment, retention in employment, promotion, or any benefit of employment by an employer on the basis of that membership, application for membership, performance of service, application for service, or obligation.
(b) An employer may not discriminate in employment against or take any adverse employment action against any person because such person (1) has taken an action to enforce a protection afforded any person under this chapter, (2) has testified or otherwise made a statement in or in connection with any proceeding under this chapter, (3) has assisted or otherwise participated in an investigation under this chapter, or (4) has exercised a right provided for in this chapter. The prohibition in this subsection shall apply with respect to a person regardless of whether that person has performed service in the uniformed services.
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28. Military Leave
Family and Medical Leave Act of 1993: In January 2008, the Family and Medical Leave Act was amended to include a provision that states “eligible employee shall be entitled to a total of 12 workweeks of leave during any 12-month period because of any qualifying exigency (as the Secretary shall, by regulation, determine) arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation.”
Note: As of April 2008, no regulations have been promulgated by the Secretary defining what constitutes a “qualifying exigency.”
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29. Unions exist in the public and private sectors.
Labor Relations
Labor relations refers to the dealings between the management of an organization and its organized labor representative (e.g., unions).
Unions exist in the public and private sectors.
The National Labor Relations Board was created by Congress in 1935 to administer the National Labor Relations Act, the primary law governing relations between unions and employers in the private sector.
Note to students that unions are not bad in and of themselves, and stress that organizations have a duty to deal with them fairly. There are pros and cons to unionization. One disadvantage from the organization’s perspective is that by having a third party involved, it loses some power to affect change in the workplace. Mention to students that the best way to avoid unionization is to treat employees fairly.
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30. Labor Relations
The overall rate of unionization in the United States has been declining for decades.
Organizations have a duty under federal law to deal with unions fairly and to bargain in good faith.
The overall rate of unionization in the United States has been declining for decades. However, unionization is still strong in certain sectors and regions of the country (e.g., in the northeastern states). Historically, southern states have had a lower percentage of unionization.
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31. Labor Relations
The National Labor Relations Act (NLRA) prohibits unfair labor practices, which are defined as activities by employers that interfere with the right to unionize by employees.
Examples of unfair labor practices include telling employees to vote against unionization or threatening to close a facility if the workplace becomes unionized.
What kinds of activities are protected by the NLRA?
Picketing
Advertising
Strikes
Primary boycott (i.e., boycott against the employer itself)
A good acronym to remember is TIPS:
An employer may not Threaten, Interrogate, make Promises, or Spy on employees engaged in union activity.
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32. Labor Relations
Employers also have protections against unfair labor practices. For example, the Taft-Hartley Act of 1947 prohibits secondary boycotts and allows states to pass right-to-work statutes. Under the Taft-Hartley Act, closed shops (in which employees must be a member of the union before they are hired) are prohibited. However, states may allow union shops (in which the union requires that an employee become a union member within a certain amount of time – usually 30 or 60 days – of being hired).
Right to work: This means that employees are not required to join a union to work in a certain workplace or position. Most of the southern U.S. states are right-to-work states. Historians relate this back to the era post-Civil War and a fear that newly freed slaves would unionize.
What kinds of activities are prohibited by the NLRA?
Hot cargo agreements (not handling products made by a non-unionized company).
Featherbedding (being paid for work that is not actually done or having someone on the payroll who does not actually do any work).
Work slowdown (intentionally working really slowly or refusing to perform certain duties).
Secondary boycott (requesting a second party not do business with the employer).
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33. Employee Privacy
Employees have a limited expectation of privacy in the workplace.
and telephone calls are normally not considered to be private. However, some states have wiretapping laws that offer limited protection for employee telephone calls.
Employees should expect privacy in restrooms and changing facilities. However, in some sectors, employees can be monitored for loss prevention.
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34. Employee Privacy
The Fourth Amendment of the U.S. Constitution has a provision on unlawful searches and seizures by the government. This provision has been interpreted by courts to mean that governmental workers have special privacy protections.
Employers with federal grants and contracts must have a drug free workplace policy pursuant to the Drug-Free Workplace Act of However, drug test results and other medical records must be handled appropriately and be consistent both with this act and the Health Insurance Portability and Accountability Act (HIPAA).
Employers should keep all employee medical records confidential.
Discussion question: Is it a good idea to routinely drug test all employees?
Pros:
Limits liability for acts performed by employees while under the influence of drugs.
Makes workplaces safer for the employer, employees, customers/clients and community.
Reduces costs associated with poor performance/absenteeism due to drug use.
Cons:
Drug testing is costly.
Savvy users can circumvent the tests.
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35. Negligent Hiring
Employers have a responsibility to workers, clients, community and themselves to ensure that employees do not harm others in the performance of their work duties.
Under the legal doctrine of respondeat superior, an employer might be held civilly liable for the actions of employees.
Under both case and statutory law (including the Sarbanes-Oxley Act), employers could be held criminally liable for the actions of their employees.
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36. Negligent Hiring
Many employers investigate the backgrounds of their employees before hiring them. Such practices include:
Checking references/contacting former employers.
Conducting a criminal background check.
Requesting transcripts.
When appropriate, requesting proof of licensure (e.g., license to practice medicine or law, driver’s license).
Drug testing.
Some employers also run credit history checks on job candidates. (The theory behind this practice is that employees who are in debt could perhaps be a higher risk for theft.)
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37. Negligent Retention
Related to the issue of negligent hiring is negligent retention. Negligent retention occurs when an employer does not discharge an employee after the employer learns (or should have known) that the employee was a danger to others.
Example: An employee threatens to shoot his/her boss and co-workers. The boss learns of these threats and does nothing about this. The following week the employee returns to the jobsite and kills three co-workers. Under these circumstances, the employer would likely lose a suit brought against it for negligent retention.
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38. Negligent Referral
Negligent referral occurs when an employer knows that a current or former employee poses a threat to others, but does not pass this information on to the next employer.
Example: An employer, a preschool, fires an employee for inappropriately touching a child in a sexual manner at the workplace. Thereafter, another preschool calls for a reference for this employee and the former employer does not report this to the second preschool. This employee goes to work for the second preschool and thereupon engages in inappropriate sexual conduct with a child. The former (first) employer might be held liable in a suit for negligent referral.
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39. Employee References
Giving employee references can pose a difficult situation for employers. On one hand, employers do not want to be sued for negligent referral by subsequent employers. On the other hand, employers want to avoid former employees bringing a lawsuit based on discrimination, tortious interference with contract (i.e., interfering with an employee’s ability to obtain another job), or defamation.
For more on employee references, please see Legal, Effective References: How To Give and Get Them, by Wendy Bliss, J.D., SPHR (A SHRM publication).
For cases on employee references/negligent referral/negligent hiring, please see the SHRM “Personally Yours” trilogy.
Title VII prohibits employers from giving negative employee references based on the employee’s race, religion, color, gender, national origin.
Article 1 of the U.S. Constitution gives us the right to contract. An employer cannot violate an employee’s constitutional rights by interfering with the employee’s ability to contract with another employer (except under limited circumstances, such as covenants not to compete).
To prove tortious interference with contract, the plaintiff (employee) must prove intent. Intent could be shown, for example, by the employee establishing that the employer provided a false negative reference because of a revenge motive.
Defamation can be oral (slander) or written (libel). The truth of a statement is a defense in a suit alleging defamation.
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40. Review and Wrap-Up
Discussion question: What are some important legal trends affecting HR?
Student evaluation: Quiz on the materials from Sessions 1 & 2.
Discussion question: What are some important legal trends affecting HR?
Possible answer:
Security in the age of technology and globalization, and how to balance this against employee privacy concerns.
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