Chapter 3 Part 1 • MGT 3513 • Dr. Marler The Legal Environment Chapter 3 Part 1 • MGT 3513 • Dr. Marler “The more laws and order are made prominent, The more thieves and robbers there will be.” Lao-tzu

Chapter 3

Class activity Find a partner Make a list of what you consider the 5 most important employment laws What should managers know and do (or not do) to follow these laws?

Questions on the Legal Environment There are three reasons why we should understand the legal environment according to the text. What are these three reasons? * We will discuss FEDERAL law only, not state law which differs from state to state.

Questions on the Equal Pay Act What does the Equal Pay Act guarantee? Explain the following exceptions to the Equal Pay Act Merit pay plan Quantity and quality of production Seniority Any factor other than sex What is the gap between men’s and women’s earnings in the U.S.?

Questions on Title VII of the Civil Rights Act Title VII prohibits employers from basing employment decisions on what five things? What is a protected class? What is discrimination? 2 types of illegal discrimination What is disparate treatment? What is adverse impact?

What’s in a name? https://www.youtube.com/watch?v=PR7SG2C7IVU#t=57

Questions on Disparate Treatment What is meant by “prima facie”? For a disparate treatment lawsuit, what are the three things that must occur to establish a prima facie case? (In other words, how do we know if we might have a legitimate case of intentional discrimination?)

Adverse Impact Griggs vs. Duke Power case Four-fifths rule Determines_____________________________ 4/5 = 80 %

Workplace Discrimination: Examples & practice applying the 4/5s rule

Example #1 Assume an organization interviews 40 male applicants and 30 female applicants for a sales associate position. The organization decides to hire 20 males and 6 females. Has adverse impact occurred?

Determining Adverse Impact: Applying the 4/5’s rule 1. Determine selection rate of each group selection rate = # hires per group # of applicants per group 2.  Determine group with highest selection rate 3. Calculate selection rate threshold Take the rate of the majority group and multiple it by 4/5 (.8 in your calculator) 4.  Compare the lowest selection rate to the threshold If the selection rate of the minority group is < the threshold, adverse impact has occurred

Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8)

Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male Female

Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male 40 Female 30

Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male 40 20 Female 30 6

Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male 40 20 = 20/40 Female 30 6 = 6/30

Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male 40 20 = 20/40 = 50 % Female 30 6 = 6/30 = 20 %

Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male 40 20 = 20/40 = 50 % = 50 % x .8 = Female 30 6 = 6/30 = 20 %

Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male 40 20 = 20/40 = 50 % = 50 % x .8 = 40 % Female 30 6 = 6/30 = 20 %

Compare MINORITY RATE with SELECTION RATE THRESHOLD Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male 40 20 = 20/40 = 50 % = 50 % x .8 = 40 % Female 30 6 = 6/30 = 20 % Compare MINORITY RATE with SELECTION RATE THRESHOLD

Compare MINORITY RATE with SELECTION RATE THRESHOLD Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male 40 20 = 20/40 = 50 % = 50 % x .8 = 40 % Female 30 6 = 6/30 = 20 % Compare MINORITY RATE with SELECTION RATE THRESHOLD

Selection rate = hires/applicants Groups Applicants Hires Selection rate = hires/applicants Selection Threshold (majority rate x .8) Male 40 20 = 20/40 = 50 % = 50 % x .8 = 40 % Female 30 6 = 6/30 = 20 % 3 POSSIBLE SITUATIONS: Minority rate is less than Minority rate is the same Minority rate is greater than

Practice Question: Did adverse impact occur??? Selection Rates Males = 20/40 = 50 % Females = 6/30 = 20 % Males have highest selection rate (50%) Calculate selection rate threshold Highest rate x 4/5 (or .80) 50% (50 in your calculator) x 4/5 (.80 in your calculator) = 40% Compare lowest selection rate to threshold

Practice question: Workplace discrimination April applies for a job as a mortgage broker at Lenny Lending. Fred, the hiring manager, decides not to hire April because in his experience men are better brokers than women. Has discrimination occurred? If so, which kind? (adverse impact or disparate treatment)

Practice question: workplace discrimination Advanced accounting prides itself in hiring employees based on qualifications and strives for a diverse workforce. However, in order for an employee to be promoted to manager, s/he must pass a test. In the firm, there are substantially fewer female managers because few pass the promotion test. Has discrimination occurred? If so, which kind?

Is it ever legal to discriminate? Yes, in certain cases. Describe the following exceptions to Title VII (Defenses to Claims of Illegal Discrimination) Job relatedness Bona fide occupational qualification (BFOQ) Seniority Business necessity

Questions on Equal Employment Laws Pregnancy Discrimination Act of 1978 Who does this law protect? What protections does it offer? Sexual harassment What are the two types of sexual harassment? Describe each. How should an employer handle a sexual harassment claim?

Questions on Equal Employment Law Civil Rights Act of 1991 What major changes were made to the 1964 Act? ___________________ Executive Order 11246 What was the purpose of this order?