Chapter 4 Legal Construction of the Employment Environment McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives Explain why employers might be concerned about ensuring protections for equal opportunity during recruitment, in particular Describe how the recruitment environment is regulated, by both statutes and common law Describe the employer’s opportunities during the information-gathering process to learn as much as possible about hiring the most effective worker Page 135

Learning Objectives Explain how the employer might be liable under the theory of negligent hiring Identify the circumstances under which an employer may be responsible for an employee’s compelled self-publication, thus liable for defamation Page 135

Learning Objectives Explain the difference between testing for eligibility and testing for ineligibility, and provide examples of each Identify the key benefits of performance appraisal structures, as well as their areas of potential pitfalls Page 135

Evolution of the Employment Relationship Recruitment of appropriate candidates Hiring Testing Performance appraisals Page 137-138

Recruitment First step in the evolution of the employment relationship Federal statutory regulation of recruitment Title VII of the Civil Rights Act of 1964 Age Discrimination in Employment Act of 1967 Immigration Reform and Control Act of 1986 Vocational Rehabilitation Act of 1973 and the Americans with Disabilities Act of 1990 Page 138-139

Recruitment State employment law regulation Common law recruitment violations Fraud Misrepresentation Material facts Page 139-141

Application of Regulation to Recruitment Practices Advertisements Word-of-mouth recruiting Promoting from within Venue recruiting Walk-in applicants Neutral solicitation Page 141-145

Information Gathering and Selection The application phase The interview Background or reference check Negligent hiring Page 145-151

Exhibit 4.60 – Grounds for Negligent Hiring Claim Page 150

Exhibit 4.8 - Where Do Employers Get Their Info? Page 153

Exhibit 4.9 – Content on Candidates’ Web Sites Leading Employers Not to Hire Page 154

Employer Liability and Protection Reference checks – potential liability for providing references Compelled self-publication: Occurs when an ex-employee is forced to repeat the reason for her or his termination “After-acquired evidence” in defense in wrongful termination suits Documentation of failure to hire Page 155-159

Exhibit 4.13 – Balancing the Interests in the Testing Debate Page 161

Testing in the Employment Environment Preemployment testing Tests to find the best individual for a position Tests to ensure that the individual is free from problems that would prevent her or him from performing the position’s functions Individual privacy Testing is illegal when the invasion of privacy is “substantially and highly offensive to the reasonable person” Page 161-162

Legality of Eligibility Testing Eligibility testing: Tests conducted to ensure capability and qualification of potential employee To be legally validated, an employer must show that the eligibility test is: Job-related Consistent with business necessity Job analysis data: Information about nature of work and skills required to perform the work Page 162-163

Legality of Eligibility Testing Validation: Evidence that shows that a test evaluates precisely what it claims to evaluate Test validity Criterion-related validation Content validation Construct validation Page 163-164

Legality of Eligibility Testing Integrity and Personality Tests Used by 40 percent of Fortune 100 companies Conscientiousness  job performance basic intelligence testing is one of the best predictors of job performance across all jobs Physical Ability Tests Medical Tests Page 164-166

Legality of Ineligibility Testing Why testing is required? Reduce workplace injury or to provide a safer working environment Predict employee performance or deter poor performance Reduce the employer’s financial responsibility to the worker’s compensation system Page 166-167

Polygraphs Polygraph: A lie-detecting device that measures biological reactions in individuals when questioned A polygraph measures Rate and depth of respiration Cardiovascular activity Perspiration Accuracy rates range from 50 to 90 percent Page 167

Polygraphs Federal Employee Polygraph Protection Act (EPPA) 33 states have statutes prohibiting or restricting the use of polygraphs in making employment decisions Page 167-169

Drug and Alcohol Tests Drug-Free Workplace Act of 1988 Only applies to federal employees Some private sector firms use the act’s guidelines Immunoassay test Radioimmunoassay of hair Drug-Free Workplace Act of 1998 Page 169-174

Genetic Tests Genetic Information Non-Discrimination Act Issues Employers may discriminate based on the potential for a debilitating disease Employees may not want to know results Genetic testing is not perfect Genetic irregularities may be considered protected disabilities under the Americans with Disabilities and Vocational Rehabilitation Act Page 174-175

Unique Considerations of HIV/AIDS Testing Why is it inappropriate? For the test to be justified, it must serve a legitimate business purpose The test reports only the subject’s status as of several weeks or months in the past HIV-positive employee may be protected under Federal Vocational Rehabilitation Act Americans with Disabilities Act Page 175-176

Management Considerations: Testing A workplace substance abuse program should incorporate A written abuse policy A supervisory training program An employee education and awareness program Access to an employee assistance program A drug testing program, where appropriate Page 176

Management Considerations: Testing Corporate approaches Mandatory testing “Probable cause” testing Random testing Page 176

Performance Appraisals, Evaluation, and Discipline Schemes Performance appraisal: A periodic assessment of an employee’s performance The purpose of performance appraisals To identify those characteristics the employer hopes the employee will accentuate To dissuade the employee from exhibiting characteristics not in keeping with the organization’s objectives The potential for discriminatory effect Page 177-179

Performance Appraisals, Evaluation, and Discipline Schemes Realities about performance evaluations Employer might be liable for negative references No need to lower its standards or qualifications to accommodate employee’s or applicant’s needs Objective measures for appraisal can be used Performance incentive systems can be effective Legal challenges found mostly in the areas of implementation, monitoring and accountability Page 178

Legal Implications of Performance Appraisal Systems Disparate impact Four-fifths rule Validation Disparate treatment Employees rated subject to different criteria Page 178-182

Legal Implications of Performance Appraisal Systems Defamation False information/evaluation Negligent performance evaluations Negligence in conducting a performance evaluation Page 181-182

Discipline “Just cause” disciplinary approach How is “just cause” determined? Due process Adequate evidence Appropriateness of penalty Documentation Progressive discipline Page 182-183

Management Tips Maintain proper documentation of performance appraisals Train supervisors on non-biased reporting and evaluations Take precautions against inappropriate disclosures Conduct appraisals as and when stated in the employee manual or other materials Page 184