Chapter 3 The Legal and Ethical Environment Nature of employment laws Key equal employment opportunity laws Employment-at-will Fair Labor Standards Act Civil Rights Act and its implementation Americans with Disabilities Act Sexual harassment Employee rights, privacy, and termination Copyright 2011 Health Administration Press

The Nature of Employment Laws Employment laws govern the relationship between employer and employee. Goal is to achieve a balance between management’s right to pursue its business goals and employee freedom from injury, prejudice, and duress. Rights and responsibilities that govern the workplace are documented in federal and state statutes, administrative agency regulations, case law interpretations, written and verbal employment agreements, and employee handbooks. Like much legislation, employment laws have been subject to extensive and far-reaching interpretation by the courts and other administrative entities, such as the National Labor Relations Board and the Equal Employment Opportunity Commission. Copyright 2011 Health Administration Press

Key Equal Employment Opportunity Law Fifth, Thirteenth, and Fourteenth Amendments, US Constitution Civil Rights Acts of 1964 (Title VII) and 1991 Amendments The Fair Labor Standards Act Equal Pay Act of 1963 Age Discrimination in Employment Act of 1967 Americans with Disabilities Act of 1990 and 2008 Amendments Executive Orders and Family and Medical Leave Act Copyright 2011 Health Administration Press

Employment-at-Will Principle that both employee and employee have the right to sever the work relationship at any time Work relationship may be severed for any reason (or for no reason) The concept of employment-at-will has eroded considerably in the United States Copyright 2011 Health Administration Press

Fair Labor Standards Act (1938) Sets the minimum wage Requires that employers pay time and a half for overtime work Establishes regulations governing child labor Act has been amended many times Some types of employees are not covered by this act (e.g., managers and, in some cases, professionals) – Much debate over who is “exempt” and “nonexempt” Copyright 2011 Health Administration Press

Title VII of the Civil Rights Act of 1964 (and 1990 Amendments) Unlawful for an employer to discriminate on the basis of an employee’s race, color, religion, sex, or national origin Unlawful to limit, segregate, or classify employees or applicants in a way that would deprive them of employment opportunities on the basis of race, color, religion, sex, or national origin Coverage extends to hiring, discharging, and compensation and to terms, conditions, and privileges of employment Act applies to: – All private employers involved in interstate commerce that employ 15 or more employees for 20 or more weeks per year – State and local governments – Private and public employment agencies – Labor unions with 15 or more members or employees – Public and private educational institutions – Foreign subsidiaries of US organizations that employ US citizens Copyright 2011 Health Administration Press

Americans with Disabilities Act (ADA) Prohibits discrimination against individuals with disabilities in all aspects of employment Disability refers to an individual who: – has a physical or mental impairment that substantially limits one or more major life activities – has a record of such impairment – is regarded as having an impairment ADA Amendments of 2008 broadened the definition of a disability: – Expanded the list of major life activities – Eliminated consideration of mitigating measures in determining whether an individual has a disability (e.g., someone with epilepsy that is well controlled by medication is still considered to have a disability) Employers are required to make “reasonable accommodation” for a person with a disability Copyright 2011 Health Administration Press

Implementing Equal Employment Opportunity Laws Affirmative action refers to employment practices that take race, gender, or ethnicity into consideration to promote equal opportunity – Under Executive Order 11246, all federal contractors are required to complete an affirmative action plan to demonstrate that the organization is taking positive steps to hire and advance qualified minorities, women, persons with disabilities, and covered veterans Protected class refers to a group of individuals protected under a particular law Disparate impact is the result of an employment practice that may appear to be neutral but has a discriminatory effect on a protected class Disparate treatment refers to an employment practice that treats employees or applicants differently on the basis of their protected class characteristics Exceptions to equal employment opportunity laws include: – Bona fide occupational qualification in which being a certain age, gender, or other characteristic is key to job success – Business necessity (e.g., religious organizations hire people of a certain religion) Copyright 2011 Health Administration Press

Title VII and Sexual Harassment Under Title VII of the Civil Rights Act, sexual harassment is considered a violation of an individual’s civil rights. Quid pro quo harassment occurs when an employee benefit is contingent on submission to sexual advances. Hostile-environment sexual harassment occurs when the behavior of anyone in the workplace is considered objectionable (and interferes with work) because of sexual content. Copyright 2011 Health Administration Press

Issues in Employee Rights and Privacy Retaliatory discharge – Unlawful for an employer to attempt to restrict an employee’s right to file a charge of discrimination – An employer who takes such action could be subject to a charge of retaliatory discharge Workplace searches Electronic monitoring Drug testing HIPAA compliance Copyright 2011 Health Administration Press

Public Policy Exceptions to At-Will Employment An employee cannot be fired for refusing to violate state or federal law. Employers may not retaliate against or mistreat an employee for whistle-blowing. Personnel policies published by an employer in handbooks or other documents may imply promises of continued employment, which may restrict an employer’s ability to terminate an employee. Noncompetition and non-solicitation clauses are used by employers to protect themselves against an employee whose departure may pose a competitive risk. Copyright 2011 Health Administration Press

Issues in Employee Termination Key principles – Analyze risk before termination – Avoid procrastination – Choose termination date strategically – Consult human resources personnel – Take action Severance agreements Dismissal for cause Grievance procedures Copyright 2011 Health Administration Press