1. Unit 5 – The Employee Stakeholder Prof. Dawn Courtright Copyright (c) Dawn Courtright 2011. All Rights Reserved.

2. Ethics and the Employee Stakeholder Many laws govern the relationship between employer and employee. The employee stakeholder is fundamental to the operation of the business. The business cannot function without the employee. If the business violates the employee’s legal rights, the business may be exposed to significant liability. With the enactment of antidiscrimination legislation, policies on ethical treatment of employees have become proper employment practices, policies that are very important to the business manager. Every effective manager must know the laws that regulate the relationship between the business and its employee stakeholders. Knowledge of the laws is important to protect the business from legal liability, and to protect the rights of the employee. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

3. Ethics and the Employee Stakeholder For tonight, you are to select two laws that you think are the most important to employee stakeholders and prepare to discuss them in the seminar. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

4. At Will Employment Most employment arrangements in the United States are employment at will. The employment agreement between employer and employee may be terminated by either party with or without just cause. Exception: Employees working under a contract or covered under collective bargaining agreements are not at will employment. Most legal and ethical issues in employment matters arise out of whether it is an at will employment relationship. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

5. Exceptions to At Will Employment The legal and ethical issues that arise in the employment at- will environment come when the business is sued for wrongful termination, or the hiring practices, promotion decisions, or job assignments violate certain legal rights of the employee. Effective managers must understand that at-will employment is not an absolute concept—there are exceptions, and violation of those exceptions may bring serious liability. Exception #1: an employer may not claim that a termination was lawful under the employment at-will doctrine if the termination violates a law (e.g., terminations based on race, color, national origin, religion, or sex ). Copyright (c) Dawn Courtright 2011. All Rights Reserved.

6. Exceptions to At Will Employment Exception #2: an employer may not claim that a termination was lawful under the employment at-will doctrine if the termination violates a public policy exception (i.e., the termination violates a social norm or value). E.g., perjury, or lying under oath, is unethical and illegal in the United States. If an employer orders an employee to lie under oath and the employee refuses (because perjury is in violation of a social norm), the employer is not free to terminate the employee under the employment at-will doctrine. To do so would be a violation of societal norms as well as violation of the law. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

7. Exceptions to At Will Employment Exception #3: an employer may not claim a termination was lawful under the employment at-will doctrine if the termination violates an implied contract right of the employee. Example: an employer’s handbook states that no employee will be terminated during a probationary period of one year. This gives the employees the impression that they cannot be terminated, even for cause, within their first year, thus creating a contractual understanding. The legitimacy and enforcement of contracts is valued in the United States. An employer’s termination of an employee who relied on this implied contract would be a violation of the implied contract exception. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

8. Exceptions to At Will Employment Exception #4: an employer may not claim that a termination was lawful under the employment at- will doctrine if the termination violates the good faith and fair dealing exception (i.e., the termination violates a societal expectation of fairness). Businesses should be free to make staffing decisions that best meet the needs of the business. Society also expects that business will be fair. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

9. Laws and the Employee Stakeholder What laws do you think are the most important to employee stakeholders? Copyright (c) Dawn Courtright 2011. All Rights Reserved.

10. The Civil Rights Act WHAT DOES THE CIVIL RIGHTS ACT MEAN TO THE EMPLOYEE STAKEHOLDER? The Civil Rights Act of 1964 protects employees from discrimination based on race, color, national origin, religion, and sex. The law covers hiring, firing, promotions, job assignments, compensation, or any other condition relating to employment. Why is this law important to the Employee stakeholder? Employers must avoid unlawful discrimination in every decision they make. If an employee is terminated for unlawful intentional discrimination, the business may be subject to both compensatory and punitive damages. Large jury awards have been increasing in an effort to punish and warn businesses that illegal discrimination will not be tolerated. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

11. Affirmative Action Affirmative action describes a set of policies designed to eliminate discrimination based on race, color, national origin, religion, or sex, by providing opportunities and access for people who have traditionally been denied such. These policies are based in the Fourteenth Amendment to the U.S. Constitution, which provides for equal protection under the law for all inhabitants of the United States. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

12. Affirmative Action In employment, affirmative action policies require employers take active measures to ensure that qualified minorities and women enjoy the same opportunities as qualified white males in obtaining and retaining jobs, receiving salary increases, and advancing their careers. Affirmative action policies do not require an employer to hire anyone who is unqualified for the position. Quotas are illegal except in cases where a court of law finds intentional discrimination. Affirmative action, or hiring based upon qualifications and not race, color, national origin, religion, or sex, is not to be achieved through the setting of rigid and inflexible quotas, but employers are expected to make good-faith efforts to provide opportunities to all qualified applicants. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

13. Affirmative Action WHAT DOES AFFIRMATIVE ACTION MEAN TO THE EMPLOYEE STAKEHOLDER? Affirmative action expands opportunity and access to qualified employees who are not part of what has been labeled “the good ol’ boys network.” Historically, these networks in the United States have been formed along race, religion, and gender lines, with the majority of hiring managers belonging to social networks of white Christian males. Affirmative action won’t help an unqualified applicant get a job, but it does require employers to allow the access and the opportunities to all qualified applicants. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

14. Affirmative Action Effective managers look beyond social networks to fill positions. Managers must broaden their applicant pool to include people of color, women, and non-Christians. Managers do not need to hire unqualified applicants of any race, color, national origin, religion, or sex. Quotas should never be used except as ordered by a court of law to address past intentional discrimination (and if the manager’s company is in such a situation, no doubt they will have extensive legal counsel on how to address all employee- related decisions pursuant to the court order). Copyright (c) Dawn Courtright 2011. All Rights Reserved.

15. The Americans with Disabilities Act The Americans with Disabilities Act (ADA) was enacted in 1990 to eliminate discrimination against individuals with disabilities. Prior to that, many states, counties and municipalities instituted measures prohibiting discrimination against the disabled; many others, of course, did not. The ADA makes it illegal to discriminate against a person with disabilities. WHAT DOES ADA MEAN TO THE EMPLOYEE STAKEHOLDER? An individual is covered under the ADA if he or she has a physical or mental impairment that substantially limits him or her in one or more major life activities. Not everyone with a physical or mental impairment qualifies for coverage under the ADA. Coverage under the act is afforded only to those whose impairments prevent or severely restrict the individual from engaging in activities that are of central importance to most people’s daily lives. Individuals covered under the ADA are protected from discrimination in regard to job application procedures, the hiring or firing of employees, employee compensation, job training, or other terms and conditions of employment. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

16. The Americans with Disabilities Act WHAT DOES THE ADA MEAN TO THE MANAGER? The ADA applies to businesses with more than 15 employees and prohibits discrimination against any qualified person with a disability. Effective managers take care to protect not only the applicant and employee rights under the ADA, but also other stakeholders who would be negatively affected if the company were found liable in a costly disability discrimination case. The ADA requires employers to make reasonable accommodations available to disabled employees. However, what qualifies as a reasonable accommodation depends on the circumstances, and an employer is not required to make accommodations for a disabled employee if making such accommodations would cause undue hardship to the employer. Copyright (c) Dawn Courtright 2011. All Rights Reserved.

17. Laws and the Employee Stakeholder What laws do you think are the most important to employee stakeholders? Copyright (c) Dawn Courtright 2011. All Rights Reserved.