1. Chapter 3 Part 1 • MGT 3513 • Dr. Barnett
The Legal Environment
Chapter 3 Part 1 • MGT 3513 • Dr. Barnett
Now is the time to silence and put away all cell phones.

2. Chapter 3

3. 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 primarily focus on FEDERAL law,
not state law which differs in all 50 states.

4. 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.?
Are there any non-discriminatory explanations for
this gap?

5. 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?

6. What’s in a name?

7. 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?)

8. Adverse Impact Griggs vs. Duke Power case
Albemarle Paper Company vs. Moody case
Employment test
Four-fifths rule
Determines_____________________________
4/5 = 80 %

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

10. Example #1
Assume an organization interviews 80 male applicants and 60 female applicants for a sales associate position. The organization decides to hire 40 males and 12 females. Has adverse impact occurred?

11. 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

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

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

14. Groups
Applicants
Hires
Selection rate = hires/applicants
Selection Threshold (majority rate x .8)
Male 80
Female 60

15. Groups
Applicants
Hires
Selection rate = hires/applicants
Selection Threshold (majority rate x .8)
Male 80 40
Female 60 12

16. Groups
Applicants
Hires
Selection rate = hires/applicants
Selection Threshold (majority rate x .8)
Male 80 40
= 40/80
Female 60 12
= 12/60

17. Groups
Applicants
Hires
Selection rate = hires/applicants
Selection Threshold (majority rate x .8)
Male 80 40
= 40/80
= 50 %
Female 60 12
= 12/60
= 20 %

18. Groups
Applicants
Hires
Selection rate = hires/applicants
Selection Threshold (majority rate x .8)
Male 80 40
= 40/80
= 50 %
= 50 % x .8 =
Female 60 12
= 12/60
= 20 %

19. Groups
Applicants
Hires
Selection rate = hires/applicants
Selection Threshold (majority rate x .8)
Male 80 40
= 40/80
= 50 %
= 50 % x .8
= 40 %
Female 60 12
= 12/60
= 20 %

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

21. 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

22. 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

23. Practice Question: Did adverse impact occur???
Selection Rates
Males = 40/40 = 50 %
Females = 12/60 = 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

24. 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)

25. 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?

26. Defenses and exceptions
Describe the following exceptions to Title VII (Defenses to Claims of Disparate Treatment)
Alternative non-discriminatory reason
Merit/qualifications
Seniority
Bona fide occupational qualification (BFOQ)
(Defenses to Claims of Adverse Impact)
Job relatedness
Business Necessity

27. 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?

28. 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?