The first of the civil rights laws was the Equal Pay Act , which became law in 1963. It requires that men and women who do the same job in the same organization should receive the same pay. “Same pay” means that no difference is acceptable.

Determining whether two employees are doing the same job can be difficult. The law specifies that jobs are the same if they are equal in terms of skill, effort, responsibility, and working conditions. Thus, it is permissible to pay one employee more than another if the first employee has significant extra job duties, such as supervisory responsibility. Pay can also be different for different work shifts. The law also specifies that equal pay is required only for jobs held in the same geographic region. This allows an organization to make allowances for the local cost of living and the fact that it might be harder to find qualified employees in some areas.

The law contains several explicit exceptions. First, it does not prohibit the use of a merit pay plan. That is, an employer can pay a man more if he is doing a better job than his female coworker. In addition, companies are permitted to pay for differences in quantity and quality of production. Seniority plans also are exempted; a company that ties pay rates to seniority can pay a man more if he has been with the company longer than a female employee. Finally, the law indicates that any factor other than sex may be used to justify different pay rates.11

When the Equal Pay Act was passed, the average female employee earned only about 59 cents for each dollar earned by the average male worker. While this gap has narrowed in the intervening years, to about 83 cents in 2010,12 this average differential remains troubling, and in some jobs it is much higher. For instance, 30-year-old male sales representatives earned an average of $60,000 in 2001, whereas their female counterparts in sales, doing the same amount and same kind of work, earned only an average of $36,000 at the same age.13 Some states, such as Washington and Illinois, have responded to this issue by requiring that civil service employers pay equally for work of comparable worth.14 Understanding equal pay and comparable worth requires more knowledge of compensation decisions, so we will return to these issues in Chapter 10.

Although not the oldest of the civil rights laws, Title VII of the Civil Rights Act of 1964 is universally seen as the most important passed to date. This law was enacted in the midst of the seething civil rights conflicts of the 1960s, one year after the civil rights march on Washington at which Dr. Martin Luther King, Jr., delivered his “I Have a Dream” speech.

Before passage of the Civil Rights Act of 1964, open and explicit discrimination based on race, particularly against African Americans, was widespread. Jim Crow laws legalized racial segregation in many southern states. The act itself had several sections, or titles, all of which aim to prohibit discrimination in various parts of society. For instance, Title IX applies to educational institutions. Title VII applies to employers that have 15 or more employees, as well as to employment agencies and labor unions.

When a discrimination case makes it to court, it is the responsibility of the plaintiff (the person bringing the complaint) to show reasonable evidence that discrimination has occurred. The legal term for this type of evidence is prima facie, which means “on its face.” In a disparate treatment lawsuit, to establish a prima facie case the plaintiff only needs to show that the organization did not hire her (or him), that the plaintiff appeared to be qualified for the job, and that the company continued to try to hire someone else for the position after rejecting the plaintiff. This set of requirements, which originated from a court case brought against the McDonnell-Douglas Corporation, is often called the McDonnell-Douglas test.19 In an adverse impact lawsuit, the plaintiff only needs to show that a restricted policy is in effect—that is, that a disproportionate number of protected-class individuals were affected by the employment decisions.

One important EEOC provision for establishing a prima facie case that an HR practice is discriminatory and has an adverse impact is the four-fifths rule . The four-fifths rule comes from the EEOC’s Uniform Guidelines on Employee Selection Procedures, an important document that informs employers how to establish selection procedures that are valid and, therefore, legal.20

The four-fifths rule compares the hiring rates of protected classes to those of majority groups (such as white men) in the organization. It assumes that an HR practice has an adverse impact if the hiring rate of a protected class is less than four-fifths the hiring rate of a majority group. For example, assume that an accounting firm hires 50 percent of all its white male job applicants for entry-level accounting positions. Also assume that only 25 percent of all African American male job applicants are hired for the same job. Applying the four-fifths rule, prima facie evidence indicates that the accounting firm has discriminatory hiring practices because 50 percent × 4/5 = 40 percent, and 40 percent exceeds the 25 percent hiring rate for African American men.

Once the plaintiff has established a prima facie case, the burden of proof switches to the organization. In other words, the employer is then placed in a position of proving that illegal discrimination did not occur. This can be very tough to prove. Suppose that a sales manager interviews two applicants for a sales position, a man and a woman. Their qualifications look very much the same on paper. However, in the interview the man seems to be more motivated. He is hired, and the rejected female applicant files a disparate treatment discrimination suit. She can, almost automatically, establish a prima facie case (she was qualified, she was not hired, and the company did hire someone else). Now the sales manager has to prove that the decision was based on a judgment about the applicant’s motivation, not on the applicant’s sex.

Although these cases can be difficult, employers do win their share of them. There are four basic defenses that an employer can use:

• ▪ Job relatedness The employer has to show that the decision was made for job-related reasons. This is much easier to do if the employer has written documentation to support and explain the decision. In our example, the manager will be asked to give specific job-related reasons for the decision to hire the man for the sales job. As we noted in Chapter 2, job descriptions are particularly useful for documenting the job-related reasons for any particular HR decision.

• ▪ Bona fide occupational qualification A bona fide occupational qualification (BFOQ) is a characteristic that must be present in all employees for a particular job. For instance, a film director is permitted to consider only females for parts that call for an actress. An airline company must apply a compulsory age ceiling for pilots, according to Federal Aviation Agency rules, so that age is a BFOQ for airline pilots.

• ▪ Seniority Employment decisions that are made in the context of a formal seniority system are permitted, even if they discriminate against certain protected-class individuals. However, this defense requires the seniority system to be well established and applied universally, not just in some circumstances.

• ▪ Business necessity The employer can use the business necessity defense when the employment practice is necessary for the safe and efficient operation of the organization and there is an overriding business purpose for the discriminatory practice. For example, an employee drug test may adversely impact a disadvantaged minority group, but the need for safety (to protect other employees and customers) may justify the drug-testing procedure.

Of these four defenses, the job-relatedness defense is the most common because of the strict limitations courts have placed on the BFOQ, seniority, and business-necessity defenses.

When an employer requires employees to speak only English at all times on the job, this speak-English-only rule may violate EEOC law, unless the employer can show that the rule is necessary for conducting business.21 Similarly, an employer may not deny an individual an employment opportunity, such as a job or promotion, if the individual speaks with an accent, unless the employer can show that speaking with an accent has a detrimental effect on job performance.

In 1978, Congress amended Title VII to state explicitly that women are protected from discrimination based either on their ability to become pregnant or on their actual pregnancy. The Pregnancy Discrimination Act of 1978 requires employers to treat an employee who is pregnant in the same way as any other employee who has a medical condition.22 For instance, an employer cannot deny sick leave for pregnancy-related illnesses such as morning sickness if the employer allows sick leave for other medical conditions such as other illnesses that cause nausea. The law also states that a company cannot design an employee health benefit plan that provides no coverage for pregnancy. These are strict requirements, as evidenced by the following cases.

In one case that applied the Pregnancy Discrimination Act, a woman who worked at the U.S. Postal Service (USPS) claimed she was subjected to pregnancy discrimination when she was not reappointed after she had served a one-year appointment. The USPS cited her absences from work and that she was considered a high-risk pregnancy and should be doing only light-duty work. However, the EEOC found the complainant was treated less favorably than comparative employees based on her pregnancy. The basis of the EEOC’s ruling was that the law requires the employer to treat pregnant employees just as it treats other employees with temporary impairments.23

A female police officer in Pinellas Park, Florida, claimed she experienced pregnancy discrimination when she was demoted to dispatcher after becoming pregnant and requesting light duty. She showed evidence that her male supervisor informed her that he was forced to hire women, and he specifically gave women the least desirable shifts and days off to punish them if they became pregnant. The city settled in favor of the complainant and reinstated her as a police officer.24

The Title VII prohibition of sex-based discrimination has also been interpreted to prohibit sexual harassment. In contrast to protection for pregnancy, sexual harassment protection was not an amendment to the law but rather a 1980 EEOC interpretation of the law.25 The EEOC’s definition of sexual harassment is given in Figure 3.3. Also shown in the figure is the definition of general harassment that the EEOC issued in 1993. The majority of harassment cases filed to date have dealt with sexual harassment, but this may change in the future.26 Courts appear to be extending sexual harassment definitions to other protected classes, such as race, age, and disability.

There are two broad categories of sexual harassment. The first, quid pro quo sexual harassment , covers the first two parts of the EEOC’s definitions. It occurs when sexual activity is demanded in return for getting or keeping a job or job-related benefit.27 For instance, a buyer for the University of Massachusetts Medical Center was awarded $1 million in 1994 after she testified that her supervisor had forced her to engage in sex once or twice a week over a 20-month period as a condition of keeping her job.28

The second category, hostile work environment sexual harassment , occurs when the behavior of coworkers, supervisors, customers, or anyone else in the work setting is sexual in nature and the employee perceives the behavior as offensive and undesirable.29

Consider this example from a Supreme Court case decided in 1993.30 Teresa Harris was a manager at Forklift Systems, Inc., an equipment rental firm in Nashville, Tennessee. Her boss was Charles Hardy, the company president. Throughout the two and one-half years that Harris worked at Forklift, Hardy made such comments to her as “You’re a woman, what do you know?” and “We need a man as the rental manager.” He suggested in front of other employees that the two of them “go to the Holiday Inn to negotiate her raise.” When Harris asked Hardy to stop, he expressed surprise at her annoyance but did not apologize. Less than one month later, after Harris had negotiated a deal with a customer, Hardy asked her in front of other employees, “What did you do, promise the guy . . . some [sex] Saturday night?” Harris quit her job at the end of that month.

The issue the Court had to decide was whether Hardy violated the sexual harassment regulations based on Title VII. Lower courts had held that Hardy’s behavior was certainly objectionable, but that Harris had not suffered serious psychological harm and that Hardy had not created a hostile work environment. The Supreme Court disagreed, holding that the behavior only needed to be such that a “reasonable person” would find it to create a hostile or abusive work environment. Figure 3.4 lists the tests that the Supreme Court said should be considered by judges and juries in deciding whether certain conduct creates a “hostile work environment” and is thus prohibited by Title VII.

Some cases of sexual harassment have involved groups of employees who have lodged hostile work environment claims. In 1998, Mitsubishi Motor Manufacturing of America paid out $34 million to settle a sexual harassment case brought by the EEOC on behalf of more than 300 female employees. Among their complaints were their being groped, gestured to, urged to reveal their sexual preferences, and exposed to sexually explicit pictures.31 In 1999, Ford Motor Company achieved a settlement with women in two Chicago area factories in regard to their sexual harassment complaints. The female employees claimed a long-term pattern of groping, name-calling, and partying with strippers and prostitutes. The carmaker agreed to set aside $7.5 million to compensate victims of harassment and $10 million more to provide diversity training to managers and male workers.32 Mitsubishi changed its image from a leader in corporate forgiveness of sexual harassment in 1998 to a model corporate citizen four years later in 2002. Mitsubishi made improvements that included a zero-tolerance policy for sexual harassment and providing training for all employees about the illegality of harassment and how to investigate complaints when they arise.33

Sexual harassment cases are not only expensive, but they also can be highly disruptive to business and political organizations. Consider the disruption to the executive branch of the U.S. government when Paula Jones sued President Clinton for sexual harassment. She alleged that the president made an unwanted sexual advance toward her in 1991 while he was the governor of Arkansas and she was a state employee. In 1999, President Clinton paid $850,000 to settle the suit.34

More recently, in 2007 a jury found that Madison Square Garden and New York Knicks coach and president for basketball operations Isiah Thomas sexually harassed and discriminated against Anucha Browne Sanders, a former senior vice president of the Knicks, and ordered that the company pay her $11.6 million in punitive damages.35

Although most sexual harassment cases involve women as victims, the number of cases in which men are the victims is increasing.36 In 1995, a federal judge awarded a man $237,257 for being sexually harassed by a female supervisor at a Domino’s Pizza restaurant. The female supervisor made unwelcome sexual advances to the male subordinate, creating a hostile work environment. When the man threatened to report the supervisor’s inappropriate conduct to top management, he was fired.37

Courts also consider same-sex harassment improper work-related behavior. Joseph Oncale, an oil-rig worker who alleged that fellow male workers physically and verbally abused him with sexual taunts and threats, was allowed to bring a sexual harassment lawsuit against his employer. Despite arguments to the contrary, a court reviewing the Oncale case ruled in 1998 that same-sex harassment, not just harassment occurring between the sexes, can be the basis for a sexual harassment lawsuit.38

As Figure 3.5 indicates, sexual harassment is a major EEO issue for employers. An ABC News/Washington Post poll found that 25 percent of women and 10 percent of men reported that they had been sexually harassed in the workplace.39 According to the EEOC, plaintiffs filed 11,364 cases of sexual harassment with federal and state agencies in 2011 (Figure 3.5). Men filed approximately 16 percent of those cases.

The Manager’s Notebook titled “Reducing Potential Liability for Sexual Harassment” spells out some ways to prevent or correct instances of sexual harassment.

Recent U.S. Supreme Court sexual harassment rulings directly affect employer liability in sexual harassment cases. First, an employer may be held liable for the actions of supervisors toward their subordinate employees even if the offense is not reported to top management. Second, the Supreme Court has established an employer defense against sexual harassment claims. The employer must prove two items: (1) It exercised reasonable care to prevent and correct sexual harassment problems in a timely manner,40 and (2) the plaintiff failed to use the internal procedures for reporting sexual harassment.41

If the employee reasonably believes that reporting the offensive conduct is not a viable option, then the employer cannot take advantage of the defense. The internal procedures, then, must consist of fair investigations.42 The Manager’s Notebook entitled “How to Handle a Sexual Harassment Investigation ” provides some guidelines.

To safeguard against sexual harassment claims, experts recommend that employers develop a zero-tolerance sexual harassment policy, successfully communicate the policy to employees, and ensure that victims can report abuses without fear of retaliation.43 Furthermore, proactive companies schedule sexual harassment training workshops with mandatory attendance required for all employees. Sexual harassment workshops explain what sexual harassment behaviors look like with role plays or video clips, explain how the company policy works for reporting sexual harassment incidents, and offer opportunities for employees to ask questions. For example, a state law in California requires all employees with supervisory responsibilities in firms with more than 50 employees to take two hours of sexual harassment training at two year intervals.44

In 1991, believing that the Supreme Court was beginning to water down Title VII, Congress passed a comprehensive set of amendments to it. Together, these amendments are known as the Civil Rights Act of 1991. Although the legal aspects of these amendments are fairly technical, their impact on many organizations is very real. Among the most important effects of the 1991 amendment are:

• ▪ Burden of proof As we noted earlier, the employer bears the burden of proof in a discrimination case. Once the applicant or employee files a discrimination case and shows some justification for it, the organization has to defend itself by proving that it had a good job-related reason for the decision it made. This standard was originally established in the Griggs v. Duke Power decision in 1971. Then a 1989 Supreme Court case, Wards Cove Packing Co. v. Antonio, had the effect of placing more of the burden of proof on the plaintiff.45 The 1991 law reinstates the Griggs standard.

• ▪ Quotas To avoid adverse impact, many organizations (including the Department of Labor) had developed a policy of adjusting scores on employment tests so that a certain percentage of protected-class applicants would be hired. The 1991 law amending Title VII prohibits quotas , which are employer adjustments of hiring decisions to ensure that a certain number of people from a certain protected class are hired. Thus, quotas, which had received mixed reviews in Supreme Court decisions before 1991, are now explicitly forbidden. Employers that have an affirmative action program giving preference to protected-class candidates have to walk a very fine line between “giving preference” (which is permissible) and “meeting a quota” (which is forbidden).

• ▪ Damages and jury trials The original Title VII law allowed successful plaintiffs to collect only back pay awards. However, racial minorities were also able to use an 1866 law to collect punitive and/or compensatory damages. Punitive damages are fines awarded to a plaintiff to punish the defendant. Compensatory damages are fines awarded to a plaintiff to compensate for the financial or psychological harm the plaintiff has suffered as a result of the discrimination. The 1991 law extended the possibility of collecting punitive and compensatory damages to persons claiming sex, religious, or disability-based discrimination. Such damages are capped at $50,000 to $300,000, depending on the size of the employer.46 In addition, the law allows plaintiffs to request a trial by jury.

Some believe that by expressly forbidding quotas, the Civil Rights Act of 1991 has prohibited a very useful mechanism for reducing discrimination in employment decisions. Many organizations had found that the best way to prevent adverse impact was to use a combination of quotas and cognitive ability testing. That is, the employer would select a certain percentage of applicants from various groups, and then choose the highest performers on cognitive ability tests from each group. This employment strategy resulted in both the maintenance of a high-quality workforce and greater participation of minorities in that workforce. Yet, by outlawing quotas, the Civil Rights Act of 1991 has prohibited this option.47

Executive orders are policies that the president establishes for the federal government and organizations that contract with the federal government. Executive Order 11246 (as amended by Executive Order 11375) was issued by President Johnson in 1965 and is not part of Title VII. It does, however, prohibit discrimination against the same categories of people that Title VII protects. In addition, it goes beyond the Title VII requirement of no discrimination by requiring covered organizations (firms with government contracts over $50,000 and 50 or more employees) to develop affirmative action programs to promote the employment of protected-class members. For instance, government contractors such as Boeing and Lockheed Martin are required to have active affirmative action programs.

The Age Discrimination in Employment Act (ADEA) prohibits discrimination against people who are 40 or older. When first enacted in 1967, it protected people aged 40 to 65. Subsequently, it was amended to raise the age to 70, and in 1986 the upper age limit was removed entirely.

The majority of ADEA complaints are filed by employees who have been terminated. For instance, a 57-year-old computerized-control salesman for GE Fanuc Automation was the only employee terminated during a “reduction in force”; he was replaced by six younger sales representatives. He brought a lawsuit, claiming that he was fired because of his age, and a Detroit jury awarded him $1.1 million in damages and lost wages and benefits.48 Employers can also lose lawsuits as a result of ill-informed workplace humor. Employers have lost several age discrimination cases because terminated employees had evidence that supervisors had told jokes about old age.49 One age-discrimination case involved 1,697 former employees laid off by Sprint Nextel and was settled in 2005 for $57 million for the plaintiffs. In 2012, the EEOC received 22,857 complaints of age discrimination.50

An important amendment to the ADEA is the Older Workers Protection Act (OWPA) of 1990, which makes it illegal for employers to discriminate in providing benefits to employees based on age. For example, it would be illegal for employers to provide disability benefits only to employees who are age 60 or younger or to require older employees with disabilities to take early retirement. Another OWPA provision makes it more difficult for firms to ask older workers in downsizing and layoff situations to sign waivers in which they give up their right to any future age-discrimination claims in exchange for a payment.51

Some companies value older employees and develop policies that help older workers extend their working lives. One such company is Deere & Company, an industrial-equipment manufacturer based in Moline, Illinois. About 35 percent of its 46,000 employees are older than 50 years of age and a number are in their 70s. Deere & Company spends a lot of effort incorporating ergonomics into its factories, making jobs less tiring, which enables older employees to stay on the job longer.52 With longer life expectancies, there will be greater numbers of employees who will prefer to keep on working beyond their mid-sixties when they qualify for Social Security retirement income and Medicare benefits. Companies will need to rethink how they design careers for older workers who plan to postpone retirement and remain employed. One approach being used to manage older employees is to treat retirement as a process rather than a sudden event and offer older workers “bridge jobs” that provide a transition between full-time employment and retirement. Mercy Health Systems uses such an approach by giving older employees the opportunity to work on jobs during seasonal periods of high demand and then offer long periods of unpaid leave during which these older employees can retain their benefits.53

The most recent of the major EEO laws is the Americans with Disabilities Act (ADA) . Signed into law in 1990 and gradually implemented since then, ADA has three major sections. Title I contains the employment provisions; Titles II and III concern the operation of state and local governments and places of public accommodation such as hotels, restaurants, and grocery stores. The ADA applies to all employers with 15 or more employees.54

The central requirement of Title I of the ADA is as follows:

Employment discrimination is prohibited against individuals with disabilities who are able to perform the essential functions of the job with or without reasonable accommodation.

Three parts of this requirement need definition.