3

The Legal Landscape of Employee Rights

“All may dismiss their employee(s) at will, be they many or few, for good cause, for no cause, or even for cause morally wrong, without thereby being guilty of legal wrong.”

—Payne v. Western and Arkansas Railroad Company, 1894

Employment at Will

Since the last half of the 19th century, employment in the United States has been “at will,” or terminable by either the employer or employee for any reason whatsoever. The employment-at-will doctrine avows that, when an employee does not have a written employment contract and the term of employment is of indefinite duration, the employer can terminate the employee for good cause, bad cause, or no cause at all.¹ At the same time employees are free to leave the employer at any time, with or without cause or notice.

The employment-at-will doctrine has eroded over time. With the advent of unions, collective bargaining agreements generally require just cause for adverse employment actions. Legislation at the federal and state levels contributed to the erosion by providing employee rights. Other exceptions to the doctrine arose from case law and include:

    The public policy exception, which prohibits employment termination or other adverse action for reasons such as the following:

    Exercising a legal right such as the right to report an unsafe working condition.

    Responding to a legal obligation such as jury duty or military reserve duty.

    Whistleblowing or discriminatory employer behavior.

    The implied contract exception, such as statements implying job security. The courts have found such statements as well as statements in policies and handbooks to be implied or sometimes even express contracts.

    The covenant of good faith and fair dealing, such as knowingly terminating someone near retirement where the action results in the denial of retirement benefits.

Selected laws focusing on employee rights and the major antidiscrimination laws are covered in this chapter. Other legal and regulatory issues affecting benefits, compensation, and employees’ safety and security will be discussed in chapters 17, 20, and 29.

Recognize that laws and regulations are not static and frequently change. References to websites are provided so current information can be referenced. However, neither the information in this book, nor any information found on the Internet, should be a substitute for legal advice. Guidance should be sought for state-specific laws and regulations.

Theories of Discrimination

Understanding the theories of discrimination is important to understanding the anti-discrimination laws. Laws that protect employees’ rights apply to the life cycle of the employment relationship—from sourcing and recruiting, to selection and hiring, to performance management, compensation, benefits, training, termination, and all other terms and conditions of employment.

There are two theories of discrimination:

    Disparate treatment is intentional discrimination. It involves all employment-related actions or decisions, such as hiring, salary, benefits, termination, and so forth, in which an employee is treated differently than another similarly situated employee or class because of a protected attribute (for example, but not limited to, race, color, religion, gender, national origin, age, or disability).

Unfair treatment, or the perception of unfair treatment, may or may not be discriminatory. For example, an employee may perceive that a low performance rating or merit increase is unlawful discrimination. In fact, the employee may not be performing up to legitimate standards.

    Disparate impact generally occurs when a neutral policy inadvertently discriminates or has a discriminatory effect on a protected class or group of people covered by discrimination law. In the landmark Supreme Court case Griggs v. Duke Power, Willie Griggs was denied a promotion based on his lack of a high school diploma and the results of two pre-employment tests. The Court found that these requirements were not related to job success and had a negative impact on protected classes.

Disparate impact differs from disparate treatment, in which the employment practice itself is discriminatory. It occurs when an employer engages in a practice that has the effect of excluding individuals because of a protected attribute regardless of the employer’s intent. It applies to employment practices that are “facially neutral,” meaning that the practice does not appear to be discriminatory on the surface and it is generally applied in an even-handed manner to all individuals.

Inconsistent application of the organization’s policies or the inconsistent treatment of individuals could result in disparate impact discrimination.

Non-Discrimination Laws

Title VII, Civil Rights Act of 1964 (Title VII)

Coverage: It is unlawful to discriminate on the basis of race, color, religion, national origin, and sex in all employment decisions and terms and conditions of employment.

Applicability: All employers with fifteen (15) or more employees.

Special Considerations:

    Prohibits retaliation.

    Prohibits sexual harassment.

    Allows for a Bona Fide Occupational Qualification (BFOQ). If gender, religion, or national origin is a BFOQ reasonably necessary to carrying out a particular job function in the normal operations of the business or enterprise, the factors may be used in employment practices. For example, being female can be a BFOQ for a women’s bathing suit model.

    Covers co-employment, meaning not just the company’s employees, but those workers from contract and temporary agencies. Both companies can be liable.

    Requires reasonable accommodation for all deeply held religious beliefs.

Remedies for violating the law can include payment of attorney’s fees and other actual damages and injunctive relief such as:

    Back pay.

    Reinstatement.

    Remedial training.

    Remedial transfer.

    Remedial promotion.

    Requiring employers to take steps to prevent future discrimination.

Civil Rights Act of 1991

Title VII was amended in 1991 by expanding the remedies to include jury trials, and punitive and compensatory damages for intentional discrimination. Compensatory damages can include such out-of-pocket expenses as job search costs and medical expenses as well as emotional distress damages. These expanded remedies also apply to the Americans With Disabilities Act, which is discussed in this chapter.

Pregnancy Discrimination Act of 1978 (PDA)

This law amended Title VII to prohibit discrimination on the basis of pregnancy, childbirth, or related conditions. It requires employers to treat pregnancy the same as any other short-term disability.

Age Discrimination in Employment Act (ADEA)

Coverage: It is unlawful to discriminate on the basis of the employee being over the age of 40 in all employment decisions and terms and conditions of employment.

Applicability: All employers with twenty (20) or more employees.

Special Considerations:

    Discrimination can occur within the protected age group.

    Age can be a BFOQ in rare circumstances.

    Prohibits retaliation.

Remedies for violating the law are the same as Title VII, plus payment of:

    Liquidated or double damages for willful violations.

    Lost retirement benefits.

Americans With Disabilities Act (ADA) and the ADA Amendment Act (ADAAA)

Coverage: It is unlawful to discriminate against qualified individuals with physical or mental disabilities that substantially limit one or more major life activities in all employment decisions and terms and conditions of employment.

Applicability: All employers with fifteen (15) or more employees.

Remedies for violating the law are the same as Title VII.

Special Considerations and Key Points:

    Requires reasonable accommodation to allow covered individuals to perform the essential job functions unless it creates an undue hardship.

    The law prohibits discrimination only against those individuals qualified to perform a job’s essential functions. There is no requirement for employers to lower their standards or to hire individuals who do not meet a position’s minimum education, skill, and knowledge requirements.

    Discrimination would include, but not be limited to, questions about the nature of a disability during a job interview; failure or refusal to consider a request for accommodation of the disability; refusal to hire, demotion, placement on an involuntary leave, termination, harassment, denial of any other term, condition or privilege of employment.

    Appendix: Definitions under the ADA.

A reasonable accommodation removes unnecessary barriers that prevent or restrict employment opportunities and enables a qualified individual with a disability to perform the essential functions of a job. Examples include:

    Part-time or modified work schedules.

    Job restructuring (task exchange).

    Reassignment to a vacant position (current employees only).

    Acquisition/modification of equipment or devices.

    Adjustment/modification of examinations, training, materials or policies.

It is not a reasonable accommodation to eliminate essential functions or duties of the position or to lower quantity or quality standards.

All requests for accommodation from applicants and employees must be considered. Failure to do so is discriminatory behavior and is actionable. Accommodation requests cannot be ignored or refused without proper consideration.

An undue hardship occurs when an accommodation would be unduly costly or disruptive, or fundamentally alter the nature or operation of the business. Determination of whether a particular accommodation will impose an undue hardship is on a case-by-case basis. Overall determination of significant cost depends on the size and nature of the business.

Genetic Information Nondiscrimination Act of 2008 (GINA)

Coverage: It is unlawful to discriminate on the basis of genetic information in all employment decisions and terms and conditions of employment.

Applicability: All employers with fifteen (15) or more employees.

Special Considerations:

    Prohibits retaliation.

    Restricts employers from requesting, requiring, or purchasing genetic information.

    Requires that genetic information be maintained as a confidential medical record, and places strict limits on disclosure of genetic information.

    Provides remedies for individuals whose genetic information is acquired, used, or disclosed in violation of its protections.

Remedies for violating the law are the same as Title VII.

    Appendix: Guidelines for Preventing Workplace Discrimination.

Equal Pay Act (EPA) and the Lilly Ledbetter Fair Pay Act of 2009

Both of these laws cover compensation only and are discussed in Chapter 17 (The Legal Landscape of Compensation).

Retaliation

Retaliation is a form of discrimination and all of the laws discussed in the previous section prohibit retaliation. An employer may not fire, demote, harass, or otherwise “retaliate” against an individual for filing a charge of discrimination, participating in a discrimination proceeding, or otherwise opposing discrimination. The Americans With Disabilities Act (ADA) also protects individuals from coercion, intimidation, threat, harassment, or interference in their exercise of their own rights or their encouragement of someone else’s exercise of rights granted by the ADA.

Retaliation occurs when an employer takes an adverse action against a covered individual because he or she engaged in a protected activity.

    An adverse action is an action taken to try to keep someone from opposing a discriminatory practice, or from participating in an employment discrimination proceeding, such as termination, refusal to hire, and denial of promotion.

    Covered individuals are people who have opposed unlawful practices, participated in proceedings, or requested accommodations related to employment discrimination based on race, color, sex, religion, national origin, age, or disability. Individuals who have a close association with someone who has engaged in such protected activity also are covered individuals.

    A protected activity includes opposition to a practice believed to be unlawful or participation in an employment discrimination proceeding, such as complaining to anyone about alleged discrimination against oneself or others, threatening to file a charge of discrimination, or refusing to obey an order reasonably believed to be discriminatory.

    Appendix: Guidelines for Avoiding Retaliation.

Equal Employment Opportunity Commission (EEOC)

The laws previously discussed are enforced by the EEOC. Employees may bring an individual charge of discrimination. The charge must be filed within 180 days of the discriminatory action, or 300 days in states that have a fair employment practice law and state agency. The employer has the opportunity to respond to the charge. The EEOC may attempt to settle or mediate. Potential outcomes include resolution, action based on a determination that discriminatory action took place, and dismissal on the basis of no reasonable cause of wrongful actions. The EEOC can bring a suit directly against the company if they believe there is a pattern or practice of discrimination. Suit would be brought in federal court.

The EEOC often issues enforcement guidance and policy statements. It also posts Q&As and Fact Sheets on them. This information is frequently updated and can be accessed on the EEOC website.

    For additional information, visit www.eeoc.gov/laws/guidance/enforcement_guidance.cfm.

Reporting Requirements

Employers with more than 100 employees (and federal contractors with 50 or more employees) are required to collect and report demographic data about gender and race/ethnicity according to some type of job grouping of their workforces. This information is recorded on the EEO-1 report and filed annually.

    For additional information about the EEO-1 report, visit http://www.eeoc.gov/employers/reporting.cfm.

Posting Requirements

Employers are required to post notices describing the federal laws prohibiting job discrimination. The EEOC’s poster is available online and in various languages.

    For additional information about the laws enforced by the EEOC and posting requirements, visit www.eeoc.gov.

Other Laws Affecting Employee Rights

Immigration Reform & Control Act (IRCA)

Coverage: Prohibits discrimination against job applicants on the basis of national origin and citizenship. It also establishes penalties for hiring individuals who do not have the right to work in the United States or who are here illegally.

Applicability: All employers with one (1) or more employees.

Special Considerations: Employers must verify that workers have the right to work in the United States. Within three days of hiring, the new employee and the employer must complete the Form I-9. This form verifies both identity and the employee’s right to work in the United States. Employers are required to maintain these forms for a period of either three years after the date of hire or one year after employment is terminated, whichever is later. The form must be available for inspection by authorized U.S. government officials (e.g., Department of Homeland Security, Department of Justice).

Violation: Employers who knowingly hire someone who is not entitled to work in the United States face both civil and criminal penalties. Fines can also be imposed for recordkeeping violations.

E-Verify is an Internet-based system that allows businesses to determine the eligibility of their employees to work in the United States. It is an electronic program through which employers verify the employment eligibility of their employees after hire. Employers submit information taken from a new hire’s Form I-9 to determine whether the information matches government records and whether the new hire is authorized to work in the United States. Government contractors must use E-Verify. Certain states have mandated its use. Many employers use it voluntarily because it provides a safe harbor and shows good intent.

    For additional information on IRCA, Form I-9, and E-Verify, visit www.uscis.gov/i-9 and www.uscis.gov/I-9Central.

Uniformed Services Employment & Reemployment Rights Act (USERRA)

Coverage: It is unlawful to discriminate on the basis of military obligation. Applicability: Employers with one (1) or more employees. Special Considerations:

    Requires job protected military leave for up to five years (extended in some circumstances).

    Requires that returning service members be reemployed in the job that they would have attained had they not been absent for military service.

    Requires oral or written notice of the need for leave.

    Gives employees on military leave the same non-seniority-based benefits and rights generally provided to other employees with similar seniority, status, and pay on other types of leave.

    Gives employees on military leave the same seniority-based benefits they would have received if they had not taken military leave.

    Requires that military leave not create a break in service for retirement plan purposes.

    Requires employers to give notice of rights and obligation under the law.

Remedies for violating the law include:

    Back pay.

    Lost benefits.

    Attorneys’ fees.

    Double damages for willful violations.

    USERRA is enforced by DOL Veterans Employment & Training Service. For additional information, including information on the posting requirement, visit www.dol.gov/vets/programs/userra/main.htm.

Beyond the nondiscrimination laws, there are additional laws and regulations that protect employees’ rights.

Consumer Credit Protection Act (CCPA)

The CCPA protects employees from discharge by their employers because their wages have been garnished for any one debt, and limits the amount of an employee’s earnings that may be garnished in any one week.

    The Wage and Hour Division (WHD) of the Department of Labor administers this Act. For additional information, visit www.dol.gov/whd/regs/compliance/whdfs30.htm.

Employee Polygraph Protection Act

This law makes it unlawful for employers to use polygraphs or lie detectors in pre-employment and post-employment decisions excluding a few narrowly defined exceptions for “security-sensitive” positions. In addition, employers are required to display the EPPA poster in the workplace for their employees.

    For additional information, visit www.dol.gov/whd/polygraph.

Fair Credit Reporting Act (FCRA)

This law protects the privacy of background information and ensures that information supplied is accurate. Employers that obtain consumer reports for applicants or employees through consumer reporting agencies and use such reports for employment purposes must notify the individual in advance in writing using a stand-alone format and get their written consent before obtaining consumer reports for applicants or employees. In addition, employers must notify employees and applicants:

    Before taking adverse action based on such reports.

    After adverse action is taken.

    When using investigative reports.

Employers are also required to a) disclose whether an adverse employment decision was influenced by a credit report; b) furnish the negative report and a summary of the FCRA rights to the applicant or employee; and c) afford the applicant or employee an opportunity to correct errors in the report.

    Employers can find additional information at business.ftc.gov/documents/bus08-using-consumer-reports-what-employers-need-know.

Fair and Accurate Credit Transactions Act (FACT)

This law is an amendment to the FCRA. It provides relief to employers who use the services of a third party to conduct workplace investigations. It reversed the consent and disclosure requirements in the event that the investigation involves suspected workplace misconduct or violation of a law, regulation, or employer policy. Employers may now hire third parties to investigate workplace issues without first notifying the individual(s) being investigated and gaining consent.

National Labor Relations Act (NLRA)

A common misconception about the NLRA, or the Wagner Act, is that it only applies to those organizations whose employees are represented by unions. In fact, the rights granted under the NLRA apply to all workers, whether or not they are union members and whether or not union organizing activity has taken place. All employees are granted the following rights:

    To organize.

    To form, join, assist, and be represented by a union.

    To bargain collectively through representatives of their own choosing.

    To engage in concerted activity for the purpose of mutual aid and protection. The following is an example of a protected activity: After an employee in a non-unionized organization had consulted with his colleagues and they all agreed that he should speak on their behalf, the employee approaches his boss about certain working conditions. The employee and his colleagues were acting “in concert” and have the right to discuss terms and conditions of employment.

The NLRA prohibits employers from engaging in certain conduct, or unfair labor practices that would interfere in the employees’ rights. Examples include:

    Employer-controlled or -dominated unions.

    Discriminating in the terms of employment to discourage union membership (for example, refusing to hire someone who has a history of union membership).

    Refusing to bargain in good faith.

    Employers can find additional information at the National Labor Relations Board website at nlrb.gov.

Discussion Questions

1.    What can organizations do to assure that their managers understand the legal landscape of employee rights? What types of steps has your organization implemented and what has been the outcome?

2.    With continued changes in the legal requirements, how does your organization stay informed and keep the management staff informed?

3.    Do the managers in your organization understand that retaliation can be a cause of action in an EEOC complaint? If not, what steps can you take to assure that they avoid any actions that could be perceived as retaliatory?

4.    What can organizations do to ensure that their managers are aware of employees’ rights under the National Labor Relations Act as well as the organization’s rights and responsibilities?