Legal Compliance 2

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Legal Compliance 2

• MANA 4328
• Dr. George Benson
• benson_at_uta.edu

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Presentation of Evidence
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Selection Rate Tests
4/5ths RULE The selection rate for any protected
group should be no less than 4/5ths or 80 of the
selection rate for the group with the highest
rate of selection. If SR1 .8 gt SR2, then
Adverse Impact. Number Hired
Selection Rate (SR)
Number of Applicants
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4/5ths Rule

• Assume 200 employees were selected from a pool of
  500 applicants (200 black and 300 white). Of the
  employees selected 60 were black and 140 were
  white.
• Selection Rates
• White 140 / 300 46.7
• Black 60 / 200 30
• 4/5ths Rule .467 X .8 .374 37.4
• Since 30 (actual selection rate) is less than
  37.4 (4/5ths
• comparison selection rate) evidence of
  discrimination exists.

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Defense of Discrimination

• Merit
• Judged on an individual basis
• Bona Fide Occupational Qualification
• Must be present for all who hold that job
• If is required for the job then it does not
  matter that it has adverse impact
• Business necessity
• Seniority

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ADEA (1967) and Age Discrimination

• Age Discrimination in Employment Act of 1967
• Protects employees 70 million workers over 40
• Nearly 50 of workers
• Cases most often arise from layoff or dismissal
• It is legitimate to consider salary in layoffs
• No standard of reverse discrimination for age
  suits
• Disparate impact rules apply
• Adams vs. Florida Power Corp
• Dismissed by the Supreme Court 2002
• Smith vs. City of Jackson
• Affirmed by the Supreme Court 2005

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Americans with Disabilities Act (ADA)

• Discrimination is prohibited against individuals
  with disabilities who can perform essential job
  functions with reasonable accommodation unless it
  would cause undue hardship.
• Employers not required to change work rules if
  they are business necessity.
• OFCCP vs. Ozark Airlines (1986) employers must
  prove applicant could not perform the job safely.

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Man fired for getting gassed on spilled ethanol
at work

• An Iowa judge has denied unemployment benefits
  to a man who claimed discrimination after being
  fired from an ethanol plant for drinking
  "automobile fuel" produced by the company.
  According to Neddermeyer, he showed up for work
  and saw that there had been a spill of 190-proof
  fuel alcohol.
• I am a recovering alcoholic, and I thought about
  the availability of this alcohol throughout the
  day. Curious about the taste and its effects, I
  dipped into this lake of liquor .
• Neddermeyer argued that his employer shared in
  the responsibility for the incident because the
  spill at the plant provided an opportunity for
  him to drink. He also argued that Amaizing Energy
  was discriminating against him due to his
  disease of alcoholism.
• He asked the judge whether the protections
  afforded him under the Americans with
  Disabilities Act could be applied to his request
  for unemployment benefits. He was denied the
  request for benefits. "The employer has a right
  to expect employees not to drink the fuel"
• Des Moines Register 7.9.06

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Americans with Disabilities Act (ADA)

• Disability is a physical or mental impairment
  that affects a major life activity.
• Essential vs. marginal job functions
• Categories of "reasonable accommodations"
• changes to a job application process
• changes to the work environment
• changes to the way a job is usually done
• employee training

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Undue Hardship

• Undue hardship means significant difficulty or
  expense.
• Not only financial difficulty
• Those that would fundamentally alter the nature
  or operation of the business.
• Every request for reasonable accommodation should
  be evaluated separately taking into account
• Nature and cost of the accommodation needed
• Overall financial resources of the business
• Number of persons employed by the business
• Impact of the accommodation on the business

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Record Keeping

• EEOC requires that employers keep all personnel
  records for one year after termination.
• Written descriptions of benefits plans (such as
  pensions) and any seniority or merit system.
• Fair Labor Standards Act (FLSA) and the Equal Pay
  Act, require employers to keep payroll records
  for at least three years.
• All records relevant to wages including wage
  rates, job evaluations, and seniority and merit
  systems.

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Employment Information Report (EEO-1)

• EEO-1 survey is authorized by Title VII and the
  Equal Employment Opportunity Act of 1972.
• All employers with 15 or more employees are
  required to keep employment records as.
• Employers are required to file an EEO-1 report
  on an annual basis if they
• Employ 100 or more employees
• Employ 50 or more employees and have Federal
  contracts totaling 50,000 or more.

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This all means.

• Make sure that selection criteria are fair.
• Use validated selection tests.
• Use the same procedure for all applicants.
• Collect data and keep records.
• Only ask job-related questions.
• No medical exams before making job offers.
• No business is ever required to hire someone not
  qualified for a job.

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EEO vs. Affirmative Action

• Equal Employment Opportunity
• Collection of laws that apply to all
  organizations
• Aimed at ending discrimination
• Affirmative Action
• Executive Order 11246
• Applies only to (1) government and contractors
  (2) court orders and (3) voluntary programs.
• NO affirmative action requirements for others.
• Written document with targets for minority
  hiring.

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Enforcement Agencies

• Equal Employment Opportunity Commission (EEOC)
• All private employers with more than 15 employees
• EEO 1 for more than 100 employees
• Office Of Federal Contract Compliance Programs
  (OFCCP)
• Government contractors or sub-contractors.
• Covers approximately 26 million or nearly 22 of
  the total civilian workforce.
• OFCCP requires a contractor to engage in a
  self-analysis for the purpose of discovering any
  barriers to equal employment opportunity.
• Investigates complaints of discrimination.

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Affirmative Action Program (AAP)

• Develop a written program for each establishment
• Identify potential problems in the participation
  and utilization of women and minorities.
• Gives the specific procedures and the good faith
  efforts to provide equal employment opportunity.
• If there is underutilization, provides gives
  targets (not hard quotas) and timetables.
• Expanded efforts in outreach, recruitment and
  training.

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AAP Statistics

• Flow Statistics
• Examines selection rates by group
• 4/5 ths rule / Std. Deviation Rule
• Availability and utilization analyses
• Employee distribution compared with local
  population
• Stock Statistics
• Concentration Statistics
• Examining placement of women and minorities by
  job category

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Availability Analysis

• U.T. System determines minority availability by
• The minority population in the surrounding labor
  market.
• The minority unemployment rate in the surrounding
  labor market.
• The percentage of the minority workforce as
  compared with the total workforce in the
  surrounding labor market and Texas.
• The availability of promotable and transferable
  minorities within U. T. System Administration.
• http//www.eeoc.gov/stats/jobpat/2000/pmsa/2800.ht
  ml
• http//www.census.gov/hhes/www/eeoindex.html

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Utilization Analysis

• Compares the percentage of minorities and
  women in each Job Group with the calculated
  availability of minorities and women.
• "Underutilized" is defined as having fewer than
  would reasonably be expected by their
  availability.

Job Category Management Trainee Job Category Management Trainee Job Category Management Trainee Job Category Management Trainee
Current Trainees Current Trainees Availability Availability
Non Minority Minority Non Minority Minority
90 10 70 30
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Concentration Statistics
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How to Proceed?

• What can companies do to navigate the differences
  between targets and preferences (which are legal)
  vs. quotas and reverse discrimination (which are
  illegal)?

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Some examples.