If you're hiring employees for your business, you should be aware of the large body of law around employment issues. In this lesson we're going to talk about some of the most popular employment legal issues. First, we'll talk about Title VII of the Civil Rights Act of 1964. There was for a few minutes talking about additional protections that the Immigration Reform and Control Act bring to the scope of Title VII. We'll introduce the Age Discrimination in Employment Act, the American with Disabilities Act, and then spend a few minutes talking about litigation and the climate around litigation and what that may mean for your business. Let's start with Title VII. This is a US statute but similar types of laws against discrimination in the workplace exist in other parts of the world. While we'll use the US law as a framework for discussing these issues, you want to make sure that you understand what the local laws may be in countries and jurisdictions where you may be doing business. Title VII in the US, it's a law that prohibits discrimination on the basis of race, color, religion, sex, or national origin. It's a fairly broad statute that's used a lot in employment cases. A plaintiff in a Title VII case, they can receive compensatory damages, as well as punitive damages. Compensatory damages will pay the plaintiff for any type of loss wages or back pay from the time that the discrimination or the adverse employment action occurred. A punitive damages can be given to the plaintiff to punish their employer for engaging in discriminatory conduct and to deter other employers from engaging in similar conduct. When you add up compensatory damages which can be fairly substantial in the case of back pay and those types of issues, plus punitive damages which are usually at the whim of a jury who's trying fashion an award to punish an employer, it can mean a pretty substantial judgment against your business if you involve in employment litigation. Some of the not so obvious discrimination issues that may come up on the Title VII include a disparate treatment. This means that while you may not be discriminating per se against an employee, if an employee in one of these protected classes, race, color, religion, sex, national origin, if they're being treated differently or having adverse treatment based on these protected classifications, that would fall under Title VII. Another one is disparate impact. This one is interesting because with disparate impact, your company may not be discriminating against this particular individual. But if certain decisions or conduct that your company is engaged in has a disparate impact on members of these protected classes or any member of one of these protected classes, that impact can also lead you into a Title VII lawsuit. Harassment, whether harassment is based on someone's religion or national origin or their race, that can get you in trouble. Sexual harassment. Sexual harassment can just be harassment based on sex or it could be what we call quid pro quo harassment. That's where an employer is conditioning promotions or positive employment actions, conditioning their own sexual favors. Sexual harassment is a big area of the law that can get you in trouble as an employer. Also a hostile work environment. If you are punishing someone, for example, for being a whistle-blower or you're treating someone in one of these protected classes unfairly, and that leads to a hostile work environment. All these are issues that courts have looked at it and have analyzed under the rubric of Title VII. The Immigration Reform and Control Act builds a little bit upon Title VII. It not only protects against discrimination based on national origin, but it also adds protections against discrimination based on US citizenship status. Whereas Title VII only applies to companies that have 15 or more employees, the IRCA really impacts small businesses because it can apply to companies with as little as four employees. Let's look at age discrimination. Under the age discrimination laws, the employer who is subjected to this law must have at least 20 employees. This is companies with 20 or more employees. However, some states have companion age discrimination laws. They don't have a minimum number of employees. Your business depending on which state you may be in may be subject to age discrimination laws regardless of the number of employees you have. Now what age discrimination laws protect against generally is employment applicants and current employees who are age 40 and older. This is very, very important to remember because it's not just your current employees, but it's also prospective employee. People who are applying to work for your company and they're aged 40 or older, they may have rights under these age discrimination laws. Now, oftentimes when you're in the process of terminating employees or laying off employees, you may want to have certain waivers in place and you may offer the departing employee severance package in exchange for waiving any type of rights they may have under discrimination laws. Now, age discrimination is very unique in the sense that even if you have a severance package and someone who's in this protected class, an employee whose age 40 and older. Even if you offer them a severance package to waive any rights or claims they may have under these employment statutes, there's first strict requirements and then employee may have the ability to resend that waiver. That employee may have to have a period of time during which they can reconsider the waiver. So there are very strict requirements for waivers even if you give the departing employee a severance package. When you're dealing with employees that are age 40 or older, you want to make sure you understand all of the rights and obligations you have as an employer dealing with an employee in this protected class. Let's talk about the Americans with Disabilities Act. Now, there's a very broad definition of disability that comes into play when you're thinking about the ADA. It can be a mental or physical impairment that substantially limits some major life activity. That's one definition of disability. Or you can have just some record of an impairment that fits that bill. Or you can just be regarded, generally regarded as having such an impairment. There are other broad definitions of what constitutes a disability for purposes of the ADA. But for purposes of an employer thinking about how to navigate disability employment law issues, remember that the law generally requires you to provide reasonable accommodations to an employee with a disability. Reasonable accommodations essentially mean that you're going to provide a method by which the employee can still perform their work duties in light of their disability. Now for some types of disabilities, this may be hard for you to do as an employer and you have to take reasonable steps to make sure you are providing these accommodations. But if trying to provide an accommodation would impose an undue hardship on you as the employer, the law will excuse the requirement that you provide such accommodation and you're going to have to make that case, the burden will be on you as an employer to prove that it would in fact be an undue hardship. Now let's talk about litigation because this is where these employment issues can really hurt your bottom line. Litigation is when a plaintiff's, someone who's been agreed by one of these laws, someone who's been injured or who's been fired, or who has lost pay as a result of some violation of one of these employment statutes. A plaintiff files a claim with the court, and that starts the process of litigation. Now in the process of these employment cases, the courts have laid out a framework for how to resolve them. We'll use Title 7 cases as a general example of this. What happens is the plaintiff has the burden of proving that some type of discriminatory conduct occurred, that your company engaged in some violation of the law. Now, what's the plaintiff has done there? They made what we call a prima facia case of discrimination. The burden then shifts to you as a company to prove that you made the employment decision, whether you fired the employee, whether you decided not to promote the employee, whatever the claims are. Your burden is now on you to prove that you didn't do so because of discrimination, that there was a legitimate business reason for that employment decision. You have to bring forth evidence to prove that employment records, to prove them, and that can be a very costly process in order to do that. Even if after you've done that, the plaintiff still has another opportunity, because if you meet that burden, the burden then shifts back to the plaintiff to prove either that you're lying, that this isn't a real reason or it's a pretext that you're essentially putting forth this reason, but the real reason you made the employment action was in violation of the law. As you can imagine, with this burden-shifting process, this can be a fairly drawn-up process. It can take a long time to get through the result, and as a result of that, it can be very costly. The legal fees that are associated with it. The potential negative judgment on the backend of payment of compensatory and punitive damages. Also, the reputational hip. If your company is involved in a sexual harassment or a racial discrimination lawsuit, it can really impact your company's brand. These employment issues can be a big drain on your company, and as a result, you want to make sure that you're taking the right steps to mitigate these types of things from coming up. In summary, the legal framework around employment legislation is designed to prevent discrimination and harassment in the workplace. Engaging in discriminatory conduct can lead to very costly litigation for your business. Make sure that you and your employees stay current on the laws, federal-state international laws, and the regulations in this area so that you can avoid such a costly endeavor.
