1
whole or in part.
Employment Discrimination
and Diversity
A class of persons defined by one or more of these criteria is known as a protected class. Several federal
statutes prohibit employment discrimination against members of protected classes. The most important is Title VII of
the Civil Rights Act of 1964 and its amendments. Title VII prohibits employment discrimination on the basis of race,
color, religion, national origin, or gender. Discrimination on the basis of age and disability are prohibited by the Age
2 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
of employment. Nearly any employer with fifteen or more employees is covered. The basic outlines of this
statute are sketched in the text.
A. THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
The Equal Employment Opportunity Commission (EEOC) issues guidelines interpreting the law. Also,
limited.
C. INTENTIONAL AND UNINTENTIONAL DISCRIMINATION
1. Intentional Discrimination
• He or she applied and was qualified for the job in question.
• He or she was rejected by the employer.
• The employer continued to seek applicants for the position or filled the position with a person
not in a protected class.
St. Rose, Louisiana. When the quality of Dees’s work deteriorated—he began marking equipment as fit to be
rented even though it was not working—he was terminated. Dees filed a suit in a federal district court against
United, alleging discrimination based on race. United provided evidence of a legitimate, non-discriminatory
reason for Dees’s termination—unsatisfactory job performance. The court issued a judgment in United’s
favor. Dees appealed.
CHAPTER 11: EMPLOYMENT DISCRIMINATION AND DIVERSITY 3
whole or in part.
Disabilities Act (ADA) prohibits disability-based discrimination in most workplaces with fifteen or more
workers. To prevail on a claim under the ADA, a plaintiff must show that he or she (1) has a disability, (2) is
otherwise qualified for the employment in question, and (3) was excluded from the employment solely
because of the disability.
As applied in the Dees case, Title VII of the Civil Rights Act prohibits employment discrimination on the
basis of race. A prima facie case on this cause can be established by a plaintiff showing that (1) he is a
member of a protected class, (2) he was qualified of the position in question, (3) he was discharged by the
employer, and (4) the employer filled the position with a person not in a protected class. The burden shifts to
ANSWERS TO LEGAL REASONING
QUESTIONS AT THE END OF CASE 11.1
case of discrimination under Title VII of the Civil Rights Act and the Age Discrimination in Employment Act. At
that point, the court determined that United Rentals had provided sufficient evidence of a legitimate, non–
Dees to show that this reason was a pretext for discrimination.
On Dees’s appeal, the U.S. Court of Appeals for the Ninth Circuit also assumed that Dees had
established a prima facie case of discrimination based on race or age, that United Rentals had submitted
sufficient evidence of a legitimate, non-discriminatory reason for Dees’ termination, and that the burden had
shifted back to Dees to show that this reason was a pretext for discrimination.
whole or in part.
of the equipment.” Both courts recognized that Dees did not present any evidence to tie United Rentals’ final
termination decision to a discriminatory motive.
Dees to show that this reason was a pretext for discrimination. And Dees did not meet this burden. He did not
present any evidence to tie his employer’s termination decision to a discriminatory motive. The lower court
concluded that Dees made only conclusory allegations that he was discriminated against. This was fatal to his
case. His claims failed.
have failed and for the same reasons as they actually failed.
For example, the Age Discrimination in Employment Act (ADEA) prohibits employment discrimination on
the basis of age against individuals forty years of age or older. For the ADEA to apply, an employer must
have twenty or more employees, and the employer’s business activities must affect interstate commerce. To
establish a prima facie case, a plaintiff must show that he or she was (1) a member of the protected age
group, (2) qualified for the position from which he or she was discharged, and (3) discharged because of age
2. Unintentional Discrimination
If a plaintiff challenging an employment practice or procedure having a discriminatory impact on a
protected class can show a connection between the practice and the impact, he or she makes out a
prima facie case, and no evidence of discriminatory intent is necessary. The burden shifts tot the
employer to show that the practice or procedure is justified.
b. Rate of Hiring
A plaintiff can also prove disparate impact by comparing the employer’s hiring rates for
members of the majority class and members of a protected class. Disparate impact is shown if
the rate for the latter is less than four-fifths of the rate for the former.
whole or in part.
• If a company’s standards or policies for selecting or promoting employees have the effect of dis–
• Discrimination against these protected classes in regard to employment conditions and benefits is
also illegal.
ANSWER TO CRITICAL THINKING QUESTION IN THE FEATURE—
others enjoy looking at images of attractive people at parties, on vacations, and having fun. When employers
see images of an employee associating with other attractive people, it may inadvertently cause employers to
have more positive feelings about that worker. That worker may then receive better performance evaluations,
higher salaries, more promotions and bonuses.
Victims of discrimination may have a cause under Section 1981 of the Civil Rights Act of 1866,
which prohibits discrimination on the basis of race or ethnicity in the formation or enforcement of
contracts, with no cap on damages.
E. DISCRIMINATION BASED ON RELIGION
2. Undue Hardship
An employer is not required to make an accommodation that would cause the employer undue
hardship.
F. DISCRIMINATION BASED ON GENDER
whole or in part.
1. Gender Must Be a Determining Factor
In a gender discrimination suit, a plaintiff must show that gender was a determining factor in an
employer’s decision to hire, fire, or promote.
• The Equal Pay Act of 1963 prohibits gender-based discrimination in wages paid for equal work
when a job requires equal skill, effort, and responsibility under similar conditions.
• Under the Lily Ledbetter Fair Pay Act of 2009, each time a person is paid discriminatory
1. Proving Constructive Discharge
An employee must show that the employer caused the intolerable conditions, and knew, or had
reason to know, of the conditions and failed to correct them within a reasonable time.
• Quid pro quo harassment occurs when job opportunities, promotions, and the like are doled out on
the basis of sexual favors.
• Hostile-environment harassment occurs when an employee is subjected to sexual comments,
jokes, or physical contact perceived to be offensive.
In 1974, Mechelle Vinson began working at Meritor Savings Bank. Vinson later sued the bank, claiming
that she had “constantly been subjected to sexual harassment.” She claimed that Sidney Taylor, a vice
president and branch manager, made sexual advances toward her, to which she acquiesced out of fear of
losing her job. She testified that Taylor fondled her in front of other employees and forcibly raped her. Taylor
denied the charges. The trial court concluded that any sexual relationship between Vinson and Taylor had no
whole or in part.
In one of the early and often-cited cases involving charges of sexual harassment—Meritor Savings Bank,
FSB v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986)—the United States Supreme Court
workplace that racial harassment is to racial equality.’” Requiring an individual to “run a gauntlet of sexual
abuse in return for the privilege of being allowed to work and make a living can be as demeaning and discon–
certing as the harshest racial epithets.” Holding that the bank’s liability for the actions of its supervisory
employees should be determined according to common law principles of agency, the Court remanded the
case to the district court for further proceedings.
Sexual harassment is a major problem in the workplace. Over 40 percent of female federal employees,
for example, reported incidents of sexual harassment in 1980 and roughly the same number reported
incidents in 1987. Sexual harassment cost the federal government $267 million between May 1985 and May
1987 for losses in productivity, sick leave costs, and employee replacement costs. According to the United
inflicted by anger, humiliation, frustration, withdrawal, dysfunction in family life, as well as medical expenses,
Sometimes, a person questions whether conduct he or she perceives as offensive should instead be
viewed only as bad taste, poor manners, a lack of social grace, or an off-color sense of humor. It has been
suggested that if a person feels belittled by an actor’s conduct, it is harassment. If the person feels that the
actor treated the person as an equal, it is not harassment.
Because women are disproportionately victims of rape and sexual assault, many women who are victims
of mild forms of sexual harassment may worry whether a harasser’s conduct is merely a prelude to violent
sexual assault. Men, who are rarely victims of sexual assault, may view sexual conduct without a full
appreciation of the social setting or the underlying threat of violence that a woman may perceive.
against an employee.
2. The Ellerth/ Faragher Affirmative Defense
Employers have an affirmative defense if—
• They took “reasonable care to prevent and correct promptly any sexually harassing behavior”
• The employee suing for harassment failed to follow these policies and procedures.
3. Retaliation by Employers
Plaintiffs in retaliation cases do not have to prove a challenged action adversely affected their
workplace or employment. Instead, the challenged action must have been one that would likely
Myrta Morales-Cruz held a teaching position at the University of Puerto Rico School of Law. For failing to
report a co-teacher’s affair with a student, the dean criticized Morales–Cruz as “insecure,” “immature,” and
“fragile.” A different professor commented that she had shown poor judgment, had “personality flaws,” and
had trouble with “complex and sensitive” situations. Morales–Cruz complained to the university’s chancellor.
Morales-Cruz filed a suit in a federal district court against the university, alleging retaliation in violation of Title
VII. The court dismissed her claim. She appealed.
in conduct protected by Title VII.
………………….………….………………………….………….………………………….…………...…………………
Notes and Questions
a former employee who complained about discrimination.
What are some of the legitimate reasons on which an employer can base job–related decisions?
Clear grounds for hiring decisions are such factors as an applicant’s experience, conduct, accomplishments,
and similar criteria. The most obvious reason for an employer to renew an employment contract, promote an
Is it possible to fully protect employees from discrimination in the workplace? No, because bias
can be subtle, unconsciously influencing the actions of even the most avowedly unbiased individuals. Also,
“fully protect” is a somewhat vague notion.
Yes, if the protection of employees from discrimination in the workplace remains a constant legal and
ethical job-related goal. Over time, people are capable of overcoming even their most entrenched,
rationalized prejudices.
whole or in part.
ANSWER TO “THE ETHICAL DIMENSION”
QUESTION IN CASE 11.2
process. If so, Morales-Cruz’s poor judgment may have made her a weaker candidate for tenure.
ANSWER TO “THE LEGAL ENVIRONMENT DIMENSION”
QUESTION IN CASE 11.2
ADDITIONAL CASES ADDRESSING THIS ISSUE —
• Brissette v. Franklin County, Sheriff’s Office, 235 F.Supp.2d 63 (D.Mass. 2003) (female correctional
officers proved that a sheriff maintained a hostile work environment for female employees, but failed to
establish that they were denied promotions and terminated because of gender bias when they failed to rebut
• Quantock v. Shared Marketing Services, Inc., 312 F.3d 899 (7th Cir. 2002) (an employee’s job transfer
was not a tangible adverse employment action on which a claim of sexual harassment under Title VII could be
based, when the transfer was a temporary change in her job responsibilities rather than a significant
diminishment of those responsibilities).
4. Harassment by Co-Workers and Others
10 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
Title VII covers same gender harassment.
ENHANCING YOUR LECTURE—
“equal opportunity” harassers—those who harass both sexes equally—because such persons are not
discriminating on the basis of gender.
This point was made clear to Steven and Karen Holman, a married couple who worked for the Indiana
Department of Transportation, when they sued their employer for sexual harassment. The Holmans alleged
supervisor harassed both of them. Thus, concluded the court, the Holmans could not maintain a Title VII
action against their employer.a
THE BOTTOM LINE
ENHANCING YOUR LECTURE—
SEXUAL HARASSMENT IN OTHER NATIONS
2 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
of employment. Nearly any employer with fifteen or more employees is covered. The basic outlines of this
statute are sketched in the text.
A. THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
The Equal Employment Opportunity Commission (EEOC) issues guidelines interpreting the law. Also,
limited.
C. INTENTIONAL AND UNINTENTIONAL DISCRIMINATION
1. Intentional Discrimination
• He or she applied and was qualified for the job in question.
• He or she was rejected by the employer.
• The employer continued to seek applicants for the position or filled the position with a person
not in a protected class.
St. Rose, Louisiana. When the quality of Dees’s work deteriorated—he began marking equipment as fit to be
rented even though it was not working—he was terminated. Dees filed a suit in a federal district court against
United, alleging discrimination based on race. United provided evidence of a legitimate, non-discriminatory
reason for Dees’s termination—unsatisfactory job performance. The court issued a judgment in United’s
favor. Dees appealed.
CHAPTER 11: EMPLOYMENT DISCRIMINATION AND DIVERSITY 3
whole or in part.
Disabilities Act (ADA) prohibits disability-based discrimination in most workplaces with fifteen or more
workers. To prevail on a claim under the ADA, a plaintiff must show that he or she (1) has a disability, (2) is
otherwise qualified for the employment in question, and (3) was excluded from the employment solely
because of the disability.
As applied in the Dees case, Title VII of the Civil Rights Act prohibits employment discrimination on the
basis of race. A prima facie case on this cause can be established by a plaintiff showing that (1) he is a
member of a protected class, (2) he was qualified of the position in question, (3) he was discharged by the
employer, and (4) the employer filled the position with a person not in a protected class. The burden shifts to
ANSWERS TO LEGAL REASONING
QUESTIONS AT THE END OF CASE 11.1
case of discrimination under Title VII of the Civil Rights Act and the Age Discrimination in Employment Act. At
that point, the court determined that United Rentals had provided sufficient evidence of a legitimate, non–
Dees to show that this reason was a pretext for discrimination.
On Dees’s appeal, the U.S. Court of Appeals for the Ninth Circuit also assumed that Dees had
established a prima facie case of discrimination based on race or age, that United Rentals had submitted
sufficient evidence of a legitimate, non-discriminatory reason for Dees’ termination, and that the burden had
shifted back to Dees to show that this reason was a pretext for discrimination.
whole or in part.
of the equipment.” Both courts recognized that Dees did not present any evidence to tie United Rentals’ final
termination decision to a discriminatory motive.
Dees to show that this reason was a pretext for discrimination. And Dees did not meet this burden. He did not
present any evidence to tie his employer’s termination decision to a discriminatory motive. The lower court
concluded that Dees made only conclusory allegations that he was discriminated against. This was fatal to his
case. His claims failed.
have failed and for the same reasons as they actually failed.
For example, the Age Discrimination in Employment Act (ADEA) prohibits employment discrimination on
the basis of age against individuals forty years of age or older. For the ADEA to apply, an employer must
have twenty or more employees, and the employer’s business activities must affect interstate commerce. To
establish a prima facie case, a plaintiff must show that he or she was (1) a member of the protected age
group, (2) qualified for the position from which he or she was discharged, and (3) discharged because of age
2. Unintentional Discrimination
If a plaintiff challenging an employment practice or procedure having a discriminatory impact on a
protected class can show a connection between the practice and the impact, he or she makes out a
prima facie case, and no evidence of discriminatory intent is necessary. The burden shifts tot the
employer to show that the practice or procedure is justified.
b. Rate of Hiring
A plaintiff can also prove disparate impact by comparing the employer’s hiring rates for
members of the majority class and members of a protected class. Disparate impact is shown if
the rate for the latter is less than four-fifths of the rate for the former.
whole or in part.
• If a company’s standards or policies for selecting or promoting employees have the effect of dis–
• Discrimination against these protected classes in regard to employment conditions and benefits is
also illegal.
ANSWER TO CRITICAL THINKING QUESTION IN THE FEATURE—
others enjoy looking at images of attractive people at parties, on vacations, and having fun. When employers
see images of an employee associating with other attractive people, it may inadvertently cause employers to
have more positive feelings about that worker. That worker may then receive better performance evaluations,
higher salaries, more promotions and bonuses.
Victims of discrimination may have a cause under Section 1981 of the Civil Rights Act of 1866,
which prohibits discrimination on the basis of race or ethnicity in the formation or enforcement of
contracts, with no cap on damages.
E. DISCRIMINATION BASED ON RELIGION
2. Undue Hardship
An employer is not required to make an accommodation that would cause the employer undue
hardship.
F. DISCRIMINATION BASED ON GENDER
whole or in part.
1. Gender Must Be a Determining Factor
In a gender discrimination suit, a plaintiff must show that gender was a determining factor in an
employer’s decision to hire, fire, or promote.
• The Equal Pay Act of 1963 prohibits gender-based discrimination in wages paid for equal work
when a job requires equal skill, effort, and responsibility under similar conditions.
• Under the Lily Ledbetter Fair Pay Act of 2009, each time a person is paid discriminatory
1. Proving Constructive Discharge
An employee must show that the employer caused the intolerable conditions, and knew, or had
reason to know, of the conditions and failed to correct them within a reasonable time.
• Quid pro quo harassment occurs when job opportunities, promotions, and the like are doled out on
the basis of sexual favors.
• Hostile-environment harassment occurs when an employee is subjected to sexual comments,
jokes, or physical contact perceived to be offensive.
In 1974, Mechelle Vinson began working at Meritor Savings Bank. Vinson later sued the bank, claiming
that she had “constantly been subjected to sexual harassment.” She claimed that Sidney Taylor, a vice
president and branch manager, made sexual advances toward her, to which she acquiesced out of fear of
losing her job. She testified that Taylor fondled her in front of other employees and forcibly raped her. Taylor
denied the charges. The trial court concluded that any sexual relationship between Vinson and Taylor had no
whole or in part.
In one of the early and often-cited cases involving charges of sexual harassment—Meritor Savings Bank,
FSB v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986)—the United States Supreme Court
workplace that racial harassment is to racial equality.’” Requiring an individual to “run a gauntlet of sexual
abuse in return for the privilege of being allowed to work and make a living can be as demeaning and discon–
certing as the harshest racial epithets.” Holding that the bank’s liability for the actions of its supervisory
employees should be determined according to common law principles of agency, the Court remanded the
case to the district court for further proceedings.
Sexual harassment is a major problem in the workplace. Over 40 percent of female federal employees,
for example, reported incidents of sexual harassment in 1980 and roughly the same number reported
incidents in 1987. Sexual harassment cost the federal government $267 million between May 1985 and May
1987 for losses in productivity, sick leave costs, and employee replacement costs. According to the United
inflicted by anger, humiliation, frustration, withdrawal, dysfunction in family life, as well as medical expenses,
Sometimes, a person questions whether conduct he or she perceives as offensive should instead be
viewed only as bad taste, poor manners, a lack of social grace, or an off-color sense of humor. It has been
suggested that if a person feels belittled by an actor’s conduct, it is harassment. If the person feels that the
actor treated the person as an equal, it is not harassment.
Because women are disproportionately victims of rape and sexual assault, many women who are victims
of mild forms of sexual harassment may worry whether a harasser’s conduct is merely a prelude to violent
sexual assault. Men, who are rarely victims of sexual assault, may view sexual conduct without a full
appreciation of the social setting or the underlying threat of violence that a woman may perceive.
against an employee.
2. The Ellerth/ Faragher Affirmative Defense
Employers have an affirmative defense if—
• They took “reasonable care to prevent and correct promptly any sexually harassing behavior”
• The employee suing for harassment failed to follow these policies and procedures.
3. Retaliation by Employers
Plaintiffs in retaliation cases do not have to prove a challenged action adversely affected their
workplace or employment. Instead, the challenged action must have been one that would likely
Myrta Morales-Cruz held a teaching position at the University of Puerto Rico School of Law. For failing to
report a co-teacher’s affair with a student, the dean criticized Morales–Cruz as “insecure,” “immature,” and
“fragile.” A different professor commented that she had shown poor judgment, had “personality flaws,” and
had trouble with “complex and sensitive” situations. Morales–Cruz complained to the university’s chancellor.
Morales-Cruz filed a suit in a federal district court against the university, alleging retaliation in violation of Title
VII. The court dismissed her claim. She appealed.
in conduct protected by Title VII.
………………….………….………………………….………….………………………….…………...…………………
Notes and Questions
a former employee who complained about discrimination.
What are some of the legitimate reasons on which an employer can base job–related decisions?
Clear grounds for hiring decisions are such factors as an applicant’s experience, conduct, accomplishments,
and similar criteria. The most obvious reason for an employer to renew an employment contract, promote an
Is it possible to fully protect employees from discrimination in the workplace? No, because bias
can be subtle, unconsciously influencing the actions of even the most avowedly unbiased individuals. Also,
“fully protect” is a somewhat vague notion.
Yes, if the protection of employees from discrimination in the workplace remains a constant legal and
ethical job-related goal. Over time, people are capable of overcoming even their most entrenched,
rationalized prejudices.
whole or in part.
ANSWER TO “THE ETHICAL DIMENSION”
QUESTION IN CASE 11.2
process. If so, Morales-Cruz’s poor judgment may have made her a weaker candidate for tenure.
ANSWER TO “THE LEGAL ENVIRONMENT DIMENSION”
QUESTION IN CASE 11.2
ADDITIONAL CASES ADDRESSING THIS ISSUE —
• Brissette v. Franklin County, Sheriff’s Office, 235 F.Supp.2d 63 (D.Mass. 2003) (female correctional
officers proved that a sheriff maintained a hostile work environment for female employees, but failed to
establish that they were denied promotions and terminated because of gender bias when they failed to rebut
• Quantock v. Shared Marketing Services, Inc., 312 F.3d 899 (7th Cir. 2002) (an employee’s job transfer
was not a tangible adverse employment action on which a claim of sexual harassment under Title VII could be
based, when the transfer was a temporary change in her job responsibilities rather than a significant
diminishment of those responsibilities).
4. Harassment by Co-Workers and Others
10 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
Title VII covers same gender harassment.
ENHANCING YOUR LECTURE—
“equal opportunity” harassers—those who harass both sexes equally—because such persons are not
discriminating on the basis of gender.
This point was made clear to Steven and Karen Holman, a married couple who worked for the Indiana
Department of Transportation, when they sued their employer for sexual harassment. The Holmans alleged
supervisor harassed both of them. Thus, concluded the court, the Holmans could not maintain a Title VII
action against their employer.a
THE BOTTOM LINE
ENHANCING YOUR LECTURE—
SEXUAL HARASSMENT IN OTHER NATIONS