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Business Law Chapter 35 Homework The text points out that the EEOC has established

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Business Law: Text and Cases 14th Edition
Frank B. Cross, Kenneth W. Clarkson, Roger LeRoy Miller
Chapter 35
Employment Discrimination
Only in recent decades have federal and state judicial decisions, administrative agency actions, and leg-
islation restricted the ability of employers, as well as unions, to discriminate against workers on the basis of race,
color, religion, national origin, gender, age, or handicap.
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
Discrimination in Employment Act of 1967 and the Americans with Disabilities Act of 1990, respectively.
The focus of this chapter is on the kinds of discrimination prohibited by these federal statutes. Discrimination
against employees on the basis of any of the above-mentioned criteria may also violate state human rights statutes or
other state laws prohibiting discrimination, as discussed at the end of this chapter.
I. Title VII of the Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964 and its amendments prohibit job discrimination against employees,
applicants, and union members on the basis of race, color, national origin, religion, and gender at any stage
of employment. Nearly any employer with fifteen or more employees is covered. The basic outlines of this
statute are sketched in the text.
The Equal Employment Opportunity Commission (EEOC) issues guidelines interpreting the law. Also,
complaints about violations are registered first with the EEOC. If it is unable to resolve a situation and
chooses not to sue to enforce the law, the victim may sue. The text points out that the EEOC has
established a priority as to which cases it will pursue.
The rights of employeesas a group, or classto bring discrimination claims against their employer are
1. Intentional Discrimination
a. Prima Facie Case
In a disparate-treatment employment discrimination case, a plaintiff must initially establish a
prima facie case of discrimination. The elements of a prima facie case are
He or she is a member of a protected class.
He or she applied and was qualified for the job in question.
b. Burden-Shifting Procedure
After the plaintiff establishes a prima facie case, the employer can offer a defense. If the
employer offers a legitimate defense, the plaintiff, to succeed, must show that it is a pretext
and that discriminatory intent was the real motivation.
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.
a. Pool of Applicants
A plaintiff can prove disparate impact by comparing the employer’s work force to the pool of
qualified members of a protected class available in the local labor market and relating any
disparity to the employer’s practice or procedure.
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.
Race includes the ancestry or ethnic characteristics of a group of persons. National origin refers to
the country of a person’s birth or their ancestry or culture.
If a company’s standards or policies for selecting or promoting employees have the effect of dis-
criminating against employees or job applicants on the basis of race, color, or national origin, a
presumption of illegal discrimination arises.
 
Research has shown that short men make statistically less income than tall men. It has also shown that
compared with attractive individuals, less attractive people generally receive poorer performance reviews,
lower salaries, and smaller damages awards if they win lawsuits. Should something be done about this?
Although there is certainly evidence that appearance-based discrimination exists in the workplace and
elsewhere, it is not so clear that it can be prohibited. In the 1970s, Michigan decided to do something about
“lookism” and passed a law barring various kinds of appearance-based discrimination,a Whether because of
the cost or the difficulty of proving this type of discrimination, however, only a few lawsuits based on the law
have been filed each year. At least six cities have similar laws, but these laws also have not given rise to
many lawsuits.
Federal and state laws prohibit discrimination against people who are clinically obese, but discrimination
against those who are merely overweight is usually not illegal. Given that one study found that more than 40
percent of overweight women felt stigmatized by their employers, this remains a serious problem.
Women sometimes complain that they are held to different grooming standards in the workplace than
their male counterparts. A female bartender at a casino in Nevada brought a lawsuit after she was fired for not
complying with rules that required her to wear makeup and teased hair while male bartenders were just told to
“look neat.” The court ruled, however, that these allegations were not enough to outweigh an at-will
employment contract.b
At the same time, women in senior management positions find that they can look “too sexy.” A few years
ago, a Citibank employee made headlines when she claimed that she was fired for her excessive sexiness,
which supposedly distracted her male co-workers.
The majority of workers today post photographs of themselves, their families, and their friends on
Facebook and other social media. How might this practice affect appearance-based discrimination in
the workplace? Attractive people often have attractive partners, families, and friends, which means that
1. Reverse Discrimination
2. Potential Section 1981 Claims
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.
Title VII prohibits government employers, private employers, and unions from discriminating against
persons because of their religion.
2. Undue Hardship
An employer is not required to make an accommodation that would cause the employer undue
Case 35.1: Bauer v. Lynch
Jay Bauer, an assistant professor at the University of WisconsinMilwaukee, attended the FBI Academy
where he passed all academic tests, showed proficiency in firearms and defensive tactics, and met all
expectations for practical applications and skills. His classmates chose him to be class leader and
spokesperson for graduation. But he was unable to pass the final physical fitness test (PFT) and resigned.
Two weeks later, the FBI offered him a position as an intelligence analyst, and he accepted. Later, he filed a
suit in a federal district court against Loretta Lynch, the United States Attorney General, alleging that the FBI’s
use of gender-normed PFT standards constituted discrimination on the basis of sex in violation of Title VII.
The court issued a summary judgment in Bauer’s favor. The Attorney General appealed.
The U.S. Court of Appeals for the Fourth Circuit vacated and remanded. An employer does not violate
Title VII by requiring fitness standards that distinguish between the sexes on the basis of “physiological
differences” if the standards “impose an equal burden of compliance on both men and women.”
Notes and Questions
How does global economic integration affect gender equality? The accelerating movement of labor
and capital, and the increasing accessibility of information, across international borders is leading to greater
global economic integration among makers and markets. These events and their effects are acting to remove
some of the traditional barriers to women in the workplace and to dissolve some other restraints on gender
Opening trade, by limiting or eliminating such constraints as import duties and quotas, and making
information and communication technology widely available has created more jobs and connections to more
markets for many women in many countries. This, of course, increases women’s economic opportunity.
This occurs in part because gender inequality can be a significant impediment to growth in an
economically integrated world. The ability of a nation, or its industries, to compete globally can be undercut by
employment policies that limit women because it can prevent makers and marketers from reaching their full
Employers may not discriminate against employees on the basis of gender.
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.
Case 35.2: Young v. United Parcel Service, Inc.
Peggy Young was a driver for United Parcel Service, Inc. (UPS). When she became pregnant, her doctor
advised her not to lift more than twenty pounds. UPS required drivers to lift up to seventy pounds and told
Young that she could not work under a lifting restriction. She filed a suit in a federal district court against UPS,
Notes and Questions
Suppose that Young had alleged employment discrimination on the basis of a disability. How
would the steps to a decision on that allegation have been different? The steps to a decision under the
two statutes on which Young based her allegations of employment discrimination and the statute that applies
to allegations of discrimination on the basis of a disability are similar, though not the same. The Americans
with 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.
2. Pregnancy Discrimination
3. Wage Discrimination
The Equal Pay Act of 1963 prohibits gender-based discrimination in wages paid for equal work
4. Discrimination against Transgender Persons
A growing number of federal courts are holding that Title VII’s protection against gender
discrimination applies to transgender persons.
Constructive discharge occurs when an employer causes working conditions to be so intolerable that a
reasonable person in an employee's position would feel compelled to quit.
1. Proving Constructive Discharge
2. Applies to All Title VII Discrimination
An employee can seek damages for loss of income, including back pay.
Sexual harassment can take two forms
Quid pro quo harassment occurs when job opportunities, promotions, and the like are doled out on
the basis of sexual favors.
Case 35.3: Roberts v. Mike’s Trucking, Ltd.
Teresa Roberts worked for Mike’s Trucking, Ltd., in Columbus, Ohio. Her supervisor was Mike’s owner,
Mike Culbertson. According to Roberts, Culbertson called her his “sexretary” and constantly talked about his
sex life. He often asked her if she wanted to sit on “Big Daddy's” lap, rubbed his crotch against her, trapped
her at the door and asked for hugs or kisses, and asked if she needed help in the restroom. Roberts asked
him to stop the behavior, to no avail. She became insecure and less productive, and began to suffer anxiety
attacks and high blood pressure. Roberts filed a suit in an Ohio state court against Mike’s, alleging a hostile
work environment through sexual harassment. From a judgment in Roberts’s favor, Mike’s appealed.
A state intermediate appellate court affirmed. Other female employees corroborated Roberts’s account.
“There was sufficient and substantial evidence * * * that a reasonable person would find Culbertson's
conduct created a hostile environment and Roberts found the conduct to be sufficiently severe or pervasive to
affect her employment.”
Notes and Questions
Does conduct need to be both severe and pervasive to constitute a hostile or abusive work
environment under Title VII? No, conduct does not need to be both severe and pervasive to constitute a
hostile or abusive work environment under Title VII. Such conduct may be both severe and pervasive, but it is
enough to meet the requirements of Title VII if it is either sufficiently severe or sufficiently pervasive.
Sexual Harassment
Cases considering claims of sexual harassment include the following.
Brissette v. Franklin County, Sheriff’s Office, __ F.Supp.2d __, 2003 WL 57577 (D.Mass. 2003) (female
correctional officers proved that a sheriff’s office maintained a hostile work environment for its female
employees, but failed to establish that they were denied promotions and terminated because of gender bias
when they failed to rebut their abuse of the office’s sick-leave policy, which was a legitimate gender-neutral
justification for the employer’s actions).
“Hostile or Offensive Environment”
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
relationship to Vinson’s continued employment and ruled in favor of the bank. Vinson appealed, and the
appellate court ruled in her favor, finding that she had made out a case of harassing-environment
discrimination. The bank appealed.
In one of the early and often-cited cases involving charges of sexual harassmentMeritor Savings Bank,
FSB v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986)the United States Supreme Court
affirmed the appellate court’s decision. The Supreme Court rejected the bank’s argument that in prohibiting
discrimination under Title VII, Congress was concerned with “tangible loss” of “an economic character” and
Perceiving Conduct as Harassment
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
States Merit Systems Protection Board, victims of sexual harassment “pay all the intangible emotional costs
inflicted by anger, humiliation, frustration, withdrawal, dysfunction in family life, as well as medical expenses,
litigation expenses, job search expenses, and the loss of valuable sick leave and annual leave.
1. Harassment by Supervisors
To be liable for sexual harassment, an employer must have taken a tangible employment action
against an employee. Employers have an affirmative defense if
They took “reasonable care to prevent and correct promptly any sexually harassing behavior”
(such as establishing effective harassment policies and complaint procedures).
The employee suing for harassment failed to follow these policies and procedures.
2. 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
have dissuaded a reasonable worker from making or supporting a charge of discrimination.
3. Harassment by Co-Workers and Others
4. Same-Gender Harassment
Title VII covers same gender harassment.
 
The prohibition against sexual harassment in the workplace is an extension of Title VII’s prohibition
against gender-based discrimination. This means that there can be no sexual harassment if no gender-based
discrimination is involved. It also means, among other things, that Title VII does not protect employees from
“equal opportunity” harassers—those who harass both sexes equallybecause 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
that their supervisor had sexually harassed each of them individually on separate occasions and that the
supervisor retaliated against themby denying them certain privileges and paywhen they rejected his
advances. In evaluating their claim, the court looked at the letter of Title VII, which states, “It shall be an
unlawful employment practice for an employer to . . . discriminate against any individual with respect to
compensation, terms, conditions, or privileges of employment, because of such individual’s . . . sex.” The
court observed that in the Holmans’ case, there was no discrimination “because of . . . sex” because the
supervisor harassed both of them. Thus, concluded the court, the Holmans could not maintain a Title VII
action against their employer.a
Harassment in the workplace takes many forms, including harassment based on gender, race, national
origin, religion, age, and disability. In cases alleging sexual harassment, however, the harassment must be
on the basis of sex (gender), or Title VII will not apply.
 
The problem of sexual harassment in the workplace is not confined to the United States. Indeed, it is a
worldwide problem for female workers. In Egypt, Turkey, Argentina, Brazil, and many other countries, there is
no legal protection against any form of employment discrimination. Even in those countries that do have laws
prohibiting discriminatory employment practices, including gender-based discrimination, those laws often do
not specifically include sexual harassment as a discriminatory practice. Several countries have attempted to
remedy this omission by passing new laws or amending others to specifically prohibit sexual harassment in
the workplace. Japan, for example, has amended its Equal Employment Opportunity Law to include a
provision making sexual harassment illegal. Thailand has also passed its first sexual-harassment law. In
2002, the European Union, which some years ago outlawed gender-based discrimination, adopted a directive
that specifically identifies sexual harassment as a form of discrimination. Nevertheless, women’s groups
throughout Europe contend that corporations in European countries tend to view sexual harassment with
“quiet tolerance.” They contrast this attitude with that of most U.S. corporations, which have implemented
specific procedures to deal with harassment claims.
Why are U.S. corporations more aggressive than European companies in taking steps to prevent
sexual harassment in the workplace?
5. Sexual-Orientation Harassment
Title VII does not cover harassment on the basis of sexual orientation. Many statesand many
companiesban such discrimination, however.
Employers may avoid liability if they take prompt remedial action. Privacy rights must be considered if
the action includes electronic monitoring of employees.
 
Many employers today establish and implement policies that specify permissible and impermissible uses
of the Internet in the workplace. Yet what if employees who violate such a policy claim that they did not
“knowingly” do so? In this situation, if the employer discharges the employees for violating the policy, can the
employees successfully claim that they were discharged without “just cause” and thus entitled to
unemployment compensation? This question recently came before a Utah appellate court in Autoliv ASP,
Inc. v. Department of Workforce Services.a
Autoliv ASP, Inc., a supplier of auto-safety products, gives each of its more than six thousand employees
an employee handbook. Among other things, the handbook states that Autoliv will not “tolerate or permit
illegal harassment or retaliation of any nature within our workforce.” The handbook also states that the use of
e-mail “for reasons other than transmittal of business-related informationis prohibited and that violations of
company policies can result in any of several disciplinary actions, including termination.
In 1999, Autoliv learned that an employee had received offensive and sexually harassing e-mail from
other Autoliv employees. The company immediately investigated and learned that two employees had, on
numerous occasions, sent messages containing jokes, photos, and short videos that were sexually explicit
and clearly offensive in nature. Shortly thereafter, Autoliv terminated the two employees for “improper and
unauthorized use of company e-mail.” When the employees applied for unemployment benefits, a threshold
question was whether they had been fired for just cause. If so, they would not be entitled to unemployment
benefits. If not, they would be entitled to such benefitsand Autoliv would ultimately have to pay higher
unemployment taxes as a result.
Under the relevant state statute, to be fired for “just cause,” employees had to have “knowledge of the
conduct which the employer expected.” The two employees testified that they had not “knowingly” engaged
in misconduct. Further, if Autoliv concluded that they were engaging in misconduct, Autoliv should have
warned them and allowed them to change their conduct. The agency agreed, noting that because abuse of
the company’s e-mail system was common among Autoliv employees, Autoliv should have notified the
employees that their misconduct would not be tolerated before firing them. Because Autoliv had not done so,
the termination was without “just cause.”
Autoliv appealed the agency’s decision to a state appellate court, asserting on appeal that it was
“incomprehensible” for the agency to hold that a worker could be unaware of the dangers of sending sexually
offensive materials to co-workers through a company’s computer network. The court agreed with Autoliv,
stating that “[s]uch materials in the workplace could have subjected the employer to sexual harassment and
sex discrimination lawsuits.” The court reversed the agency’s decision, concluding that “in today’s workplace,
the e-mail transmission of sexually explicit and offensive jokes, pictures, and videos constitutes a flagrant
violation of a universal standard of behavior.”
Suppose that an employee writes a message to like-minded persons concerning religious beliefs
or political views. Can the employee be fired in that situation? Who decides what is acceptable
Internet activity when there is no written policy?
How might an employee avoid the possibility that his or her employer will discover objectionable
items on the employee’s computer?
The focus of this case was on whether the two discharged employees were entitled to un-
employment benefits. Suppose, though, that the employees had sued Autoliv for wrongful discharge
on the ground that their discharge constituted a violation of an implied employment contract (see
Chapter 34). Could they have succeeded in such a suit? Why or why not?
a. 29 P.3d 7 (Utah App. 2001).
A plaintiff may obtain reinstatement, back pay, retroactive promotions, and damages. Compensatory
damages are available only in cases of intentional discrimination. Punitive damages may be recovered
in some cases, but the sum of compensatory and punitive damages is limited to specific amounts
against specific employers (stated in the text).
Paramour Liability
When, because of a romantic relationship, an employer hires, promotes, or otherwise favors someone (a
“paramour”), an applicant or employee who is better qualified may believe that the employer should be held
liable under Title VII on the ground of sex discrimination.
In King v. Palmer, 778 F.2d 878 (D.C. Cir. 1985), a nurse filed a discrimination claim against her employer
because her supervisor had promoted another nurse allegedly on the basis of their romantic relationship. The
plaintiff proved that kissing, embracing, and other “amorous behavior” played a part in the promotion decision.
The court stated that Title VII is violated if a romantic relationship is a substantial factor in an employment
decision. The court ordered the employer to promote the nurse who had been overlooked.
The Equal Employment Opportunity Commission (EEOC) has rejected claims of discrimination based on
consensual romantic relationships. According to the EEOC, “[a]n isolated instance of favoritism toward a
For example, Jane promotes Wallace, her fiancée, over Dora, who believes she is better qualified for the
promotion. Dora was not denied the promotion because she is a woman, nor would she have received the
promotion if she were a man. Thus, under the EEOC’s guidelines, there would be no liability.
Most courts agree with the EEOC. For example, in DeCintio v. Westchester County Medical Center, 807
F.2d 304 (2d Cir. 1986), the court held that voluntary, romantic relationships cannot form the basis of a sex

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