Management Chapter 2 The Legal Environment Regulations For Federal Contractors Addition The Various Laws

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Chapter 2: The Legal Environment

Regulations for Federal Contractors

In addition to the various laws described above, numerous other regulations apply only to

federal contractors. For instance, all banks (that participate in the U.S. Federal Reserve

Executive Order 11478 required the federal government to base all employment policies

and decisions on merit and fitness, specifying that race, color, sex, national origin, and

Discrimination on the Basis of Sexual Orientation

Sexual orientation discrimination refers to being treated differently because of one’s real or

perceived sexual orientation—whether gay, lesbian, bisexual, or heterosexual. There is no

federal law that prohibits discrimination on the basis of sexual orientation. Although

federal employees are protected against such discrimination, any attempt to pass a law

regarding all employees has failed.

The Defense of Marriage Act (DOMA), signed into law in 1996 by Bill Clinton, states that

for the purposes of deciding who receives federal benefits, marriage is defined as only

changing facilities consistent with the gender on their birth certificate. A new law revoking

HB2 was passed in March of 2017, but this was only after major public outcry and

boycotts from several businesses and the NBA. But in revoking the controversial bill, the

Chapter 2: The Legal Environment

North Carolina legislature stated that the regulation of public bathrooms and locker rooms

would remain the purview of the state and that no entity could pass antidiscrimination

legislation that was contrary to the decision by the state government. This was a direct

repudiation of the antidiscrimination bill passed by the city of Charlotte, which started the

entire discussion and led to the passage of HB2. Furthermore, in 2017, President Trump’s

F. Enforcing Equal Employment Opportunity

The enforcement of equal opportunity legislation generally is handled by two agencies. One

agency is the Equal Employment Opportunity Commission, and the other is the Office of

Federal Contract Compliance Procedures. The Equal Employment Opportunity Commission

(EEOC) is a division of the Department of Justice. It was created by Title VII of the 1964

Civil Rights Act and today is given specific responsibility for enforcing Title VII, the Equal

Pay Act, and the Americans with Disabilities Act. The EEOC has the following three major

functions.

2. Gathering information regarding employment patterns and trends in U.S. businesses

3. Issuing information about new employment guidelines as they become relevant

The first function is illustrated in Figure 2.3 of the text, which depicts the basic steps that an

individual who thinks she has been discriminated against in a promotion decision might

On the other hand, if the EEOC cannot reach an agreement with the organization, then two

courses of action may be pursued. First, the EEOC can issue a right-to-sue letter to the victim.

The second important function of the EEOC is to monitor the hiring practices of

organizations. The third function of the EEOC is to develop and issue guidelines that help

organizations determine whether their decisions are violations of the law enforced by the

Chapter 2: The Legal Environment

EEOC.

III. Other Areas of Human Resource Regulation

A. Legal Perspectives on Compensation and Benefits

The Fair Labor Standards Act (FLSA), passed in 1938, established a minimum hourly

wage for jobs. The first minimum wage was $0.25 an hour but the minimum wage has been

raised many times in the decades since as the law has been amended. The FSLA also

established the workweek in the United States as 40 hours per week. It further specified that

all full-time employees must be paid at a rate of one and a half times their normal hourly rate

for each hour of work beyond 40 hours in a week. Finally, the FLSA also includes child labor

provisions, which provide protection for persons 18 years of age and younger. These

protections include keeping minors from working on extremely dangerous jobs and limiting

the number of hours that persons younger than 16 can work.

Chapter 2: The Legal Environment

Contemporary Challenges in HR: Working for Free?

The Fair Labor Standards Act specifically exempts those in executive, administrative, or

professional jobs from overtime payments. But because so many jobs have shifted from the

manufacturing setting to service settings, and because the nature of so many jobs has changed,

the lines between different kinds of work have blurred. Service jobs, though, often have more

subjective “boundaries” and may require more start-up time.

Think It Over

1. How might you respond if your employer (current or future) directly or indirectly

requires you to work extra hours with no additional compensation?

Students’ answers may vary. Some may say that working overtime with no additional

compensation is a practice that they do not want to encourage. Others may say that

they would consider working overtime if they can leverage it for a promotion or a

recommendation at a later time.

2. What might you as a manager do to insure your employees never feel compelled to

work “off the clock”?

Students’ answers may vary. Ensuring that timelines and business requirements are in

should be able to have a discussion with the manager on how to resolve any issues

without having to work overtime.

B. Legal Perspectives on Labor Relations

The National Labor Relations Act, or Wagner Act, was passed in 1935 in an effort to

control and legislate collective bargaining between organizations and labor unions. The

Chapter 2: The Legal Environment

the act.

The Employee Free Choice Act, also known as the Union Relief Act, was first proposed in

2009. NLRB ruled, in August of 2015, in the case of the Browning-Ferris Industries of

California, that firms employing contractors to perform various HR functions are liable for

any violations committed by those contractors.

C. Employee Safety and Health

The basic premise of the Occupational Safety and Health Act of 1970 (OSHA) is that each

employer has an obligation to furnish each employee with a place of employment that is free

D. Drugs in the Workplace

The Drug-Free Workplace Act of 1988 was passed to reduce the use of illegal drugs in the

workplace. This law applies primarily to government employees and federal contractors, but it

also extends to organizations regulated by the Department of Transportation and the Nuclear

E. Plant Closings and Employee Rights

The Worker Adjustment and Retraining Notification (WARN) Act of 1988 stipulates that

an organization with at least 100 employees must provide notice at least 60 days in advance of

plans to close a facility or lay off 50 or more employees. The penalty for failing to comply is

F. Privacy Issues at Work

The Privacy Act of 1974, applies directly to federal employees only, but it has served as the

Chapter 2: The Legal Environment

impetus for several state laws. Basically, this legislation allows employees to review their

personnel files periodically to ensure that the information contained in them is accurate. But

IV. Evaluating Legal Compliance

The assurance of compliance with the laws and regulations can best be done through a three-step

process. The first step is to ensure that managers clearly understand the laws that govern every

Closing Case: Power Plays at Work

Case Summary

In 2012 (the last year for which there are complete data), nearly 13,000 charges of sexual

harassment were filed with the U.S. Equal Employment Opportunity Commission (EEOC), 84

percent of them by women. Why does sexual harassment (mostly of women) occur in the

workplace? “Power,” says researcher Debbie Dougherty, who conducted a study in conjunction

Chapter 2: The Legal Environment

Case Questions

1. In light of the research discussed in this case, in your opinion how should sexual

harassment be punished?

Students’ answers will vary. Students might suggest enforcing the laws relating to

2. What laws relate most closely to sexual harassment?

3. What legal protection, if any, should exist to protect an innocent individual from false

charges of sexual harassment?

4. How might sexual harassment relate to bullying?

Students’ answers will vary. Sexual harassment and bullying are both forms of power play.

Discussion Questions

1. Describe the process through which the legal context of human resource management

(HRM) is created.

The legal context of human resource management is shaped by a variety of forces.

2. Summarize the role of the Thirteenth and Fourteenth Amendments to the U.S. Constitution

in equal employment opportunity.

The Thirteenth Amendment, which abolished slavery, was the beginning of the long road

toward equal employment opportunity for African American citizens of the United States.

3. What is illegal discrimination? What is legal discrimination?

4. Identify and summarize the various forms of illegal discrimination.

Students’ answers will vary. Disparate treatment involves treating employees or applicants

differently because of their race, color, sex, religion, national origin, age, or disability

status. Bona fide occupational qualifications are rare exceptions when sex, religion, age, or

5. Identify and summarize five major laws that deal with equal employment opportunity.

Students’ answers will vary. Title VII of the Civil Rights Act of 1964 prohibits

discrimination in a broad range of employment actions on the basis of race, color, sex,

religion, or national origin. Executive Order 11246 requires federal contractors who

receive $10,000 or more to have affirmative action plans to increase the employment of

6. What is the legal status of sexual orientation? What about the rights of transgendered

persons? How do you feel about their rights versus the stated rights of others?

7. Which equal employment opportunity laws will likely affect you most directly when you

finish school and begin to look for employment?

8. Which equal employment opportunity law do you think is most critical? Which do you think

is least critical today?

9. Which equal employment opportunity law do you think is the most difficult to obey? Which

do you think is easiest to obey?

10. In the case of a conflict between a legal and an ethical consequence of a human resource

decision, which do you think should take precedence?

Additional Resource

The Supreme Court’s Decision on Affirmative Action in Fisher v. University of Texas, No.

14–981