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An introduction to the fundamentals of dynamic business law and business ethics chap024

Chapter 24
Employment and Discrimination


Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 24 Case Hypothetical
Jerry Weir is a loading dock worker for American Beauty Supplies, Inc. Jerry’s
supervisor, Bob Garcia, is suspicious that Jerry is a drug user. Although the
company does not have a dress code for its loading dock employees, Jerry’s attire
has given Bob what he believes to be cause for concern. Today, for example, Jerry
is wearing a t-shirt of his favorite 1960s rock-and-roll band, The Appreciative
Deceased. The t-shirt has a picture of The Appreciative Deceased’s mascot, the
“Pooh-Bah Man,” along with the words “Keep on Tokin’.” He is also wearing a
“peace-sign” necklace, tattered blue jeans, and sandals. Add to his attire Jerry’s
long, curly hair and his disheveled beard, and Bob believes his subordinate is a
human tribute to the “60s” generation.
Bob has decided to give Jerry a drug test to determine whether his charge is under

the influence of illicit substances. Bob believes he has “reasonable suspicion” to do
so based on Jerry’s appearance, and the fact that courts have generally upheld the
right of employers to drug-test employees.
Based on these circumstances, does Bob Garcia have the legal right to require that
Jerry Weir submit to a drug test?

Chapter 24 Case Hypothetical and Ethical Dilemma
James Donovan (“J.D.”) Cuthbert, J. D., one year removed from law school and practicing at the St. Louis firm Gibson, Smith and
McGwire, P.L.L.C., is on the “fast-track” for partnership. Cuthbert was a prized hire for Gibson, Smith, and McGwire; with an
imposing physical presence (6 feet, two inches tall and 210 pounds,) a disarming smile, and enough ambition for an entire
courtroom of first-year attorneys, the “grapevine” surmises that Cuthbert will be offered a partnership in four years, far sooner
than the standard wait period of seven years.
Summer has arrived, and the Gibson firm has made plans to field its best-ever recreational softball team. The firm’s “legal nine”
competes annually in the The Bar Association of Greater St. Louis Softball League. Attorneys participating in the league compete
just as vigorously on the field as they do in the courtroom, and law firms strive to earn the annual “bragging rights” associated
with a league championship.
A senior partner at Gibson, Smith and McGwire, Tom Hackman, has recruited Cuthbert to play first base for the team. J.D. was at
first reluctant to play (after all, the practice of law is a “jealous mistress,”) but he eventually agrees, realizing that impressing the
partnership does not occur exclusively in the courtroom.
The Gibson team excels, powering its way to the bar association softball championship game against an impressive foe, The
Micah A. Mayo Personal Injury Law Firm. In the bottom of the 9th inning of a tied championship game, with no one on base and
two outs, “The Mighty Cuthbert” comes to bat. He swings for the fence, and drives the softball to within five feet of a home run.
As he reaches third base, Hackman (the team’s third base coach) signals Cuthbert to stay, but he heads for home instead; glory
is only ninety feet away, an “inside-the-park” homerun would only add to his legend, and extra innings come with no guarantees.
Playing catcher for the Mayo firm is Albert Flaherty, an imposing figure himself; at 6 feet, five inches tall and 230 pounds, Flaherty
is determined to use his height, weight and mass to save the game for his employer.
Cuthbert and Flaherty collide, a cloud of dust surrounds home plate, and a sickening “crack” and scream are heard by all in
attendance. Cuthbert’s right leg is severely broken, and he is out. Reasonable minds might differ in terms of which hurts worse.
The Gibson firm loses after 10 innings, and the biggest question back at the office is “What would have happened if Cuthbert had
stayed on third?” Cuthbert is hospitalized; his medical bills and days out of work are accumulating.
Is Gibson, Smith and McGwire, P.L.L.C. legally liable for Cuthbert’s injury? Is the firm ethically liable for Cuthbert’s injury?

Chapter 24 Case Hypothetical and Ethical Dilemma
Scooters Restaurant is a popular “dive” in Key Largo, Florida with twenty-nine employees. It
primarily attracts male bikers en route to sunny, sub-tropical Key West. Although the
testosterone-charged motorcyclists claim they stop at Scooters for its delicious buffalo wings

and adult beverages, their wives and girlfriends believe the real reason they patronize the
restaurant is the wait staff. Scooters only hires “drop-dead” gorgeous female waitresses
ranging in age from eighteen to twenty-eight, with uniforms of white, midriff-baring halter tops
and key lime-green “short” shorts. Male waiters need not apply at Scooters.
Five (5) male plaintiffs who were denied wait-staff employment at Scooters have filed a civil
lawsuit against the restaurant, alleging gender discrimination in violation of Title VII of the Civil
Rights Act of 1964. The plaintiffs uniformly claim that although they were offered significantly
lower-paying cook and dishwasher positions at Scooters, they were denied wait-staff positions
on the basis of their gender. The eatery has defended on the basis of the “bona fide
occupational qualification” (“BFOQ”) defense. The restaurant alleges that its female-only wait
staff hiring practice is reasonably necessary for the success of its business, based on the
contention that its typical customer (a burly, bearded man in bike leather) expects to be served
only by an attractive waitress.
Is Scooters Restaurant liable for gender discrimination, or should the court accept the
defendant’s “BFOQ” defense?

Chapter 24 Case Hypothetical
Ben Kerrigan and Allison LaCroix have worked together for five years. Although he has kept it to himself, Ben adores
Allison, hanging on every word she says and watching every move she makes. Ben feels considerable guilt for his
amorous emotions, since he has been married to his wife Jeannie for seven years, and since Allison is also married.
From Allison’s perspective, her association with Ben is purely professional, although she does consider him a dear
friend, enjoying his sense of humor, sharing with him many of her daily experiences, and consoling in him when life is
On Friday morning, Ben asks Allison to join him for a quick lunch, stating “You drive, and I’ll buy.” They choose a local
delicatessen, and are seated at a “table for two.” Aware that life is short, and weakened by five years of keeping a
torturous secret, Ben confesses all to Allison over turkey subs and tomato soup. Ben proclaims, “Allison, I am tired of
living a lie. You are not just the woman of my dreams, you are real, and I want you for my own. I worship you, and I
want to share my life with you. You are the most beautiful and intelligent woman I have ever met, and I am willing to
leave Jeannie for you. I hate to hurt your husband, but I love you more than he does. As far as work goes, we can try
our best to keep it a secret; if not, I am willing to find another job. Tell me how you feel, Allison.”
At first, Allison is speechless; her face then reddens, and she finds the words: “Ben, I thought you were my friend, but
instead, you are a lustful stalker. I feel violated. For crying out loud, Ben, we are both married. Don’t you understand
the true meaning of “family values?” Allison immediately rushes from the restaurant, leaving Ben to find a cab, and
Ben wonders if he has said too much.
The following Monday, Ben is called into the office of his supervisor, Alex Friedman. Friedman informs Ben that much
to his regret, Allison has filed a sexual harassment claim against him, and that although she would like to resolve the
matter internally, she will file a claim with the Equal Employment Opportunity Commission if the incident is not
addressed satisfactorily. Friedman has scheduled an internal hearing in two weeks. The supervisor states that if
Allison’s claim holds, Ben will be terminated in light of the company’s “zero-tolerance” anti-sexual harassment policy.
Do Ben’s statements constitute sexual harassment?

• Means that any employee not employed under a
contract/collective bargaining agreement may quit for
any reason/no reason at all, with no required notice
to employer
• Also means employer may fire employee at any time,
with no notice, for almost any reason


Federal Employment Discrimination
• Provide minimum level of protection for
• States may give employees more rights, but
not less rights, than they have under federal
law (federal supremacy)


Title VII of the Civil Rights Act (1964, As
Amended by the Civil Rights Act of 1991)
Protects employees against discrimination based on:
• Race
• Color
• Religion
• National Origin
• Gender

“Disparate Treatment” Versus
“Disparate Impact” Discrimination
• “Disparate Treatment” Discrimination: In all aspects of human
resource management (hiring, firing, promotions, etc.), if
candidate/employee discriminated against based on membership
in a protected class, employee has actionable claim based on
intentional discrimination
• “Disparate Impact” Discrimination (also referred to as unintentional
discrimination): Occurs when plaintiff establishes that while
employer’s policy/practice appears to apply to everyone equally,
its actual effect is to disproportionately limit employment
opportunities for a protected class


Requirements For Establishing A “Disparate
Treatment” Discrimination Case
• Plaintiff-employee must demonstrate a “prima facie”
case of discrimination
• Defendant-employer must articulate a legitimate,
non-discriminatory business reason for the action
• Plaintiff-employee must demonstrate that the reason
given by the defendant-employer is a “mere pretext”


Sexual Harassment
• Includes unwelcome sexual advances, requests for
sexual favors, and other verbal/physical conduct of a
sexual nature that implicitly/explicitly makes
submission a term/condition of employment;
• Makes employment decisions related to individual
dependent on submission to such conduct (“quid pro
quo” sexual harassment); or
• Has the purpose/effect of creating an intimidating,
hostile/offensive work environment (“hostile work
environment” sexual harassment)


Pregnancy Discrimination Act of
Amended Title VII of the Civil Rights Act by
expanding definition of sex discrimination to
include discrimination based on pregnancy


Defenses to Claims Under Title VII of The
Civil Rights Act
• Bona Fide Occupational Qualification (BFOQ): Allows employer to
discriminate in hiring on basis of gender, religion, or national origin
(but not race/color) when doing so is “reasonably necessary” for
performance of job
• Merit
• Seniority: Seniority system legitimate if:
-System applies equally to all persons
-Seniority units follow industry practices
-Seniority system did not have its genesis in discrimination; and
-System maintained free of any illegal discriminatory purpose


Procedure For Filing A Claim Under
Title VII of the Civil Rights Act
• Charge Filed With EEOC
• EEOC Conciliation Attempts
• EEOC “Right-to-Sue” Letter


Age Discrimination in Employment
Act of 1967 (ADEA)
Prohibits employers from refusing to hire,
discharging, or discriminating in “terms and
conditions” of employment on basis of
employee/applicant being age 40 or older


Americans With Disabilities Act
• Prohibits discrimination against employees and job
applicants with disabilities
• Requires employers to make “reasonable
accommodations” to the known physical/mental
“disabilities” of an “otherwise qualified” person with
disability, unless necessary accommodation would
impose “undue burden” on employer’s business


Requirements For Bringing A
Successful Claim Under ADA
Plaintiff must show he/she meets all of the following:
• Has a disability
• Was “otherwise qualified” for the job
• Was excluded from the job because of disability


Equal Pay Act of 1963
Prohibits an employer from paying workers of
one gender less than wages paid to
employees of opposite gender for work that
requires equal skill, effort, and responsibility


Defenses To An Equal Pay Act Lawsuit
• Bona fide seniority system
• Bona fide merit system
• Pay system based on “quality or quantity” of
• Any other factor(s) other than gender


Additional Laws Governing The
Employment Relationship


The Fair Labor Standards Act (FLSA)
• Requires that a “minimum wage” of specified amount be paid
to all covered employees
• Specified minimum wage amount periodically raised by
• Mandates that employees who work greater than 40 hours in
a week be paid no less than one and one-half times regular
wage for all hours worked beyond 40
-Administrative Employees
-Professional Employees
-Outside Salespersons

The Family and Medical Leave
Act (FMLA)
Requires certain employers to establish policy that
provides all eligible employees with up to 12 weeks of
unpaid leave during any 12-month period for specified
family-related occurrences (Examples: birth/adoption
of child, care for seriously ill spouse/parent/child)


Federal Unemployment Tax Act
Created state system that provides unemployment
compensation to qualified employees who lose their


Workers’ Compensation Laws
• State laws that provide financial compensation to
employees or their dependents when covered
employee injured/killed on the job
• To recover workers’ compensation benefits, injured
party must demonstrate
-He/she is an employee
-Both employer and employee are covered by
state workers’ compensation program
-Injury occurred “on the job”


The Consolidated Omnibus Budget
Reconciliation Act (COBRA)
• Ensures that when employees lose their jobs or have their
hours reduced to level at which they are not eligible to
receive medical, dental, or optical benefits from their
employer, employees have right to continue receiving
benefits under employer’s policy for up to 18 months by
paying the premiums for the policy
• COBRA does not apply if:
-Employee fired for “gross misconduct”; or
-Employer decides to eliminate benefits for all current


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