Legal Issues in Human Resource Management
What you’ll learn to do: Examine legal issues involved in human resource management
As modern day society moves forward many new legal issues arise that would never before have been anticipated. This is true within any realm of business but most considerably retail management. The best way to manage potential liability concerns is to avoid having to defend a lawsuit altogether. By communicating up front to new employees with the implementation of a personnel handbook, human resource managers can attempt to circumvent inappropriate or unethical behavior from their staff members. Personnel handbooks are a resourceful tool for human resource managers and should be treated as a valuable guide for new employees. Some other tools and methods for dealing with legal issues in retail management will be examined throughout this page.
LEARNING OUTCOMES
- Differentiate between laws and ethics
- Explain the equal employment opportunity law
- Discuss the details of employee health and safety laws
- Describe the key points of sexual harassment laws
- List some critical laws that pertain to web retailing
Laws Vs. Ethics
Ethics are a set of moral values an individual establishes for one’s self and their own personal behavior. Laws are structured rules utilized to govern all of society. Not only do retail companies have an obligation to act ethically but so do the professional individuals working there. Within the hierarchy of retail companies, managers often interact with individual employees who are subject to “professional” codes of conduct. These codes of conduct may vary depending on the employee and their position within the company. For example the American Bar Association has set forth Model Rules of Professional Conduct for licensed attorneys, that were put into place in order to influence what behavior is to be expected when working in that particular profession.[1] Therefore, an attorney working for a retail company might be held to a higher ethical standard than that of a clerk working in a stockroom. Nonetheless, both have to follow the laws as set forth by their state and local governments.
As times progress so do ethical and moral standards within the retail environment. Advancements with the internet have brought about websites where employees can report unethical behavior within a company. Ethicspoint is one such internet reporting site where one can go online anonymously and report violations by entering the name of the organization, the violation category which best describes the unethical behavior and after agreeing to the websites terms and conditions, one can file a report.[2] These types of reporting methods are helpful with issues like health and safety violations, sexual harassment claims and discrimination which will be addressed further in the next few sections.
Some retailers have prided themselves on their ethical practices and procedures and even promote them publicly to improve their corporate image. For instance, a retailer’s number one concern might not be to have an ethical obligation to the environment but if they use and sell only environmental friendly products within their company and advertise as such this may assist in improving their image. “The economic crisis and its consequences represent an unparalleled opportunity for retailers to develop ethical practices and social policies for the good of society and their companies. Studies indicate a positive link between ethical perceptions and consumer responses, in terms of trust.”[3]
Equal Employment Opportunity Law
Retail managers and human resource management within a retail company are most likely familiar with or at some time become aware of the Equal Employment Opportunity Act (EEOA) as implemented by Congress.[4] This act is an amendment to the Civil Rights Act of 1964 which prohibits discrimination based on color, race, religion, national origin and gender. Congress further added to this act by passing the Age Discrimination in Employment Act of 1967 which also prohibits discrimination based on age and concentrating on the protection of individual employees ages 40 to 65 years of age.[5] Another act implemented by Congress was the Americans with Disabilities Act of 1990 which requires employers to make reasonable accommodations to disabled individuals.
A regulatory administrative agency governing the enforcement of the EEOA was established by the federal government. This agency is called the Equal Employment Opportunity Commission (EEOC).[6] The EEOC has the power to seek statutory remedies for individuals whose rights as set forth by the EEOA have been egregiously violated. These remedies can include but are not limited to punitive and compensatory damages and back-pay (depending on the case). However, the EEOC is not an answer or remedy necessarily for everyone who feels that they have became a victim of prejudice in the workplace as they typically only file suit in less than one percent of charges per year.[7]
If an employee feels that they have been discriminated against and moves forward with filing suit, the burden of proof relies on the plaintiff and he or she must build a “prima facie” case of discrimination. This means that the plaintiff must prove the employers discriminatory motive as prohibited by the EEOA. For example, written proof in the form of email or text explaining to the employee that they did not receive a promotion solely based off of the fact that they are a woman or a minority could be considered proof enough for the EEOC to pick up the suit. Typically the EEOC establishes proving discrimination based off of the treatment the employee received, the impact it had on them and/or if there was harassment involved. Harassment is another way to prove discrimination. In this instance it is a bit more complicated to build a “prima facie” case against a potential violator of this type of discrimination which will be addressed further in the section on sexual harassment laws.
For an employee to prove discrimination as defined by the EEOC the individual employee (or alleged victim in this instance) must be capable of establishing that “he or she was treated differently than other employees who were similarly situated, and that the difference was based on a protected characteristic.”[8] The EEOC has various types of reporting forms which are used and kept as record if a case is filed against a company for discrimination. Filing a charge against an employer would require an individual employee to sign a sworn statement naming the offender and detailing the discriminatory offense. Once the EEOC has received a complaint of discrimination the business organization being accused will be notified and given the opportunity to rectify the situation.
In the case of discrimination retail organizations who have over a certain number of employees must comply. For this reason some of these laws may not apply to single-store retailers or retailers with a smaller organizational structure. Regardless of the size or type of retail store, management’s daily operations when dealing with subordinates such as hiring, firing, promotions and raises should be carried out in the most ethical manner.
Employee Health and Safety Laws
The previous topics discussed cover a multitude of concerns when managing a retail store but what about health and safety? This is an important topic of concern when managing a retail store because any retail manager will be required to ensure that a safe work environment is provided for their employees to work in. One of the reasons health and safety is so important for retail managers is that current and future employees alike would not want to work in or for your retail store if a company is known for unsafe work conditions. As with the previous topics of equal employment opportunities for all and expected ethical behavior, there are laws as set forth by the federal government to which a retail manager must follow.
The Occupational Safety and Health Act (OSH Act) of 1970 was passed by United States Congress in order to ensure the safety, health and wellbeing of employees as well as workplace safety. “The goal was to make sure employers provide their workers a place of employment free from recognized hazards to safety and health, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress, or unsanitary conditions.”[9] Retail managers should be familiar with this law so that they can ensure their stores do not have hazardous conditions which might cause injury or serious health risks to their employees. It is no secret that modern-day employees have concerns about safe work environments. This is evidenced by the fact that jobs which might be considered more dangerous have a harder time finding potential employees to fill their positions.
The adoption of the OSH Act in 1970 gave rise to three agencies which work to verify that the standards of the act are achieved by retail companies and their management teams. The Occupational Safety and Health Administration (OSHA), the Occupational Safety and Health Review Commission (OSHRC) and the National Institute for Occupational Safety and Health (NIOSH) are the regulatory agencies to which retailers must meet these standards.[10] Impromptu inspections that may come as a surprise to the retail manager are one of the methods these agencies utilize when enforcing the standards as set forth in the OSH Act. If a retail store is in violation the agency has the right to impose fines against the company (or in some cases even file criminal charges) which can be costly for the organization as a whole and could also cause potential problems for the manager’s career with the company and background overall.
A retail manager, especially working in a large retail chain, might expect multiple inspections from OSHA without warning at any given time. When this happens the routine might become familiar to the retail manager but if the manager is unaware or newly promoted they would expect OSHA to present their credentials, request to see any pertinent paperwork with regard to the company and its health and safety procedures, and then inspect the premises. If it becomes apparent to the OSHA compliance inspector that there are violations present, citations may be issued depending on the severity of the offense and if there are repeat offenses jail time could be imposed.
Sexual Harassment Laws
The issue of harassment was briefly touched on in the section on Equal Employment Opportunity Law with regard to discrimination but what about sexual harassment specifically? The EEOC defines sexual harassment as “unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.”[11] The judicial system within the United States has set guidelines in determining whether or not sexual harassment in the workplace has occurred. One such instance of sexual harassment is when an authority figure or manager makes sexual advances to a subordinate with the promise of a job or promotion. This is termed as quid pro quo. Another form of sexual harassment could include a hostile work environment. These types of harassment within a retail business could be detrimental to a company’s public image.
More recently sexual harassment has made headlines with some high profile cases as a means of proving discrimination. One such case was that of Fox News. The news station was disrupted by multiple reprehensible reports of sexual harassment within the workplace which caused the departure of some of its more popular anchors and top executives. These particular cases also brought to light the flaws with the laws governing sexual harassment cases. More specifically “women are forced to report harassment nearly immediately, despite the many career-related reasons not to, and yet they are not fully protected against retaliation when they do report the harassment. Scholars have also documented that if a victim’s claims do make it to court, the standard for proving harassment is a nearly insurmountable burden to overcome. These identified weaknesses in the law would seem to explain why the law failed to act as a stronger deterrent to Fox News.”[12]
The Fox News scandal paved the way for a new movement called “MeToo.” Between numerous news reporting agencies and multiple Hollywood producers, actors and television figures, this movement caught on fast and was extremely publicized in the media costing various high profile on-air personalities their jobs and ultimately tarnishing their careers forever. As stated previously, the best way for retail companies to manage potential liability altogether is with the avoidance of a lawsuit by addressing sexual harassment promptly. When notified of sexual harassment a retail manager may find that there could be various remedies.
Modifying schedules, moving individual employees away from other employees or having to dismiss an employee altogether could be potential remedies for subordinates committing possible sexual harassment violations against another employee(s). “Companies need to foster an environment where there’s no room for sexual harassment to take hold. . . . That starts with building a culture based on collaboration, teamwork, and respect—and not tolerating employees who dominate or treat other employees as if they are there to serve them. Leaders sometimes inadvertently send the wrong message by excusing—or even rewarding—employees for behaving aggressively toward colleagues.”[13]
Web Retailing Laws
Brick and mortar stores have been a primary source of sales for retailers for centuries. With technological advances in computers and the internet many retailers have turned to conducting business online in order to expand their sales. Online sales also provide the opportunity for consumers who might not otherwise have the means to physically go into a retail store to purchase products or who may live outside the retail stores physical location. Around the time of the new millennium the federal government began to recognize that there was a need for laws governing these types of transactions. The Uniform Commercial Code (UCC) has been the statutory law which governs the sale and/or lease of goods and contracts for the same.[14] The UCC decidedly began implementing laws which regulated online retail sales after it became apparent in the 1990s that e-commerce was here to stay.
E-contracts for the sale of goods are covered in Article 2 of the UCC’s guidelines. An agreement online is typically made by checking a box agreeing to the terms of a contract or acceptance of an offer. In July of 1999 a new act was created called the Uniform Computer Information Transaction Act (UCITA). This act is used as a guideline for licensure of computer information exclusively and is most pertinent if the retailer you are working for sells computer software.[15] Electronic signatures are also a means of conducting business transactions online. Electronic signatures were confirmed as a means of carrying out the sale or lease of goods and services online in 2000 under the Clinton administration when the Electronic Signatures in Global and National Commerce Act was approved by Congress.[16] Other laws retail managers should be familiar with when selling retail goods online have to do with international purchases. The United Nations has been beneficial with attempting to provide an outline for countries that are in agreement of their International Sale of Goods trade laws.[17]
Retail managers should become familiar with these laws as retail sales over the internet increase. While shopping in retail stores is still where the majority of sales are made for retailers shopping via the internet has grown significantly in recent years. “Researchers predicted a 15 percent growth in U.S. sales and total value for online shopping between 2016 and 2017, while offline only saw a 4.5 percent increase. There are almost as many people who prefer to shop in stores rather than online—with 51 percent of Americans preferring ecommerce, and 49 percent preferring heading into an actual store. However, a larger portion of millennials (67 percent) prefer shopping online over offline.”[18]