The Business Master (3rd Edition)/The Business Master (3rd Edition).iso/files/legaegal/sba1/f1sba.exe/F128.SBE

Text File | 1993-04-09 | 5KB | 103 lines

@077 CHAP 5

               ┌──────────────────────────────┐
               │    NEW CIVIL RIGHTS LAWS     │
               └──────────────────────────────┘

The new federal Civil Rights Act of 1991 (CRA91), which im-
mediately became effective upon enactment on November 29,
1991, is certain to make life a lot more complicated for
all covered employers in the area of employment practices.

The new law's most controversial aspect will be in the
"disparate impact" cases, where a company's employment
practices, although not shown to be intentionally discrim-
inatory, have a "disparate" (unequal) impact on employment
of protected groups.

For example, if a company is located in an area where 80%
of the population consists of Native Americans, but only 5%
of its employees are Native Americans, there may be grounds
for a "disparate impact" discrimination claim against the
employer, under prior civil rights law as well as these new
CRA91 provisions, regardless of employer intent.

The huge difference that CRA91 will make in these "disparate
impact" cases is that under prior law, the Supreme Court has
held that the burden of proof is upon the employees who
allege discrimination, to identify a particular business
practice of the employer that resulted in the disparity.
Under the new law, by contrast, the employees are relieved
of this burden of proof if they can simply show that the
employer failed to select an alternative employment prac-
tice (such as hiring quotas) that would not have had a
"disparate impact" -- that is, that would not have had a
negative impact on the minority or other protected group.
Instead, the burden of proof in these cases is now shifted
to the employer to show that the challenged employment
practice (regarding hiring, promotions, pay, or other as-
pects of employment) is "job-related for the position in
question and consistent with business necessity" (whatever
the courts ultimately decide that means).

It is the vagueness of this part of the new civil rights
law that President Bush initially expressed concerns over,
arguing that many firms would find it easier to simply
adopt minority hiring quotas than to attempt to prove the
"business necessity" defense in court.  There are no easy
answers as to what policy a company should adopt in this
regard, but it does seem reasonably clear that the only
safe way to avoid discrimination suits under the new law
may be to adopt some sort of quota system, despite the
issues of unfairness and possible employee morale problems
that the use of hiring quotas sometimes entails.

CRA91 also considerably expands the monetary damages that
can be awarded in cases of intentional discrimination.  Be-
fore, an employer who lost such a discrimination suit was
usually liable only for back pay, front pay, lost benefits,
attorney's fees and court costs.  Now, under CRA91 (which
may even be retroactive in effect), compensatory damages
may also be allowed in addition to other monetary damages.
CRA91 also overrides a Supreme Court case that had limited
fees recoverable by a claimant for expert witness fees to
the flat $40 limit for "fact" witnesses.

In light of the foregoing changes in the Civil Rights Act of
1991, the odds, as well as the costs, of losing a discrimi-
nation action have been increased significantly for employ-
ers, and the new rules will make it much more attractive
for plaintiffs to file such suits, both for claims of in-
tentional discrimination and in "disparate impact" cases.
Employers can now expect a great many more such claims to
be filed, as a result.

@IF015xx]Thus, however fair you may feel your firm's employment prac-
@IF015xx]tices are, your firm is large enough to be subject to the
@IF015xx]Civil Rights Act, so this may be a good time to consult an
@IF015xx]attorney who is familiar with employment discrimination mat-
@IF015xx]ters to find out what, if any, steps you may need to take to
@IF015xx]protect your business from liability in this area, since the
@IF015xx]amount of such litigation is going to expand significantly.
@IF015xx]Because your company has over 14 employees, almost all of the
@IF015xx]Civil Rights laws apply to @NAME.
@IF015xx]
@IF100xx]This includes EEO reporting requirements, since you have 100
@IF100xx]or more employees.
@IF100xx]
@IF014xx]NOTE:  Most of the foregoing problems don't apply to your
@IF014xx]business at present, since most of the Civil Rights laws do
@IF014xx]not apply to firms that have fewer than 15 employees, such
@IF014xx]as @NAME.
@IF014xx]
@IF001xx]You have only one employee, so with very limited exceptions,
@IF001xx](such as being a company with federal contracts), you don't
@IF001xx]have to worry much about Civil Rights regulations impacting
@IF001xx]your business.
@IF000xx]You have no employees, so the above discussion will only be-
@IF000xx]come relevant to you when your business expands and begins
@IF000xx]hiring employees.
@IF201xx]NOTE:  Any firm which has more than one employee (you have
@IF201xx]@EMP) is subject to the provisions of the Equal Pay Act.