04/ 28/ 2008
by Erick Helenihi, NFIB Small Business Legal Center
Discrimination claims against employers are on the rise. The Equal Employment Opportunity Commission reports that in 2007, over 82,000 claims were filed, a 9 percent increase over 2006. Discrimination lawsuits are costly and time consuming. Hiring, termination, promotions, raises, job assignments and working conditions (including harassment) can all implicate discrimination laws. To avoid litigation you'll need to establish clear policies on hiring, working conditions and terminations.
Anti-discrimination policy is crucial
First, don't discriminate! You should base all employment decisions on relevant employment characteristics only. Do not consider protected characteristics like race, color, religion, sex, national origin, age, citizenship, pregnancy or physical disability. In addition to federal anti-discrimination rules, state laws may cover businesses exempt from the federal laws or provide additional protections. For example, in some states sexual orientation or marital status are protected.
Develop a comprehensive anti-discrimination policy. Make clear that your workplace will not tolerate discriminatory behavior. All employees should receive a copy of the policy and sign a notice indicating that they have received and reviewed the policy. If an employee violates your policy, hold that individual responsible. Showing that you swiftly punished bad behavior can help you in a lawsuit.
Employees should have multiple ways to report discrimination. If a supervisor is the one with whom they have a problem, you need an alternate method for employees to report complaints.
Hiring and evaluating employees
Carefully analyze your job descriptions and make sure they contain accurate job requirements. Don't include age preferences in your job postings that relate to protected characteristics, and be careful not to stereotype. Just because a job requires strength doesn't mean only men can do it.
If someone has a physical disability, offer reasonable accommodations, then see if they would be prevented from performing a job. A disability might not interfere with their work at all, or there might be a simple way to alter work duties or work areas to accommodate their needs.
When you interview someone, do not ask questions that could be perceived as discriminatory. Don't ask about spouses, children or family plans.
Increasingly, employers are relying on pre-employment tests and selection procedures to determine a candidate's suitability. While these are useful tools, be aware that they can have discriminatory effects. In 2007, the EEOC received nearly twice as many charges alleging unlawful discrimination based on background checks and screening tests as it had in 2002. Ronald Cooper, EEOC General Counsel, recently warned that "there's a fair chance" employers will see the EEOC bringing more cases involving screening and testing issues. Make sure your background check and screening procedures don't run afoul of the EEOC's guidelines by downloading a free fact sheet.
Proper documentation can help shield employers from discrimination claims. Perform employee evaluations fairly, honestly and regularly, and keep copies. Inform employees when their evaluations are negative and give them a chance to improve. If you do, not only can evaluations be a useful tool for improving workplace productivity, but they also give you solid evidence about an employee's underachievement if you have to terminate someone.
Termination
Terminations can be minefields for employers. Your employee is upset. They may honestly feel like they were let go for no good reason, or they might just be angry and out for revenge. Every termination should be handled very carefully to avoid opening the door to a wrongful termination lawsuit.
When terminating for cause, make sure you follow proper procedures. Talk to employees about why you're letting them go. If poor performance is the reason, let them know.
Did you give the employee a warning that their work performance was unsatisfactory? If you are going through a large round of layoffs, make sure you have fair procedures for determining which employees are kept on the payroll. Don't fire an employee and then hire a friend or family member to fill that position.
Consequences
Lawsuits and investigations are costly. You may have to pay lawyer costs, fines or damages, and sometimes even the employee's attorney's fees. There are also indirect costs. You will lose productivity as interviews and investigation take up your business' time. Lawsuits are also bad publicity. People may sympathize with the plaintiff and stop patronizing your business.
If an employee makes a discrimination claim, don't retaliate! Don't fire the employee, demote them, or harass them at work. Discrimination claims are protected, and if you retaliate, you can be sued for it. Even if a discrimination claim is baseless and you win it, you could still lose a retaliation suit.
