Guard against discrimination lawsuits

by Loretta W. Prencipe

April 30, 2001 —

IF THE STOCK market continues to fall, more lawsuits claiming racial, gender, or age discrimination will be filed, says Jason Boulette, an attorney at Vinson and Elkins in Austin, Texas. During the dot-com heyday, with the potential for startup millions, a very tight labor market, and companies apt and able to give generous severance packages, many IT professionals simply quit and moved to another company when discrimination or unethical behavior occurred in the workplace, according to Boulette.

But that's now changed, Boulette says. "As the stock market continues to fall, stocks tank, and employees are not making as much as they did previously, every [poor management behavior] will uspet them," and they will be more likely to take legal action, he adds.

Awards for such cases are increasing. During 2000, the Equal Employment Opportunity Commission obtained more than $200 million on behalf of employees claiming discrimination. That's up from the $118 million that the Commission obtained in 1992. According to Jury Verdict Research, in Horsham, Pa., the probability of an employee winning a discrimination case increased from 45 percent in 1994 to 72 percent in 1999. The median compensatory award increased from $128,000 in 1996 to $221,612 in 1999.

State and federal laws prohibit certain kinds of discrimination

"Managers can't hire, fire, pass over for promotion, deny a vacation request, do anything surrounding the terms and conditions or employment because of someone's protected characteristics. This means you can't make decisions or take employment actions because of an employee's race, color, gender, religion, or national origin," Boulette says. "This is prohibited by Title VII of the Civil Rights Act of 1964." To be covered by Title VII, a company must have 15 or more employees. Age discrimination is prohibited by the Age Discrimination in Employment Act; and the Americans with Disabilities Act covers discrimination against and reasonable accommodations for disabled workers.

Discrimination charges against Microsoft

Citing the economic downturn as an impetus, some legal experts believe that high-tech companies will face an increase in lawsuits similar to the high-profile discrimination action filed against Microsoft in October 2000.

Donaldson, et al v. Microsoft:

Filed in October 2000 at the U.S. District Court for Washington in Seattle; complaint amended in March 2001 to consolidate related cases

Seeks unspecified damages at this time and a change in workplace practices at Microsoft through injunctive relief from the court

Claims violation of Title VII of the 1964 Civil Rights Act and section 1981 for racial discrimination against African American employees and discrimination against female employees effected through employee evaluations, compensation -- stock options and bonus payments -- and promotions

Trial date expected in April 2002. Class certification brief due July 13. Trial briefs due April 10, 2002. Plaintiffs seek discovery of e-mail records as evidence.

Review employment practices

Boulette says managers need to look beyond the protected characteristic to the actual business necessity of the job. For example, he says, "If your company sells a product to a South American company and, to sell more effectively, management decides that it's better to have people from South America work these accounts because they close more deals, that's illegal. "

Framing employment decisions based on national origin will produce a statistically disparate impact -- more South Americans versus other qualified individuals will be hired. The proper and nondiscriminatory employment decision, Boulette says, would be to hire based on the job duties: a mastery of the language, familiarity with South American customs and cultures, and proven sales ability.

Review management behavior

A manager's actions -- treating a particular employee differently based on a protected characteristic -- make up the crux of many discrimination claims, Boulette says. A common scenario involves a fired employee and an inadequate manager who has not advised the employee about his or her poor performance or has not given that employee a chance to improve, Boulette says. "The poor performer will start looking for the 'real reason' for being fired and starts thinking about every interaction," Boulette says. "If the manager made racial jokes or only invited [people of] certain races to lunch, this ... could lead to discrimination claims."

Courts will look at "comparables," that is whether the manager treated other employees in the same way. "If you only fired this one [employee] for being late five times in two months and didn't fire others [of a different race, for example] who were also frequently late, this may be evidence of discrimination," Boulette says.

Prevent a hostile work environment

"Employers have a duty to see that employees work in a harassment-free environment. If the employer learns that there is a hostile environment [in ways the law forbids such as toward a partciular race, religion, or disability] and fails to correct the problem,the duty has been breached, even if it was a customer who created the problem," Boulette says.

The court uses the legal standard "sufficiently severe and pervasive" to assess whether a work environment is hostile. Boulette clarifies, "A single offhand remark, a joke alone, is wrong, but almost never 'sufficiently severe and pervasive' [to meet the legal standard]." However, Boulette says, a joke told every day that targets one specific class of people or a single racial assault makes for a hostile work environment.

Take steps to prevent discrimination

First and foremost, Boulette advises that companies adopt, enforce, and train employees on a nondiscrimination policy that prohibits more than the law does. "Don't ask managers to interpret the law. Only judges do that," the attorney says. "Make sure that you give employees an avenue for complaint, such as telling the manager, or HR, or [a toll-free] number to call." Managers should also be trained on the dangers of e-mail and to remove all racial and sexual comments from their vocabularies, Boulette advises.

Companies should also create an environment where discrimination and harassment are not tolerated and where employees feel comfortable to speak out. "Ninety percent of harassment would go away if an employee would tell the offending person that he or she didn't like [the remarks or treatment]," Boulette says.

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