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Discrimination Cases to The Rise of Teams

Items twenty-one through forty of The Workforce 80.

January 8, 2002
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21-30Top 10 Labor and Employment Discrimination Cases of the 20th Century

It's a sort of hit parade: on an average day, HR does indeed dance to the tunes played by these cases. This list was prepared by Matthew T. Miklave and A. Jonathan Trafimow of the New York office of Epstein, Becker & Green PC, where Miklave is a partner and Trafimow is a senior associate. The firm is one of the largest in the nation representing management exclusively in labor and employment law, employee benefits, and related litigation. Miklave and Trafimow also offer commentary on the decisions' effect on HR as it is practiced today.

Lochner v. New York (1905). Strikes down new York law limiting hours of labor in bakeries as impairment of freedom of contract.
How things change in 97 years. In a decision that Trafimow says would be hard to imagine today, the U.S. Supreme Court found that the Constitution prohibited a New York state law limiting the number of hours worked in bakeries. The court reasoned that the New York law kept employers and workers from entering into contracts on their own behalf, thereby depriving them of a constitutional "liberty" without due process of law. It was one of many rulings that, prior to the New Deal and the creation of the National Labor Relations Act, viewed an employer's freedom to do business as "part of the sacrosanct constitutional right to due process," Miklave says. While workplace health and safety laws are here to stay, Lochner's core idea that courts should stay out of agreements struck between workers and their employers resonates in later cases, including the so-called "Steelworkers Trilogy" cases and Gilmer v. Interstate/Johnson Lane Corp.
NLRB v. Jones & Laughlin Steel Corp. (1937). Upholds the constitutionality of the NLRA.
This case was "a frontal attack on the constitutionality" of the 1935 National Labor Relations Act, Trafimow says. Miklave cites the 1935 NLRA, also known as the Wagner Act, as arguably the single most important piece of labor legislation enacted in the United States in the 20th century, and explains that it was the first American law to recognize employees' rights to join, form, or assist unions without fear of employer reprisal. Miklave adds, "Put this decision in its historical context. Before many in this country were granted basic civil rights, American workers were granted the right to join a union." In this case, the Supreme Court held that the Wagner Act is constitutional.
Steele v. Louisville & Nashville R.R. (1944). A union must represent interests of all employees in the class of employees it represents, without regard to their union affiliation or race.
Here is a race-conscious, civil rights case that the Supreme Court decided long before passage of the Civil Rights Act of 1964, Trafimow says. Steele involved a union in which a majority of the members were white. There were a substantial number of African-Americans, but less than a majority, and the white members essentially voted in ways that operated to the detriment of the African-American members. The union contended that it could do so under the idea of majority rule. The Supreme Court disagreed, explaining that unions legally must represent the interests of all their members. The court compared the union to a mini-legislature or congress that was obliged to protect the rights of all its constituents. "It's a precursor of what unions face today," Miklave says. "They have to represent the interests of all equally."
United Steelworkers v. American Manufacturing Co. (1960); United Steelworkers v. Warrior & Gulf Navigation Co. (1960); United Steelworkers v. Enterprise Wheel & Car Corp. (1960). Courts must enforce arbitration awards unless the arbitrator exceeded his or her authority or exhibited fraud, corruption, or denial of due process.
These cases, known as the Steelworkers Trilogy, uphold the primacy of arbitration, Miklave and Trafimow say. The ruling puts the employment community on notice that "courts will, in fact, stand back and let arbitrators do their job. The parties have bargained for arbitration as a way to resolve disputes, and the courts will not interfere with that," Trafimow says.
Boys Markets, Inc. v. Retail Clerks Union, Local 770 (1970). District court may enjoin a strike where the dispute is over a grievance subject to arbitration under the collective-bargaining agreement and the party seeking the injunction is willing to proceed to arbitration.
Once again, the highest court in the land recognized the binding power of an agreement made by labor and management. "Some people might disagree with me, but I think this is another effort by the Supreme Court to say, 'You're stuck with the deal you've reached at the bargaining table,' " Miklave says. "If a no-strike clause was part of the deal, courts can enforce that contract." He says that while courts might be a little more sympathetic when the deal is struck by an individual and an employer, their message to unions and management is, "Don't come looking to a court to save you from the terms of your own deal."
Griggs v. Duke Power Co. (1971). Recognizes adverse-impact theory under Title VII.
This is a case that really hits HR where it lives. "It established the principle that, even if there is no intention to discriminate, an employment practice can still be illegal because of its discriminatory effect," Trafimow says. "It's a huge, huge case for HR," Miklave says. "Everyone knows that it is unlawful to intentionally pick someone to terminate or promote because of their protected status. What Griggs says is that even when the discriminatory effect is accidental, it's just as illegal as if the person had been chosen intentionally. Intent is not relevant." Ironically, Miklave says, employment law "requires us to be blind to gender, and race, and so on, but we are now required (under Griggs) to consider those things to make sure the employment decision is neutrally applied. It turns the law on its head."
McDonnell Douglas Corp. v. Green (1973). Establishes basic framework for analyzing discrimination claims.
This case established some now-familiar concepts in cases of alleged intentional discrimination, such as the prima facie case, the employer's articulation of a non-discriminatory reason for the employment decision, shifting burdens of proof, and so on. The analytical framework used by courts to determine if a company has discriminated in employment goes back to this case. "Courts found it handy to use this framework to determine if it's more likely than not that discrimination was the reason for the complained-of employment action," Miklave says. While the ruling might have the greatest impact on the lives of employment lawyers, it certainly affects HR, which is often called on to counter the employee's prima facie case, explaining the reason for the decision and gathering up the evidence to prove why a certain workplace decision was made.
Meritor Savings Bank v. Vinson (1986). Recognizes sexual harassment as a form of sex discrimination.
Until 16 years ago, some courts did not recognize sexual harassment as a form of discrimination, and that's pretty amazing, Trafimow and Miklave say. Before this case, the question was whether an employee had to suffer a demotion, a firing, or being passed over for a promotion or raise before there was a violation of Title VII, Trafimow says. The then-available remedies under Title VII -- back pay, front pay, reinstatement -- didn't necessarily relate to a situation in which no adverse job action had occurred, other than the creation of a pervasive ugly and oppressive atmosphere. In this ruling, the Supreme Court recognized that an oppressive atmosphere itself can be unlawful. HR professionals don't have to be told why Meritor is in the Top 10. "I don't know an HR person who doesn't question what is harassment, and ask, 'What do I do about it; how do I stop it?' " Miklave says. In 1991, Congress amended Title VII to permit compensatory and punitive damages.
Gilmer v. Interstate/Johnson Lane Corp. (1991). Agreement between employer and employee to arbitrate employment discrimination claims is enforceable.
With this case, the Supreme Court said, for the first time, that a private agreement to arbitrate disputes was enforceable. "It goes back to the Steelworkers cases," Miklave says.
"I call it ABJ -- anything but a jury. Employers are looking for ways to avoid litigation, and many are adopting mandatory arbitration agreements, particularly after the Circuit City case" (Circuit City Stores, Inc. v. Adams, 2001, in which the court ruled that employers may require employees to agree to mandatory arbitration as a condition of employment).
Faragher v. City of Boca Raton (1998); Burlington Industries, Inc. v. Ellerth (1998). Establishes defense for employers sued for discrimination by employees against whom no tangible employment action has been taken if (1) the employer has an internal policy for handling discrimination claims (2) that the employee unreasonably has failed to take advantage of.
This case provides HR with an important tool: a two-step defense against suits for sexual harassment. The downside, Miklave says, is that "if you have a supervisor who has engaged in sexual harassment, unless you have an affirmative defense, write a check. Judges are fed up with employers who don't get the message." The affirmative defense's two parts are: the employer has to have an effective complaint procedure or policy that prohibits harassment, and the plaintiff must have unreasonably failed to use the procedure. If only one or the other is in place, the employer is liable. There's more bad news: "If there's a tangible loss, you don't even have a defense," Miklave says. "If a boss says to an employee, 'Sleep with me or you'll be demoted,' and she's demoted, you're done." The impact for HR is equally black and white. Trafimow explains: "Make sure you have a policy, and make sure any reasonable employee would take advantage of it."
31The Flexible Workplace

Long before office computers were standard and HR coined the term telecommuting, there were versions of workplace flexibility. The term, which was around before World War II, originally had a dark meaning to unskilled industrial workers. Rather than providing more freedom, flexibility meant that jobs were not permanent.

The employer's version of flexibility was the employee's version of underemployment, says Tobias Higbie, a social historian at Chicago's Newberry Library and author of an upcoming book on temporary workers in the early 20th century.

After World War II, the workforce became more skilled, technology more advanced, and the meaning of the term began to change.

In the 1960s and 1970s, workplace flexibility was related to scheduling, staffing, and location options. Employers needed to staff continuous-process manufacturing and service demands, and workers wanted more options, says Gil Gordon, a New Jersey-based consultant and author.

Today, technology has fostered even more flexibility. "For the first time in the history of work and the workplace, it is possible to separate what people do and where they do it," says Joanne H. Pratt, a Dallas-based researcher and workplace futurist. She predicts even more flexibility in the future, as the tools of work become more powerful, miniaturized, and affordable.

32Upton Sinclair and The Jungle

The author, politician, workplace reformer, and socialist (1878-1968) used literature to expose workplace problems from a worker's perspective. Though Sinclair was labeled a muckraker by President Theodore Roosevelt, his classic The Jungle has been required reading in high schools and colleges since it first appeared as a serial in a socialist publication 96 years ago. The classic is one of the few works of literature that had a direct impact on government policy, says Tobias Higbie, a social historian at Chicago's Newberry Library. Sinclair's exposure of unsanitary conditions in Chicago's meatpacking industry led to passage of meat-inspection and pure food and drug laws. But the book didn't accomplish his other agenda: workplace reform. He and fellow socialists were outspoken champions of labor unions, workplace training, public health care, health insurance, workers' compensation laws, overtime pay, limits on number of work hours in a day and a week, and efforts to employ people who were out of work.

33Founding of SHRM

The Society for Human Resource Management began in 1947 as the National Association for Personnel Directors, the only national group then representing the profession. The group ultimately dissolved, re-forming as the American Society for Personnel Administration, dedicated to the advancement of the profession.

ASPA's first conference was held in Cleveland and drew 67 people. The organization had fewer than 100 members when it began and exercised little influence in the field.

Today, SHRM has a membership of more than 165,000, a staff of more than 200, an annual budget of $80 million, and an influential lobbying presence on Capitol Hill.

34The Pink Slip

Everyone knows that a pink slip is bad. It's a synonym for getting terminated, getting the ax, getting cut, fired, laid off, canned. Historians, however, haven't a clue about the true origin of the expression, though it's commonly thought to have been used ever since some company somewhere settled on pink dismissal forms. (One theory is that colored paper was once used as a primitive performance review. Workers who found white paper in their cubbyholes knew they'd done well; those who saw pink knew their job was over.)

Giving a pink slip, or "downsizing," has come to be equated with increased efficiency and shareholder value. If you're an HR professional, though, laying people off is not only often personally wrenching, it also signals a whole new passel of problems.

HR managers, for example, face the daunting task of motivating and retaining the employees who remain. And studies have shown that employees who survive cuts are self-absorbed and risk-averse, and that they often leave the firm soon after a layoff.

Tom Dougherty, professor of management at the University of Missouri, says that as job security has decreased in recent decades, recruiting and hiring have become much more difficult. "That lack of job security has added significantly more stress to HR's job."

35Mary Anderson

From her first jobs as a domestic servant and a shoe factory worker, the Swedish immigrant soared through the ranks of social-reform activists to become a national leader in the cause of rights for women in the workplace.

For almost two centuries, American women had no say in how their government or their businesses operated. With the ratification of the 19th Amendment to the U.S. Constitution on August 26, 1920, women got the right to vote, and activists like Anderson were inspired to broaden their campaigns for justice. That same year, Anderson was named director of the Women's Bureau of the U.S. Department of Labor, where she served until 1944.

She conducted research on workplace issues, and was committed to setting universal employment standards. Her leadership established her as the foremost authority in the struggle to improve the lives and working conditions of women.

"As the world evolves," she said, "so too does the growing role of women who are proving their infinite capabilities in today's complex workplace, and exhibiting a new usefulness now and for the future."

36Mergers & Acquisitions

In the past decade, HR has been directly affected by an unprecedented boom in mergers and acquisitions. On one hand, the business trend has thrust HR into a more strategic role. On the other, awareness of HR's role in the process has been slow in coming. "In at least 10 major studies, the same conclusion has been reached: in M and A's, people and cultural issues are the most common failure factors," says Mark Herndon, regional leader of mergers and acquisitions services at Watson Wyatt Worldwide and co-author of The Complete Guide to Mergers and Acquisitions (Jossey-Bass, 2000).

That failure is due in large part to a lack of involvement by human resources, the only department that really understands the people and cultural issues associated with integration, Herndon says.

"Employees are less trusting in organizations that don't handle M and A's well, especially when HR doesn't manage employee expectations.

"Only 16 percent are involved in the strategy planning process. A full third don't get involved until post-acquisition integration," Herndon adds. "And that's just too late."

37First HR Textbook

Written in 1954 by Ordway Tead and Henry C. Metcalf, Personnel Administration is considered the first true human resources textbook. Before the book was published, human resources as an academic discipline was folded into psychology and economics. But shortly after the text appeared, universities began establishing industrial relations departments, says Robert Heneman, director of labor and human resources graduate programs at Ohio State University.

Personnel Administration also signaled the start of a major stream of research about human resources management in business schools. "Because it was written by businesspeople rather than academics, the book attempted to integrate HR into business," Heneman says.

38Sputnik

On October 4, 1957, the Soviet Union launched Sputnik I. The spectacular event "scared the hell out of the U.S. government," says Clifton Berry, aerospace researcher and author, and also inspired a new technological mind-set in the workplace. "There was a satellite going around the earth and it wasn't ours. It meant the Soviet Union, the evil empire, was ahead of us."

That spurred the United States to action. Within days, the Department of Defense activated the Explorer satellite program, launching Explorer I four months later. It also led to the creation of NASA in 1958. Sputnik was the "great challenge" that marked the start of the space age, Berry says.

To create a workforce with the technical and scientific training to support these programs, the National Defense Education Act of 1958 was passed, providing student loans, graduate fellowships, and aid for improvement in teaching science, mathematics, and languages.

The goal was to get into space, says Berry, but the NDEA spawned technological research and inventions, such as the transistor, that affected commercial industries. "It created a climate of innovation that endures today."

39John Maynard Keynes

The British economist, government adviser, and author lived from 1883 to 1946, and is thought of as the father of macroeconomics. His monetary theories, known as Keynesian economics, are considered the most influential of the 20th century. In a departure from the laissez-faire economics of his day, Keynes advocated government intervention in markets and monetary policy to stimulate the economy in his 1936 book, The General Theory of Employment, Interest, and Money. Intervention could include actions such as tax cuts, government spending, and deficit spending as a means to create economic stability.

"Before Keynes, economists always thought the economy would right itself," says Daniel Mitchell, a professor of HR at the University of California Los Angeles. Without Keynes's philosophy of this external intervention in the workplace by the federal government, there might never have been such innovations as unemployment insurance, he says. After World War II, Keynesians proposed the Full Employment Act, which subsequently became the Employment Act, and also created the President's Council of Economic Advisers. "Thus the idea was implanted that ultimately the federal government was accountable for macroeconomic performance," Mitchell says.

40The Rise of Teams

The team concept has been a part of the workplace since the Egyptians built the pyramids, says Dave Ulrich, professor of business at the University of Michigan. But it didn't permeate contemporary workplace culture until the 1930s, when management theorists like Frederick Taylor and Douglas McGregor proved that collaboration resulted in faster, more efficient production cycles.

Teams were first implemented on production floors to streamline manufacturing processes. In the 1960s, they gained popularity as a way to bolster worker satisfaction. "Volvo put the names of team members on every engine they built to bolster pride on the job," Ulrich says.

Sensitivity-training seminars, called T-Groups, further advanced the idea of teamwork, teaching executives to value people over products and to view work as a source of personal meaning. "People get more satisfaction working in teams."

At the same time, speed-to-market became a critical factor for success. It became clear that systems based on products designed by teams were more efficient, says Fred Foulkes, professor of organizational behavior at Boston University's School of Management. "Speed is at the core of the team-based culture."

Workforce, January 2002, pp. 34-38 -- Subscribe Now!

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