By Karle Stinehour

(Estimated Reading Time 5 min.)

Filling knowledge gaps and building awareness in the workplace.  It’s how DigitalChalk serves the small to mid-sized business segment.  Today we take the first step in addressing gender diversity and discrimination in the workplace, specifically discussing how to avoid legal and financial risks regarding issues of gender.  This is still a pressing issue in the workforce today.  In 2016 alone, the EEOC received 26,934 sex discrimination claims, many resulting in litigation and monetary reparation (Source: Sex-Based Charges, eeoc.gov/eeoc/statistics/enforcement/sex.cfm).  As a business owner or HR professional, it’s important for you to understand labor laws concerning gender, identify possible risks in your workplace, and find solutions that fortify the overall health of your business.

Understanding the Law

The starting point for understanding US labor laws regarding gender is Title VII of the Civil Rights Act of 1964.  While this law reaches further than just the category of gender, it does define what the law considers sex discrimination. Section 2000e-2 of Title VII states,

Another more recent law dealing with gender diversity and sex-based discrimination is the Lilly Ledbetter Fair Pay Act of 2009, which increases the effectiveness and the efficiency with which prosecutors can litigate sex discrimination claims related to compensation. (Source: EEOC, https://www.eeoc.gov/eeoc/publications).  

What is the impact of these two laws on your business?  

First, the Title VII definition of discrimination is far reaching.  As the EEOC reports, “The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.”   

Second, the Ledbetter Act drastically reduces the amount of time it takes to file claims of sex-based discrimination and increases the number of claims that can be made because every paycheck containing discriminatory compensation constitutes a separate violation of the law.

Employers with 15 or more employees are subject to Title VII regulations.  If fewer, employers fall under any applicable state laws. The broad legal definition of sex discrimination under Title VII and the potential for multiple claims under Lily Ledbetter can increase the potential for violations within any company.  If a sex discrimination claim is proven, employers may be liable for compensatory and punitive damages.

Case Studies   

Ruby Tuesday: In 2013, Ruby Tuesday denied two male employees the opportunity to work as servers in Park City, Utah. The company offered this special summer position only to female servers throughout the surrounding nine-state region over concerns of housing male and female employees together. The EEOC sued the restaurant chain for $100,000. (Press Release, “Ruby Tuesday to Pay $100,000 to Settle EEOC Sex Discrimination Lawsuit”,eeoc.gov/eeoc/newsroom/release/5-21-15a.cfm, May 2015)

Nestlé Waters: According to reports, the EEOC filed suit against Nestlé waters for failing to select a female employee who worked for the company for 20 years for a newly created position.  Instead, the company selected a male employee who did not meet the minimum requirements.  Nestlé settled for $300,000. (Press Release, “Nestlé Waters North America To Pay $300,000 To Settle Sex Discrimination Lawsuit”, eeoc.gov/eeoc/newsroom/release/3-13-17a.cfm, Mar, 2017)

Heritage Bank: From 2010-2013, a Nebraska bank paid one of its female employees 33% less than a male co-worker in a job position that required the same amount of skill and experience.  The EEOC recently filed suit against Heritage Bank. (Press Release, “EEOC Sues Heritage Bank For Paying Women Less Than Men”, eeoc.gov/eeoc/newsroom/release/6-12-17b.cfm, Jun 2017)

The Cost

In addition to the clear legal and financial costs, if a sex-based discrimination case is proven, the ramifications of sex-based discrimination in the workplace can extend far beyond the monetary.  Discrimination lowers morale and will likely decrease productivity.  Another cost is the failure to retain high performing employees.  With a negative work environment, it is unlikely that productive employees will continue doing their best work and it is also unlikely that they will stay at a discriminatory company long-term.

What Can We Do?

Our intent for this post is to fill knowledge gaps and build awareness.  Though sex-based discrimination can be deliberate and intentional, it can also happen out of ignorance.  For now though, we must remember that the Supreme Court states that “ignorance of the law excuses no one.”

Protect your employees and your bottom line by taking these logical next steps:

1. Review your gender discrimination policy.  Where is it?  How is it distributed?  Is it well-written and compliant with today’s state and federal laws?  Make sure it includes:
   • A strong, easily-understood statement that says gender discrimination will not be tolerated and that, as an employer, you will aggressively enforce your policy to its fullest extent.
   • A clear definition of what constitutes gender discrimination.  You might begin with the EEOC definition listed above and provide clear, easily-understood examples of related behavior.
   • An easy to follow reporting process.
   • An anti-retaliation statement.
2. If an incident takes place, act on it immediately in a manner that aligns with your policy.
3. Lead by example.  As always, make sure that the C-suite and each person in a supervisory role wear their title honorably.  Each of them are your brand ambassadors and their actions need to embrace the culture and vision you have built for your company.
4. Educate employees and managers to comply with laws and company policies. Teach them how to recognize sex-based discrimination. Set up an appropriate complaint process.  As always, remember that repetition is the key to learning. Training cannot be a one-time event but must be taught and reinforced on a regular basis.

Let us help with some heavy lifting.  The following training courses from our on-demand learning library can help bolster your learning and development program in this important area.  

• Gender Matters: Creating a Gender Inclusive Workplace
• Equality Essentials: Making Sense of Equality in Practice