Ask your insurance carrier who is most likely to sue a nonprofit, or business for that matter, and their answer may surprise you.
The plaintiff is not likely to be a victim of slip and fall in your poorly lighted or maintained parking lot. The most likely plaintiffs are already known to you — they are your entity’s employees.
Nearly a third of nonprofit liabilities arise from employment-related claims. These include wrongful termination, discrimination, and wage and hour claims.
These FAQs focus on employment discrimination. As a Nonprofit director, what should you and your organization know and do to minimize such claims?
- What constitutes prohibited discrimination?
The U.S. Supreme Court has identified 3 elements:
(1) The plaintiff is a member of a protected class (defined below);
(2) The plaintiff was qualified for a job or promotion; and
(3) The employer rejected the plaintiff and hired a less qualified applicant or continued to look for other applicants.
- During what stages of the employment relationship can prohibited discrimination arise?
This formula applies to all stages of the employment relationship, including recruiting, hiring, firing, disciplinary actions, promotions, salary increases, transfers, and all other employee benefits.
- What is a “protected class” of employees?
Also called a “suspect class,” this term refers to a segment of the population that has historically received discriminatory treatment in the workplace and is now protected by various state and/or federal anti-discrimination laws. Examples of protected classes under current laws include ethnic minorities, women, the elderly, the disabled, veterans, etc.
- Does my intent determine whether or not I’m liable for discrimination?
Not always. One form of discrimination, called “disparate treatment,” is based on an employer’s intentional discrimination. But another form of discrimination, called “disparate impact,” does not depend on intent. “Disparate impact” discrimination occurs when an employment policy has a discriminatory impact on a protected class, regardless of intent or rationale behind the policy.
- Are there any exceptions that permit discrimination in certain instances?
Yes, three exceptions exist if the employer meets certain criteria:
(1) The Bona Fide Occupational Qualification (BFOQ) exception is available for certain job positions. If you can demonstrate that a particular qualification is necessary for the job, (e.g. Japanese ethnicity for a Japanese restaurant) that job may qualify for a BFOQ exception, allowing discriminatory hiring.
(2) Business Necessity. This permits various physical or aptitudinal discriminatory job selection criteria if such criteria are shown to be compelled by business necessity or if they are reasonably related to the demands of the job. Before adopting physical ability requirements for any position, however, employers should first confirm compliance with the Americans with Disabilities Act (ADA).
(3) Religious Employers. A limited exemption applies to religious organizations hiring employees on the basis of religion, but this only applies to religious employers with clearly stated, demonstrated, and consistently applied religious purposes and activities that are essential to its organizational existence precepts.
- Does an affirmative action plan help avoid discrimination problems for employers?
An affirmative action plan may be a helpful policy for most employers since its purpose is to detail a plan for increasing minority representation within the organization. It enables an employer to consider a job applicant’s minority status during job selection if it furthers the goals of the plan.
An affirmative action plan is not a requirement for private employers unless they bid on and/or receive government contracts. With or without a plan, an employer need not hire or promote anyone who is not qualified for a position.
- What steps in the selection process can I take to help avoid discrimination problems?
As a director, you would not normally be involved in the hiring process, but you can request the chairman to confirm that your organization’s employee selection process has been reviewed by HR or counsel to evaluate whether any aspect provides a more favorable or less favorable opportunity for candidates of any protected class.
- Are there other steps that could be taken to minimize discrimination claims?
Yes. In addition to the selection process, HR should present to the board the best practices that have been implemented to prevent discrimination in the workplace and to promptly and formally investigate and process all discrimination complaints.