Employment Law Issues - Essay Example

EMPLOYMENT LAW ISSUES – DENNY’S INC – A CASE STUDY ANALYSIS Table of Content S.No Heading Page No 1 Introduction 3 2 Evolution of the Employment Discrimination 4 2.1 Application of Law to Racial Discrimination 5 3 Case Analysis Legal Problem confronted by Denny’s Inc 5 3.1 Racial Discrimination Charges against Denny’s Inc 5 3.1.1 Parties Involved 8 3.1.2 Issue Raised by the Problem 8 3.2 Discrimination towards disabled employees in Denny’s Corp 9 3.2.1 Parties Involved 10 3.2.2 Issue Raised by the Problem 10 3.3 Recent Sexual Harassment Case against Denny’s Inc 11 3.3.1 Parties Involved 11 3.3.2 Issue Raised by the Problem 12 3.4 Denny’s out of court settlement in unused vacation wages suit 13 3.4.1 Parties Involved 13 3.4.2 Issue Raised by the Problem 13 4 Suggestions 14 5 Conclusion 15 6 Works Cited 17 1. Introduction In the last decade, there had been a sudden explosion of class action lawsuits as regard to discrimination in employment which has been resolved through record breaking out of court settlements. One of the famous settlement cases is the $176 million settlement made by Texaco. In Texaco case, there had a good deal exposed revelation of eavesdropping conversations that apparently disclosed the use of open racial slurs by top management employees. Closely following the foot prints of Texaco, there were other large settlements involving “Home Depot ($103.9 million) , Coca-Cola ($ 192 million) , Publix Markets ($80.9 million) , State Farm Insurance Co ($ 156.9 million ) and Shoney’s ($ 105 million) . “ Despite of hospitality industry best efforts to minimize the incidents of employment related discrimination charges in workplace, the number of discrimination charges lodged against the industry in on the increase. Majority of the EEOC cases revolve around not just grievances of harassment but also relating to retaliation where the complaining employee was forced to quit or fired due to hostile work atmosphere. In majority of the cases, there is harassment charges mingled together with retaliation charges. In such cases, employees can seek both compensatory and punitive charges as this will increase the not only the amount of payoff but also employer’s liability. Denny’s Inc is a famous food chain restaurant in U.S.A. However, in 1994 and recently also, it witnessed a host of racial discrimination cases and it settled these issues by paying whooping compensation amount to claimants. This research essay analyses how Denny’s Inc , being a famous restaurant chain witnessed host of discrimination in employment litigations including racial , sexual and disability discrimination litigations and what are lessons learnt by it in detail. 2. Evolution of the Employment Discrimination “The Civil Rights Act of 1964” deals with numerous disciplines of discrimination from education to voting. The coverage about employment aspects falls under Title VII which prohibits discrimination in all features of employment footed on “religious faith, gender, race, nationality and color,” The discrimination in workplace was present widely and hence Congress took the unprecedented decision not to permit jury trial in Title VII cases. Hence, enforcement of Title VII was assigned to federal judges. It is really shock to note that in the early years, some of the judges who heard indiscrimination cases were murdered due to their efforts o transform the world. (Appleby 68) In the early 1990’s , in response to Supreme Court of U.S.A which restricted the scope of federal employment discrimination law and swelling of complaints of unjust treatment of sex discrimination claims , Congress enacted the 1991 CRA. Some of the case laws that forced the enactment of CRA were Patterson v. McLean Credit Union where there was a restriction of application of post-contractual discrimination under § 1981, PriceWaterhouse v. Hopkins thereby limiting applicant recovery in “mixed-motive “ unequal treatment case etc.( Nielsen 266). There are set of laws which govern the discrimination in employment in U.S.A. These laws are known as “Federal Equal Employment Opportunity (EEO) Laws.” The details of such laws are given below: EPA –“Equal Pay Act of 1963”- that safeguards employees who carries out same type of job in an organisation from sex-oriented discrimination in wage. “The Civil Rights Act “which forbids prejudice in service footed on “religion, color, nationality, race, or sex.” ADA-“Title I “and” Title V of the Americans with Disabilities Act of 1990” which forbid discrimination in service against specified persons with impairments in the private industry and in local and in the state government. ADEA – “The Age Discrimination in Employment Act of 1967.” This safeguards persons who crossed forty years in age or still elder people. Civil Rights Act which offers financial compensation in respect of designed prejudice in service. “Under Rehabilitation Act of 1973,” the section 505 and 501 forbid prejudice against specified individuals with impairments in the federal government. EEOC administers all the above said laws and offers coordination and oversight of all employment practices, policies and regulations of federal government. 2.1 Application of Law to Racial Discrimination “Title VII of the Civil Rights Act of 1964” as altered proscribes discrimination in service footed on color, race, sex, religious faith or nationality. Denny’s management acknowledged that though there was no practice or policy of discrimination at the company, some customers did witness discrimination in some of their restaurants. It is claimed that Denny’s training on non-discrimination and procedures are meant to thwart discrimination against any individuals of any sex, age, race, nationality and not just against African –Americans. 3. Case Analysis Legal Problem confronted by Denny’s Inc. 3.1 Racial Discrimination Charges against Denny’s Inc The Denny’s family restaurant chain (Denny’s Corp) has witnessed copious charges of racial discrimination against black customers. The company owned about 1,500 restaurants across U.S.A in the year 1990. About 30% of these restaurants were managed by Whites under franchise schemes whereas the remaining 70% were company owned. From the start of 1990’s, Denny’s allegedly witnessed more than 4.300 complaints by black customers on racial discrimination charges. Further , numerous number of cases have been filed against Denny’s on mistreatment ,denial of service , racial slurs and various discriminatory practices. Plaintiffs were from different categories like a police officer, a reverend, a student etc. Denny’s had witnessed a single” harassment on sexual basis “case also. (“EEOC 2002”). One case filed by a group of African American and Chinese students who were from Syracuse University who alleged that they were refused service and then pushed out of the restaurant by one of the security guards in 1997. They also alleged that they were beaten by the security guards and by a mob of White clients. (Michalle 242). Majority of political negotiation in U.S.A operates through a complex system where a part or role inflicted by the welfare state. Both collective and individual rights can be enforced especially through equal opportunity and affirmative action. A group of African American who had won $ 55 million settlement who alleged that the Denny’s discriminated them. (Kohn 1994). It is to be noted that in a country like Brazil, where African American population exceeds the figures of African Americans living in America, action like discrimination or equal opportunity action is currently impossible. This is mainly due to Brazilian culture and Brazilian society has not encountered a civil rights uprising. There is a complete disconnection at the heart of public culture in Brazil, for example the law and other liberal ideas are mixed with favor and other social customs footed on a clienteles and hierarchical society For instance, in Denny’s settlement with NAACP, which required Denny’s should offer 54 of its future restaurants on franchise to minorities by 1997. As the result, 47 restaurants were owned and managed by a black company in 1994. (Kleifeld, 1994). In America , due to existence of discrimination and class action rights , Latinos sued and won against Disney World against it “English Only” policy. Deaf people had won the suit to recognize them as people of autonomous culture and not as handicapped persons. John Gabriel in his comparative study of McDonald’s U.K with that of McDonald U.S refers not only the existence of affirmative action legislations in the U.S.A as a basic distinguishing element , accounting for the greater number of minority franchises than in U.K. (Yudice 179). Recent Racial Discrimination lawsuit against Denny’s Inc Denny’s Restaurant was ordered to pay $ 600,000 by a federal jury as damages to a black family of 15 members when they were deliberately neglected by a white waiter and used racial slurs against them. The award was made during September 2007. Each black family member was awarded as a compensatory damage of $ 5000 and $35000 as punitive damages by the federal jury. Denny’s corporation later fired the white waiter. During November 2003, Sandra Green filed a suit against Denny’s Restaurant when they mistreated by a white waiter at Denny’s restaurant in the “St.Louis Suburb of Fairview Heights.” It was alleged by the Sandra Green family that white waiter purportedly gave priority to white patrons while completely disregarded Sandra Green’s family. It was alleged by Sandra Green family members that they had to arrange for their own drinks, napkins and utensils. Sandra Green family illustrated the experience as too harsh and horrible. Denny’s is claiming constantly that they practice a “zero-tolerance policy “especially for discrimination. However, in reality, this is being rather on the paper and not on the practice by Denny’s corporation. Commenting on the compensation awarded, Sandra Green family commented that we were not concerned about the money. However, we want that no other black family or our children to have to witness what we experienced. (www.rrstar.com). It should be noted that harassment at workplace and its costs are most often avoidable. Management should have concise and effective policies restraining religious and ethnic slurs. Management should give enough protection to whistle blowers who are witness to such harassment who come forward to give their evidence or to act as an eye witness. Management should focus on action for putting a full stop for such harassment and to correct its outcomes on the complaining employee. 3.1.1 Parties Involved In the racial discrimination charges, the plaintiffs were mostly African Americans and other non-whites like Chinese and defendant was Denny, Inc. 3.1.2 Issue Raised by the Problem In U.S.A, food styles symbolizes racial and class divides. For instance, so as to enhance their image among black customers, the Denny’s restaurant in Los Angeles offers soul food and some other Denny’s restaurant offer food items like green chilies and burritos. This clearly demonstrates Denny’s thirst for profits irrespective of customer’s color. Denny’s restaurant well aware that if they do not reach out or serve the tastes of minorities, they will be loosing great percentage of their business to its competitors. Hence, food industry is under compulsion not to confront the rituals of racism as long as it affects their falling rates of profits and loss of customers. Denny’s restaurant through settlement agreed to compensate the black plaintiffs against their discriminatory lawsuits by promising greater racial diversity through their purchasing and employment policies and striving to thwart future discrimination in their restaurant operations. (Feagin et al.77) The various efforts to restrict or exclude blacks to access to family restaurants like Denny’s had stricken a hard blow at U.S.A‘s fundamental values of democracy and equality. Commenting on the compensation awarded, Sandra Green family commented that we were not concerned about the money. However, we want that no other black family or our children to have to witness what we experienced. (www.rrstar.com). It should be noted that harassment at workplace and its costs are most often avoidable. Management should have concise and effective policies restraining religious and ethnic slurs. Management should give enough protection to whistle blowers who are witness to such harassment who come forward to give their evidence or to act as an eye witness. 3.2 Discrimination towards disabled employees in Denny’s Corp During September 2006, EEOC pronounced that it registered a lawsuit against Denny’s Inc for discrimination under the “Americans with Disabilities Act (ADA).” According to EEOC, the lawsuit was filed in deference to the wishes of EEOC disabled employees nationwide who were not offered with the rational adjustment and were dismissed after being refused sick leave required in relation to their impairments. The main issue in this litigation process was Denny’s was failed to offer rational adjustment for sick leave. In the lawsuit, EEOC charged that Denny’s declined to offer to its disabled manager of a restaurant who served in Baltimore branch with lawfully –necessitated rational accommodation. Denny’s management also restrained her from working in its restaurant due to her disability in spite of eagerness to resume to work. Further, Denny’s also finally fired her from the employment mainly due to her disability. The main charge against Denny’s in this case was that it infringed the privileges of a category of employees with impairment by having an utmost sick leave scheme by denying any extra medical leave facility beyond a specified limit. This is against the provisions of ADA as it requires that additional medical leave should be granted for those employees resulting in their illegal ouster. It is to be remembered that EEOC is the federal agency in USA which is striving hard to make equivalent service chances for individuals with impairments. EEOC is devoted to serious ADA implementation and stretch to make sure that all disabled individuals have the liberty to vie for the employment on a just and equitable manner. Denny’s Inc lawsuit hark back us that disability discrimination is still rearing its ugly head in USA despite of the fact that as a measure of abolishing the same measures were initiated fifteen years back when the landmark Americans with disabilities Act was passed . 3.2.1 Parties Involved The plaintiffs in this case are the affected disabled employees of Denny’s Corp and defendant is Denny’s Inc. 3.2.2 Issue Raised by the Problem It is to be remembered that individuals with impairments are remain as an unexploited team of talent who are eager , enthusiastic and ready to work and all that is needed by them is an equal opportunity . It is to be remembered that “Title 1 OF THE ADA” forbids service related prejudice against individuals with impairments in state, federal, local governments and in private sector also. Under Title I, an employer is under obligation to make a rational accommodation to the known physical disability of a qualified employee or applicant if it would not inflict an “unwarranted suffering” on the management of its business. For the purpose of accommodation, a business is not under obligation to bring down either production standards or quality. Further, employer is not required to offer to such disabled employees personal use items like hearing aids or glasses. EEOC is doing yeomen services for the uplift of disabled in America to have equal employment opportunity and to redress for any discrimination experienced and had secured more than $ 600 million by monetary relief to disabled employees from the introduction of ADA with effect from July 1992. For instance, in the fiscal year 2008, EEOC received about 19450 charges of disability discrimination. In the year 2008, EEOC had resolved about 15, 710 disability discrimination charges and collected about $57 million by way of monetary compensation from the defendants. 3.3 Recent Sexual Harassment Case against Denny’s Inc A law suit was filed by the EEOC during September 2003 against Denny’s Inc for the alleged sexual harassment made to an eighteen year –old female erstwhile member of staff at Denny’s restaurant in Carbondale, Illinois. It was alleged that a restaurant in-charge manager and a male co-employee beleaguered a high school student sexually. When she complained about this, the management retaliated against her by reducing her working hours and finally she was terminated from her employment. In a consent decree, Denny’s Inc agreed to pay $135,000 as compensation to the affected employee and also terminated the general manager and another co-employee who indulged in such indecent behavior. Denny’s Inc also agreed to provide training to all employees at it’s restaurant at Carbondale and also to provide further training to the management on how to handle complaints and investigations of complaints on sexual harassment. 3.3.1 Parties involved The plaintiff was affected female employee of Denny’s Inc and the defendant was Denny’s Inc 3.3.2 Issue Raised by the Problem Sexual annoyance is a kind of sex prejudice that infringes “Title VII of the Civil Rights Act of 1964.” Sexual annoyance includes appeal for sexual favors, undesirable sexual progress and other forms of physical or verbal conduct of a sexual nature if it implicitly or explicitly influences a person’s employment thereby creating an offensive or unfriendly work ambiance. A sexual annoyance includes the following: It is not necessary that victim have to be the member of other sex. The victim or harasser may be a man or a woman. The person who is harassing may be victim’s immediate boss, manager of the employer, a controller, and a colleague or a third party. The sufferer need not to be the individual teased but could be any individual who have been distressed by the offensive conduct. Without discharge of the victim or without economic injury, unlawful sexual harassment may occur. The harasser’s demeanor must be undesirable. Denny’s Inc should clearly demonstrate to its employees that sexual harassment in any form will not be tolerated. Denny’s Inc should organize sexual harassment training to its employees. It should see that there should be an effective grievance or complaint process and initiating appropriate and immediate actions when an employee makes a complaint. Employers should not take revenge against employees who have filed discrimination charges, participating in the litigation proceedings under Title VII. For instance, in the fiscal year 2008 alone, EEOC received about 13,900 complaints of sexual harassment. It is to be noted that about 16% of the sexual harassment complaint have been made by male employees. Further, EEOC resolved about 11,750 sexual harassment complaints in the fiscal year 2008 alone and recovered about $48 million in monetary compensation from the defendants. It is to be remembered that “Title VII of the Civil Rights Act of 1964 “prohibits employment prejudice on the foot of “color , religious faith ,race , national origin or sex. “ Further, “the Equal Pay Act”, “the Age Discrimination in Employment Act” and “Title I of the Americans with Disabilities Act “also safeguards the interest of employees in the state, federal, local government and also in the private sector. 3.4 Denny’s out of court settlement in unused vacation wages suit Denny’s Inc finally agreed during October 2005 to shell out $7.75 million to erstwhile California employees as a settlement in a lawsuit which asserted that restaurant chain did not pay them for unavailed vacations. The lawsuit was initiated in September 2002 by the “California Department of Industrial Relations” over purported violations of state law as regards to payment of accrued vacation upon ouster from employment. 3.4.1 Parties Involved The Plaintiff’s were employees of Denny’s Corp through the “California Department of Industrial Relations” and defendant was Denny’s Corp. 3.4.2 Issue Raised by the Problem This case reminds us that companies should adhere the employment law issues and any infringement may lead to payment of fines and legal implications on the defaulters. 4. Suggestion Management Denny’s Inc management has made various radical changes in their service delivery and have introduced training to its employees on preserving ethnic values and to abolish racial indiscrimination totally from its restaurants. By conducting a survey, it examined its sales activity on whole company basis .Further, it broke down its examination by non-Hispanic and Hispanic store clusters to evaluate the associations between marketing efforts, sales and the outcomes of consumer tracking studies. As on date, Denny’s has witnessed everlasting development with its abundant value hypothesis across all consumer sections including Hispanics. Due to its overall efforts by motivating its employees and franchising to African American many of its outlets, Denny has now found that it is able to win over Hispanic consumers while staying true to its brand status and by recognizing and delivering on fundamental consumer requirements rather than product delivery already tailored. (Soto 115). Diversity Immediately after Denny’s settlement with NAACP in 1994, its Chief executive Adamson introduced drastic policy implementation to avoid racial discrimination in their restaurants. A chief diversity officer was appointed. Adamson publicly warned that any employee or franchise owner found acting in a discriminated way or challenged the diversity changes would be immediately fired. Due to implementation of stringent anti-discrimination policies, in 1998, Fortune publication graded the Denny’s as the second-most excellent workplace for minorities to work. Denny’s remained within top 10 of the ranks since 1998, in 2000 and 2001, it secured rank number one as the best place to work by minorities. (Mor-Barak, p.241) Thus ,having diverse workforce will bring organizational benefits like enhanced decision-making and problem solving , expanding to new consumer markets , improved product development and the capability to vie in global market. Thus, by employing diverse employees will definitely fetch prosperity to the business and helps to manage the language barriers by understanding the cultural behaviors and societal variances. Embracing the diversity in a business does not connote that there will be ever prolonging bliss. In a diversified workplace, all employees will speak one analogous language of business, profitability and return on investment. (Reyes 2008). Service Quality Despite of these revamping efforts, the number of customers dining at Denny’s restaurants declined sharply in 2002. It stock price quoted about 60 cents per share in mid 2003 which was not adequate to buy a sandwich at one of Denny’s restaurant. Denny’s Inc admitted that it is now experiencing fro a reputation for inadequate customer service and is required to upgrade not only its food quality but also its service at its restaurants. (Alsop 275). 5. Conclusion For instance, in Denny’s settlement with NAACP, which required Denny’s should offer 54 of its future restaurants on franchise to minorities by 1997. As the result, 47 restaurants were owned and managed by a black company in 1994. (Kleifeld, 1994). In America , due to existence of discrimination and class action rights , Latinos sued and won against Disney World against it “English Only” policy. Deaf people had won the suit to recognize them as people of autonomous culture and not as handicapped persons. John Gabriel in his comparative study of McDonald’s U.K with that of McDonald U.S refers not only the existence of affirmative action legislations in the U.S.A as a basic distinguishing element , accounting for the greater number of minority franchises than in U.K. (Yudice.179). It should be noted that harassment at workplace and its costs are most often avoidable. Management should have concise and effective policies restraining religious and ethnic slurs. Management should give enough protection to whistle blowers who are witness to such harassment who come forward to give their evidence or to act as an eye witness. In view of the above case laws, employers like Denny’s Inc should not indulge in workplace discrimination else such business would be prosecuted under “Title VII of the Civil Rights Act of 1964.” Works Cited Alsop, Ronald J. The 18 Immutable Laws of Corporate Reputation. New York: Kogan Page Publishers, 2006. “EEOC 2002 “30 October 2002. EEOC Settles Sexual Harassment Lawsuit Against Denny’s. 22 April 2009 < http://www.eeoc.gov/press/10-30-02.html>. “EEOC 2006” 28 September 2006.Denny’s sued by EEOC for Disability Bias against Class of Workers Nationwide. 22 April 2009 < http://www.eeoc.gov/press/9-28-06.html>. “Los Angeles Times” 12October 2005. Denny’s Settles Suit Over Wages. 22 April 2009 . “The Associated Press. “ 16 September 2007. Jury awards family $ 600,000 in bias lawsuit against Denny’s.22 April 2009 < http://www.rrstar.com/archive/x1217302041> Feagin, Joe R, Vera Heman & Batur Pinar. White Racism: The Basics. London: Routledge, 2001. Michalle E., Mor-Barak. Managing Diversity: Towards a Globally Inclusive Workplace. North America: Sage Publication, 2005. Mor-Barak, Michalle. Managing Diversity. New York: SAGE, 2005. Reyes, Wilson. “Embracing Diversity: Bringing Advantage of Different Cultures to the Workplace”. Indiana Business Magazine. (2008). Soto, Terry J & Soto, Teresa J. Marketing to Hispanics. New York: Kaplan Publishing, 2006. Yudice, George. The Expediency of Culture: Uses of Culture in the Global Era. Durham: Duke University Press, 2003. Read More