Most Common Hiring Discrimination Complaints

In a work world where the average tenure with any given employer is declining, many companies must routinely advertise and fill both new and established jobs. Yet as common as this process has become, every employer must periodically stop and re-evaluate how all job applications are being reviewed, skills tests are being administered and interviews are being granted and conducted.

After all, implicit bias (discriminatory hiring) remains a constant threat to maintaining an even playing field for all job applicants. And though most Texas employees are hired on an “at-will” basis, (allowing them to leave when they choose – and be fired without notice or cause), certain federal, state and local laws forbidding hiring discrimination must still be obeyed.

The most critical laws protecting employees against discrimination are set forth below, followed by examples of the types of hiring questions employers should avoid. Finally, the roles played by the TWC (Texas Workforce Commission) and the EEOC (Equal Employment Opportunity Commission) regarding employee complaints are also briefly noted.

Federal, state and local laws provide many anti-discrimination protections to Texas workers

Both federal laws and Texas statutes have been passed providing job applicants and employees with protections against discrimination on the following grounds.

  • Race
  • National origin
  • Color
  • Religion
  • Sex (including various medical conditions directly related to pregnancy)
  • Age (40 and older)
  • Genetic testing information
  • Disability

Federal law also provides specific employment discrimination protection to applicants who may not be actual U. S. citizens.

Federal laws and related regulations designed to protect workers against discrimination

  • Title VII of the Civil Rights Act of 1964 (Title VII). This law was later amended to include The Pregnancy Discrimination Act
  • The Equal Pay Act of 1963 (EPA)
  • The Age Discrimination in Employment Act of 1967
  • Title I of the Americans with Disabilities Act of 1990 (ADA)
  • Sections 102 and 103 of the Civil Rights Act of 1991
  • Sections 501 and 505 of the Rehabilitation Act of 1973
  • GINA – The Genetic Information Nondiscrimination Act of 2008

Many of the legal rights guaranteed to Texas workers under the federal laws referenced above are also protected (and set forth) in Chapter 21 of the Texas Labor Code. Various Texas cities, including both Houston and Austin, have passed additional anti-discrimination laws to protect their residents with unique sexual orientation and gender identity issues. (Additional information about protecting employee rights is set forth on our Texas Governor’s website.)

Here’s some additional, pragmatic information for handling the job application process.

Company interviewers must carefully avoid asking job applicants these types of questions

While the following list is not intended to be comprehensive, it should heighten your awareness of how careful you must be when trying to learn more about applicants who may have certain special needs or limitations that are not directly related to legitimate job requirements.

  • Do you have any disability? (However, if the applicant has a visually obvious disability — or has voluntarily disclosed one – you can normally ask if any special job accommodations are necessary or required);
  • Are you currently taking any medications that might impair your ability to perform the assigned tasks as described?
  • Have you needed to file any workers compensation claims in the past?
  • Are you pregnant – or planning to have a child during the coming year?
  • Have you obtained the results from any genetic tests during the past 10 years that indicate your likelihood of developing cancer (or another debilitating condition)?
  • Have you ever suffered a heart attack or stroke? Do you have any close blood relatives who have suffered from either of these medical problems?
  • Do you currently suffer from depression, bipolar disorder or schizophrenia – or do any immediate family members have these medical conditions?

Under some circumstances, once you’ve hired a new employee, you may be able to inquire about certain disability-related medical conditions. However, you should discuss all the specific conditions that must exist before asking these questions with your employment law attorneys to avoid violating any of the employee’s legal rights.

The TWC and EEOC help current (and prospective) employees with discrimination concerns

When individuals believe that they’ve endured discrimination while applying for work with your company – or while employed by you, they usually contact the Texas Workforce Commission and the EEOC while deciding whether to file a formal complaint.

Should you learn that such a complaint has been filed, be sure to immediately contact our law firm so we can help you prepare a thorough response, detailing all that your company did to fully respect all employee (or job applicant) rights. We can also discuss with you various proactive steps your company can take to try and decrease the chances of having any further complaints filed against you.

Buying a New Company:  Conducting Due Diligence

Depending on the nature and size of the business you’re interested in buying, the process of completing due diligence can be straightforward or complex. Fortunately, the basic steps you’ll need to follow are rather standard.

After your lawyer has negotiated a Letter of Intent (LOI) with the seller –  covering each party’s duties and responsibilities involving confidentiality, exclusivity and other matters – you’ll be ready to begin the due diligence phase of possibly buying the company.

The Main Reasons for Performing Financial Due Diligence

This process is partially designed to help determine if the initial evaluation placed on the business is fair and if the company is both stable and viable. Time must also be set aside to review all current contracts and potential legal and regulatory liabilities.

Some of the specific aspects of the business you’ll want your Houston business law attorney and personal accountants to carefully review and examine are set forth below.

  • All accounts receivable and payable
  • At least the last three years of the company’s tax filings
  • All current payroll obligations
  • Most or all the major banking transactions for the past year or more
  • The full nature and extent of any outstanding loans on the books

As this initial list of matters indicates, this process can take many months with some businesses. Normally, the parties negotiate the timetable for completing all due diligence examinations in their Letter of Intent (LOI).

Special Inquiries You Must Include Regarding Other Financial Matters

Hopefully, your review of all the financial accounts won’t turn up any troubling questions that can’t be answered. However, since a small percentage of business sellers may be dishonest, your due diligence team must carefully watch out for certain types of “red flags” or irregularities. These can include some of the following concerns.

  • Missing funds
  • References to non-existing accounts
  • Improperly filed tax returns
  • A varying degree of bad debt that’s regularly written off
  • Unstable profit margins

Your lawyer’s due diligence inquiry must also include carefully reviewing all current contracts with other businesses or corporations.

Key Concerns Involving Executory Contracts

  • When are they each due to expire? (This is important since this information can affect the company’s current valuation and other issues). For example, if current supplier contracts are ending soon, you may soon find yourself having to pay far more for critical supplies;
  • What’s the status of all customer contracts? You need to be sure all funds owed to the company are being collected regularly and all goods and services promised are being delivered in a timely manner. Failure to carefully monitor all contract terms can cost you valuable customers and open you up to major legal liabilities;
  • Are all Service contracts being carefully monitored? Nearly every business is dependent on outside service vendors to keep their manufacturing and other equipment working properly. Likewise, contracts are often in place to secure the professional services of lawyers, accountants, computer repair technicians and others. You must make sure the company is properly honoring all these contracts and renegotiating them in a timely and responsible manner;
  • Are all current leases being properly maintained? Companies can’t afford to accidentally let leases lapse on buildings or other property that are essential to their daily operations.
  • Employee Agreements? Do current employees have employment agreements with non-compete clauses? These must be carefully examined because they cannot be assigned if you are only buying the assets.

Due diligence can also extend beyond merely reviewing key financial documents and contracts. It should also include a detailed review of all actual or threatened litigation and regulatory investigations.

Your Lawyers Must Review All Current or Likely Lawsuits & Regulatory Challenges

Each of the following issues must be examined regarding all current or anticipated litigation. They may prove crucial if you decide to still buy a specific company since you’ll probably need to request contractual indemnity for all future liability (and litigation expenses).

  • How costly might each case eventually prove to be? In other words, what potential liabilities are involved?
  • Has the business received formal notice that any of its operations may be operating in conflict with any state or federal statutes or regulations?

You must be willing to sit down with your lawyer and the target company’s current legal counsel to sort through all these legal and regulatory concerns since they directly bear on the business’ current valuation and the wisdom or folly of buying it.

While the due diligence concerns referenced above are not intended to be fully comprehensive, they should help you understand many of the critical matters that must be examined. Once you make it through this due diligence stage, you can then either decline to buy the company or move forward into the “closing” or final transactions phase.

Please feel free to contact our law office so we can help guide you through the various stages of due diligence as you try to decide whether you should buy a specific company.