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When the Laws Aren't Clear

Published:  May 29, 2019

The Equality Act bill would extend existing federal employment anti-discrimination laws to cover sexual orientation and gender identity; it would also specifically prohibit individuals from being denied access to areas based on their sexual orientation or gender identity. New England states in particular already prohibit discrimination in employment on the basis of sexual orientation or gender identity, however, this does illustrate an interesting dilemma that arises in many other contexts: what should employers do when the law is not clear?

Depending on the specific nature of the issue, an employer’s course of action may depend on several factors. First, employers may decide on risk aversion. Running afoul of a law is costly, and where the law is unclear, risk-adverse employers may decide to default to the position with the lowest risk. For example, in states without state-level LGBTQ protections, the employer may decide to provide those protections even if federal law isn’t clear that they are required to do so. This ensures that they won’t be found in violation if the courts resolve the issue in favor of granting such legal protections. In other situations, the risk assessment may require balancing on the comparative costs and risks of various courses of action. On one hand, providing only what is clearly required may be substantially less costly for an employer; however, it may also risk substantial liability if a court rules that the employer did have an obligation to provide the additional benefits, rights, protections, etc.

Employers may also decide their course of action based on moral or ethical principles, or other considerations such as public health. In these situations, an employer would knowingly accept the risk that their course of action could later be found to be in violation of the law; however, the employer may nonetheless do so if they feel strongly about the principle. 

Finally, employers may decide that the best course of action is based on public perception and/or publicity. In many situations, legal protections (or the lack thereof) don’t keep pace with public support. In certain scenarios, an employer may not have a clearly defined legal obligation, but nonetheless may choose a course of action based on avoiding the risk of negative publicity or public outrage. For example, savvy employers are sensitive to the risk of substantial and damaging negative publicity in the wake of the ‘Me Too’ movement. If an employer finds themselves in a situation where they are faced with a sexual harassment complaint, the employer may decide to act swiftly and decisively, even if they feel that the complaint doesn’t present a large risk of legal liability. These savvy employers understand that the attenuated financial harm created by negative publicity can often end up being substantially more harmful than the more easily defined cost of liability in a strictly legal sense.

In truth, wise employers should weigh all of these considerations when faced with situation wherein their legal obligations are not clear. Like with virtually all business decisions, the best course of action involves an earnest cost-benefit analysis weighing as many important factors and considerations as possible.

If you have any questions about the potential impact of this bill on your business, please do not hesitate to contact the attorneys at Royal, P.C.

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