DB FPX 8410 Assessment 4 Propose Preventative Measures to Avoid Legal Liability

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Capella university

DB-FPX 8410 Addressing Problems in Human Resources and Compliance

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Executive Summary

This analysis reviews one of the complaint letters that could place CapraTek at legal risk and liability. Among the 30 complaint letters received by the company, one stands out for its potential to cause serious legal issues, apart from the wrongful death letters received. Omari Masri, an intern, sent a complaint letter regarding unpaid hours worked. This analysis discusses U.S. laws and regulations related to the complaint, the potential damage to the company and its employees if the complaint is not handled professionally, and preventive measures to eliminate future liabilities. Recommendations for legal defenses CapraTek should employ to defend against this complaint and the ethical implications will also be discussed.

Salient Facts

The complaint letter from intern Omari Masri outlined expectations of being overworked in a hostile work environment. Key facts include the intern taking on the responsibilities of a hired employee while being treated offensively. The overworking of the intern raises compliance concerns, and the alleged discrimination and harassment pose legal liabilities to CapraTek. According to the U.S. Department of Labor (DOL), an unpaid internship must provide an educational experience similar to training and must not replace a regular employee (Miller, 2017). If Masri can prove the internship violated DOL regulations, CapraTek could face consequences. A court ruling advised employers to use the primary beneficiary test to differentiate an intern from an employee under the Fair Labor Standards Act (FLSA) (U.S. Department of Labor, 2018). The most recent test includes seven factors (U.S. Department of Labor, 2018):

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
2. The extent to which the internship provides training similar to that given in an educational environment, including clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program through integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

DB FPX 8410 Assessment 4 Propose Preventative Measures to Avoid Legal Liability

Courts have agreed that this test is flexible, and the classification is unique to each case depending on the circumstances (U.S. Department of Labor, 2018).

Masri’s letter also states that when she raised her concerns to her supervisor, the supervisor attacked her nationality and suggested she return to where she came from. The U.S. Equal Employment Opportunity Commission (EEOC) classifies national origin discrimination as treating an employee unfavorably due to their nationality (National Origin Discrimination | U.S. Equal Employment Opportunity Commission, n.d.). The Department of Justice’s Civil Rights Division’s Immigrant and Employee Rights Section (IER) enforces the EEOC’s requirements (National Origin Discrimination | U.S. Equal Employment Opportunity Commission, n.d.). This places CapraTek at risk for legal liability.

Legal Exposure

Based on the complaint letter’s facts, CapraTek’s legal exposure is high. If the allegations of harassment based on nationality are proven true, the company could face consequences from the EEOC and the Department of Justice’s Civil Rights Division. The Immigration Reform and Control Act of 1986 (IRCA) prohibits discrimination based on an employee’s citizenship or immigration status (National Origin Discrimination | U.S. Equal Employment Opportunity Commission, n.d.). This also includes harassment based on national origin. However, the intern being an unpaid worker may not be covered by these regulations unless she proves she did not pass the beneficiary test set by the DOL (Share, 2017).

To establish legal liability, Masri must prove that CapraTek misclassified her internship and should have paid her wages, violating FLSA rules and regulations, resulting in fines and penalties. Fortunately for CapraTek, Masri did not contract COVID-19 while on the job, as this would have raised another issue with worker’s compensation coverage. Paid interns are covered under worker’s compensation, and since Masri’s complaint involves the classification of paid or unpaid internship, this would have led to another legal liability, as Illinois law requires employers to cover workers with insurance (Employer Guide to Internship Laws, n.d.; Insurance – About, n.d.).

Harm to Company

The most harmful impact on CapraTek is the potential settlement cost of any legal action. Beyond financial implications, there are internal issues that could arise from discrimination complaints. A change in morale could occur, affecting employee productivity and overall company performance. CapraTek could also suffer reputational harm, especially among consumers of different nationalities.

Internships are valuable to companies, as many hire their interns as full-time employees. Internships allow companies to evaluate individuals’ work ethics, adaptability, and compatibility with the team (Steele, 2017). Paid internships result in about 65% of interns receiving job offers, while unpaid interns receive offers 39% of the time (Steele, 2017). If CapraTek loses its partnerships with colleges for internships, it may miss out on valuable future employees.

Preventative Measures

Hiring a robust human resources team is the first step in preventing legal liability, as they ensure compliance with regulations (B&F System Admin, 2017). HR ensures the hiring process follows regulations such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA) (B&F System Admin, 2017). Consulting the HR team when concerns arise can prevent liabilities, as they provide guidance to ensure actions do not lead to legal issues.

Continued training for employees and management on rules and regulations can also prevent legal liabilities by raising awareness. Training should include available resources for employees who witness violations. Establishing a documented process for reporting violations and outlining potential consequences for non-compliance can further prevent liabilities.

Defense

CapraTek’s first line of defense is proving the intern met the DOL requirements for an unpaid intern. This involves confirming the documentation of the intern’s hours worked. If Masri can prove she did not qualify as an unpaid intern, CapraTek must show she met the unpaid internship requirements to potentially win the case.

Investigating the harassment allegation regarding Masri’s nationality is crucial. If the supervisor involved has no prior complaints of this nature, the defense could argue that there were no witnesses to the discriminatory remark and no history of such conduct, leaving it as Masri’s word against the supervisor’s.

Ethical Implications

Ethically, overworking an intern without compensation contradicts CapraTek’s mission and values. It is unethical to expect free labor, especially when employees are already overworked due to the pandemic. Allowing discriminatory comments creates a hostile work environment, which is not acceptable. Permitting such behavior can lead to internal chaos, making employees feel unsafe at work, which is not ethical for any business.

Conclusion

Addressing complaints seriously and appropriately is crucial for any company. This paper highlights the legal, reputational, cultural, and ethical implications of Masri’s complaint. One complaint can significantly impact a company from multiple facets. CapraTek should take this complaint seriously and work to address the issues presented, both in this specific case and for the future.

References

B&F System Admin. (2017, October 3). What are the legal responsibilities of your human resources department? www.justiceatwork.com. https://www.justiceatwork.com/resources/2017/october/what-are-the-legal-responsibilities-of-your-huma/#:~:text=The%20reality%20is%20that%20HR%20performs%20a%20vital

Employer guide to internship laws | Symplicity. (n.d.). www.symplicity.com. Retrieved October 15, 2022, from https://www.symplicity.com/employers/campus-recruiting/resources/the-employer-guide-to-understanding-internship-laws

Insurance – About. (n.d.). www2.illinois.gov. Retrieved October 15, 2022, from https://www2.illinois.gov/sites/iwcc/about/Pages/insurance.aspx

Miller, S. (2017, August 21). Despite gains, average intern wage still below pre-recession level [Review of Despite gains, average intern wage still below pre-recession level]. SHRM. https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/intern-wages.aspx

DB FPX 8410 Assessment 4 Propose Preventative Measures to Avoid Legal Liability

Nagele-Piazza, L. (2017, May). Employers: Is your unpaid internship program legal? SHRM; SHRM. https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/is-your-unpaid-internship-program-legal.aspx

National origin discrimination | U.S. Equal Employment Opportunity Commission. (n.d.). www.eeoc.gov. Retrieved October 13, 2022, from https://www.eeoc.gov/national-origin-discrimination

Share, M. A. B. (2017, June 12). The law governing unpaid interns, Part II: Rights under federal and state nondiscrimination laws. www.pullcom.com. https://www.pullcom.com/working-together/the-law-governing-unpaid-interns-part-ii-rights-under-federal-and-state-nondiscrimination-laws#:~:text=For%20unpaid%20interns%20and%20volunteers%2Crt_I