Cross 9e TBB Ch21
Chapter 21
Employment Relationships
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
1. Generally, under employment-at-will doctrine, an employer may fire an employee even if doing so would violate a federal or state statute.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
2. The key consideration in determining whether an employment manual creates an implied contract is the employee’s reasonable expectations.
ANSWER: T PAGES: Section 1 TYPE: + BUSPROG: Analytic AICPA: BB-Legal
3. The most common exception to the employment-at-will doctrine is made on the basis that the employer’s reason for firing the employee violates fundamental common sense.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
4. Generally, under the employment-at-will doctrine, an employee may quit a job at any time for any reason.
ANSWER: T PAGES: Section 1 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
5. Federal wage-hour laws cover all employers engaged in interstate commerce.
ANSWER: T PAGES: Section 2 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
6. Certain employees are exempt from federal overtime provisions.
ANSWER: T PAGES: Section 2 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
7. Children under fourteen years of age are not allowed to work.
ANSWER: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
8. An employer can voluntarily pay overtime to ineligible employees.
ANSWER: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
9. Certain employers must provide advance notice of a layoff to the affected workers or their representative (if the workers are members of a labor union).
ANSWER: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
10. An employee may take up to twenty-six weeks of military caregiver leave within a twelve-month period to care for a family member with a serious injury or illness incurred as a result of military duty.
ANSWER: T PAGES: Section 3 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
11. Whenever a work-related injury or disease occurs, employers must make reports directly to the Occupational Safety and Health Administration.
ANSWER: T PAGES: Section 3 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
12. An employer generally is required to notify an employee when an absence will be counted as family or medical leave under federal law.
ANSWER: T PAGES: Section 3 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
13. Employers have a general duty to keep workplaces safe.
ANSWER: T PAGES: Section 4 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
14. To recover workers’ compensation, an employee must prove that an injury did not occur on the job or in the course of employment.
ANSWER: F PAGES: Section 4 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
15. Vesting gives an employee a legal right to receive pension benefits at some future date when he or she stops working.
ANSWER: T PAGES: Section 5 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
16. Like Social Security, Medicare is funded by contributions from the employer and the employee.
ANSWER: T PAGES: Section 5 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
17. Most employers with fifty or more employees are required to offer health-insurance benefits.
ANSWER: T PAGES: Section 5 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
18. Employers are required to establish retirement plans for their employees.
ANSWER: F PAGES: Section 5 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
19. Employees of private (nongovernment) employers have some privacy protection under the U.S. Constitution.
ANSWER: F PAGES: Section 6 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
20. Federal law does not restrict what employers may do on the basis of results of genetic testing.
ANSWER: F PAGES: Section 6 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
MULTIPLE CHOICE QUESTIONS
1. Vidal is an employee of Wild Thing Ranch. Vidal learns that Wild Thing is illegally importing endangered animals to sell as pets. He reports his employer’s illegal activities but is laid off shortly thereafter and successfully sues Wild Thing for retaliatory discharge. With respect to the employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
ANSWER: C PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
2. Febo is an employee of Guitar & Drum Company. Guitar & Drum’s employee manual states that workers, such as Febo, will be dismissed only for good cause. With respect to the employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
ANSWER: B PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
3. Processed Food Packaging Company employs workers, including Quint, at six locations in two states. Processed Food’s discharge of Quint outside the terms of an employment contract may result in
a. Processed Food’s liability for damages.
b. Quint’s liability for damages.
c. discontinuance of Quint’s health-plan coverage.
d. monitoring Processed Food’s communications for privacy violations.
ANSWER: A PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
4. Lena offers Miguel a job, representing falsely that it will be long term. In reliance, Miguel takes the job but is laid off shortly thereafter and successfully sues Lena for fraud. With respect to the employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
ANSWER: D PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
5. Backfill Equipment Corporation currently employs three thousand full-time workers. Because business has declined, Backfill plans to lay off one hundred workers. If Backfill does not provide advance notice of the layoff, the employer may be subject to
a. fines, employee back-pay awards, attorneys’ fees, and more.
b. a cease-and-desist order or other injunction but no economic liability.
c. imprisonment but no injunctive or economic sanction.
d. no sanctions.
ANSWER: A PAGES: Section 2 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
6. Mythic Games Company employs two hundred workers full-time. If Mythic Games plans to have a mass layoff, it must provide its employees with notice of at least
a. thirty days.
b. sixty days.
c. ninety days.
d. one year.
ANSWER: B PAGES: Section 2 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
7. Flannery is seventeen years old. Under the Fair Labor Standards Act, she cannot work
a. during school hours.
b. in a hazardous job.
c. more than eighteen hours per week.
d. without a special permit.
ANSWER: B PAGES: Section 2 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
8. Curtis is an employee of Deepwater Drilling, Inc., covered by federal overtime provisions, which apply only after an employee has worked more than
a. eight hours in a day.
b. forty hours in a week.
c. 160 hours in a month.
d. one year for the same employer.
ANSWER: B PAGES: Section 2 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
9. Geno’s Italiano Ristorantes, Inc., employs three hundred workers at four locations in two states. Under federal law, Geno’s must provide each employee, during any twelve-month period, family or medical leave of up to twelve
a. days.
b. weeks.
c. months.
d. years.
ANSWER: B PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
10. Hauser takes temporary family leave from his job at Gelato Confectionary Corporation to care for a new baby. On Hauser’s return from the leave, Gelato must
a. restore Hauser to his original position.
b. reimburse Hauser for his expenses while on leave.
c. promote Hauser to the status of a key employee.
d. do nothing.
ANSWER: A PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
11. Livia takes temporary family leave from her job at Meatpackers Corporation to care for a new baby. On Livia’s return from the leave, Meatpackers must
a. restore Livia to her original position.
b. reimburse Livia for her expenses while on leave.
c. promote Livia to the status of a key employee.
d. do nothing.
ANSWER: A PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
12. Thom, who works as an employee for Upstate Power Corporation, suffers an injury in an accident. Thom will be compensated under state workers’ compensation laws
a. only if the injury occurred during working hours.
b. only if the injury occurred off the job.
c. only if the injury occurred on the job.
d. whenever and wherever the injury occurred.
ANSWER: C PAGES: Section 4 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
13. Cy, an employee of Dockyard Shipping Corporation, is injured on the job and accepts workers’ compensation. Cy can successfully sue Dockyard
a. only if the injury was caused by Dockyard intentionally.
b. only if the injury was caused by Dockyard’s negligence.
c. regardless of Dockyard’s fault.
d. under no circumstances.
ANSWER: A PAGES: Section 4 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
14. Steel Production Industries, Inc., employs five hundred workers. For the Occupational Safety and Health Administration, Steel Production must do all of the following except
a. keep occupational injury and illness records for each employee.
b. report any work-related diseases.
c. report any employee death due to a work-related incident within eight hours.
d. pay employees higher wages for working in more dangerous areas.
ANSWER: D PAGES: Section 4 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
15. Blayne is an employee of Chemical Refinery, Inc. Blayne is threatened with a discharge when he refuses a transfer to a Chemical Refinery department in which several employees suffered serious injuries from exposure to hazardous chemicals. Blayne may be entitled to protection from discharge under
a. no law.
b. the Family and Medical Leave Act.
c. the Occupational Safety and Health Act.
d. the state workers’ compensation act.
ANSWER: C PAGES: Section 4 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
16. Seiko works for TallTales Publishing, Inc. The basis for Seiko’s contribution under the Federal Insurance Contribution Act to help pay for benefits that will partially make up for her loss of income on retirement is her
a. seniority at TallTales.
b. annual wage base.
c. special job skills.
d. county of residence.
ANSWER: B PAGES: Section 5 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
17. Community Recycling, Inc., plans to lay off fifty of its five hundred workers, including Bev. Bev has a right to continued health-care coverage under Community’s group plan unless
a. Community changes its insurer.
b. Community completely cancels its plan.
c. Bev files a suit against Community for wrongful discharge.
d. Community decides not to pay Bev’s premium.
ANSWER: B PAGES: Section 5 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
18. Petro Oil Company wants to conduct genetic testing of its workers to identify those who might develop significant health problems in the future. Under federal law, Petro may use genetic information to
a. make decisions about hiring or firing.
b. make decision about job placement or promotion.
c. deny group health-care coverage or charge a higher premium.
d. none of the choices.
ANSWER: D PAGES: Section 5 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
19. Investment Sales Corporation wants to monitor its employees’ electronic communications. Investment Sales’s best course of action to avoid liability under laws related to employee monitoring is to notify
a. no one.
b. its employees.
c. its clients.
d. the public generally.
ANSWER: B PAGES: Section 6 TYPE: + BUSPROG: Reflective AICPA: BB-Legal
20. Data & Data Accountants, a private employer, handles bookkeeping for small employers. In most circumstances, with exceptions, federal law clearly prohibits Data & Data from subjecting its employees to
a. job-skills tests.
b. monitoring of business communications.
c. drug tests.
d. lie-detector tests.
ANSWER: D PAGES: Section 6 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
Essay Questions
1. Owen, a counter clerk at Pastry Bakery, notices that the bakers are not wearing protective gloves while preparing baked goods, a violation of state law. Owen reports this to Quinn, the owner, who does nothing. Owen tells Roberta, a reporter for STUV, a local television station. STUV reports the violations on a newscast. Pastry’s business drops 40 percent. Can Quinn fire Owen for this?
ANSWER: Most likely, no. Most states and the federal government protect employees such as Owen who “blow the whistle” on the wrongdoing of their employers under the public policy exception to he employment at-will doctrine. In some instances, specific statutes encourage whistleblowing by offering a monetary reward if the employee’s charges lead to a successful government lawsuit.
PAGES: Section 1 type: = BUSPROG: Reflective AICPA: BB-Decision Modeling
2. Francesca works for Glassworks Inc. Near her workstation is a conveyor belt that runs into a large industrial oven. Some workers, including Harry, Francesca’s supervisor, use the oven to heat food. One day, when the conveyor is not moving, Francesca uses the oven to cook her lunch. As she removes the food from the oven, the conveyor comes on and Francesca is pulled partially into the oven and suffers serious burns. Francesca seeks recovery under the state workers’ compensation law. Should she recover? Why or why not?
ANSWER: For a worker to be eligible for workers’ compensation, the injury must have been an accident and have arisen out of or in the course of employment.
Although Francesca was accidentally pulled into the oven, recovery could be denied because she was not engaged in an activity directly related to her work but was instead heating food in an industrial oven. By the same token, however, it appears to be a common practice to use the oven and the employer has apparently not forbidden the practice. Because the cooking is done by other employees, including Francesca’s supervisor Harry, Glassworks can be imputed with the knowledge of it. On balance, then, Francesca should be allowed to receive workers’ compensation benefits.
PAGES: Section 4 type: = BUSPROG: Reflective AICPA: BB-Decision Modeling
Chapter 22
Employment Discrimination
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
1. Title VII of the Civil Rights Act of 1964 applies to employers with fifteen or less employees.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
2. Intentional discrimination by an employer against an employee is known as disparate-treatment discrimination.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
3. Title VII of the Civil Rights Act of 1964 prohibits job discrimination against majority group individuals, such as white males.
ANSWER: T PAGES: Section 1 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
4. The Civil Rights Act of 1964 prohibits job discrimination on the basis of merit.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
5. Title VII of the Civil Rights Act of 1964 prohibits only intentional discrimination.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
6. Most employers can treat their employees more or less favorably based on their religious beliefs or practices.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
7. The Equal Pay Act and other federal laws prohibit employers from engaging in gender-based wage discrimination.
ANSWER: T PAGES: Section 1 TYPE: + BUSPROG: Analytic AICPA: BB-Legal
8. If a wage differential is due to any factor other than gender, then it does not violate the Equal Pay Act.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
9. Employee demotion is one of the least frequently cited reasons for a finding of constructive discharge under Title VII of the Civil Rights Act of 1964.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
10. Sexual harassment occurs when sexual favors are demanded in return for job opportunities, promotions, salary increases, or other benefits.
ANSWER: T PAGES: Section 1 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
11. For an employer to successfully defend against a charge of a supervisor’s sexual harassment, the plaintiff-employee must have taken a tangible employment action against the supervisor.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
12. When the harassment of co-workers creates a hostile working environment, an employee may have a cause of action against an employer.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
13. Compensatory damages are not available in cases of intentional discrimination in violation of Title VII of the Civil Rights Act of 1964.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
14. Under the Age Discrimination in Employment Act of 1967 permits private cause of action against employers for age discrimination.
ANSWER: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
15. The Americans with Disabilities Act of 1990 defines persons with disabilities as persons with physical or mental impairments that “substantially limit” one or more everyday activities of the affected individuals.
ANSWER: T PAGES: Section 3 TYPE: + BUSPROG: Analytic AICPA: BB-Legal
16. If a job applicant or an employee with a disability, with reasonable accommodation, can perform essential job functions, the employer must make the accommodation.
ANSWER: T PAGES: Section 3 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
17. Employers are not required to modify their job-application and selection process so that those with disabilities can compete for jobs with those who do not have disabilities.
ANSWER: F PAGES: Section 3 TYPE: =- BUSPROG: Analytic AICPA: BB-Legal
18. The distribution of promotions and other job benefits according to a seniority system is not normally a good defense to a suit for employment discrimination.
ANSWER: F PAGES: Section 4 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
19. Employers can avoid liability for employment discrimination on the basis of after-acquired evidence of an employee’s misconduct.
ANSWER: F PAGES: Section 4 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
20. Any federal, state, or local affirmative action program that uses racial or ethnic classifications as the basis for making decisions is subject to strict scrutiny by the courts.
ANSWER: T PAGES: Section 5 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
MULTIPLE CHOICE QUESTIONS
1. Iago believes that he is a victim of a form of employment discrimination that falls under the Civil Rights Act of 1964. Compliance with this statute is monitored by
a. employees and job applicants, not an administrative agency.
b. employers and businesses, not an administrative agency.
c. the courts and Congress, not an administrative agency.
d. the Equal Employment Opportunities Commission.
ANSWER: D PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
2. Sara believes that she was rejected for a position at Trek n’ Travel Agency on the basis of her race. Sara files a suit against Trek n’ Travel under the Civil Rights Act of 1964. To establish a prima facie case of employment discrimination, Sara must show all of the following except that
a. she is a member of a protected class.
b. she applied and was qualified for the job in question.
c. she was rejected for a position by Trek n’ Travel.
d. other persons of her race hold similar positions with other similar employers.
ANSWER: D PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
3. Neville, a member of a protected class, applies for a job with Origami Paper Products Corporation, but fails the company’s employment test and is not hired. Neville believes that the test has an unintentionally discriminatory effect. If so, this is
a. reverse discrimination.
b. disparate-impact discrimination.
c. disparate-treatment discrimination.
d. not discrimination.
ANSWER: B PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
4. Buena files a suit against Credit Services Corporation under the Civil Rights Act of 1964, alleging employment discrimination on the basis of gender on a disparate-impact theory. To succeed, Buena must show that Credit Services hires fewer women than the percentage of
a. qualified women in the local labor market.
b. qualified women in the United States.
c. women in Credit Services’s state.
d. women who apply to Credit Services for work.
ANSWER: A PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
5. Melanie files an employment discrimination suit against Natural Resources Industries Corporation under the Civil Rights Act of 1964 on a disparate-impact theory. To succeed, Melanie must show that members of a protected class are adversely affected by any of the following except the employer’s
a. practices.
b. procedures.
c. tests.
d. seniority system.
ANSWER: D PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
6. Insurance Sales Corporation gives preferential treatment in hiring and promotion to the members of all protected classes. This treatment results in discrimination against members of the majority. This is
a. disparate-impact discrimination.
b. gender discrimination.
c. not discrimination.
d. reverse discrimination.
ANSWER: D PAGES: Section 1 TYPE: + BUSPROG: Reflective AICPA: BB-Legal
7. Ruta is a supervisor for Subs & Suds, a restaurant. Tim is a Subs employee. The owner announces that some employees will be discharged. Ruta tells Tim that for sexual favors she will give him an excellent performance review and recommend a raise. This is
a. harassment on the basis of sexual orientation.
b. hostile-environment harassment.
c. not harassment.
d. quid pro quo harassment.
ANSWER: D PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
8. Conrad and Delilah are employees of EcoCrop Feed & Seed Corporation. Under the Equal Pay Act of 1963, EcoCrop can legitimately pay different wages on the basis of
a. seniority.
b. job descriptions.
c. substantial equality of skill, effort, and responsibility.
d. gender.
ANSWER: A PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
9. Emylee, an employee of Farm Supplies, Inc., files a sexual-harassment suit against Gowan, her supervisor. Emylee wins. Farm Supplies may also be liable if it had effective harassment policies and complaint procedures, and
a. none of the employees followed them.
b. Emylee followed them.
c. all of the employees were aware of them.
d. Gowan followed them.
ANSWER: B PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
10. Elsa participates in an investigation into possible violations of the Civil Rights Act of 1964 at Fabrication Foundry, Inc., where she works. As a result, Elsa’s employer demotes her. Elsa can file a
a. harassment complaint.
b. retaliation claim.
c. constructive discharge claim.
d. disparate-impact discrimination claim.
ANSWER: B PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
11. Boni, the owner of Café Rico, knows about, but does not take any action to prevent, the sexual harassment of employees. Boni and the café may be liable for such harassment by
a. an employee’s previous employer.
b. a customer or a co-worker.
c. an employee’s spouse or other close relative.
d. none of the choices.
ANSWER: B PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
12. Lisa brings a successful lawsuit against her employer Metal Mold & Die Corporation for unlawful discrimination. Lisa may be awarded
a. back pay, but not retroactive promotions.
b. retroactive promotions, but not back pay.
c. damages, but not back pay.
d. back pay, retroactive promotions, and damages.
ANSWER: D PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
13. Free-Flo Pipes & Plumbing Corporation is a private employer involved in an employment discrimination suit under the Civil Rights Act of 1964. Punitive damages may be recovered against Free-Flo only if the employer
a. acted with malice or reckless indifference.
b. can easily afford to pay the amount.
c. has one hundred or more employees.
d. consents.
ANSWER: A PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
Fact Pattern 22-1 (Questions 14–15 apply)
Kyla replaces Lomax in his job at Motor Vehicle Manufacturing Corporation (MVMC).
14. Refer to Fact Pattern 22-1. Lomax believes that he has been discriminated against on the basis of his age. For the Age Discrimination in Employment Act of 1967 to apply
a. Kyla must be forty years of age or younger.
b. Kyla must be forty years of age or older.
c. Lomax must be forty years of age or older.
d. Lomax must have been MVMC’s employee for at least forty years.
ANSWER: C PAGES: Section 2 TYPE: + BUSPROG: Reflective AICPA: BB-Legal
15. Refer to Fact Pattern 22-1. To succeed with an age-discrimination claim against MVMC, Lomax will have to show that
a. Kyla is not qualified for Lomax’s job.
b. Lomax is qualified for his job.
c. MVMC’s qualifications for Lomax’s job are too high.
d. no one could do Lomax’s job as well as he could.
ANSWER: B PAGES: Section 2 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
16. Helene, a disabled person, applies for a job at Industrial Engineering Applications Inc. for which she is well qualified, but for which she is rejected. Industrial Engineering continues to seek applicants and eventually fills the position with a person who is not disabled. Helene is most likely to succeed in a suit against Industrial Engineering for discrimination under the Americans with Disabilities Act of 1990 if she can show that
a. she was not hired solely because of her disability.
b. she can function well with corrective devices or on medication.
c. her disability causes her undue hardship.
d. she could not perform the job even with reasonable accommodation.
ANSWER: A PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
17. Merlin is a drug addict who has completed a supervised drug-rehabilitation program. Nabil used drugs casually in the past. Both work for Omni Insurance & Investments Inc. Considered to have a disability under the Americans with Disabilities Act of 1990
a. are Merlin and Nabil.
b. is Merlin only.
c. is Nabil only.
d. none of the choices.
ANSWER: B PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
18. Satin, Silk & Swimwear, a women’s clothing store, employs female attendants who assist customers in the dressing rooms. Toribio, a forty-one-year-old male, applies for an attendant’s job, but is not hired. In Toribio’s suit against Satin, Silk & Swimwear for employment discrimination under the Civil Rights Act of 1964, the store has
a. no defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. an affirmative action defense.
ANSWER: B PAGES: Section 4 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
19. Solar Power Panels Corporation requires its employees to have a high school diploma, claiming a connection between a high school education and job performance. In a suit against Solar Power under the Civil Rights Act of 1964, this is shown to have a discriminatory effect. Solar Power has
a. an affirmative action defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. no defense.
ANSWER: C PAGES: Section 4 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
20. Lumber Mill Inc. is a private employer with more than twenty employees. Its employment practices do not indicate a past pattern of discrimination. It is located in Metro City, which has recently seen an increase in the number of its citizens who are members of protected classes. Under the Civil Rights Act of 1964, Lumber Mill is
a. required to promote diversity in its workplace, but not to implement an affirmative action policy.
b. not required to implement an affirmative action policy.
c. required to implement an affirmative action policy until the number of its minority employees is proportional to the number of minority individuals in Metro’s labor pool.
d. required to implement an affirmative action policy that considers race merely as a plus factor.
ANSWER: B PAGES: Section 5 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
Essay Questions
1. For twenty years, Maynard works for Natural Gas Wells, Inc., which employs more than five hundred persons in two states. Natural Gas Wells drills for and mines natural gas to sell and transport to refineries, which in turn pipes liquefied gas to other states. Maynard starts as an unskilled worker in the drilling fields. After a career of positive job evaluations and pay raises, Maynard is ultimately promoted to the position of chief of maintenance for a dozen wellheads. Five years later, a new employee, Oberto, is hired to oversee operations at all of the wellheads. Oberto demotes Maynard, who is now over the age of forty, and freezes his salary. Oberto demotes five other employees over the age of forty and places Maynard under the supervision of Pitt, who is twenty-three. Maynard overhears Pitt say, “We’re going to have to do away with these old men.” Maynard quits and files a suit against Natural Gas Wells for employment discrimination. Should he prevail? Explain.
ANSWER: The Age Discrimination in Employment Act of 1967 (ADEA) prohibits discrimination in employment on the basis of age against individuals forty years of age or older. For the ADEA to apply, an employer must have twenty or more employees, and interstate commerce must be affected by the employer’s business activities.
Maynard worked at Natural Gas Wells, which employed more than twenty persons. Natural Gas Wells’s activities affected interstate commerce—its operations spanned two states from which its products were shipped to and through other states. Maynard could likely establish the rest of a prima facie case. Because Maynard was not demoted due to any apparent job-performance problems, the fact that he was replaced by a person approximately half his age, coupled with Pitt’s statement about getting rid of all the “old men,” would be enough to shift the burden to Natural Gas Wells to show that it was not discriminating on the basis of age. Ultimately, based on the facts in the question, Maynard would probably prevail.
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2. Veronica is a repairperson for Wind Power Company. The job requires traveling to remote areas to make repairs to windmills, transmission towers, and power stations under any conditions. Veronica has had the job longer than other employees. Veronica applies for a promotion to a supervisory position that requires constant communication with others in the field. Wind Power rejects the application on the ground that Veronica is hearing impaired. Wind Power acknowledges that Veronica is otherwise qualified, but asserts that it “needs someone who does not have a hearing problem.” Veronica files a suit against Wind Power under the Americans with Disabilities Act of 1990. What is the issue, and what are the relevant considerations on which its resolution depends?
ANSWER: The issue is whether hiring a sign interpreter is a reasonable accommodation for an employee or an undue hardship for the employer.
The Americans with Disabilities Act of 1990 (ADA) prohibits employers from refusing to hire (or promote) disabled persons who are otherwise qualified for a particular position. An employer may have to make reasonable accommodations for a disabled applicant, but that will not cause the applicant to be considered unqualified. Reasonable accommodations might include creating new job assignments, and creating or improving training materials and procedures. Employers who do not wish to make such accommodations must demonstrate that the accommodations will cause “undue hardship.” The law offers no uniform standards for identifying what is an undue hardship, but there are limits to the employer’s obligation to accommodate an employee under the ADA. Accommodation cannot impose a “significant difficulty or expense” on the employer. Also, if a disabled employee can perform the essentials of his or her job without accommodation, then no violation of the ADA has occurred.
Besides hiring a sign interpreter to accompany a deaf employee, in some cases a company could train an employee’s co-workers in American Sign Language. The basics of sign language can be learned in just a few hours, so the expense to the company would be minimal. In the facts of this question, contact among distant field workers might be accomplished via texting and other visual means.
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Employment Relationships
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
1. Generally, under employment-at-will doctrine, an employer may fire an employee even if doing so would violate a federal or state statute.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
2. The key consideration in determining whether an employment manual creates an implied contract is the employee’s reasonable expectations.
ANSWER: T PAGES: Section 1 TYPE: + BUSPROG: Analytic AICPA: BB-Legal
3. The most common exception to the employment-at-will doctrine is made on the basis that the employer’s reason for firing the employee violates fundamental common sense.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
4. Generally, under the employment-at-will doctrine, an employee may quit a job at any time for any reason.
ANSWER: T PAGES: Section 1 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
5. Federal wage-hour laws cover all employers engaged in interstate commerce.
ANSWER: T PAGES: Section 2 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
6. Certain employees are exempt from federal overtime provisions.
ANSWER: T PAGES: Section 2 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
7. Children under fourteen years of age are not allowed to work.
ANSWER: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
8. An employer can voluntarily pay overtime to ineligible employees.
ANSWER: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
9. Certain employers must provide advance notice of a layoff to the affected workers or their representative (if the workers are members of a labor union).
ANSWER: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
10. An employee may take up to twenty-six weeks of military caregiver leave within a twelve-month period to care for a family member with a serious injury or illness incurred as a result of military duty.
ANSWER: T PAGES: Section 3 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
11. Whenever a work-related injury or disease occurs, employers must make reports directly to the Occupational Safety and Health Administration.
ANSWER: T PAGES: Section 3 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
12. An employer generally is required to notify an employee when an absence will be counted as family or medical leave under federal law.
ANSWER: T PAGES: Section 3 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
13. Employers have a general duty to keep workplaces safe.
ANSWER: T PAGES: Section 4 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
14. To recover workers’ compensation, an employee must prove that an injury did not occur on the job or in the course of employment.
ANSWER: F PAGES: Section 4 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
15. Vesting gives an employee a legal right to receive pension benefits at some future date when he or she stops working.
ANSWER: T PAGES: Section 5 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
16. Like Social Security, Medicare is funded by contributions from the employer and the employee.
ANSWER: T PAGES: Section 5 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
17. Most employers with fifty or more employees are required to offer health-insurance benefits.
ANSWER: T PAGES: Section 5 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
18. Employers are required to establish retirement plans for their employees.
ANSWER: F PAGES: Section 5 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
19. Employees of private (nongovernment) employers have some privacy protection under the U.S. Constitution.
ANSWER: F PAGES: Section 6 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
20. Federal law does not restrict what employers may do on the basis of results of genetic testing.
ANSWER: F PAGES: Section 6 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
MULTIPLE CHOICE QUESTIONS
1. Vidal is an employee of Wild Thing Ranch. Vidal learns that Wild Thing is illegally importing endangered animals to sell as pets. He reports his employer’s illegal activities but is laid off shortly thereafter and successfully sues Wild Thing for retaliatory discharge. With respect to the employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
ANSWER: C PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
2. Febo is an employee of Guitar & Drum Company. Guitar & Drum’s employee manual states that workers, such as Febo, will be dismissed only for good cause. With respect to the employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
ANSWER: B PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
3. Processed Food Packaging Company employs workers, including Quint, at six locations in two states. Processed Food’s discharge of Quint outside the terms of an employment contract may result in
a. Processed Food’s liability for damages.
b. Quint’s liability for damages.
c. discontinuance of Quint’s health-plan coverage.
d. monitoring Processed Food’s communications for privacy violations.
ANSWER: A PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
4. Lena offers Miguel a job, representing falsely that it will be long term. In reliance, Miguel takes the job but is laid off shortly thereafter and successfully sues Lena for fraud. With respect to the employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
ANSWER: D PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
5. Backfill Equipment Corporation currently employs three thousand full-time workers. Because business has declined, Backfill plans to lay off one hundred workers. If Backfill does not provide advance notice of the layoff, the employer may be subject to
a. fines, employee back-pay awards, attorneys’ fees, and more.
b. a cease-and-desist order or other injunction but no economic liability.
c. imprisonment but no injunctive or economic sanction.
d. no sanctions.
ANSWER: A PAGES: Section 2 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
6. Mythic Games Company employs two hundred workers full-time. If Mythic Games plans to have a mass layoff, it must provide its employees with notice of at least
a. thirty days.
b. sixty days.
c. ninety days.
d. one year.
ANSWER: B PAGES: Section 2 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
7. Flannery is seventeen years old. Under the Fair Labor Standards Act, she cannot work
a. during school hours.
b. in a hazardous job.
c. more than eighteen hours per week.
d. without a special permit.
ANSWER: B PAGES: Section 2 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
8. Curtis is an employee of Deepwater Drilling, Inc., covered by federal overtime provisions, which apply only after an employee has worked more than
a. eight hours in a day.
b. forty hours in a week.
c. 160 hours in a month.
d. one year for the same employer.
ANSWER: B PAGES: Section 2 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
9. Geno’s Italiano Ristorantes, Inc., employs three hundred workers at four locations in two states. Under federal law, Geno’s must provide each employee, during any twelve-month period, family or medical leave of up to twelve
a. days.
b. weeks.
c. months.
d. years.
ANSWER: B PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
10. Hauser takes temporary family leave from his job at Gelato Confectionary Corporation to care for a new baby. On Hauser’s return from the leave, Gelato must
a. restore Hauser to his original position.
b. reimburse Hauser for his expenses while on leave.
c. promote Hauser to the status of a key employee.
d. do nothing.
ANSWER: A PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
11. Livia takes temporary family leave from her job at Meatpackers Corporation to care for a new baby. On Livia’s return from the leave, Meatpackers must
a. restore Livia to her original position.
b. reimburse Livia for her expenses while on leave.
c. promote Livia to the status of a key employee.
d. do nothing.
ANSWER: A PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
12. Thom, who works as an employee for Upstate Power Corporation, suffers an injury in an accident. Thom will be compensated under state workers’ compensation laws
a. only if the injury occurred during working hours.
b. only if the injury occurred off the job.
c. only if the injury occurred on the job.
d. whenever and wherever the injury occurred.
ANSWER: C PAGES: Section 4 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
13. Cy, an employee of Dockyard Shipping Corporation, is injured on the job and accepts workers’ compensation. Cy can successfully sue Dockyard
a. only if the injury was caused by Dockyard intentionally.
b. only if the injury was caused by Dockyard’s negligence.
c. regardless of Dockyard’s fault.
d. under no circumstances.
ANSWER: A PAGES: Section 4 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
14. Steel Production Industries, Inc., employs five hundred workers. For the Occupational Safety and Health Administration, Steel Production must do all of the following except
a. keep occupational injury and illness records for each employee.
b. report any work-related diseases.
c. report any employee death due to a work-related incident within eight hours.
d. pay employees higher wages for working in more dangerous areas.
ANSWER: D PAGES: Section 4 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
15. Blayne is an employee of Chemical Refinery, Inc. Blayne is threatened with a discharge when he refuses a transfer to a Chemical Refinery department in which several employees suffered serious injuries from exposure to hazardous chemicals. Blayne may be entitled to protection from discharge under
a. no law.
b. the Family and Medical Leave Act.
c. the Occupational Safety and Health Act.
d. the state workers’ compensation act.
ANSWER: C PAGES: Section 4 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
16. Seiko works for TallTales Publishing, Inc. The basis for Seiko’s contribution under the Federal Insurance Contribution Act to help pay for benefits that will partially make up for her loss of income on retirement is her
a. seniority at TallTales.
b. annual wage base.
c. special job skills.
d. county of residence.
ANSWER: B PAGES: Section 5 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
17. Community Recycling, Inc., plans to lay off fifty of its five hundred workers, including Bev. Bev has a right to continued health-care coverage under Community’s group plan unless
a. Community changes its insurer.
b. Community completely cancels its plan.
c. Bev files a suit against Community for wrongful discharge.
d. Community decides not to pay Bev’s premium.
ANSWER: B PAGES: Section 5 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
18. Petro Oil Company wants to conduct genetic testing of its workers to identify those who might develop significant health problems in the future. Under federal law, Petro may use genetic information to
a. make decisions about hiring or firing.
b. make decision about job placement or promotion.
c. deny group health-care coverage or charge a higher premium.
d. none of the choices.
ANSWER: D PAGES: Section 5 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
19. Investment Sales Corporation wants to monitor its employees’ electronic communications. Investment Sales’s best course of action to avoid liability under laws related to employee monitoring is to notify
a. no one.
b. its employees.
c. its clients.
d. the public generally.
ANSWER: B PAGES: Section 6 TYPE: + BUSPROG: Reflective AICPA: BB-Legal
20. Data & Data Accountants, a private employer, handles bookkeeping for small employers. In most circumstances, with exceptions, federal law clearly prohibits Data & Data from subjecting its employees to
a. job-skills tests.
b. monitoring of business communications.
c. drug tests.
d. lie-detector tests.
ANSWER: D PAGES: Section 6 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
Essay Questions
1. Owen, a counter clerk at Pastry Bakery, notices that the bakers are not wearing protective gloves while preparing baked goods, a violation of state law. Owen reports this to Quinn, the owner, who does nothing. Owen tells Roberta, a reporter for STUV, a local television station. STUV reports the violations on a newscast. Pastry’s business drops 40 percent. Can Quinn fire Owen for this?
ANSWER: Most likely, no. Most states and the federal government protect employees such as Owen who “blow the whistle” on the wrongdoing of their employers under the public policy exception to he employment at-will doctrine. In some instances, specific statutes encourage whistleblowing by offering a monetary reward if the employee’s charges lead to a successful government lawsuit.
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2. Francesca works for Glassworks Inc. Near her workstation is a conveyor belt that runs into a large industrial oven. Some workers, including Harry, Francesca’s supervisor, use the oven to heat food. One day, when the conveyor is not moving, Francesca uses the oven to cook her lunch. As she removes the food from the oven, the conveyor comes on and Francesca is pulled partially into the oven and suffers serious burns. Francesca seeks recovery under the state workers’ compensation law. Should she recover? Why or why not?
ANSWER: For a worker to be eligible for workers’ compensation, the injury must have been an accident and have arisen out of or in the course of employment.
Although Francesca was accidentally pulled into the oven, recovery could be denied because she was not engaged in an activity directly related to her work but was instead heating food in an industrial oven. By the same token, however, it appears to be a common practice to use the oven and the employer has apparently not forbidden the practice. Because the cooking is done by other employees, including Francesca’s supervisor Harry, Glassworks can be imputed with the knowledge of it. On balance, then, Francesca should be allowed to receive workers’ compensation benefits.
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Chapter 22
Employment Discrimination
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
1. Title VII of the Civil Rights Act of 1964 applies to employers with fifteen or less employees.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
2. Intentional discrimination by an employer against an employee is known as disparate-treatment discrimination.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
3. Title VII of the Civil Rights Act of 1964 prohibits job discrimination against majority group individuals, such as white males.
ANSWER: T PAGES: Section 1 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
4. The Civil Rights Act of 1964 prohibits job discrimination on the basis of merit.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
5. Title VII of the Civil Rights Act of 1964 prohibits only intentional discrimination.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
6. Most employers can treat their employees more or less favorably based on their religious beliefs or practices.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
7. The Equal Pay Act and other federal laws prohibit employers from engaging in gender-based wage discrimination.
ANSWER: T PAGES: Section 1 TYPE: + BUSPROG: Analytic AICPA: BB-Legal
8. If a wage differential is due to any factor other than gender, then it does not violate the Equal Pay Act.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
9. Employee demotion is one of the least frequently cited reasons for a finding of constructive discharge under Title VII of the Civil Rights Act of 1964.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
10. Sexual harassment occurs when sexual favors are demanded in return for job opportunities, promotions, salary increases, or other benefits.
ANSWER: T PAGES: Section 1 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
11. For an employer to successfully defend against a charge of a supervisor’s sexual harassment, the plaintiff-employee must have taken a tangible employment action against the supervisor.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
12. When the harassment of co-workers creates a hostile working environment, an employee may have a cause of action against an employer.
ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
13. Compensatory damages are not available in cases of intentional discrimination in violation of Title VII of the Civil Rights Act of 1964.
ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
14. Under the Age Discrimination in Employment Act of 1967 permits private cause of action against employers for age discrimination.
ANSWER: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
15. The Americans with Disabilities Act of 1990 defines persons with disabilities as persons with physical or mental impairments that “substantially limit” one or more everyday activities of the affected individuals.
ANSWER: T PAGES: Section 3 TYPE: + BUSPROG: Analytic AICPA: BB-Legal
16. If a job applicant or an employee with a disability, with reasonable accommodation, can perform essential job functions, the employer must make the accommodation.
ANSWER: T PAGES: Section 3 TYPE: = BUSPROG: Analytic AICPA: BB-Legal
17. Employers are not required to modify their job-application and selection process so that those with disabilities can compete for jobs with those who do not have disabilities.
ANSWER: F PAGES: Section 3 TYPE: =- BUSPROG: Analytic AICPA: BB-Legal
18. The distribution of promotions and other job benefits according to a seniority system is not normally a good defense to a suit for employment discrimination.
ANSWER: F PAGES: Section 4 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
19. Employers can avoid liability for employment discrimination on the basis of after-acquired evidence of an employee’s misconduct.
ANSWER: F PAGES: Section 4 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
20. Any federal, state, or local affirmative action program that uses racial or ethnic classifications as the basis for making decisions is subject to strict scrutiny by the courts.
ANSWER: T PAGES: Section 5 TYPE: N BUSPROG: Analytic AICPA: BB-Legal
MULTIPLE CHOICE QUESTIONS
1. Iago believes that he is a victim of a form of employment discrimination that falls under the Civil Rights Act of 1964. Compliance with this statute is monitored by
a. employees and job applicants, not an administrative agency.
b. employers and businesses, not an administrative agency.
c. the courts and Congress, not an administrative agency.
d. the Equal Employment Opportunities Commission.
ANSWER: D PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
2. Sara believes that she was rejected for a position at Trek n’ Travel Agency on the basis of her race. Sara files a suit against Trek n’ Travel under the Civil Rights Act of 1964. To establish a prima facie case of employment discrimination, Sara must show all of the following except that
a. she is a member of a protected class.
b. she applied and was qualified for the job in question.
c. she was rejected for a position by Trek n’ Travel.
d. other persons of her race hold similar positions with other similar employers.
ANSWER: D PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
3. Neville, a member of a protected class, applies for a job with Origami Paper Products Corporation, but fails the company’s employment test and is not hired. Neville believes that the test has an unintentionally discriminatory effect. If so, this is
a. reverse discrimination.
b. disparate-impact discrimination.
c. disparate-treatment discrimination.
d. not discrimination.
ANSWER: B PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
4. Buena files a suit against Credit Services Corporation under the Civil Rights Act of 1964, alleging employment discrimination on the basis of gender on a disparate-impact theory. To succeed, Buena must show that Credit Services hires fewer women than the percentage of
a. qualified women in the local labor market.
b. qualified women in the United States.
c. women in Credit Services’s state.
d. women who apply to Credit Services for work.
ANSWER: A PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
5. Melanie files an employment discrimination suit against Natural Resources Industries Corporation under the Civil Rights Act of 1964 on a disparate-impact theory. To succeed, Melanie must show that members of a protected class are adversely affected by any of the following except the employer’s
a. practices.
b. procedures.
c. tests.
d. seniority system.
ANSWER: D PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
6. Insurance Sales Corporation gives preferential treatment in hiring and promotion to the members of all protected classes. This treatment results in discrimination against members of the majority. This is
a. disparate-impact discrimination.
b. gender discrimination.
c. not discrimination.
d. reverse discrimination.
ANSWER: D PAGES: Section 1 TYPE: + BUSPROG: Reflective AICPA: BB-Legal
7. Ruta is a supervisor for Subs & Suds, a restaurant. Tim is a Subs employee. The owner announces that some employees will be discharged. Ruta tells Tim that for sexual favors she will give him an excellent performance review and recommend a raise. This is
a. harassment on the basis of sexual orientation.
b. hostile-environment harassment.
c. not harassment.
d. quid pro quo harassment.
ANSWER: D PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
8. Conrad and Delilah are employees of EcoCrop Feed & Seed Corporation. Under the Equal Pay Act of 1963, EcoCrop can legitimately pay different wages on the basis of
a. seniority.
b. job descriptions.
c. substantial equality of skill, effort, and responsibility.
d. gender.
ANSWER: A PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
9. Emylee, an employee of Farm Supplies, Inc., files a sexual-harassment suit against Gowan, her supervisor. Emylee wins. Farm Supplies may also be liable if it had effective harassment policies and complaint procedures, and
a. none of the employees followed them.
b. Emylee followed them.
c. all of the employees were aware of them.
d. Gowan followed them.
ANSWER: B PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
10. Elsa participates in an investigation into possible violations of the Civil Rights Act of 1964 at Fabrication Foundry, Inc., where she works. As a result, Elsa’s employer demotes her. Elsa can file a
a. harassment complaint.
b. retaliation claim.
c. constructive discharge claim.
d. disparate-impact discrimination claim.
ANSWER: B PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
11. Boni, the owner of Café Rico, knows about, but does not take any action to prevent, the sexual harassment of employees. Boni and the café may be liable for such harassment by
a. an employee’s previous employer.
b. a customer or a co-worker.
c. an employee’s spouse or other close relative.
d. none of the choices.
ANSWER: B PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
12. Lisa brings a successful lawsuit against her employer Metal Mold & Die Corporation for unlawful discrimination. Lisa may be awarded
a. back pay, but not retroactive promotions.
b. retroactive promotions, but not back pay.
c. damages, but not back pay.
d. back pay, retroactive promotions, and damages.
ANSWER: D PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
13. Free-Flo Pipes & Plumbing Corporation is a private employer involved in an employment discrimination suit under the Civil Rights Act of 1964. Punitive damages may be recovered against Free-Flo only if the employer
a. acted with malice or reckless indifference.
b. can easily afford to pay the amount.
c. has one hundred or more employees.
d. consents.
ANSWER: A PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
Fact Pattern 22-1 (Questions 14–15 apply)
Kyla replaces Lomax in his job at Motor Vehicle Manufacturing Corporation (MVMC).
14. Refer to Fact Pattern 22-1. Lomax believes that he has been discriminated against on the basis of his age. For the Age Discrimination in Employment Act of 1967 to apply
a. Kyla must be forty years of age or younger.
b. Kyla must be forty years of age or older.
c. Lomax must be forty years of age or older.
d. Lomax must have been MVMC’s employee for at least forty years.
ANSWER: C PAGES: Section 2 TYPE: + BUSPROG: Reflective AICPA: BB-Legal
15. Refer to Fact Pattern 22-1. To succeed with an age-discrimination claim against MVMC, Lomax will have to show that
a. Kyla is not qualified for Lomax’s job.
b. Lomax is qualified for his job.
c. MVMC’s qualifications for Lomax’s job are too high.
d. no one could do Lomax’s job as well as he could.
ANSWER: B PAGES: Section 2 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
16. Helene, a disabled person, applies for a job at Industrial Engineering Applications Inc. for which she is well qualified, but for which she is rejected. Industrial Engineering continues to seek applicants and eventually fills the position with a person who is not disabled. Helene is most likely to succeed in a suit against Industrial Engineering for discrimination under the Americans with Disabilities Act of 1990 if she can show that
a. she was not hired solely because of her disability.
b. she can function well with corrective devices or on medication.
c. her disability causes her undue hardship.
d. she could not perform the job even with reasonable accommodation.
ANSWER: A PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
17. Merlin is a drug addict who has completed a supervised drug-rehabilitation program. Nabil used drugs casually in the past. Both work for Omni Insurance & Investments Inc. Considered to have a disability under the Americans with Disabilities Act of 1990
a. are Merlin and Nabil.
b. is Merlin only.
c. is Nabil only.
d. none of the choices.
ANSWER: B PAGES: Section 3 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
18. Satin, Silk & Swimwear, a women’s clothing store, employs female attendants who assist customers in the dressing rooms. Toribio, a forty-one-year-old male, applies for an attendant’s job, but is not hired. In Toribio’s suit against Satin, Silk & Swimwear for employment discrimination under the Civil Rights Act of 1964, the store has
a. no defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. an affirmative action defense.
ANSWER: B PAGES: Section 4 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
19. Solar Power Panels Corporation requires its employees to have a high school diploma, claiming a connection between a high school education and job performance. In a suit against Solar Power under the Civil Rights Act of 1964, this is shown to have a discriminatory effect. Solar Power has
a. an affirmative action defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. no defense.
ANSWER: C PAGES: Section 4 TYPE: = BUSPROG: Reflective AICPA: BB-Legal
20. Lumber Mill Inc. is a private employer with more than twenty employees. Its employment practices do not indicate a past pattern of discrimination. It is located in Metro City, which has recently seen an increase in the number of its citizens who are members of protected classes. Under the Civil Rights Act of 1964, Lumber Mill is
a. required to promote diversity in its workplace, but not to implement an affirmative action policy.
b. not required to implement an affirmative action policy.
c. required to implement an affirmative action policy until the number of its minority employees is proportional to the number of minority individuals in Metro’s labor pool.
d. required to implement an affirmative action policy that considers race merely as a plus factor.
ANSWER: B PAGES: Section 5 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
Essay Questions
1. For twenty years, Maynard works for Natural Gas Wells, Inc., which employs more than five hundred persons in two states. Natural Gas Wells drills for and mines natural gas to sell and transport to refineries, which in turn pipes liquefied gas to other states. Maynard starts as an unskilled worker in the drilling fields. After a career of positive job evaluations and pay raises, Maynard is ultimately promoted to the position of chief of maintenance for a dozen wellheads. Five years later, a new employee, Oberto, is hired to oversee operations at all of the wellheads. Oberto demotes Maynard, who is now over the age of forty, and freezes his salary. Oberto demotes five other employees over the age of forty and places Maynard under the supervision of Pitt, who is twenty-three. Maynard overhears Pitt say, “We’re going to have to do away with these old men.” Maynard quits and files a suit against Natural Gas Wells for employment discrimination. Should he prevail? Explain.
ANSWER: The Age Discrimination in Employment Act of 1967 (ADEA) prohibits discrimination in employment on the basis of age against individuals forty years of age or older. For the ADEA to apply, an employer must have twenty or more employees, and interstate commerce must be affected by the employer’s business activities.
Maynard worked at Natural Gas Wells, which employed more than twenty persons. Natural Gas Wells’s activities affected interstate commerce—its operations spanned two states from which its products were shipped to and through other states. Maynard could likely establish the rest of a prima facie case. Because Maynard was not demoted due to any apparent job-performance problems, the fact that he was replaced by a person approximately half his age, coupled with Pitt’s statement about getting rid of all the “old men,” would be enough to shift the burden to Natural Gas Wells to show that it was not discriminating on the basis of age. Ultimately, based on the facts in the question, Maynard would probably prevail.
PAGES: Section 2 TYPE: = BUSPROG: Reflective AICPA: BB-Decision Modeling
2. Veronica is a repairperson for Wind Power Company. The job requires traveling to remote areas to make repairs to windmills, transmission towers, and power stations under any conditions. Veronica has had the job longer than other employees. Veronica applies for a promotion to a supervisory position that requires constant communication with others in the field. Wind Power rejects the application on the ground that Veronica is hearing impaired. Wind Power acknowledges that Veronica is otherwise qualified, but asserts that it “needs someone who does not have a hearing problem.” Veronica files a suit against Wind Power under the Americans with Disabilities Act of 1990. What is the issue, and what are the relevant considerations on which its resolution depends?
ANSWER: The issue is whether hiring a sign interpreter is a reasonable accommodation for an employee or an undue hardship for the employer.
The Americans with Disabilities Act of 1990 (ADA) prohibits employers from refusing to hire (or promote) disabled persons who are otherwise qualified for a particular position. An employer may have to make reasonable accommodations for a disabled applicant, but that will not cause the applicant to be considered unqualified. Reasonable accommodations might include creating new job assignments, and creating or improving training materials and procedures. Employers who do not wish to make such accommodations must demonstrate that the accommodations will cause “undue hardship.” The law offers no uniform standards for identifying what is an undue hardship, but there are limits to the employer’s obligation to accommodate an employee under the ADA. Accommodation cannot impose a “significant difficulty or expense” on the employer. Also, if a disabled employee can perform the essentials of his or her job without accommodation, then no violation of the ADA has occurred.
Besides hiring a sign interpreter to accompany a deaf employee, in some cases a company could train an employee’s co-workers in American Sign Language. The basics of sign language can be learned in just a few hours, so the expense to the company would be minimal. In the facts of this question, contact among distant field workers might be accomplished via texting and other visual means.
PAGES: Section 3 type: = BUSPROG: Reflective AICPA: BB-Decision Modeling
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