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JOB CITES: You will never work in this town (or any other) again

In a public meeting held on Feb. 16, the U.S. Equal Employment Opportunity Commission examined the impact of employers considering only those currently employed for job vacancies.

Specifically, EEOC Chair Jacqueline A. Berrien, described the meeting as “an important opportunity to learn about the emerging practice of excluding unemployed persons from applicant pools.”

Several speakers, including Helen Norton, associate professor at the University of Colorado School of Law, noted that employers and staffing agencies have publicly advertised jobs in fields ranging from electronic engineers to restaurant and grocery managers to mortgage underwriters with the explicit restriction that only currently employed candidates will be considered.

While other speakers questioned the veracity of this “emerging practice,” the fact is that there are pitfalls to having such a policy. In particular, such a policy can lead to a disparate impact in hiring on several fronts, including the following:

  • Individuals with disabilities may be more likely to be unemployed. According to Joyce Bender, CEO of Bender Consulting Services, nearly 80 percent of Americans with disabilities are not considered to be in the labor force (January). Of the remaining 20 percent considered to be in the labor force, 13.6 percent of those individuals are unemployed. The majority of applicants with disabilities do not have work experience, and even if they do, it is often not current work experience. This includes many veterans who have sustained an injury in battle, requiring time to recuperate and resulting in a disability. As a result, their work experience is not current.
  • An employer’s exclusion of the unemployed may have an adverse impact on women. Many women temporarily leave the workforce to care for young children, ailing parent or disabled family members.
  • An employer’s exclusion of the unemployed may have an adverse impact on minority groups during an economic downturn. According to Algernon Austin, Ph.D. director of the Program on Race Ethnicity, and the Economy Economic Policy Institute, African-Americans are more likely to be unemployed than white workers. Historically at times, there has been a 2-to-1, black-to-white unemployment rate ratio. For instance, in January, the white unemployment rate was 8 percent. For blacks, it was 15.7 percent, basically twice as high as the white rate.

From this data, it appears that excluding unemployed persons from applicant pools may, in some circumstances, cause an adverse impact, ultimately opening an employer to potential liability. This is problematic for employers, as often past job history and, in particular, longevity or gaps in employment history, can be telling. So what is an employer to do when hiring to avoid a disparate impact claim?

  • Refine your job descriptions. Make sure job descriptions are accurate in the skills necessary for the job. If a job requires up-to-date, specific job knowledge that can only be obtained in the current job market, then make sure that is an accurate claim if stated within the job description. Making such a claim for every single position, including entry-level jobs which typically require little to no experience, can be problematic.
  • Develop a recruitment plan. Make sure jobs are posted through several sources, including print and online advertising and social media. Cast a wide net so that a diverse applicant pool is located. Seeking assistance from a staffing firm may also be an option.
  • Maintain a solid plan for managing the resume flow. Ensure that resumes are reviewed consistently. If an employer intends to exclude unemployed persons from the applicant pool, then the employment must also ensure that non-diverse applicants with significant employment gaps between jobs are not routinely considered.
  • Maintain a sold plan for interviewing candidates. Schedule interviews in order to provide both the final candidates and the organization an opportunity to gather the information needed to make a decision. On the day of the interview, you should meet and greet the candidate, review the schedule and be available to resolve any change in schedule.Good practices include having all candidates complete an employment application prior to interviewing so that managers have a consistent set of information on each candidate,
  • Document the interviews and the reasons for turn down. Document what is discussed during the interview. Make sure the notes are legible and that they can be read so that if months later, a charge is filed, the application can be reviewed, and it can quickly be assessed why the individual was not offered a position. Maintain the application on file for the requisite period of time so that it can be easily located if a charge is filed.
  • Consult with human resources. Human resources can assist in ensuring that interviewers share the assessment of all candidates in order to choose the best qualified candidate for each open position.
  • Check references consistently. For employers who conduct reference checks, background checks, etc., make sure that such policies are being implemented among all candidates consistently.
  • Conduct a disparate impact analysis. Under Title VII, an employer can defend against a disparate impact claim by demonstrating that a “challenged (employment) practice,” in this case restricting applicants to individuals who are currently or recently employed, “is job related for the position in question and consistent with business necessity.” However, the “business necessity” involves a fact-intensive inquiry tethered to a specific job. Thus, it is best practice to ensure that any hiring practice or policy is not creating a disparate impact against a protected class of applicants.
  • Don’t assume. If a candidate looks interesting but has a significant gap in employment or has been unemployed for quite some time, don’t assume that the reason for unemployment was poor performance. Ask the applicant during the interview. It may be that the applicant simply was let go by his or her prior employer during a reduction in force or that the applicant was out of the job market for some time due to caregiving responsibilities. However, if the candidate was discharged for cause, such as for an incident of workplace violence, surely that may disqualify the candidate from further consideration.

Finally, while not discussed by the EEOC at the commission meeting, a practice of excluding unemployed individuals may have a disparate impact against individuals with arrest and conviction records, who may have been out of the job market due to incarceration. This, too, could open a company to potential liability.

Given the EEOC’s recent statements on arrest and conviction record discrimination, it is a given that the EEOC will closely be scrutinizing any hiring practice or policy that conceivably creates a disparate impact.

Marcie Cornfield is an attorney at Gonzalez Saggio & Harlan LLP, practicing employment law in the Milwaukee office. She can be reached by telephone at 414-277-8500 or via email at marcie_cornfield@gshllp.com.

2 comments

  1. Can an employer exclude on the basis of a poor credit history? It seems to me that in this economy if all else is very good/excellent on a person’s resume and this information can be verified that credit history should be overlooked in non-financial jobs.

  2. Marcie Cornfield

    This is another hot button topic. In fact, the EEOC has recently held Commission meetings on this topic. For more information, below is a link to the GSH 60 Second Memo. Please refer to the September 2, 2009 edition of the 60 Second Memo written by Warren Buliox. The article is entitled, “Illegal Employment Discrimination on the Basis of Credit History?”

    http://www.gshllp.com/newsletter.shtml.

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