By: James B. Sherman, Esq.
Employers have long known not to press job applicants for information such as age, race, religion, etc., and, more recently, disability status unless in one of those rare instances where the information is a bona-fide occupational qualification. After all, most everyone knows of the federal and state laws prohibiting discrimination on the basis of age, race, religion, etc. in regard to terms and conditions of employment, including hiring. But how many employers have heard of laws prohibiting workplace discrimination on the basis of being unemployed, or based on a person's zip code? The fact is there are no such laws - at least not yet - but this has not prevented the Equal Employment Opportunity Commission (EEOC) from challenging employers' hiring decisions if they rely on such information.
On February 16, 2011, the EEOC held hearings to address concerns that employers are now screening out job applicants based on their status as "unemployed." Specifically, the EEOC is concerned that employers are systematically refusing to interview candidates whose resumes show they are unemployed at the time of their application. Given today's high unemployment rates, frankly, it should come as no surprise that many job applicants are unemployed. However, the EEOC is relying on statistics that blacks, Hispanics, older workers and disabled workers, all of whom are protected by various federal laws, make up a greater percentage of those who remain unemployed. This being the case, a practice of rejecting job candidates simply because they are unemployed could have a "disparate impact" on minorities and other groups protected from discrimination under federal law.
Last October the EEOC held similar hearings on whether pre-employment credit checks have a similar disparate impact on minorities. The outcome of those hearings was both evident and swift when only two months later the EEOC filed a class action law suit against a large employer who used pre-employment credit checks for its job applicants. Allegedly the employer's policy was to weed out any applicants with poor credit ratings. The suit alleged that the employer's hiring practice was neither job-related nor justified and had the effect of discriminating against African-American applicants because statistically, as a group, they tend to have poorer credit scores. Whether any court adopts the EEOC's new theory on credit scores remains to be seen; just as employers are left to wonder whether anyone will soon be sued for "unemployment discrimination."
One thing seems clear: the EEOC seems intent on expanding the growing list of forbidden pre-employment inquiries to include subjects previously unforeseen by employers. When laws are passed, employers rely on counsel to advise them of their responsibilities. However, when the EEOC or some other agency merely changes or adopts a new theory or position on what is unlawful, the word does not always get out. This is unfortunate and potentially fatal to employers since EEOC litigation is increasingly brought as class action litigation, particularly in challenges to hiring practices which arguably impact many applicants.
At least in the case of credit scores employers are somewhat put on notice by the fact that the issue has found its way into many state legislatures. Illinois, for starters, already has a state law restricting background checks into an applicant's credit history and at least 14 other states are considering similar legislature. But few could predict the EEOC's latest foray into possibly declaring unlawful an employer's reliance on an applicant's status as unemployed. In another instance, not long ago the Chair of the EEOC was in Minneapolis telling lawyers how the EEOC was exploring a theory called "address" discrimination. As the theory goes, if an employer rejects an applicant because his or her zip code, or because the person lives on a "street" or "avenue" versus a "way" or "court", chances are it disproportionately impacts a protected minority group or some other protected class.
With the EEOC expanding its list of unlawful pre-employment inquiries at a seemingly torrid pace these days, what can employers do to stay out of court? Well, first of all, look on the bright side - if you are hiring at all your company may well be on the upside of the recession. On a more practical note, try to stay aware of what the EEOC is doing and saying because, like it or not, if the federal government sues your company on any of these new theories it will be a costly and unpleasant experience, to say the least. The best practice for employers is to avoid blanket policies or practices that reject job applicants who may otherwise be qualified, based on a single ground unless it is closely related to the job opening and consistent with business necessity. On a final note: Do any employers really screen job applicants based on their address?
