Thursday, February 17, 2011

Out of work? Out of luck. EEOC hold meeting on use of employment status as screening tool

As I reported yesterday, the EEOC held its public meeting on the use of the exclusion of unemployed persons from applicant pools, a practice which it calls "emerging." As I expected, the EEOC is using this meeting to explore whether the use of employment status has a disparate impact on certain racial and ethnic minorities, such as African-Americans, Hispanics, and Native Americans.

According to the testimony of Algernon Austin, Director of the Program on Race, Ethnicity, and the Economy of the Economic Policy Institute, "any practice which disadvantages currently unemployed workers relative to similar employed workers will likely have a disproportionate negative impact on people of color." The Commission also heard testimony from Colorado School of Law Profession Helen Norton, who considered various defenses employers could raise under the anti-discrimination laws to a claim of disparate impact. Professor Norton considered possible claims of job-relatedness and business necessity, such as current employment as a signal of job performance, current employment as a proxy for relevant experience, and as a tool to reduce the number of applications received. With little explanation, she rejected each possible defense.

The EEOC did take testimony from two advocates for employers, James Urban, an attorney with Jones Day, and Fernan Cepero, Vice President for Human Resources The YMCA of Greater Rochester and representative of the Society for Human Resource Management. Mr. Urban relied on his experience to cast doubt on the legitimacy of this issue as a real problem:
At end, under the widespread practice that I have seen employers follow, the simple fact that the applicant is or was unemployed does not operate to disqualify the applicant. The reason the employer may decline to hire the applicant will be the underlying reason the applicant became unemployed, and typically it is job-related. In sum, it is my experience and belief that there is not a widespread practice among employers to disqualify applicants on the basis of unemployment. I submit to you that the anecdotal examples contained in a media reports over the past year or so regarding such circumstances are, when viewed in the broad scope, isolated incidents.
Mr. Cepero elaborated further, challenging that the blanket exclusion of the unemployed is not a good HR practice, and runs contrary to the best interest of companies that simply look to fill jobs with the best people available:
Employers, in SHRM’s experience, whether operating in the currently challenging economy or in more robust times, are focused on finding the right people for the job, regardless of whether or not they are currently employed. Our members recognize that any type of blanket exclusion raises concerns under Title VII. What’s more exclusionary policies are poor business practices because they prevent organizations from accessing some of the best available knowledge, skills and abilities in a given labor force.
This public meeting was fascinating. The EEOC is looking for systemic discrimination in new and unique places. Just because something might be bad business, however, does not mean it is discriminatory. Nevertheless, employers who use blanket screening tools such as employment status should be aware that the EEOC may be watching. Employers would be wise to document the job-relatedness and business necessity for all screening tools to be prepared if the EEOC appears on your doorstep.

For more information about yesterday's meeting, the EEOC has published the bios and written testimony of each of its presenters.

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or