The EEOC Adds Another Reason For Your Business to Worry

As if HR managers didn’t have enough to worry about, the EEOC (U.S. Equal Employment Opportunity Commission that enforces the Federal Non-Discrimination Laws) recently held a hearing aimed at determining whether companies who sought only currently employed job applicants were potentially violating the non-discrimination laws. Although being out of work is not, in and of itself, a protected category (race, color, religion, national origin, sex, pregnancy, disability, genetic information and age being the categories monitored by the EEOC), the EEOC is empowered to consider whether an action taken by a business may have a "discriminatory impact" on their designated protected categories.

In a press release1 issued on February 16, 2011, the EEOC questioned whether a practice of seeking only currently employed job applicants could have a disproportionate impact on women, people of color and the disabled, who were each unemployed in greater numbers. The EEOC’s ultimate determination on this may have a chilling effect on how many employers structure their hiring process.

Our mantra as employment lawyers has been to tell our company clients that they need to make business decisions for business reasons—hire an employee based on his or her background or skills; let an employee go for violating work rules; promote the employee with the highest sales statistics. As HR managers, you probably are well familiar with that operating basis. At a time when businesses are struggling, other concerns may now need to come into play.

By looking at a choice companies would likely argue is not discriminatory, the EEOC reminds us that even decisions that are thought to be based on business reasons can have unintended discriminatory affects. Therefore, since the EEOC’s actions may heighten the possibility of employee claims, businesses need to ensure that actions are not only rooted in "business needs" but also do not have an unintended discriminatory impact. Otherwise, that action could potentially open the company up to discrimination claims.

In usual discrimination cases, a plaintiff has to prove that he or she was discriminated against because of a protected category, and that the company had a discriminatory animus, or intent to discriminate in that case. If a business action has a tendency to affect or screen out members of a particular category, however, there need not be any intent to discriminate—a showing that discrimination occurred is all that is needed. For example, if a company required a high school diploma for an entry-level position which has the effect of eliminating African American applicants when that diploma is not actually reasonably related to the ability to do the job, an African Americans denied a job would only have to show is that he or she had the skills to do the job and members of the applicant’s protected class were improperly screened out by the requirement. The company could then be found liable for discrimination under what is called the "discriminatory impact" theory.

Depending on the outcome of the EEOC’s review of employers’ prohibitions against hiring the unemployed, businesses may need to rethink this and other actions that they believe are being taken for business reasons. Hopefully, this EEOC action will not have a chilling effect on hiring. Adding headcount is a sign that the economy is improving, and getting people back to work is something that should be encouraged.

1. Read the full press release at the EEOC website.