The EEOC Adds Another Reason For Your Business to Worry

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Devora Lindeman | EEOC | Discrimination | Unemployment | Employment Law

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.

Contributor:   Devora Lindeman

Devora L. Lindeman is a Partner with Greenwald Doherty LLP, a labor and employment law firm exclusively representing management in relationships with employees and unions, with offices in New York, New Jersey, and Connecticut. She provides management training to employers and employer associations on these and other topics. Lindeman joined Greenwald Doherty in 2007 with many years experience in management-side labor and employment law. Previously an attorney at Proskauer Rose, LLP, she divided her practice between human resources consultation and court and agency litigation. Lindeman spent a number of years at a labor and employment boutique firm prior to that. Since she has a business background, she understands employers’ needs and works with them to creatively solve employee issues. Much of her practice involves counseling clients on issues that arise daily, such as responding to workplace discrimination or harassment complaints, dealing with wage and hour compliance issues, accommodating individuals with disabilities, dealing with leave laws such as the Family and Medical Leave Act and routinely addressing the other myriad of situations that arise on a daily basis when one has employees. She also reviews and drafts employee policies and handbooks and assists employers with employee agreements, such as non-compete and confidentiality agreements, as well as those involved with reductions in force. Lindeman lectures to trade and business associations on various employment law topics.

Lindeman received her undergraduate degree from Sarah Lawrence College and graduated from Rutgers School of Law—Newark with Highest Honors. During law school, she served as the Notes & Comments Editor for the Rutgers Law Review. On graduation, she was inducted into both the Order of the Coif and the Order of the Barrister. She then clerked for the Honorable Stanley R. Chesler, U.S.M.J., in the District of New Jersey. Lindeman has practiced management-side labor and employment law ever since. She is admitted to practice in New York and New Jersey.

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