Discrimination against the Unemployed?

At a recent EEOC meeting, opinions were mixed on the prevalence of discrimination against the unemployed. While lawyers say the practice is not illegal, they advise HR to shy away from such action.

Thursday, March 3, 2011
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It's no secret the unemployed have had it pretty rough over the last few years. Hiring remains slow. Many have been forced to take lower-level jobs than they had in the past, and plenty are struggling to pay bills.

Are they also being discriminated against by employers who exclude them from applicant pools when hiring? Opinions were mixed when the subject was discussed during a hearing of the U.S. Equal Employment Opportunity Commission on Feb. 16.

Helen Norton, associate professor at the University of Colorado Law School in Boulder, said plenty of job ads -- for positions ranging from electrical engineers to restaurant and grocery managers to mortgage underwriters -- have explicitly said they will only consider employed job candidates.

In fact, a Google search turned up many reports indicating that companies have created job postings using phrases such as, "No unemployed candidates will be considered at all" and "Client will not consider/review anyone NOT currently employed regardless of the reason."

"Some employers," said Norton, "may use current employment as a signal of quality job performance. But such a correlation is decidedly weak. A blanket reliance on current employment serves as a poor proxy for successful job performance."

Christine Owens, executive director of the National Employment Law Project, a New York-based advocacy group for the employment rights of low-wage workers, agreed that discrimination against the unemployed was prevalent.

During the hearing, she recounted stories of job candidates who had been specifically told they would not be considered for jobs because they were unemployed.

"At a moment when we all should be doing whatever we can to open up job opportunities to the unemployed, it is profoundly disturbing that the trend of deliberately excluding the jobless from work opportunities is on the rise," she said.

But, Fernan R. Cepero -- who spoke on behalf of the Alexandria, Va.-based Society for Human Resource Management -- disputes there is such a trend.

"SHRM is unaware of widespread recruiting practices that involve blanket exclusions of the unemployed," said Cepero, the vice president of human resources at the YMCA of Greater Rochester, in New York. "We also reached out to our colleagues at the U.S. Chamber of Commerce and Equal Employment Advisory Council, and similarly, neither organization has encountered this type of blanket exclusion."

James Urban, partner at the law firm Jones Day in Pittsburgh, also said at the EEOC meeting that he "never experienced an employer with such a policy or practice."

"Employers in most all circumstances are looking to hire the best candidate for the position that is being filled and, to that end, solicit, welcome and consider all qualified candidates regardless of their employment status," said Urban. 

Whether employers are discriminating against the unemployed or not, it's not illegal, say employment attorneys interviewed after the event.

Susan McKenna, a partner in the Orlando office of law firm Jackson Lewis, says that, with the mixed opinions at the meeting, it's "highly debatable" whether the EEOC will issue guidelines relative to hiring the unemployed.

She also says that discriminating against that group could prove to be a bad business decision.

"People affected by these layoffs were very skilled, valuable good performers. It's not just that companies got rid of poor performers ... ," says McKenna. "I had clients agonize in the last couple of years because they were forced to choose among good performers, but they had no choice but to reduce head count."

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Such a policy could also bring bad publicity, she says.

"Why kick these people when they're down? 'We don't hire unemployed people during a recession?' That just sounds bad," McKenna says.

It also sounds like a source of potential liability, albeit a "remote" one, she says, because of the possibility that such a policy would leave a company open to a disparate-impact claim by groups hit harder by unemployment, such as African-Americans and the disabled.

"If employers wanted to avoid a possible disparate-impact claim, then they would be wise to not limit their search to the currently employed," says McKenna.

When it comes to job postings, Christopher Degroff, a partner at Seyfarth Shaw in Chicago, says that, while it's not illegal for companies to explicitly say they're looking for employed job candidates, such a statement will garner the attention of the EEOC or other agencies.

"If you say, 'We're only looking for energetic employees,' the EEOC takes that as proxy that you only want younger employees and uses that as evidence of age discrimination," he says. The same links or connections could be made using job posts aimed only at employed workers.

McKenna says that, in addition to avoiding such language in postings, companies should also avoid putting such information in internal documents.

Also, don't have an informal process of discarding resumes from job candidates just because they're unemployed, she says.

In the end, it's all about proving why someone was chosen.

"If you select a candidate who is currently employed over someone who is not," she says, "show the business reasons why that selection was made."

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