Pushing Back Against Unemployment Discrimination

An amendment to a human-rights law in New York City banning employers from considering unemployment as a hiring factor is just the latest step in a nationwide progression toward eradicating such discrimination.

Wednesday, July 10, 2013
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The recent passing of an amendment to the New York City Human Rights Law marks the latest in forward momentum nationwide of legislation barring discrimination against the unemployed, momentum that legal experts say won't necessarily slow in an improving economy.

"There is certainly a movement afoot to ban discrimination against unemployed individuals," says Andrew Moskowitz, member of the employment and labor practice at Pashman Stein, based in Hackensack, N.J. "And you have to consider the fact that these laws aren't going away. Once they're in the books, they're in the books.", the amendment to the NYCHRL -- which already bars discrimination based on a variety of factors, including race, age, national origin, gender, sexual orientation and disability -- passed in March and effective as of June 11, provides that, unless otherwise permitted by city, state or federal law, covered employers may not base an employment decision on the fact that the applicant is unemployed, a term defined as someone who does not have a job, is available for work and is actively seeking employment.

In addition, says Moskowitz, the law prohibits "facially neutral policies" -- such as, for example, requiring a minimum level of professional experience that could disparately impact the unemployed, unless an employer can demonstrate such requirements are substantially job-related.

New York City is only the most recent jurisdiction where legislative action has been taken to protect the unemployed. States that have already passed laws against such discrimination include Oregon (passed in March 2012) and New Jersey (2011). The District of Columbia passed a similar bill in May 2012. And as of May 2013, five states -- New York, Pennsylvania, Massachusetts, Iowa and Minnesota -- have introduced bills during the 2013 legislative session, with another 17 states considering doing so.

In all these bills now on the books, employers need to research carefully what is allowed and what is not allowed when they're considering someone for employment. According to a report from, for instance, under this latest NYCHRL amendment, employers are still allowed to consider an individual's unemployment where there is a "substantially job-related reason for doing so." Likewise, the report states, employers are not prohibited from asking about the "circumstances surrounding an applicant's separation from prior employment."

Also, under the amendment, employers remain free to consider whether applicants have a "substantially job-related qualification," including "a current and valid professional or occupational license; a certificate, registration permit or other credential; a minimum level of education or training; or a minimum level of professional occupational or field experience."

So, yes, employers in New York, as well as states and other jurisdictions where such legal constraints against unemployment discrimination now exist, employers can consider relevant and job-related specifics. What they can't do, says Moskowitz, is simply rule candidates out because they aren't working.

"You can say, 'You're required to have a particular level of licensing and education, and even permitting,' but you simply can't say, 'You can't be unemployed,' " he says.

Where most employers erring on the side of unemployment discrimination are bound to get caught, legally speaking, "with their hands in the cookie-jar," says Moskowitz, is in the type of job advertisement that goes out bearing their company name.

"Any ad using that one caveat, that one criterion of being currently employed," will be liable, he says. "You can focus on their qualifications, you can focus on their work history, but just to focus on whether they were unemployed" is now against the law.

If there is any one area employers and HR executives would be wise to spend time and energy in, he adds, "it would be to review their job listings and see what criteria they use and list. You'd be amazed what goes out from a company in the form of job ads" that top leaders "did not check carefully enough."

In New York City, especially, with its 9.1-percent unemployment rate, "employers should have reason to be concerned that the new law will result in a flood of litigation by unemployed job applicants who are displeased after being rejected for open positions," a legal alert from Philadelphia-based Duane Morris states. "Even baseless lawsuits can be expensive to defend."

To "potentially avoid liability," it states, "employers should revise any job posting that requires applicants to be employed and should ensure they do not base any employment decision going forward on an individual's employment status."

Even a recent posting on the site reads as follows, according to Moskowitz: "Highly regarded service company seeks an account manager to call on third-party administrators in an assigned geographic region. You will call on new TPAs as well as handle an assigned list. Candidates must have three-plus years of inside sales experience, must be currently employed and have a very stable work history."

Michael Weber, labor and employment attorney with San Francisco-based employment-law firm Littler Mendelson, says New York's move is a particular problem for staffing firms because they employ people on a temporary basis, thus they are constantly being sued.

The particular staffing-agency challenges hover around the fact that the four basic "exceptions" that make considering an applicant's previous employment status lawful -- i.e., how they separated from their previous job(s), whether there is a "substantially job-related" reason for considering their previous unemployment, whether current employees may have priority for the vacant position, or whether their previous unemployment might impact their overall experience level when it comes time to set their compensation -- may easily swallow the rule.

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"We expect the number of failure-to-hire claims brought by job applicants to increase in the near future -- both at the administrative-charge level, and by private litigants who choose to go directly to court first," says Weber.

"Until the New York City -- and/or the New York State -- Division of Human Rights issues any practical guidelines on compliance," he adds, "staffing agencies can take several immediate steps to minimize their risk of exposure, such as:

• Deleting all references to an applicant's 'employment status' for job postings in New York City;

• Revising all employment applications to make clear that the agency does not discriminate on the basis of employment status;

• Revising all job-posting, screening and selecting procedures to make sure recruiters and clients know that they cannot disqualify applicants in New York City on the basis of their employment status; and

• Training all recruiters who post job listings and/or screen or interview applicants on the new law and how to comply."

Indeed, going forward, Moskowitz writes, "New York City employers would be wise to refrain from employing some of the terms in the listing such as requiring applicants to be 'currently employed' or to 'have a very stable work history.'

"To the contrary," he writes, "employers should revise their policies to affirmatively state that they do not discriminate against individuals who are unemployed. Finally, employers should be prepared to explain why each qualification for a position is substantially job-related."

(According to this latest law, employees can sue as class plaintiffs and, if they can prove the employment practice or policy -- or group of policies or practices -- results in a disparate impact to the unemployed, "the employer then must plead and prove as an affirmative defense that such policy or practice has as its basis a substantially job-related qualification or does not contribute to the disparate impact," according to the Duane Morris alert.)

In other words, and overall, say employment lawyers, make sure you're consulting counsel about the latest law as it applies to the jurisdiction where you're doing business and don't give disgruntled, unemployed job candidates anything they can hang their hats on.

The legal momentum on the side of the unemployed, says Moskowitz, should "certainly make employers more cautious."

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