Get ready for a new federally protected class: the unemployed

December 14, 2011
in Employment Law

by Kathryn M. Nash, Esq.

Employers may be surprised to learn there is a growing movement to add the unemployed to the list of people who belong to a protected class. If leaders in the U.S. Senate and the EEOC have their way, it may no longer be legal for em­­ployers to show a preference to hire only those who are currently employed.

The idea that it’s easier to find a job if you already have a job is fairly widely accepted. Most people recognize that if you’re unemployed and looking for work, prospective employers might wonder what you did wrong to lose your old job.

Some employers have confirmed this theory by going so far as to create job advertisements that actually state a preference for applicants who are currently employed.

How prevalent is the problem?

The National Employment Law Proj­ect, a national advocacy organization for workers’ employment rights, conducted informal research on the issue earlier this year. It found more than 150 job postings on employment websites such as CareerBuilder.com, requiring applicants to “be currently employed” or using other language that excluded the unemployed.

The preference for hiring the em­­ployed—or as critics would state it, discrimination against the unemployed—has drawn the attention of the EEOC, Senate Democrats and the White House.

The Fair Employment Oppor­tu­nity Act of 2011, part of President Obama’s American Jobs Act that was presented to Congress in September, would add the unemployed to the list of protected classes under federal law. According to the proposed jobs bill, it would be unlawful for em­­ployers with 15 or more employees to refuse to hire a person “because of the individual’s status as unemployed.”

In addition, it would also be un­­law­­ful for employers to advertise jobs that bar the unemployed from applying.

Three Senate Democrats who spon­­sored the Fair Employment Oppor­­tunity Act recently sent a letter to CareerBuilder.com, asking the company to quit posting job opportunities that discriminate against potential applicants based on their employment status.

The EEOC responds

The EEOC has received complaints from individuals (as well as the senators) regarding some companies’ practice of requiring applicants to be employed. In response to those complaints, last February the EEOC held a public hearing to address this issue.

Even though Title VII of the Civil Rights Act does not specifically prohibit termination based on employment status, considering an applicant’s employment status may still be illegal, even without the passage of the Fair Employment Opportunity Act. If showing a preference toward the employed has a negative or adverse impact on a legally protected group of people, it may still violate Title VII.

At the EEOC’s public hearing, William Springs, assistant secretary of labor for policy, presented na­­tional employment statistics showing that the pool of unemployed workers includes a relatively higher percentage of minorities, especially blacks and Hispanics. Thus, Springs testified, they would be more likely to be affected by a refusal to hire the unemployed.

What employers should do

It is unlikely that the president’s job bill will pass in Congress. Nevertheless, employers should be aware of the growing concern that is being raised about a hiring preference for those who are currently employed.

At the very least, employers should discontinue the practice of stating such a preference in job postings.

Additionally, given the EEOC’s interest in this issue and its recent focus on certain disparate impact cases (e.g., the practice of screening applicants with credit checks, arrest records and criminal convictions affecting minorities at a higher rate than nonminorities), employers should strongly consider discontinuing the practice of using an applicant’s unemployment status as an automatic bar to employment with the company.

The EEOC, courts and juries would like to see applicants seeking employment standing or falling on their own relevant qualifications.

Although the reason why an applicant might be unemployed could be relevant to your decision not to hire him or her, barring such an applicant from consideration may result in a charge of discrimination or a lawsuit based on the theory of disparate impact.

Assuming the applicant is otherwise qualified for the job, it is best to let the applicant explain the reason for his or her unemployment and then base your decision on how that affects the applicant’s qualifications for and the ability to perform the job.

Fair warning, though: If the unemployed become a federally protected class, even asking applicants to ex­­plain the circumstances surrounding their departure from their previous employment could run afoul with the law.

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Author: Kathryn M. Nash is a principal at Gray Plant Mooty, practicing in the areas of employment law and higher education. Contact her at (612) 632-3273 or ­kathryn.nash@gpmlaw.com.

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