Unemployment Discrimination – The Law

December 13, 2013

A.   Federal Law

Federal law prohibits discrimination on the basis of age, disability, national origin, sex/pregnancy, race/color, religion, genetic information, etc.  Federal law does not currently prohibit discrimination on the basis of employment status.  (In other words, unemployment status is not a “protected class” under federal law.)  However, that doesn’t mean employers can discriminate against the unemployed without legal risk.

While “disparate treatment” (i.e., intentional) discrimination cases garner most of the media attention in this country, employers can also be held liable under a “disparate impact” (i.e., unintentional) discrimination theory of liability.

What is Disparate Impact?

Federal law prohibits not only intentional acts of overt discrimination, but also neutral policies or practices which have a disproportionate, adverse impact on members of a protected class (e.g., race/color).  Once an employee shows a specific employment policy or practice adversely impacts members of a protected class, the employer must prove the specific employment policy or practice is “job related and consistent with business necessity.”  If the employer satisfies this burden, the focus of the case then becomes whether the employee can show a less discriminatory alternative exists that meets the business need and whether the employer refuses to adopt it.

Disparate Impact and the Unemployed

As William Spriggs, Assistant Secretary for Policy at the Department of Labor, noted during the EEOC’s February 16, 2011 meeting, individuals in some protected categories, such as African Americans, Hispanics, Native Americans and disabled people, are currently overrepresented in the pool of unemployed workers.  Consequently, an employment policy or practice of only hiring individuals who are currently employed could end up having a disproportionate, adverse impact on members of these protected categories, in violation of federal, state and local law.

B.   State Law

Beginning June 2011, New Jersey became the first state to adopt a law (N.J.S.A. 34:8B) directly addressing the hiring of unemployed job applicants.  (The New York and Michigan legislatures have each proposed laws addressing the issue.) As recounted in our June 2011 newsletter, New Jersey employers may not knowingly publish an advertisement for a job opening in New Jersey that contains one or more of the following:

  1. Any provision stating that the qualifications for a job include current employment;
  1. Any provision stating that the employer or employer’s agent, representative, or designee will not consider or review an application for employment submitted by any job applicant currently unemployed; or
  1. Any provision stating that the employer or employer’s agent, representative, or designee will only consider or review applications for employment submitted by job applicants who are currently employed.

It is important to note New Jersey’s law is limited in both scope and remedies. The law does not prohibit employers from publishing in job vacancy advertisements other job qualifications, such as education, training, and experience requirements, as well as any required professional/occupational licenses or certificates.  The law also does not prohibit employers from publishing job vacancy advertisements which state that only applicants who are currently employed by the employer will be considered (e.g., internal job postings soliciting applicants from within the company).

The law also does not permit an applicant to bring a private lawsuit against an employer, but rather, empowers the Commissioner of Labor and Workforce Development to collect civil penalties from employers in an amount not to exceed $1000 for a first violation, and $5000 or $10,000 for subsequent violations.

C.  Fair Employment Opportunity Act of 2011

The Fair Employment Opportunity Act of 2011 (H.R. 2501) was recently introduced in the U.S. House of Representatives, and a similar bill was introduced in the U.S. Senate (S. 1471).  The House bill would prohibit discrimination in employment on the basis of an individual’s status or history of unemployment by making it illegal for an employer to:

  1. Refuse to consider for employment or refuse to offer employment to an individual because of the individual’s status as unemployed;
  1. Publish in print, on the Internet, or in any other medium, an advertisement or announcement for any job that includes — (A) any provision stating that an individual’s status as unemployed disqualifies the individual for a job; and (B) any provision stating or indicating that an employer will not consider an applicant for employment based on that;individual’s status as unemployed; and
  1. Direct or request that an employment agency take an individual’s status as unemployed into account in screening or referring applicants for employment.

The House bill would also prohibit employment agencies from “limit[ing], segregat[ing], or classify[ing] individuals in any manner that may limit their access to information about jobs, or consideration, screening, or referral for jobs, as employees, because of their status as unemployed.”  The proposed legislation would prohibit discrimination against all unemployed applicants, regardless of the amount of time an individual has been unemployed.

The legislation also provides a defense for employers. An employer will not be liable for discrimination if an applicant’s employment status is a bona fide occupational qualification, meaning that it is “reasonably necessary to successful performance in the job that is being filled.”

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