Hunton Employment & Labor Law Perspectives : Employment Lawyers & Attorneys : Hunton & Williams Law Firm : Labor Law Legislative Updates

The EEOC has initiated an aggressive campaign to correct what it considers as widespread discriminatory practices in the hiring process. As part of this campaign, the EEOC is examining the alleged “emerging practice” of unemployment discrimination. On February 16, 2011, the EEOC held a public meeting in which advocates of the movement to prohibit unemployment discrimination testified that employers and staffing agencies are refusing to consider unemployed applicants for vacant positions at an increasing rate. According to these advocates, as well as the EEOC, unemployment discrimination has a “disparate impact” on minority, older, and disabled workers because those groups face higher-than-average unemployment rates.

Several members of Congress have supported the EEOC’s plans to prohibit employers from making hiring decisions based on unemployment status. Prior to the EEOC’s February public meeting, 54 members signed a letter to EEOC Chairperson Jacqueline Berrien encouraging the Commission to investigate the “very serious issue” of unemployment discrimination. Many of these Congress members also cosponsored H.R. 1113, a bill introduced by Rep. Henry Johnson, Jr. (D-GA) on March 16, 2011, which would amend Title VII to include “unemployment status” as a protected category, along with race, color, religion, sex, or national origin.

More recently, on July 12, 2011, Rep. Rosa L. DeLauro (D-CT) introduced another bill intended to prohibit unemployment discrimination. H.R. 2501, entitled the “Fair Employment Opportunity Act of 2011,” specifically targets employment actions commonly viewed as discriminatory against the unemployed, such as denying employment based on unemployment status, refusing to consider unemployed applicants, publishing job postings that bar applications by unemployed persons, and directing a staffing agency to do the same. Although the Act was introduced just weeks ago, it has already garnered the support of 30 cosponsors.

While it is too early to gauge just how far the EEOC and Congress will push the issue of unemployment discrimination, employers should be mindful of these recent trends.

Application of Test, not just Adoption of Test, Determines Timeliness

As part of its hiring process the City used a written exam for firefighters to assess their qualifications.  Based on applicants test results, the City created an eligibility list and only hired individuals from the list who scored high enough to be classified as “well qualified.” 

The City argued that the firefighters claims were not timely because limitations began to run when the City announced the adoption and use of the test and the eligibility list.  The Court determined, however, that the unlawful employment practice was not just the adoption of the test, but also the application of the test, which occurred each time the City hired firefighters.  The Court reasoned that although a claim based on the adoption of the test would be untimely, this did not mean that no new violations could occur based on the City’s continued use of the test.  As a result, to have a timely claim, all the firefighters needed to prove was that the City used the unlawful practice that caused a disparate impact during the limitations period.

Without mentioning the Lilly Ledbetter Act, the Court rejected the City’s arguments that present effects of past discrimination could not lead to Title VII liability for the hiring test.  Instead, the Court distinguished disparate impact claims from disparate treatment claims, explaining that disparate impact claims do not require discriminatory intent.  Accordingly, the Court noted that plaintiffs bringing disparate impact claims do not need to show that deliberate discrimination occurred within the limitations period.  

Advice for Employers

So what should employers do?  If a policy or practice is in use, limitations for a disparate impact claim based on that policy or practice will run from each time the policy is applied.    In order to limit liability, employers should review their current polices and practices and consistently monitor the application of the policies and practices to ensure that there is no disparate impact.