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In California, Lingering Concerns over Exclusion of Unemployed

By Toni Vranjes  6/4/2013
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Sometimes, trends still start in the East before heading out West.

That was the case with concern over employers running job ads that were strikingly explicit: The unemployed would not be considered.

Some call this “unemployment discrimination,” and they say the problem extends far beyond job ads. Over the past several years, advocacy groups have focused attention on companies that refuse to consider or hire the jobless, and the U.S. Equal Employment Opportunity Commission (EEOC) held a public meeting to explore the controversy. In addition, unemployment-discrimination laws have been enacted in New Jersey, Oregon, the District of Columbia and New York City.

In California, Gov. Jerry Brown vetoed an unemployment-discrimination bill last year, but the concerns linger. Despite the veto, employers need to be aware of many legal issues, and they should focus on only relevant factors during the recruiting and hiring process.


According to the National Employment Law Project, the issue first came to national attention with a May 2010 news article on a Sony Ericsson job ad, which stated that no unemployed candidates would be considered. A few months later, the Atlanta Journal-Constitution published a story on these types of job postings, and the subject started to pick up steam, said Maurice Emsellem, NELP policy co-director.

“It was pretty shocking to a lot of people,” Emsellem said.

At Congress’ request, the EEOC held a public meeting in February 2011, which included testimony from a wide range of speakers.

At the public hearing, NELP Executive Director Christine Owens shared the stories of many unemployed people, and several speakers discussed the adverse impact on women, minorities, older people and those with disabilities. In addition, law professor Helen Norton emphasized that the reasons for unemployment often have nothing to do with job performance.

During the meeting employment attorney James Urban and Society for Human Resource Management representative Fernan Cepero said they were unaware of any widespread recruiting practices that involved excluding the jobless. Urban said the best practice is to invite all qualified candidates to apply, and Cepero said screening out the unemployed would be counterproductive.

In July 2011, NELP released an in-depth report that included the findings of a NELP researcher who reviewed ads on four major job boards over a four-week period. The researcher found more than 150 job ads that barred the unemployed.

In 2011, House and Senate Democrats introduced the federal Fair Employment Opportunity Act to ban such practices, and President Obama included a proposal in the American Jobs Act. Although the federal legislation didn’t pass, the issue has gained momentum in some parts of the country.

Unemployment-Discrimination Laws

In 2011, New Jersey passed a law banning explicit discrimination against the jobless, and Oregon followed the next year with its own legislation. Both laws prohibit jobs ads that exclude the unemployed.

In January 2012, California Assemblyman Michael Allen introduced AB 1450, which was sponsored by NELP and the California Labor Federation. Initially, the measure was broad, banning discrimination in all stages of the recruiting and hiring process. This drew the opposition of the California Chamber of Commerce, which labeled the bill a “job killer” and said it would hinder an employer’s ability to screen applicants.

After the California bill was amended in August to apply only to job ads, the chamber took no position on the legislation. Brown vetoed it the following month, saying, “Unfortunately, as this measure went through the legislative process it was changed in a way that could lead to unnecessary confusion.”

Meanwhile, the District of Columbia enacted a law in 2012 that designates the unemployed as a protected class. The measure bans exclusionary job ads and prohibits discrimination in hiring decisions.

In March, New York City enacted broad legislation that also treats the jobless as a protected class. Emsellem said that NELP was especially supportive of the New York City bill because it addresses the problem at every stage of the process and has an enforcement procedure.

“The real issue is trying to address the underlying discrimination at different levels of the hiring process—not just ads,” Emsellem said.

As of mid-May, five states had introduced unemployment-discrimination bills during the 2013 legislative session, according to the National Conference of State Legislatures (NCSL).

The outcome of all these legislative battles could affect a huge number of people. Nearly 11.7 million were unemployed in April—and 37 percent of those had been jobless for 27 weeks or longer, according to the U.S. Bureau of Labor Statistics.

Clash of Opinions

The California Chamber of Commerce insists that the original version of AB 1450 would have burdened employers and hurt the economy.

The initial version of the bill would have placed businesses in a no-win situation, according to Jennifer Barrera, policy advocate for the California chamber. For instance, if an employer had learned that an applicant was unemployed but didn’t hire that person, then the company might have faced a discrimination claim. If the organization failed to conduct a thorough background check for fear of being sued, it might have been hit with a negligent-hiring claim.

Although the bill included language allowing employers to request information about work history and to refuse to make a job offer because of the “reasons underlying an individual’s employment status,” this didn’t alleviate the chamber’s concerns, Barrera said.

However, Emsellem insists legislation is needed to protect the jobless because of negative societal attitudes. He cites two studies: one that found a psychological stigma to unemployment and another that showed major obstacles for the long-term unemployed.

NELP also hears about the problems firsthand, through its campaign to expose discrimination against the unemployed. More than 400 people have contacted NELP through its website to share their stories.

One of them is David Collins, who was laid off after his former company lost a major contract. Recently, he applied for a sales position with an HR software-management company. The recruiter sent him an e-mail stating that the company wouldn’t consider him because it was looking for someone who was currently employed, Collins said. He was shocked when he read the message—and he considers the action discriminatory.

“I never thought I would ever see this,” said Collins, 54, of Avon, Ohio.

His message to the HR community: “Give everyone an equal chance. Judge by their skills and knowledge, not by whether they are currently working or not.”

Guidance for HR

Despite the veto of AB 1450, employers should consider only relevant factors when trying to fill job openings.

According to EEOC spokeswoman Justine Lisser, the rate of joblessness and the time it takes to find a job vary by race, age, sex, disability and other protected characteristics. Therefore, someone who wasn’t hired because of a period of unemployment might be able to show that this had a disparate impact on a protected group, she said in an e-mail.

If a practice is found to have a disparate impact, an employer must demonstrate that the practice is job related and consistent with business necessity, according to Lisser. Similarly, it would be unlawful for an employer to use periods of joblessness to deny employment to one group of people while hiring people of a different group with the same unemployment record, she added.

Inquiring about job history and asking candidates to explain gaps in employment are lawful and prudent, according to Daniel Eaton, a San Diego attorney at Seltzer, Caplan, McMahon & Vitek. Still, he advises employers to be cautious. In some instances, he said, it’s conceivable that long-term unemployment could be viewed as a pretext for unlawful discrimination against a member of a protected group.

“If long-term unemployment is going to be used as a reason to deny someone a job, it is a good idea for an employer to be able to explain why—beyond the mere fact of long-term unemployment—the candidate’s long-term unemployment resulted in his or her rejection,” Eaton said in an e-mail.

Costa Mesa attorney Keith Watts of Ogletree Deakins said it’s shortsighted for companies to exclude the jobless. Hiring decisions should be based on qualifications, not employment status, he emphasized.

In this tough economy many extremely skilled people are out of work because of circumstances beyond their control, he said. Those who have struggled with unemployment could end up being “extraordinarily loyal employees” who are thrilled to be working again. They could bring a wealth of experiences and knowledge that they gained from their adversity, Watts added. “There may be so many hidden benefits from hiring someone who is unemployed.”

 At the federal level, meanwhile, the EEOC is focusing more on this issue. Although the agency hasn’t issued specific best practices, one priority in its new strategic enforcement plan is targeting recruitment and hiring practices that discriminate against protected groups.

“Fundamentally, the EEOC strives to ensure that only job-related, relevant factors are considered when reviewing applicants for employment,” Lisser said. “As we have seen in other contexts, using periods of unemployment, particularly during high unemployment nationally, to screen out individuals does not appear to relate to an individual’s specific qualifications for a job.”

Toni Vranjes is a freelance business writer in San Pedro, Calif.

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