By W. Barry Nixon
How to hire without becoming a candidate for a lawsuit.
When Robert F. Byrnie was not hired by the town of Cromwell, Connecticut, he filed a lawsuit against the town claiming that he was discriminated against because of his age. It turned out that the prospective employer had failed to keep the application or any other forms relating to the applicant's case. After the case was filed, the municipality also destroyed the written ballots completed by the screening committee concerning the candidate.
The court ruled that the missing application alone would not have created sufficient evidence to infer discrimination, but that the missing documents, coupled with the destruction of the ballots, was sufficient to allow the applicant to pursue a discrimination claim. As a result of the ruling, Byrnie has the right to take his claims to a jury. Even if the employer prevails, it will have had to expend time and resources on the case.
As this case (Byrnie v. Town of Cromwell, 2001) illustrates, poor hiring practices can be costly. Companies can reduce their exposure by adopting and implementing the right hiring policies and procedures.
Among the elements to consider are how to treat the résumé, what to ask in job interviews, what information to seek on the applications, and what to consider in the job-offer stage. Addressing each of these elements wisely and legally are the keys to avoiding lawsuits.
The résumé provides the first indication of whether the person is qualified for the job. Though this sounds simple, eliminating unqualified persons from the hiring pool immediately will help reduce future lawsuits brought by applicants who feel that they were not hired due to an unlawful reason--such as their gender, religion, or race.
If the résumé does not indicate the requisite experience or educational background, that applicant should be taken out of the hiring pool. This will help employers avoid future lawsuits.
If an employer does not want to hire a candidate because he does not have the appropriate experience, and if some of those candidates happen to belong to a minority class, the employer will be in a strong legal position in a lawsuit if all applicants without adequate experience were taken out of consideration at the same stage of the process and in the same manner.
To ensure that the applicant is qualified for the job at hand, managers should carefully read the description of the work the individual was responsible for and compare it to the duties of the job they are filling. If the two do not match or something appears to be missing or unusual, the applicant should be rejected.
Once satisfied that the applicant's qualifications and experience are a good match for the position, the hiring manager should arrange to interview the applicant.
Interviews are an important part of the hiring process. They allow the manager the opportunity for in-depth questioning and dialogue, and they provide a chance to assess how well the person will fit in with the organization. However, interviews must be conducted carefully so that the manager can avoid asking potentially discriminatory questions.
Civil rights legislation prohibits employers from considering any potentially discriminatory information during the interview. Such issues include all questions about an applicant's race, religion, sex, national origin, or ancestry. Similarly, managers should avoid asking applicants questions about their age, disability, military history, union membership, or sexual orientation.
Managers should be familiar with the two types of discrimination that could land them in court--disparate treatment and disparate impact.
Disparate treatment. In a hiring context, the disparate-treatment theory of discrimination applies to situations in which a prospective employee claims that he was not hired because of a discriminatory reason. The interviewer must be careful to ask all prospective employees the same questions and to avoid all questions that are not work related or that might be considered discriminatory.
For example, asking only one candidate to provide information about his age or asking women, but not men, about child-care arrangements could be considered disparate treatment in hiring. Asking questions of married female applicants that are not posed to all applicants could be viewed as discriminatory as well.
Disparate impact. Disparate impact claims arise when job applicants challenge seemingly neutral treatment as being in fact a standard or requirement that favors one group over another or specifically disadvantages one group. For example, a policy requiring certain educational levels might be subject to a disparate impact claim based on age or race. Another example would be to ask every applicant about whether they have or plan to have children because the question has a greater effect on females than on male applicants.
The manager should be able to demonstrate that all the interview questions relate to a requirement of the job. For example, requiring that an engineer have an advanced degree would not be deemed discriminatory even if it did prevent a certain group of people from being hired. It is clearly a legitimate requirement for performing the job.
Questions. Managers should remember that in most companies there are no job-related considerations that would justify asking an applicant a question based on race, gender, or religion. The only exception to this rule applies to religious institutions, which may give preference to individuals of their own religion. Similarly, managers should regard any questions about an applicant's sexual preferences as strictly impermissible.
Similarly, questions of national origin may not be posed. For example, managers may not ask an applicant where he or she was born or where the applicant's parents were born. However, asking whether the applicant is eligible to work in the United States is permissible.
Questions about height or weight may lead to gender or national-origin discrimination claims unless their relationship to specific job requirements can be demonstrated.
According to the Equal Employment Opportunity Commission (EEOC), any question that is age-related, such as asking whether an applicant is a recent graduate, is potentially unlawful under the Age Discrimination Act of 1967. The act bars discrimination against persons age 40 or over.
Questions relating to an applicant's arrest record are also improper. The EEOC and many states prohibit the use of arrest records for employment decisions because they are inherently biased against applicants in protected classes.
Questions about an applicant's conviction record may be asked, however, if job related. For that information then to be a factor in the hiring decision, the employer must establish that it constitutes a business necessity.
In establishing business necessity, the employer must consider three factors to justify the use of that record:
- The nature and gravity of the offense underlying the conviction
- The amount of time elapsed since the applicant's conviction and the completion of the sentence
- The nature of the job as it relates to the nature of the offense committed
In terms of financial status, managers should not ask whether the applicant owns or rents a home or car, or if wages have been previously garnished, unless financial considerations exist for the job in question. For example, this question might be allowed when hiring a financial officer for the company. Also, any employer who relies on consumer credit reports in its employment process must comply with federal law governing the use of such reports.
Applicants cannot be asked what type of discharge they received from the military. However, other types of questions, such as whether or not the applicant served in the military, period of service, rank at time of discharge, and type of training and work experience received while in the service are all valid questions.
To avoid discrimination claims on the grounds of disability, managers should not ask whether the applicant has a particular disability. Managers may only ask whether the applicant can perform the duties of the job in question with or without a reasonable accommodation.
The guiding principle to follow when conducting interviews is whether the employer can demonstrate a job-related necessity for asking the question. If a discrimination claim against the company is made, the EEOC will examine both the intent behind the question and how the information is used.
An important step in the hiring process is to have the candidate complete an employment application. The application should ask for basic information, such as the applicant's name and address, as well as education (if relevant) and work history. An application should be completed by all applicants who have been prescreened and accepted into the hiring pool. The application is a legal document and, once signed by the potential employee, should be used as a tool to obtain necessary information.
Among the other important questions that should be on the application is whether the candidate has any felony convictions. The application must also clearly state that an affirmative answer will not automatically disqualify a person from consideration.
Employers should also consider including a question about misdemeanors on the application. In many states, the crimes included in this category are ones an employer would want to know about before making a hiring decision. These could include convictions for battery, drug possession, and driving while intoxicated (DUI), for example.
One point to keep in mind with regard to asking about misdemeanors is that state laws vary, so managers must be sure to consult legal counsel before including these questions.
Another question employers are encouraged to include on their applications pertains to pending trials for a felony or misdemeanor. The primary reason for asking if trials are pending is that a person responding "no" to the query "Have you ever been convicted of a felony?" has truthfully responded. However, that person may be the defendant in a pending murder trial. The question will provide the manager with enough information to question the applicant further.
The application or a separate form given at the same time should let the candidate know that finalists who receive a job offer will have to undergo a background check. At this point or when an offer is made contingent on the background check, the candidate should be asked to sign a release form that gives consent for the background check to be performed. The application should also ask the candidate to provide the names of references to be used in the background check. (More on background checks later.)
Managers should include a statement on the application making it clear that falsification or omission of relevant information is grounds for rejecting the candidate or--if the problem is only discovered after the candidate has been hired--grounds for terminating employment.
This statement is essential for advising prospective employees that they must be truthful; however, it also provides a valuable option should the company later discover that an employee has a felony conviction or some other negative information in his or her background that would likely have precluded that employee from being hired. The omission statement gives the company legal grounds for terminating the employee if this is deemed the appropriate action.
For example, in a well-publicized case in Luzerne County, Pennsylvania, a scandal erupted when a newspaper reporter discovered that the county's new human resource director, who also was an attorney, had been disbarred, was wanted on a charge of obstructing police, had been arrested for shoplifting, and was operating under an assumed name. The new employee was terminated for falsifying her employment application.
To be able to act on a falsification or omission statement, companies should keep all the employment applications and attendant materials until the statute of limitations has elapsed on discrimination claims. Failing to do so could weaken the company's ability to defend itself if a lawsuit was ever brought against it.
Based on information from the résumé, interview, and application, a top candidate who meets the requirements for the position will emerge. At this point, the company is ready to make a job offer contingent on a background check.
The background check. Reference checking involves speaking directly with previous employers about the candidate's work history, work habits, performance, and capabilities. The standard response from most former employers is to provide dates of employment and verification of the person's position and salary. This practice has emerged among employers because any negative reference carries with it the threat of a defamation suit.
To help protect companies that want to give candid references, many states have passed job-reference immunity statutes (see box). These shield employers from lawsuits brought by former employees about whom they have given negative information to a prospective employer.
For an employer to get the protection of what is called "qualified privilege," an employer's statements about a former or current employee must be truthful, made in good faith, and made for a legitimate purpose. The ultimate benefit of these statutes is that all employers will be able to obtain more complete information about applicants before hiring them.
However, companies must ensure that the conditions of qualified privilege are met. If the company crosses the line, it opens itself up to a lawsuit. For example, in one case (Gibson v. Overnite Transportation Company, Wisconsin Court of Appeals, 2003), an employee of Overnite Trucking resigned to work for USF Holland, another trucking firm. During his probationary period with USF, the company contacted Overnite as part of a reference check.
An Overnite manager advised USF that the employee would never be rehired because he had been late most of the time, regularly missed two to three days of work a week, had a questionable work ethic and attitude, was not trustworthy, and had a problem with authority. Based on this information, USF fired the employee.
After his termination, the employee sued Overnite for defamation, claiming that he lost his job with USF because of the report it had received from the Overnite manager. A jury awarded him $283,000 in damages, which included $250,000 in punitive damages. On appeal, Overnite argued that the verdict should be reversed because a state law provides that an employer is immune from civil liability for providing a job reference unless it acts with malice.
The Wisconsin appeals court found that, contrary to the report given to USF by the Overnite manager, Gibson's personnel file at Overnite contained no reprimands or record of problems with his job performance. Therefore, it affirmed the jury verdict ruling that Overnite's manager had made the statements solely from spite or ill will.
Despite the protections offered by the immunity laws, however, some employers still worry that any reference critical of a former employee will expose the company to some level of litigation risk. Consequently, they continue to minimize the risk by withholding information.
Employers in the states that have job-reference immunity laws should attach a copy of the law to the signed release authorizing the reference check. This practice may encourage the former employer to release additional information.
Another tactic is to diplomatically advise the previous employer that it may be held liable for negligent referral if it does not provide information about illegal activity--rape, assault, extortion--the employee might have committed.
Salary negotiation. When tendering an offer, managers must be careful not to give details of a compensation or salary package unless the company is sure that it will be correct. Making an offer that induces an employee to take the job or to resign another position and then reneging on that offer can be grounds for a lawsuit.
In one case (Agosta v. Astor, California Appeals Court, 2004), for example, Len Agosta left his job at a radio station to work for a competitor based on a compensation package he was promised. A month after Agosta began working for his new employer, the company rescinded the compensation package. Two days after that, Agosta was fired. He sued the company for fraud.
The company requested and was granted a summary judgment--a decision based on the facts of a case without a trial. The court ruled that Agosta could not sue because he was an at-will employee and could be terminated for any reason.
Agosta appealed the decision. The appeals court ruled that, despite the at-will agreement, Agosta could seek damages from the company based on his termination and the altered compensation package.
The hiring process is one of the most challenging chores that any manager faces. How it is handled will affect both the company's prospects for building a good team and the likelihood of future litigation. By working with human resources and legal professionals, security can help ensure that the firm hires talented employees and minimizes its liability risk at the same time.
W. Barry Nixon, SPHR (Senior Professional in Human Resources), is executive director of the National Institute for the Prevention of Workplace Violence, Inc. Nixon serves as the workplace violence consultant for the State of California, as well as many organizations in both the public and private sector. He is a member of ASIS International's Crime and Loss Prevention Council.