Ione is asked to fill two new positions at her company. The first requires complicated accounting knowledge; the second has no prerequisites but there is no opportunity for advancement without a college degree, preferably in advertising or English. Ione wants to hire younger workers so they will be more likely to have a long tenure at the firm. She places an advertisement in the local public university’s alumni magazine, requesting résumés from “recent college graduates,” Business or English degrees preferred. Ione’s co-worker suggested that she place the advertisement in their mutual alma matter’s magazine, since many of the current employees graduated from there and employees from that university have proven knowledgeable and hard working. Ione decides not to place advertisements at this time in the alumni magazines of the two local private universities, a Jesuit in-state and a historically black college that is very close to her offices, and which has a well-regarded business program. She figures she will get around to it if her first search is unsuccessful. Is Ione’s firm subject to any liability based on this advertisement?

SCENARIO 2

Wole Okri is the owner of a large apple orchard and hires about 50 young employees each season to work for him on a part-time basis to pick apples in his outdoor operation. During the past few weeks he has noticed a suspicious smell lingering around his orchard, which is recognizes as smoke from marijuana. Because the apple pickers are required to climb high ladders and drive trucks with wagons full of apples, the orchard has a zero tolerance policy for drugs and alcohol. The use of such substances could lead to serious injury.

Wole has no idea where to begin a search for suspects but the smell is stronger during and just after break times and in the area where his workers gather to rest during breaks and between shifts. Can Wole simply notify each of his employees that they will all be required to submit to a drug test to determine who has been smoking the marijuana, or should he figure out some way to narrow down the number of “suspects” and then use the drug test only as a means of confirmation of suspicion? How could he narrow down the number?

In addition, Wole has not yet purchased computerized checkout scanners for his large retail outlet where he sells apples and other local products to the public. Therefore all of the product prices must be input by hand to the store registers. Wole has found in the past that certain employees are able to perform this task at a much more rapid pace than others.

To maintain store efficiency, he decides to test all applicants relating to their ability to input prices into the register. After administering an on-site timed test, he finds that 12 white applicants, 2 black applicants, and 1 Hispanic applicant are represented among the top 15 performers, in that order of performance. Wole has five positions available. Will he be subject to liability for disparate impact discrimination if he proceeds to hire the five top performers, all of whom are white?

SCENARIO 3

Lominy is the supervisor of 13 employees, most of whom generally perform adequate work in conformance with company job descriptions and standards. However, he has had dilemmas in completing the annual performance reviews of two employees.

The first employee is Gordie, a young, white American male who was widowed in the past year. Since the death of his wife, who was the primary caregiver of their two young children, Gordie has had a difficult time balancing his increased familial responsibilities with his job requirements. He missed a major deadline and the company lost an important client, as a result. Gordie has received two written warnings about his inadequate performance, and a poor year-end performance appraisal would mean an automatic dismissal. However, Lominy is confident that Gordie will be able successfully to manage these two priorities in the coming year, if only given the chance.

Gordie told Lominy that his sister would be moving in “at some point soon” to help care for the children. Should Lominy draft an honest appraisal of Gordie’s performance this past year with the knowledge that it would mean Gordie would lose his job according to company policy, or does he decide to use his discretion and offer a less-than-truthful assessment? Lominy thinks to himself that perhaps he could argue that it is in the company’s best interest to retain this employee. He just isn’t sure what lies ahead.

Lominy‘s dilemma is accentuated by the fact that he is to review Julietta, an Argentinian worker who page 147holds a position similar to Gordie’s. Julietta is consistently late for work and also has received two written warnings about her inadequate performance. Lominy has no idea why Julietta arrives late, and, when asked, Julietta offers no justification, though Lominy recently heard office gossip that Julietta has just gotten married to her partner. If Lominy writes a performance evaluation that highlights Julietta’s behavior, similar to Gordie’s, and terminates Julietta but not Gordie, he is concerned about the potential for discrimination implications.

Evolution of the Employment Relationship

The people who work at a firm—its human resources—are among its most valuable assets; consequently, the utmost care must be used in their selection process. The law therefore permits employers a great deal of leeway in choosing and managing employees (and in their terminations, as you saw in Chapter 2 ). Basically, the only restrictions placed on the employment relationship are the laws that protect certain groups from employment discrimination (as will be discussed) since history has demonstrated a need for protection. As we will see, am employer actually is permitted to discriminate in employment unless that discrimination is based on a particular category, including gender, race, religion, disability, and a few others. So, for instance, an employer looking for a salesperson is allowed to discriminate against applicants who do not get along well with others; an employer hiring a computer technician may discriminate against someone without computer training; and employers may discriminate against applicants for all sorts of other, equally permissible reasons. (See Exhibit 4.1, “Realities about Hiring Employees or Finding a Job.” )

Exhibit 4.1 Realities about Hiring Employees or Finding a Job

1. The best way to promote workplace unity may be to seek guidance from those who do not work there.

2. If an employer places an advertisement only at limited locations within the city where hiring is to be done, it risks being accused of selective recruiting.

3. The purpose of an interview is not only for the employer to find out information about the employee. It is also for the employer to share information about itself so that the potential employee may learn whether it is the best fit for her or him.

4. While promoting from within may raise employee morale and encourage loyalty, the strategy may lead either to a real or perceived lack of diversity or discriminatory impact.

5. Though nepotism (favoring relatives and friends in hiring decisions) occurs with frequency, it has the potential to create challenges in the workplace.

The focus of this chapter will be on the evolution of the employment relationship, from recruitment of appropriate candidates through hiring, testing, and performance appraisals. Though the chapter will not reiterate completely the nature of Title VII regulation discussed in Chapter 3 , it is difficult to discuss the regulation of this evolution without heavily drawing on those concepts. Accordingly, we page 148will briefly mention appropriate and applicable laws as they arise, though fuller coverage will be given to these issues in the chapters that follow.

The employment relationship usually begins with recruitment. Employers use a variety of techniques to locate suitable applicants. Once the employer has a group from which to choose, information gathering begins. This stage consists of soliciting information from the applicant through forms, interviews, references, and testing. Targeting recruitment and selection has been found to be the most effective way to reduce employment discrimination charges.

Recruitment

LO1

Recruitment practices are particularly susceptible to claims of discrimination as barriers to equal opportunity. If applicants are denied access to employment opportunities on the basis of their membership in a protected class, they may have a claim against the potential employer for discriminatory practices.

Statutes such as Title VII of the Civil Rights Act of 1964 and others require, in part, that an employer not only recruit from a diverse audience but also design their employment announcements so that they encourage a diverse group of people to apply. How does the employer create a diverse applicant pool? Does the employer place ads in local newspapers as well as in diverse communities, advertise on radio stations that reach a variety of populations, ask varied groups to share the recruiting information or to encourage people to submit résumés, or ask current employees for suggestions about how to gather a broad submission pool?

Employers should review their materials with a critical eye. Does the advertisement contain gender-specific language that might discourage certain groups from applying for the position? Does it tend to speak to one particular group, one age group, one “clique,” one community only? Each of these possibilities has potential hazards and may result in an adverse impact on a protected group even if the employer had no intent to discriminate.

Federal Statutory Regulation of Recruitment

LO2

Though a number of statutes apply to recruitment (see Exhibit 4.2 ), the EEOC has offered important guidance specific to disability-related inquiries of applicants as well as employees under the Americans with Disabilities Act, which is covered in greater detail in Chapter 13 . For example, prior to an offer of employment, an employer may not ask disability-related questions or require any medical examinations, even if they seem to be related to the job. However, the EEOC’s Enforcement Guidelines explain that an employer may ask whether an applicant will need a “reasonable accommodation” during the hiring process (e.g., interview, written test, job demonstration). The employer also may inquire whether the applicant will need a reasonable accommodation for the job if the employer knows that an applicant has a disability (i.e., if the disability is obvious or the applicant has voluntarily disclosed the information, and the employer reasonably believes that the applicant will need a reasonable accommodation).

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Exhibit 4.2 Federal Laws Regulating Recruitment

TITLE VII OF THE CIVIL RIGHTS ACT OF 1964

Section 703(a)(1) It shall be an unlawful employment practice for an employer to fail or refuse to hire . . . any individual or otherwise to discriminate against any individual with respect to his [sic] compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.

Section 704(b) It shall be an unlawful employment practice for an employer, . . . to print or cause to be printed or published any notice or advertisement relating to employment by such an employer indicating any preference, limitation, specification, or discrimination based on race, color, religion, sex, or national origin, except that such a notice or advertisement may indicate a preference, limitation, specification, or discrimination based on religion, sex, or national origin when religion, sex, or national origin is a bona fide occupational qualification for employment.

VOCATIONAL REHABILITATION ACT OF 1973 AND THE AMERICANS WITH DISABILITIES ACT OF 1990

The Rehabilitation Act and the Americans with Disabilities Act, which will be covered in depth in Chapter 13 , protect otherwise qualified individuals with disabilities. The former regulates the employment practices of federal contractors, agencies, and employers, while the latter act applies similar standards to private-sector employers of 25 (15, effective July 1993) employees or more.

The Rehabilitation Act specifically provides that, in connection with recruitment, contractors and their subcontractors who have contracts with the government in excess of $10,000 must design and commit to an affirmative action program with the purpose of providing employment opportunities to disabled applicants. Affirmative action recruitment programs may include specific recruitment plans for universities for the disabled, designing positions that will easily accommodate a disabled employee, and adjusting work schedules to conform to the needs of certain applicants.

AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967

All employers of 20 or more employees are subject to the Act, which prohibits discrimination against an individual 40 years of age or older, unless age is a bona fide occupational qualification. In addition, the Act states:

Section 4(e) It shall be unlawful for an employer . . . to print or publish, or cause to be printed or published, any notice or advertisement relating to employment . . . indicating any preference, limitation, specification or discrimination based on age.

IMMIGRATION REFORM AND CONTROL ACT OF 1986

IRCA is slightly different in its regulation of recruitment. IRCA applies to all employers. IRCA’s purpose is to eliminate work opportunities that attract illegal aliens to the United States. With regard to discrimination based on national origin, the Act provides that all employers must determine the eligibility of each individual they intend to hire, prior to the commencement of employment. In this way, IRCA condones discrimination against illegal aliens in recruitment. Note that while IRCA applies to all employers, its discrimination provisions apply only to those with four employees or more.

The employer must provide a reasonable accommodation to a qualified applicant with a disability even if it believes that it would be unable to provide this individual with a reasonable accommodation on the job if the person were eventually hired. According to the EEOC, in many instances, employers will be unable page 150to determine whether an individual needs reasonable accommodation to perform the job based solely on a request for accommodation during the application process, or whether the same type or degree of accommodation will be needed on the job as was required for the application process.

State Employment Law Regulation

Many states have enacted legislation specifically aimed at expansion of the federal statutes above. For instance, many states have human rights acts that include in their protections the prohibitions against discrimination based on marital status or affinity orientation. The statutes generally establish a state human rights commission, which hears claims brought under the state act. Several other states have enacted legislation that closely mirrors Title VII but covers a larger number of employers.

Common Law: Misrepresentations and Fraud

In addition to statutes, recruitment is also governed by the common law; and one area where employers sometimes get into hot water involves statements and promises made during the recruitment process. A company representative who makes an intentional or negligent misrepresentation that encourages an applicant to take a job may be liable to that applicant for any harm that results. Misrepresentations may include claims regarding the terms of the job offer, including the type of position available, the salary to be paid, the job requirements, and other matters directly relating to the representation of the offer. (See Exhibit 4.3, “Common-Law Recruitment Violations,” for elements of the prima facie cases.)

Exhibit 4.3 Common-Law Recruitment Violations

For example, assume that Meri Clare is told by her employer at the time when she is hired that she will automatically receive a raise at her six-month review. Based on this representation, Meri Clare accepts an offer. Six months pass and she does not receive the promised raise. She may be able to sue her employer for the misrepresentation that induced her to take the job, even if she is an at-will employee working without a contract.

Why do you think Meri Clare might pursue the claim for misrepresentation and not for fraud? For misrepresentation, the statement does not actually need to be a false statement, it need merely to create a false impression. However, for fraud, Meri Clare would need to prove an intent to deceive at the time the statement was made. Since that is a higher standard and more difficult to prove, she likely would pursue the former claim. However, employers should be aware that liability for misrepresentation attaches even where an employer is aware that the applicant is under a mistaken belief about a position or company; an employer’s silence may constitute misrepresentation.

Where an employer hides certain bits of information, the employer’s silence may also be considered misrepresentation. For instance, suppose an employer needs someone to serve as an assistant to the president of the company. The president has a reputation for being unpleasant to his assistants and for constantly firing them. The employer, therefore, solicits applications for a general administrative position, “with specific duties to be assigned later,” knowing the hiree will spend the majority of the time working for the president.

page 151Assume that Alina applies for the job, states during her interview that she would like the position, and then says that she is glad that it is not the assistant-to-the-president position for which they were interviewing last month, phew! She explains that she had heard from a prior assistant about difficulties with the president and preferred not to work for him. She is offered the job and, even though she has an excellent offer from another company for more money, decides to take the job because she likes the culture of this work environment. Later, she is told that she will be spending a large part of her workday with the president. Alina could sue the employer for misrepresentation—and perhaps fraud—even though the employer did not respond at all to her statement about the president during the interview.

Employers also may be liable for fraud in recruitment when misstatements are used to discourage potential applicants from pursuing positions. For instance, an employer who wishes to maintain a male-dominated workforce may intentionally present an excessively negative image of the position or the company in an effort to persuade females not to apply. If all candidates are offered the page 152same information, there may be no basis for a discrimination claim. However, if only the female applicants receive this discouraging outlook, the practice presents to the female applicants a “chilling” effect and the employer may be subject to claims of gender discrimination.

Application of Regulation to Recruitment Practices

Advertisements

Statutes and the common-law claim of fraud protect applicants from discriminatory recruitment practices, ranging from a refusal to interview Latinx 1 to a job notice that is posted only in the executive suite where it will be seen primarily by white males. Assume, for instance, that an employer advertises in a newspaper that is circulated in a neighborhood that has an extremely high Asian population but does not have many other minorities represented. You therefore might also assume that the employer will expect to see almost all of its applications to come from Asians and few, if any, applications from other groups. While there may be no intent to discriminate, the effect of the practice will be an unbalanced workforce with a disparate impact on non-Asians.

In connection with Scenario 1, recall that Ione is concerned about placing an advertisement requesting résumés from “recent college grads.” Older workers may claim that they are discouraged from applying due to the language—they are less likely to be “recent” college grads. On the other hand, language such as this does not constitute a per se violation. Instead, the applicant would have to establish a prima facie case of age discrimination. Though terminology such as “recent college grads” seems to be a minor concern to some, courts have found that it may lead to a belief that stereotyping or pigeonholing of one gender or a certain age group in certain positions is condoned by the law. Consider Dominick’s supermarket’s experience when it named the second-in-command of its deli section the “Second Deli Man,” notwithstanding whether the person was male or female. Maybe someone at Dominick’s noticed the inconsistency this might create, but probably no one expected a class action suit by 1,500 women alleging gender discrimination! While this was only one of numerous pieces of evidence, it may have made a difference in encouraging a settlement.

Additionally, consider how the placement of Ione’s advertisement may affect who is aware of the position. By failing to send it to the local historically black college, Ione inadvertently may be discriminating against black applicants.

Word-of-Mouth Recruiting

The same discriminatory effect may occur where an employer obtains its new employees or applicants only from referrals from within its own workforce, or “word-of-mouth” recruiting. Generally most people know and recommend others similar to themselves. Word-of-mouth recruiting generally results in a workplace that looks just like the existing workplace.

This type of recruiting is not necessarily harmful as long as precautions are taken to ensure a balanced applicant pool or where it can be shown to be necessary to ensure the hiring of the most competent workers. Benefits of this type page 153of recruitment include preliminary screening happens by the current employees before they even recommend the applicant for the position, and the tendency for long-term service and loyalty among the new hires. Since they already have bonds to the company, a family attitude toward the firm, resulting in increased productivity, is more easily developed.

In fact, a 2016 study found that 27.5 percent of hires in 2015 were part of an employee referral program, making them the top source of hire. 2 This study shows that the vast majority of respondents regard referrals as the number one source of above-average applicants. A different survey found that hiring a referred candidate takes less time and saves the company money on recruiting and advertising. Plus, there is the added benefit that 46 percent of referred hires remain at their job for at least one year after they are hired, compared to the 33 percent of hires that come from career sites and the 22 percent hired from job boards. 3 But, it is important to consider how this strategy might lead to liability under Title VII.

There is a significant difference between disparate impact and disparate treatment in the context of word-of-mouth recruiting. The Seventh Circuit decided two important cases in this area, one that explained the difference and one that subsequently applied it. In EEOC v. Chicago Miniature Lamp Works, 4 the EEOC claimed that Chicago Miniature Lamp Works discriminated against blacks in its recruitment and hiring of its entry-level workers because it recruited primarily through an informal word-of-mouth process. Current employees simply would tell their relatives and friends about a job. If interested, these people then would come to Miniature’s office and complete an application form. Miniature did not tell or encourage its employees to recruit this way.

Between 1978 and 1981, Miniature hired 146 entry-level workers. Nine of these workers (6 percent) were black. The trial court concluded that “the statistical probability of Chicago Miniature’s hiring so few blacks in the 1978–1981 period, in the absence of racial bias against blacks in recruitment and hiring, is virtually zero.”

The Seventh Circuit evaluated the EEOC’s arguments for both discriminatory treatment and impact. It dismissed the treatment claim, since that claim requires intent, explaining that “[i]ntent means a subjective desire or wish for these discriminatory results to occur.” They found no evidence whatsoever of any desire for the results. With regard to impact, the Seventh Circuit also dismissed the claims. “[A] Title VII plaintiff does not make out a case of disparate impact simply by showing that, ‘at the bottom line’ there is a racial imbalance in the work force.” Instead, the plaintiff must identify a particular practice that caused the disparate impact. But in what “practice” did Miniature engage? In a seminal ruling that has been cited significantly since, the court held:

The EEOC does not allege that Miniature affirmatively engaged in word-of-mouth recruitment of the kind where it told or encouraged its employees to refer applicants for entry-level jobs. Instead, it is uncontested that Miniature passively waited for applicants who typically learned of opportunities from current Miniature employees. The court erred in considering passive reliance on employee word-of-mouth recruiting as a particular employment practice for the purposes of disparate impact. The practices here are undertaken solely by employees.

page 154The vital lesson from Miniature is the distinction in liability between acts of the general workforce and acts of the employer, itself. Where workers learn of opportunities on their own and share these opportunities with those in their social networks (posting an open position notice through Facebook, for instance), Miniature tells us that this would not be considered a practice of the employer unless the employee were asked to do so by the employer.

The same court followed Miniature with its decision in EEOC v. Consolidated Service System (included at the end of this chapter), an extraordinary statement by the court, authored by Judge Posner, a noted economist, that contains some quite interesting conclusions. In that case, a janitorial firm owned by a Korean immigrant and staffed mostly by Koreans used word-of-mouth recruiting for its hires. Between 1983 and 1987, the firm hired 81 percent Korean workers, while less than 1 percent of the workforce in its surrounding community is Korean.

In this case of disparate treatment, the court basically said that, just because the end result is completely askew, one should not reach the conclusion that discrimination was involved. “If the most efficient method of hiring adopted because it is the most efficient . . . just happens to produce a workforce whose racial or religious or ethnic or national-origin or gender composition pleases the employer, this is not intentional discrimination.” The court does suggest that, if the case were instead based on disparate impact, which it is not, “then the advantages of word-of-mouth recruitment would have to be balanced against its possibly discriminatory effect when the employer’s current workforce is already skewed along racial or other disfavored lines.”

As you will see by the conclusion in that case at the end of this chapter, the Seventh Circuit apparently grew frustrated with the EEOC’s conception of “disparate impact,” even suggesting that the defendant consider suing to recoup its fees based on groundless prosecution!

Promoting from Within

While promoting from within the company is not in and of itself illegal, it also has the potential for discriminatory results, depending on the process used and the composition of the employer’s workforce. Some employers use a secretive process, quietly soliciting interest in a position from a few upper-level employees who have been selected based on recommendations by their supervisors. The employer then conducts interviews with the candidates and extends an offer. After the employee accepts the offer, a notice is posted announcing the promotion. If women and minorities are not well-represented in a firm, this process might result in a disparate impact against them, even where the purpose of the employer is merely to locate and promote the most qualified candidate.

A process that could avoid a finding of disparate impact would be to post a notice of position availability in which all employees are offered the opportunity to compete for open positions. The employer is less vulnerable to attack for discriminatory policies as long as the workforce is relatively balanced so there is equal employment opportunity.

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Venue Recruiting

Employers may decide to conduct recruiting at a university or high school. Similar precautions must be taken to attract diverse applicants in a locale that may be either purposefully or unintentionally uniform. The same effect may result when an employer recruits with a preference for experienced applicants for entry-level jobs—for instance, recruiting firefighters and specifying a preference for applicants with experience in volunteer fire departments. The court held in one case that this recruitment practice was wrongful because volunteer fire departments tended in the past to be hostile to minorities and to women as firefighters. Preference for firefighters with this experience, therefore, would lead to few, if any, minorities and women being hired. Employers should be aware of the effects of the composition of their workforce on protected groups and the effects of the sources of their recruitment.

Walk-In Applicants

Recruiting may not be necessary when the company is constantly receiving unsolicited applications. Depending on the profession, potential employees may send their résumés to prospective employers in hopes of locating an open position, or of persuading them to create one. While this strategy may be effective in locating employees and reducing costs of formal recruiting, the company may find that its reputation attracts only one type of employee, while others are intimidated by, unaware of, or uninterested in the firm. Equal employment opportunity is again lost.

Neutral Solicitation

While selecting an appropriate source from which to choose applicants is crucial, fashioning the process to encourage diverse applicants is also important. For instance, an advertisement that requests “recent college grads” may discourage older workers from applying and result in an adverse impact on them. Or, a job announcement that states the employer is looking for “busboys” or “servicemen” may deter females from applying. Other terms that at first appear innocuous are actually discouraging to one group or another, including “draftsman,” “saleswoman,” “repairman,” “waiter,” “host,” and “maid.” An announcement or solicitation should invite applications from all groups and should not suggest a preference for any one class of individual.

Information Gathering and Selection

Once the employer has recruited a group of applicants, how does the employer reach a final conclusion about whether to hire a particular applicant? The next step is for the employer to balance some additional information about the applicant—her or his experience, education, fit with the company, and other information gained through interviews, reference checks, testing, and application forms—with the needs of the company along with any negative information on page 156the candidate discovered during the course of the information gathering. Amassing this information is a time-consuming, yet important, process that is subject to suspicion by applicants and others because of its potential for the invasion of privacy and discriminatory treatment. While we will discuss the extent to which an employer is prohibited from delving into private information about an employee on the basis of invasion of privacy in Chapter 14 , this section will examine the information that the employer may or may not obtain during this particular stage of the employment process.

The Application Phase

The hiring process usually begins with an application for employment. Most of us at some point have filled out an employment application. Did you ever stop to think about whether the employer actually had a right to ask these questions? Under most circumstances, the application requests information that will serve as the basis for screening out applicants because of education or experience requirements. Questions that are business-related and used for a non-discriminatory purpose are appropriate. The form will generally ask for name, address, educational background, work experience, and other qualifications for the position; but, it may additionally request date of birth, nationality, religion, marital status, number of children, or ethnicity.

Unfortunately, research demonstrates the existence of discrimination against applicants based on assumptions about their race or national origin, or membership in other protected groups. One study found that applicants with white-sounding names were 50 percent more likely to receive callbacks for interviews than applicants with African-American sounding names who were similarly qualified. 5 A 2011 study found that an Arab male applicant needed to send two résumés for every one résumé sent by a white male applicant in order to receive a callback for an interview by hiring personnel. 6 In 2014, a study revealed evidence of exclusion in hiring practices, where a test in France revealed that recruiters with European names were more likely to call back applicants with French names, and female recruiters were more likely to call back women. This practice of preferring people like ourselves—whether because they look like us, sound like us, or simply have names that seem familiar—is called homophily . 7

homophily

A theory in sociology that people tend to form connections with others who are similar to them in characteristics such as socioeconomic status, values, beliefs, or attitudes.

LO3

There are only a few questions that are strictly prohibited by federal law from being asked on an application and/or during the interview process. Any questions concerning disability, specific health inquiries, and workers’ compensation history are either prohibited by the Americans with Disabilities Act of 1990 or strictly regulated (see Chapter 13 ). Other questions regarding age, sex, religion, marital status, nationality, and ethnicity are not prohibited by federal statute, but they are generally considered off-limits. These answers create vulnerabilities for employers if they have access to this information, and employers are strenuously advised to avoid them. Questions involving these topics must be related to the position for which the applicant applies in order for an employer to be able to ask them. If they are not related and, even if the employer does not page 157base its employment decision on the responses to these inquiries, the selection process results in a disparate impact against a protected group, the employer could be liable.

Nevertheless, research has shown that companies frequently violate EEOC guidelines regarding appropriate application and interview questions. You may even be thinking right now that you have answered these questions on some form in the past! The areas of inquiry that are most often violated during this phase include education (where not business justified and where questions relate to religious affiliation of the school, and so on), arrest records, physical disabilities, and age. For instance, an employer should ask if you are of a legal age to work rather than asking for your date of birth. Though there may be reason to know once hired, your date of birth provides far more information than most employers might need to know during the interview stage.

Even the most innocuous remark may be inappropriate. For instance, an employer should not really make off-the-cuff comments or ask questions about your name during an interview, other than what it is. It could be perceived as national origin discrimination. For example, someone might say, “Gosh, that‘s an interesting last name, how do you pronounce it? What language is that?” Imagine where the conversation might lead. Questions relating to other names by which an applicant may be known are proper, while questions regarding the origins of the applicant’s surname or whether it is one’s original name versus one’s married name are improper (it may be perceived as marital status discrimination, prohibited in some states).

Moreover, while most applicants are used to filling in the response to a question regarding gender on an application, an employer actually has no right to that knowledge unless gender is a bona fide occupational qualification. As hair and eye color may lead to an inference regarding the applicant’s race or color, these questions, too, may be inappropriate, but not per se illegal. But, can you imagine a position where hair or eye color would be a bona fide qualification?

The Interview

The second step in the process is usually an interview conducted by a representative of the employer. Discrimination may occur during the interview in the same manner in which it is present on application forms. An improper question on the application is just as improper in an interview.

Questions are not the only source of discrimination during an interview. In a pioneering study conducted by the Urban Institute, researchers found that black applicants were treated more harshly during interviews than white applicants with identical qualifications. 8 Researchers submitted pairs of applications of black and white applicants for available positions. The researchers found that black people were treated more favorably than whites in 27 percent of the interview situations, while they were treated less favorably than whites in half of the interviews. Black applicants suffered greater abuses, including longer waiting times, shorter interviews, and being interviewed by a greater number of individuals. White applicants were more likely to receive a job offer. All of this occurred under controlled page 158circumstances, where the applications of the pairs were kept equal in terms of qualifications and experience. A meta-analysis of 10 comparable subsequent studies, conducted in different locations and across various industries, reveals the same basic conclusion: that race matters in hiring decisions, with whites anywhere from 1.5 to 5 times more likely to receive a callback or job offer compared with equally qualified black applicants. 9 An interview, therefore, must be nondiscriminatory not only in terms of the information solicited but also in terms of the process by which it is conducted.

There are four areas of potential problems in connection with the interview. First, the employer must ensure that the interview procedures do not discourage women, minorities, or other protected groups from continuing the process. Second, employers should be aware that all-white or all-male interviewers, or interviewers who are not well trained, may subject the employer to liability. Third, the training of the interviewers is crucial to avoid biased questions, gender-based remarks, and unbalanced interviews. Fourth, the evaluation of the applicant subsequent to the interview should follow a consistent and evaluative process rather than reflect arbitrary and subjective opinions.

Exhibit 4.4, “Preemployment Inquiry Guidelines,” offers guidance on developing acceptable questions for an interview. Questions should be uniformly applied to all applicants.

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Exhibit 4.4 Preemployment Inquiry Guidelines

Subject	Acceptable	Unacceptable
Name	“Have you ever used another name?”	“What is your maiden name?”
Citizenship	“After an offer of employment, can you submit verification of your legal authorization to work in the United States?” or statement that such proof may be required after a decision is made to hire the candidate.	“Are you a U.S. citizen?”; citizenship of spouse, parents, or other relative; birthplace of applicant, applicant’s parents, spouse, or other relative; requirements that applicant produce naturalization papers, alien card, etc., prior to decision to hire applicant.
National origin	Questions as to languages applicant reads, speaks, or writes, if use of a language other than English is relevant to the job for which applicant is applying.	Questions as to nationality, lineage, ancestry, national origin, descent, or parentage of applicant, applicant’s parents, or spouse; “What is your native language?”; “What language do you use most?”; “How did you acquire the ability to speak [language other than English]?”
Sex, family	Statement of company policy regarding work assignment of employees who are related; name and address of parent or guardian if applicant is a minor; ability to work overtime or to travel; experience working with a certain age group.	Questions to indicate applicant’s sex, marital status, number and/or ages of children or dependents; provisions for child care; “Are you pregnant?”; “Are you using birth control?”; spouse’s name or contact information.
Physical or mental disability	“Can you perform [specific job-related tasks]?”; statement that employment offer may be made contingent upon passing a job-related mental or physical examination; questions about illegal drug use, missed days of work during previous year.	“Are you in good health?”; “Have you ever received workers’ compensation?”; “Do you have any disabilities?”; any inquiry into the applicant’s general health, medical condition, or mental/physical disability, requiring a psychological or medical examination of any applicant.
Religion	Statement by employer of regular days, hours, or shifts to be worked.	Religion or religious days observed; “Does your religion prohibit you from working weekends or holidays?”

Source: Adapted from California Department of Fair Employment and Housing, DFEH-161 (rev. 11/14), http://www.dfeh.ca.gov/res/docs/Publications/Brochures/2015/DFEH-161.pdf .

Background or Reference Check, Negligent Hiring, and Googling Employees

Once the applicant has successfully completed the interview process, the next step for the employer is to check the applicant’s background and references. This is how the employer discovers whether the information in the application and the interview is true, and whether there is any additional information that might be relevant to the person’s employment.

Research suggests that job candidates engage in extensive misrepresentation of academic credentials and work experience on résumés and job applications, and that the problem may be getting worse. While reliable statistics on résumé fraud are difficult to obtain, the best evidence comes from companies that provide employment screening services. For example, a HireRight report, based on over 290,000 background checks preformed in the last half of 2014, revealed that 27 percent of employment checks showed discrepancies. 10

On the other hand, as the level of job responsibility decreases, the employer is less likely to verify all of the information provided by the applicant. But, a check is crucial to verify the information that the candidate offers in the application and interview. There are some pretty basic ways to keep an eye out for these discrepancies. For instance, in the interview, do the candidate’s answers sound too clean and rehearsed? It is one thing to know how you feel about something but another to repeat an answer you have memorized. On the résumé, check for overlapping dates or details that conflict. Google some of the organizations of which the candidate says that she or he has been involved in a leadership capacity to verify his or her page 160participation. When you check references, ask those references to give you the name of someone else who has worked alongside this individual as a peer. While the candidate likely only offered the names of references who would offer glowing reviews, these second-tier names might provide a realistic capsule otherwise not available.

LO4

It is important, as well, to ensure that there is no information that, if discovered, would disqualify the applicant from employment or could subject other employees, clients, or customers to a dangerous situation. That type of information also could subject the employer to a claim of negligent hiring , recognized as a cause of action in all 50 states. 11 For these reasons, employers may verify not only education and experience, but also driving records, credit standing, refusals of bonds, or exclusion from government programs. An employer is liable for negligent hiring where an employee causes harm that could have been prevented if the employer had conducted a reasonable and responsible background check on the employee; in other words, when the employer knew or should have known that the worker was not fit for the job. The person injured may claim that the negligence of the employer placed the employee in a position where harm could result, and, therefore, the employer contributed to that harm (see Exhibit 4.5, “Grounds for Negligent Hiring Claim” ). Although workplace violence has declined dramatically since statistics were first collected in 1993, 12 in 2015, 307 employees were shot by another person at work, 13 and every year nearly 2 million Americans report being victims of workplace violence. 14 Since 25.5 percent of workplace violence against men (and almost 32 percent against women) is committed by a person with whom the victim has a working relationship, this is a critical area of caution. 15

negligent hiring

Employment of a person who causes harm that could have been prevented if the employer had conducted a reasonable and responsible background check on the employee. The standard against which the decision is measured is when the employer knew or should have known that the worker was not fit for the job.

negligence

The omission or failure to do something in the way that a reasonable or prudent person would have done the same thing; or doing something that a reasonable or prudent person would not have done. Failing to raise one’s standard of care to the level of care that a reasonable person would use in a given situation. In order to prove negligence, one must show that these acts or omissions resulted in damage to another person or property.

Exhibit 4.5 Grounds for Negligent Hiring Claim

For instance, in a 2012 case 16 a student whose guidance counselor had engaged in an improper sexual relationship with him sued the school district. The California Supreme Court considered whether the district could be vicariously liable for “the negligence of supervisory or administrative personnel who allegedly knew, page 161or should have known, of the counselor’s propensities and nevertheless hired, retained and inadequately supervised her.” The court held the district could be vicariously liable for negligent hiring, retention, and supervision of its employees.

An additional wrinkle is added when the case involves temporary or contingent workers. Employers often hire candidates from temporary employment agencies, which have engaged in background screening of the worker on their own. It is arguable that, as long as the employer ensures the reasonableness and diligence of these third-party checks, the employer should be sufficiently protected from liability for negligently hiring these workers (the EEOC Guidelines suggest this framework). 17 However, the court decisions are not uniform and research suggests that screening of temporary workers by agencies is inconsistent and not reliable. 18

To check on an applicant’s references in a careful and adequate manner, in order to insulate oneself from negligent hiring liability, the employer might try several strategies.

· First, the employer might contact the reference in person, by telephone, by letter, or email and request a general statement about whether the information stated in the application and interview is correct.

· Second, the contact might be much more specific, posing questions about the applicant’s abilities and qualifications for the available position.

· Third, the employer may undertake an independent check of credit standing through a credit reporting agency, military service and discharge status, driving record, criminal record, or other public information to obtain the most complete information on the applicant.

There are problems inherent in each form of query:

· Most employers are willing to verify the employment of past employees, but obtaining this limited information may not necessarily satisfy the standard of care required to avoid a claim of negligent hiring.

· Certain information is not available to employers and is protected by state law. For instance, if an employer asks about the applicant’s prior criminal arrest record, or even certain convictions, in one of several states that statutorily protect disclosure of this type of information, the employer may be subject to a claim of invasion of privacy or other statutory violations.

· There also may be the basis for a claim of disparate impact where it can be shown that those of one protected class are arrested more often than others. In that case, asking about an arrest record where the offense is not necessarily related to job performance may result in adverse impact. Note that arrests and convictions are not the same. Employers are more limited in inquiring about arrest records than about convictions relevant to the job.

· The Fair Credit Reporting Act requires that an employer notify the applicant in writing of its intention to conduct an investigative consumer report and inform the applicant of the information it seeks. It further requires the employer to obtain written authorization to obtain the report. In addition, if the employer plans to take an adverse employment action based on the report, it must notify page 162the employee of the reporting agency and give notice that he or she can get a free copy of the report and that he or she can dispute its contents.

· The reference and background information-gathering process is a lengthy one and may be unmanageable, given the employer’s position requirements.

· Past employers may not be willing to offer any further information than that the applicant worked at that company for a time. Employers have cause for concern, given the large number of defamation actions filed against employers based on references. (See Exhibit 4.6, “Checklist for Safe Hiring” ; see also Chapter 14 .)

Exhibit 4.6 The ABC Company Safe Hiring Checklist

To be completed for every new applicant before being hired.

Applicant: __________________________________________________

Position: __________________________________________________

Hiring Manager __________________________________________________

Task	Yes/N or NA	Date/Initials	Notes/Follow-up
Application Process
Is application complete?
Did applicant sign and date application?
Did applicant indicate reason for leaving prior employment?
Any excessive cross-outs or changes seen?
Is the application internally consistent and consistent with other information in the employer’s possessions?
Interview Process
Did applicant explain any excessive cross-outs/changes?
Leaving past jobs: Did applicant explain?
Leaving past jobs: Was verbal reason consistent with reason on written application?
Gaps in Employment: Did applicant explain?
Employment Gaps: Are verbal explanations consistent with written application?
Security Question. 1 – “Our firm has a standard drug testing policy and drug tests all applicants and perform background checks. Do you have any concerns you would like to share with me about the policy or our procedures?”			page 163Answer:
Security Question 2 – “We also have a policy requiring criminal background checks on all finalists pursuant to all applicable rules and regulations including EEOC Guidance. Do you have any concerns you would like to share with me about the policy or our procedures?”			Answer:
Security Question 3 – “If I were to contact past employers pursuant to the release you have signed, what do you think they would tell us about you?”			Answer:
Security Question 4 – “If I were to contact past employers pursuant to the release you have signed, would any of them tell us you were terminated or were disciplined?”			Answer:
Security Question 5 – “Please explain any gaps in employment.”			Answer:
Security Question 6 – “Is everything in the application and everything you told us in the hiring process true, correct, and complete?”			Answer:
Reference Checks (performed by employer or by a third party)
Have references been checked for at least last 5–10 years, regardless of whether past employers will give details?
Have efforts been documented?
Discrepancies between information located and what applicant reported in application: a. dates//job title b. reason for leaving
Security, Drug Screening and Background Checks
Check with legal counsel before asking about criminal records on the employment application or in the interview process, or before using a criminal record to deny employment. When and how these inquiries can be made varies by state, county, and municipality. These regulations are generally referred to as “Ban the Box.” In some jurisdictions, background checks can only be obtained post offer of employment.
Did applicant receive a standalone background check disclosure document consistent with the federal Fair Credit Reporting Act (FCRA) and applicable state laws?
Did applicant sign and return the background check consent document?
Has background check been ordered?
Did applicant receive the drug testing Chain of Custody and instructions?
Have drug screening results been received and reviewed according to the policy?			page 164
If DISQUALIFYING drug test what action was taken per drug testing policy and procedures?			Describe:
Has background check been completed?
Has background check been reviewed for discrepancies and possible disqualifying criminal history?
If background check not CLEAR or SATISFACTORY, what action is taken per policy and procedures including pre and post adverse action under the FCRA?			Describe:
If not CLEAR or SATISFACTORY, are there disqualifying factors based on position/company policy?			Describe:
If criminal record found, did employer analyze under EEOC three-part test and did applicant receive opportunity for an “Individualized Assessment.”			Result:

Note: If in a “Ban the Box” jurisdiction, check with legal counsel before asking about criminal records in an application or an interview. Also, be aware of the U.S. Equal Employment Opportunity Commission (EEOC) rules on the use of criminal records. A criminal record should not be used to automatically eliminate a candidate.

The most effective way to avoid these potential stumbling blocks is to request that the applicant sign a statement on the application form, which states that former employers are released from liability for offering references on her or his behalf. In the course of making a request for a reference from those former employers, the release should be sent to the former employer along with a copy of the applicant’s entire application.

In addition, in this environment of enhanced access to information, perhaps the standard of what a reasonable employer should do is also heightened. For instance, if people Google their blind dates as standard practice, is it really asking too much for an employer to simply Google a prospective employee to see what can be uncovered through a basic Internet search? If a number of employers begin to use the Internet as a method of information gathering, does that practice become the norm, thus raising the bar for other employers? The bar does seem to be rising—while a 2006 survey reported that 10 percent of employers had used social networking sites (including Facebook) to gather information on future employees, 19 by 2016 the percentage had risen six times that level to 60 percent. 20 It is not limited to the recruitment process. More than 40 percent of employers use a variety of social media sites to gather information on existing staff and employees, and 26 percent have used information they have discovered online to reprimand or terminate a worker. 21

page 165When managers and human resource professionals do use social media sites to make decisions, a 2016 nationwide survey by CareerBuilder found that they generally use Facebook and LinkedIn to do their research. 22 See Exhibit 4.7, “Use of Social Media in Hiring Decisions,” to see some of the reasons that have both discouraged them from hiring people based on what they have found, but also encouraged some hiring decisions.

Exhibit 4.7 Use of Social Media in Hiring Decisions

Source: Adapted from CareerBuilder “Number of Employers Using a Social Media to Screen Candidates Has Increased 500 Percent over the Last Decade” (April 28, 2016), http://www.careerbuilders.com/share/aboutus/pressrelesedetail.aspx?ed=12/31/2016&id=pr945&sd=4/28/2016 (accessed August 20, 2016).

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Employers should exercise caution when using online sources for background checks. While they may find valuable information about prospective employees, if they use (or appear to use) certain information, such as age, race, marital status, or other defining features of potentially protected classes, to screen job candidates, it could serve as grounds for a discrimination suit. Because social media platforms like Facebook and Instagram contain highly personal information, employers who use them to conduct background screening risk allowing hiring decisions to be affected by factors that are illegal to consider—such as medical problems or disability, marital status, or pregnancy.

In addition, in 2011, the Federal Trade Commission published an alert on its website reminding employers and consumer reporting agencies that social media background checks using information found online must comply with the same Fair Credit Reporting Act (FCRA) rules that apply to traditional information sources such as employment history and criminal records. 23 Further, as of 2016, 23 states have enacted legislation that prohibits an employer from requesting or requiring an employee, student, or applicant to disclose her or his username or password to a personal social media account; and nine other states are considering similar laws. 24 Facebook itself has threatened to take legal action against companies that ask job applicants for passwords, saying such a request violates its terms of service. 25

In considering a claim of negligent hiring, you might notice the inherent conflicts between the potential liability involved in hiring someone without sufficient information and the alternate liability involved in intrusion into a candidate’s personal information. As we have noted and will discuss, certain subjects are not acceptable areas of inquiry for employers except under specific circumstances. In addition, while the Occupational Safety and Health Act (OSHA) mandates that employers protect the workplace from “recognized” workplace safety and health hazards that are likely to cause serious injury or death, until those threats are manifested, it may be difficult to identify some of them before they enter the workplace.

Therefore, the amount of background and reference checking for an employer to shield itself from a claim of negligent hiring should both be based on a written workplace policy that applies a standard procedure across the board and maintains a zero tolerance bar for any threats of violence whatsoever, but also should be sufficiently flexible to vary from situation to situation, as needed. A position that provides for absolutely no contact with clients, customers, or other employees may necessitate a quick check of the information contained on the application, while a position that requires a great deal of personal contact, such as an intensive care nurse, would require an investigation into the applicant’s prior experiences and background. An employer must exercise reasonable care in hiring applicants who may pose a risk to others as a result of their employment and the employer’s negligent failure to obtain more complete information. The standard of care to be met is what would be exercised by a reasonable page 167employer in similar circumstances. If an employer had no means by which to learn of a dangerous propensity, or if discovery of this information would place a great burden on the employer, a court is more likely to deny a claim for negligent hiring.

Reference Checks: Potential Liability for Providing References?

Due to an increasing risk of lawsuits as a result of reference checks, many employers have adopted an official policy of providing only name, position held, and salary, or simply saying, “No comment.” However, employers should be aware that, should an employer choose not to provide reference information on prior employees, it could face liability for injuries to the prospective employer who sought the reference, or even third parties. In one case, a former employer settled for an undisclosed amount after allegedly sending an incomplete referral letter that neglected to mention that the former employee had been fired for bringing a gun to work. The employee was subsequently hired by an insurance company and went on a rampage, killing three and wounding two of his co-workers, before killing himself. 26

While employers may not have an affirmative duty to respond to a reference inquiry, those who choose to respond may be held liable for negligent misrepresentation based on misleading statements made in employment references. Therefore, while there is no affirmative duty to respond, once an employer chooses to do so, some courts have held that it creates a duty to respond fully and honestly, to avoid foreseeable harm. 27

One possible safeguard an employer can utilize is requiring a written release from former employees before any information is released. However, the written release should be voluntary, should allow the former employee to discuss the waiver with an attorney, and should include the employee’s agreement not to contest his or her termination or the contents of the personnel file. For additional guidance, see Exhibit 4.8, “Employer Strategies for Avoiding Negligent Hiring, References, and Supervision” and Exhibit 4.9, “Tips for Employer Protection.”

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Exhibit 4.8 Employer Strategies for Avoiding Negligent Hiring, References, and Supervision

Former Employees
Strategy	Considerations
Examine state law to determine whether statutory protection is available for employers giving references. · If yes, conform reference policy for former employees to state law. · If no, develop a policy that balances the potential legal costs with the future employers’ need for information regarding the former employee.	· Possible protection under General Liability Policy. · Require form signed by former employee authorizing release of information.
Current and Future Employees
Strategy	Considerations
Preemployment:
For each new hire or position change, review position to determine risk factors. Based on assessment, determine scope of necessary applicant investigation.	Risk factors include: · Contact with the public/children/infirm. · Access to employer property. · Operation of motor vehicles/dangerous equipment.
Employment application should include:
· Statement that any misrepresentation is grounds for dismissal, no matter when discovered. · Inquiry as to any criminal convictions. · Signed permission for all former employers to release reference information, including reason for separation and eligibility for rehire. · Data on all education, certifications, and experience relevant to position.	If applicant discloses a criminal conviction, determine the nature of the crime and whether it is within the scope of job requirements or job related.
Strategy	Considerations
If applicant is deemed to be qualified via personal interviews, skills, or other preemployment tests, begin background check commensurate with prior review of position and risk factors.
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In particular, the employer should:
· Verify all claimed credentials and certifications. · Instigate any necessary criminal background checks. · Send signed consent form to past employers requesting appropriate information. · Request any other pertinent information, given job duties/responsibilities.	Where former employer does not respond, employer will need to follow up and document due diligence. Where former employer has a “no comment” reference policy, depending on position’s risk factors, remind former employer of potential negligent reference issues and allow former employer opportunity to reconsider. Document due diligence. Where negative information is received, consider risk factors, consider investigating further, or seek applicant’s rebuttal to information received, and make best decision possible for all concerned.
During Employment:
If an employee exhibits any display of greater than ordinary temper or violent behavior: · Remove employee from potentially hazardous duties (i.e., working closely with public, children, or the infirm). · Require anger management or similar counseling before reinstatement to prior duties.
Postemployment:
When employee is terminating employment, present Reference Permission Form for employee to sign during exit interview and inform employee that factual information will be provided to future employers. If contacted for reference of past employee: · Provide data as prescribed by Reference Permission Form. · Consider potential position risk factors, including risk to third parties, when deciding whether to release additional relevant factual information.

Source: S. Arsenault, D. Jessup, M. Hass, and J. Philbrick, “The Legal Implications of Workplace Violence: Negligent References, Negligent Hiring, and Negligent Supervision and Retention,” Journal of Legal Studies in Business 9 (2002), pp. 31–63. Reprinted by permission of the authors and Journal of Legal Studies in Business.

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Exhibit 4.9 Tips for Employer Protection

LO5

Employers also can be liable for reference checks in an unexpected manner—from an ex-employee’s own mouth through compelled self-publication . Compelled self-publication happens when an ex-employee is forced to repeat the reason for her or his termination and thereby has the basis for a claim for defamation. When the reason for the termination is allegedly defamatory (for instance, termination based on false accusations of insubordination or theft), then courts have held that self-publication can satisfy the prima facie requirements of defamation since the employee was compelled to publish the defamatory statement to a third person (the potential new employer), and since it was foreseeable to the employer that the employee would have to repeat the basis for termination. The tort of compelled self-publication, however, is recognized in a minority of states. 28

compelled self-publication

Occurs when an ex-employee is forced to repeat the reason for her or his termination and thereby makes a claim for defamation.

The discussion above about negligent hiring standards also applies to situations involved in negligent training, supervision, and retention. Some courts recognize a responsibility of employers in certain industries to appropriately train their employees when third parties will rely on that training, such as in the medical environment. Negligent supervision exists where an employer fails to adequately oversee the activities of an employee who threatens violent conduct. Negligent retention occurs when the employee’s conduct gives rise to employer action such as suspension or dismissal, but the employer fails to take such action and a third party suffers damages.

“After-Acquired Evidence” Defense in Wrongful Termination Suits

While the previous discussion has focused on potential for employer mistakes, omissions, or wrongdoing, what happens when the applicant is the wrongdoer, page 171such as when she or he includes misstatements on her or his application? An employer may fire someone for that reason. Often, this situation will come up after someone has been fired for another, allegedly wrongful reason. The “after-acquired evidence” of the misstatements is admissible to show the court that, whether or not the employer had unlawful reasons for the action, it also had this legal justification for the action. In McKennon v. Nashville Banner Publishing Co, 29 the court held that a discharge in violation of the ADEA was acceptable where the employer would have terminated the employment anyway because of a breach of confidentiality.

Documentation of Failure to Hire

No federal statute or guideline requires that employers document the reasons for failing to hire any specific applicant. However, it really is in the best interests of the employer to articulate the reasons in order to avoid the presumption of inappropriate reasons. (See Exhibit 4.10, “Reasons for Not Hiring.” ) In addition, since a claim under Title VII or other statutes may come long after the decision was made, documentation will help an employer recall the particular reasons why a certain applicant was rejected so that she or he is not left, perhaps on a witness stand, to say, “I don’t remember!”

Exhibit 4.10 Reasons for Not Hiring

Possible Lawful Reasons for Choosing to Reject a Candidate

· No positions available.

· Not interested in positions available.

· Not qualified for positions available.

· Not qualified for position being sought.

· Better qualified persons were hired instead.

· Cannot work hours offered.

· Rejected our job offer.

· Unable to communicate effectively in the English language (if required for position).

· Obviously under the influence of drugs or alcohol during the employment interview.

· Did not return for follow-up interview or otherwise failed to complete the preemployment process.

· Employment interview revealed no interest in type of work.

Moreover, the individuals who originally made the decision about this candidate may no longer even be working with the firm. Finally, a firm may choose to document in order to supplement any statistical data that otherwise might prove a lack of discrimination. This paper trail may serve to prove that others who were similarly situated were treated the same way, not differently. For instance, in a gender discrimination action, the documentation may demonstrate that no one with a certain low level of experience was hired, male or female.

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Management Tips The Employment Relationship

· If you are looking for the most qualified candidate, make sure that you are advertising in all of the places where that candidate might look for employment—not just the obvious places where you are sure to find the same type of workers as those that already work for you.

· Be wary of representations about the firm that are made during recruitment interviews. While, of course, you want to encourage the best candidates to work for your firm, sometimes glowing accounts of life at the firm might cross the line to misrepresentations. Also, be cautious about promises made to prospective employees as these might be construed as part of the individual’s contract with the firm.

· While word-of-mouth recruiting, nepotism, and promoting from within may appear on the surface to be an easy method for locating a new employee, these methods are likely to produce new employees quite similar to your present employees. Make sure that you employ additional methods to prevent discrimination in developing your applicant pool.

· Take a look at your written applicant form. Does it ask for any information that is not relevant to the candidate’s potential ability to do the job? Is there any information upon which you are prohibited from basing an employment decision, such as age?

· Background checks are relevant to most positions. If you fail to conduct a check, you might be liable for any actions that you would have learned about in the check, such as previous workplace violence. From a cost–benefit perspective, conducting the check usually wins.

On the other hand, some might argue that documentation also may serve to demonstrate facts to which the employer does not want to be bound. Once the reason for failing to hire is on paper, the employer is now bound to use that, alone, as the reason for the decision. Further, while any one decision may seem appropriate, systematic documentation of these decisions may demonstrate a pattern of adverse impact that one might not notice if nothing is ever recorded. But, just because the employer can document this information more easily, this does not mean that it is not able to be recorded at all by others. So, in the long run, it is in the employer’s best interests to document, document, document so that it is in the best position to know its own vulnerabilities and make changes, where necessary, before it is too late—and much more expensive—to do so on its own.

Employers may then discover problem areas and respond appropriately and lawfully to them once observed. As long as an employer’s policies about hiring are consistently applied and are reasonable, there should be no problems—whether recorded in writing or not.

Testing in the Employment Environment

The third step beyond recruitment and information gathering is to hone in on the particular information that would tell the employer if this is the right worker to satisfy the job’s essential requirements. Testing may allow the employer to do so. page 173However, while preemployment testing can help locate ideal employees, it also may land the employer in court. Managing the risk created by use of preemployment tests requires an understanding of the types of preemployment tests used, the benefits they offer, and their possible costs, beyond the monetary expenditures involved in testing. This balance is critical, given the high rate of résumé fraud as discussed earlier in the chapter.

Note also that, while much of this section refers to preemployment testing, the laws discussed also apply to testing throughout the employment relationship.

Preemployment testing began in the 1950s as a response to the inefficiencies that were purportedly present in American business. Since that time, preemployment testing has been considered necessary to the selection process. The majority of selection tests originally given were conducted as a means of bettering the company’s position in a competitive market. Testing was seen as the answer to workplace personnel problems, ineffective hiring programs, and the inappropriate job placement of hirees. Employers believed they would be more competitive if they could test applicants to “weed out” those who failed the tests. However, many managers administered tests that had never been validated as indicators of performance or were not specifically job-related in any way. (See Exhibit 4.11, “Balancing the Interests in the Testing Debate.” )

preemployment testing

Testing that takes place before hiring, or sometimes after hiring but before employment, in connection with such qualities as integrity, honesty, drug and alcohol use, HIV status, or other characteristics.

Exhibit 4.11 Balancing the Interests in the Testing Debate

LO6

Testing in the workplace has taken two forms: tests for the purpose of finding the best individual for a position and tests to ensure that the individual is free of problems that would prevent her or him from performing the position’s functions. Examples of the former include achievement tests and personality indicators. The problem with this type of eligibility test is that, while appearing facially neutral, it may have a disparate impact on a protected class. Pursuant to Title VII of the Civil Rights Act of 1964, where adverse impact has been shown, the test may still be used if it has been professionally developed and validated (discussed later in this chapter). If used properly, however, a validated test not only will determine page 174for the employer the most appropriate applicant for the position but also may reduce the chance for discriminatory choices based on conscious or subconscious employer bias.

The latter form of examination refers to tests for ineligibility, such as for drug and alcohol abuse and other impairments that may limit an applicant’s ability to perform. Drug and alcohol addictions have become pervasive issues in our society, and employers are often concerned about hiring employees with a drug or alcohol addiction.

The challenges of addiction have permeated almost every facet of our lives, including the workplace. Employers have institutionalized prevention programs, not only for the safety of their workers but also in an effort to ensure high productivity and quality output. As technology has improved, impairment tests have become more efficient, less expensive, and therefore more prevalent.

In an effort to protect individual employee rights, courts do a balancing test to determine the legality of ineligibility testing. The courts weigh the conflicting interest of the employer in securing a problem-free or substance-free workplace against the privacy rights of the employee and protections against self-incrimination. The California Supreme Court ruled, for example, that a city’s drug-testing program did not violate an individual’s right to privacy so long as all job applicants were required to submit to suspicionless drug testing as part of a preemployment medical examination. 30

As many of the protections offered to the employee come from the Constitution (Fourth Amendment protection against unreasonable searches and seizures, Fifth Amendment right against self-incrimination, and Fifth and Fourteenth Amendments’ protections of due process), government employees and contractors generally receive greater protection in these areas than do employees in the private sector. However, state constitutions can be a source of protection in the private sector as well. The issue of privacy rights is more completely discussed in Chapter 14 . This discussion, instead, will be concerned with the potential for discrimination in the course of testing procedures and requirements and the various statutes that protect against related discrimination.

Legality of Eligibility Testing

Eligibility testing refers to tests that an employer administers to ensure that the potential employee is capable and qualified to perform the requirements of the position. Some tests also are used to determine who is most capable among applicants. These tests may include intelligence tests, tests of physical stamina, eye exams, tests for levels of achievement or aptitude, or tests for the presence of certain personality traits. Tests for ineligibility, on the other hand, test for disqualifying factors, for example, drug and alcohol tests, polygraphs, and HIV testing.

eligibility testing

Tests an employer administers to ensure that the potential employee is capable and qualified to perform the requirements of the position.

Of course, a test may cross the line between the two. For instance, an employer may administer a preemployment, post-offer, medical exam to determine whether the applicant is sufficiently healthy to perform the job requirements. If the individual fails the medical examination, the test has determined that she or he is not qualified for the position and, therefore, the offer may be rescinded.

page 175Employers may conduct eligibility tests for a variety of reasons. For example, the position may require a unique skill for which the employer wishes to test the applicants. Those applicants who possess that skill will continue in the application process. Or perhaps the employer may need to ensure that the applicants meet minimum standards to satisfy requirements of the position. For instance, an English language competency examination for all applicants for customer relations positions or an eye exam may be required for all potential bus drivers.

These tests, however, in their implementation may have a disparate impact on members of a protected class. To illustrate, the employer’s test for English language competency would have an adverse impact on individuals of non–English-speaking origin. Where discrimination on the basis of national origin has been shown, the employer may continue to use the test only where it can establish that the requirement is a bona fide occupational qualification. For instance, the Seventh Circuit held in Melendez v. Illinois Bell Telephone Co. 31 that the employer’s aptitude test had a disparate impact on Latinx job applicants because there was no significant correlation between an applicant’s test score and his or her ability to perform the duties of an entry-level manager. The plaintiff’s expert testified in that case that the aptitude tests could “predict a person’s job performance only 3 percent better than chance alone.” This conclusion will be discussed in more detail in Chapter 7 .

Eligibility tests that have been professionally developed, such as medical licenses, are specifically exempt from claims of disparate impact, as long as the test is not designed, intended, or used to discriminate on the basis of membership in a protected class. For an eligibility test to be legally validated as an effective gauge of performance other than through this exemption, an employer must show that the test is job-related and consistent with business necessity .

business necessity

Defense to a disparate impact case based on the employer’s need for the policy as a legitimate requirement for the job.

For example, most people would agree a test of general math is probably related to successful performance as a cashier. Thus, even if this type of test had disparate impact against a particular group, it would be allowable if the employer provided job analysis data supporting its claim that math skills were required to perform the job. In general, the more abstract the trait the instrument purports to test (such as “creativity”), the more difficult it becomes to establish evidence of validity. Note that a test may be challenged if a less discriminatory alternative exists.

job analysis

Information regarding the nature of the work associated with a job and the knowledge, skills, and abilities required to perform that work.

Test Validity - Confirming capacity to do a job

In 1975, the Supreme Court decided Albemarle Paper Co. v. Moody, 32 a seminal case with regard to test validation. In that case, Albemarle Paper imposed a requirement that those in skilled labor positions have a high school diploma and pass two tests. The Court found it a critical error that Albemarle Paper made no attempt to validate that the tests were related to the job; instead, the employer simply adopted a national norm score as a cutoff point for its new applicants. The Court held that “discriminatory tests are impermissible unless shown, by professionally acceptable methods, to be predictive of or significantly correlated with important elements of work behavior that constitute or are relevant to the job or page 176jobs for which employees are being evaluated.” Because of defects in the validation process, the court found that Albemarle was liable for discrimination for failure to evidence job relatedness of a discriminatory test process.

Recall Wole’s on-site timed test in Scenario 2 at the beginning of the chapter? He wanted to determine applicants’ actual ability with regard to the specific activity they would be performing in their new position. Because the test is correlated with the work that candidates would be conducting in their eventual roles, Wole could argue that he should be permitted to use the test in his selection process. The next step would be to determine whether the test is sufficiently validated. See below to figure out what type of test validation Wole would be considered to have used and whether he meets the standards of that strategy.

In 1978, the EEOC, with the assistance of several other government agencies, developed the Uniform Guidelines on Employee Selection Procedures as a framework for employers in connection with the determination of the proper use of tests and other selection procedures. Where a selection test has been shown to have an adverse impact on a protected class, the guidelines identify three approaches to gathering evidence of validity; the choice of validation strategy depends on the type of inference the user wishes to draw from the test scores. The guidelines define an adverse impact on a protected class as any procedure that has a selection rate for any group of less than 80 percent of the selection rate of the group with the highest rate.

validation

Evidence that shows a test evaluates what it says it evaluates.

The most traditional type of test validation is criterion-related validity. To validate using criteria, one collects data relating to job performance from a simulated exercise or on-the-job measures of performance. The test is developed using these measurements of critical work behaviors once a systematic relationship between the criteria and the test scores has been demonstrated.

The second form of validity that is identified by the guidelines is content validation. Content validation is based on a careful job analysis and definition that identifies important tasks, behaviors, and knowledge that the job requires. The test is then developed involving a representative sample of these tasks, behaviors, and knowledge. Employers should be particularly concerned with this type of validity during test construction, as there is a vulnerability toward lack of representativeness at this stage.

The third strategy to validate tests under the guidelines is construct validity, an approach that is generally most useful when the employer is seeking to measure a psychological characteristic such as reasoning ability, introversion (a personality characteristic), leadership behaviors, and others. Construct validation is a relatively technical area, dependent on intercorrelation of test items, but relevant for employers are the following considerations. First, the characteristic sought needs to be important for job performance. As with content validity, this is done through the use of careful job analysis. In addition, the characteristic should be well defined.

In a 2012 case that took more than 15 years to resolve, a New York district court invalidated a test used by the New York school system to license teachers. A class of teachers had challenged the test in 1996, claiming that it was not a valid measure of qualification to teach. Further, the teachers charged, the test disparately impacted African-American and Latinx test-takers, both of who passed at a rate of 60 percent page 177when taking it for the first time, while Caucasians passed the test at 90 percent. At trial, test developers were unable to demonstrate a significant relationship between the test content and job content. The court ruled that a proper job analysis had not been conducted prior to use of the test. 33 As this case demonstrates, if a test results in a disparate impact, its relevance to job qualifications must be substantial.

Integrity and Personality Tests

Because employers have been restricted in their use of polygraph tests (to be discussed in the next section), many have resorted to subjective tests that purport to measure personality, honesty, or integrity through analysis of written or oral answers to numerous questions.

As of 2014, 60 percent of companies used some sort of assessment tool as part of the hiring process, and the assessment industry grew 30 to 40 percent from 2010 to 2015. 34 Preemployment testing includes assessment of general cognitive ability, math and language skills, as well specific job-related competencies. While cognitive ability tests continue to be the most commonly used form of preemployment testing, personality and integrity tests are being used more and more frequently, although it is unclear what proportion of testing they comprise. 35

There are a number of traits for which employers test but only general agreement that attention to detail (conscientiousness) has a strong correlation to on-the-job behavior. 36 Because of research that demonstrates that intentional faking can be successful, 37 their results have been deemed suspect by courts. However, perhaps because the tests have not been shown to have a consistently adverse impact on any one protected group, employers continue to use them to measure a wide variety of constructs, such as honesty, integrity, propensity to steal, attitude, and counterproductivity.

As of 2015, almost 30 percent of people 18–24 had taken a personality test for work while far fewer older workers had the same experience. However, Fortune 100 companies make far more use of them—a whopping 40 percent ask applicants to complete a psychological test before they will be made an offer of employment. 38

Personality or psychological tests for preemployment selection screening, however, must be used with caution. Their use pre-offer is inconsistent with the Americans with Disabilities Act. In 2011 the EEOC received 164 complaints about such testing. 39 The Seventh Circuit upheld a claim against an employer on the basis of disability discrimination because of its use of one of the most popular personality tests, the Minnesota Multiphasic Personality Indicator. 40 In a class action lawsuit against the furniture rental company Rent-a-Center, the court found that the use of the screening test would likely exclude employees with mental impairments from promotions. In this case, the court noted that the ADA limits medical exams as a condition of employment; they may only be required after the offer is made and, even then, only when all entering employees are required to take the test, any medical results are maintained in a confidential manner, and the “examination or inquiry is shown to be job-related and consistent with business necessity.” 41 Simply because a test is an accepted psychological measure does not make that test relevant to a particular job, nor does it validate its use in any situation.

page 178Personality tests should not be confused with intelligence tests, which have suffered a great deal of criticism in connection with their potential for disparate impact discrimination against various minority groups. Notwithstanding these concerns, basic intelligence testing does remain one of the single best predictors of job performance across all jobs. 42

Physical Ability Tests

Physical ability tests are administered to applicants seeking particularly physically demanding jobs in order to increase the likelihood that candidates will be able to perform the essential physical functions of the job in question. General tests of fitness may no longer be an appropriate means of testing for physical fitness for a particular position since these tests might exclude individuals who could still perform the essential functions of that position. For instance, physical ability tests in the past might have required applicants to perform sit-ups, lift weights, and run certain distances—not all of which might be required by every job. The logic of this test approach is that those who do better on these events are more physically fit and thus better able to perform the physical tasks of any job; however, as we now know, there is not always a correlation between being able to pass a physical exam and being able to perform a specific job. Today, the employer must be able to show that the physical test is related to an essential function of the job. 43

Under current laws, physical ability testing usually results in some type of job simulation. For example, a physical ability exam for entry-level firefighters might require applicants to drag hoses, open fire hydrants, or climb ladders. Job simulations imply a content approach to test validation because the test components are direct samples of the job domain. This approach to physical ability testing is used extensively in the public sector.

Medical Tests

Many employers require preemployment, post-offer medical tests to ensure that the applicant is physically capable of performing the requirements of the position. Medical examinations are prohibited only prior to the offer in order to protect against wrongful discrimination based on a discovered disability. Note that testing for marijuana is not considered a medical test, even though 23 states and the District of Columbia have legalized possession and use of limited amounts of marijuana for medical purposes. 44 Furthermore, the Americans with Disabilities Act of 1990 does not protect individuals who use marijuana for medical purposes.

Medical examinations subsequent to the offer of employment, but prior to the actual employment, are allowed for the purpose of determining whether an employee will be able to perform the job for which she or he has been hired. The order in which the employment offer is made and the medical test is administered is important. For example, in one case, an offer was made, conditional on a drug test, medical examination, and background check. The employee happened to do the medical examination first. When the blood test uncovered the employee’s HIV-positive status, the employer rescinded the offer. However, the employee page 179prevailed in court. The court found that no medical examinations were permitted until after all of the non-medical aspects of the application process, including the background check. 45 (See Exhibit 4.12, “Timing of Testing Processes.” )

Exhibit 4.12 Timing of Testing Processes

All employees within the same job category must be subject to the same medical examination requirement; individual applicants may not be singled out. In addition, all information generated through the examination process must be maintained in confidential files, separate from other general personnel-related information.

Subsequent to the applicant’s employment, no medical examination may be required unless the test is job-related and justified by business necessity.

Legality of Ineligibility Testing

Despite the fact that the U.S. Constitution only protects employees from invasive or wrongful action by the state, an employee may make a number of possible claims against testing. For example, in 2014, a U.S. District Court in Florida declared unconstitutional the City of Key West’s policy requiring applicants for City jobs to be drug tested. A potential employee objected to the City’s across-the-board drug testing (in other words, testing without any suspicion) and the city revoked her job offer. The court rejected the City’s position that it should be permitted to categorically drug test all applicants, because the City failed to demonstrate “a special need or important governmental interest” that justified the policy’s Fourteenth Amendment intrusion. 46

Portions of state constitutions, state statutes, and local laws establish private-sector requirements for workplace testing. For example, San Francisco has enacted an ordinance that requires reasonable suspicion based on evidence of job impairment or danger to others before testing is deemed appropriate. Mandatory or random testing would not be allowed in this jurisdiction.

There is also some support for a claim of common-law invasion of privacy in connection to private-sector testing, under certain circumstances. 47 We will examine the balance of rights surrounding drug testing in much greater detail when we discuss privacy issues in Chapter 14 .

page 180Generally, congruent with fundamental theories of employment law, a discharge resulting from an employee’s failure to take a test for ineligibility is protected under the employment-at-will doctrine. The employment relationship is based on the consent of both parties; if the employee does not wish to be subject to various requirements or conditions of employment, the employee may refuse and leave. If the employee, for instance, is uncomfortable with the idea of random drug testing, that employee may quit and work in an environment in which she or he is more comfortable.

Drug and Alcohol Tests

One popular form of preemployment testing includes screening for drug and alcohol use. Illegal substances are prevalent in workplaces, affecting approximately 20 percent of the U.S. workforce, with some estimates going much higher. 48

The cost of substance abuse in the workplace in the form of lost productivity amounts to approximately $276 billion per year, and alcoholism is specifically responsible for at least 500 million lost workdays each year. 49

Additional costs to businesses of employee substance abuse are difficult to quantify, but include:

· Increased healthcare costs (35 percent of emergency room patients with an occupational injury were at-risk drinkers);

· Increased insurance costs (workers with alcohol problems are 2.7 times more likely than workers without drinking problems to have injury-related absences);

· Workers’ compensation claims (substance abusers file three to five times as many claims);

· Reduced productivity (one-fifth of workers and managers report that a co-worker’s drinking jeopardized their own productivity and safety);

· Higher turnover (workers who report having three or more jobs in the previous five years are about twice as likely to be current or past year users of illegal drugs). 50

The enormity of these figures is one of the reasons why as of 2015, between 48 and 58 percent of U.S. workplaces test for drugs, including most larger corporations and nearly all of the Fortune 500. 51 While it might seem clear why an employer would want to ensure its employees and contractors are not affected negatively by the use of prohibited substances (or the abuse of permitted substances), the question of whether to institute a testing program is not as easy as it might seem. Consider the costs weighed against the benefits in the next sections.

Costs of Drug Testing Programs The basic costs of testing, itself, can run high when you multiply the cost of each test by the number of employees a firm chooses to test. Tests per employee can run anywhere from $10 to $80, depending on the type of test involved. 52 Additional costs mount as you consider the price of program administration, such as grievances and lawsuits. Costs also include any associated treatment and rehabilitation services offered to those workers who test positive (regardless of whether their drug use poses dangers in the workplace that would require such intervention).

page 181Testing may also lower workplace morale and can be experienced as demeaning and degrading, particularly where it involves urine collection under direct observation. Additionally, the significant minority of Americans who are opposed to drug testing (around 40 percent) includes a large number of non-drug users who regard drug testing as an unjustified intrusion into their private lives. These potentially well-qualified candidates may be reluctant to work for a company that conducts preemployment drug testing, a particular concern where employers are recruiting from a small pool of highly skilled workers.

Most importantly, there is little empirical evidence to clearly establish a relationship between drug testing and reduced costs to employers. Many of the large, cross-industry studies that seem on their face to show the benefits of drug testing are funded by the drug-testing industry and also rely only on surveys of human resources professionals’ attitudes toward drug testing, rather than on actual cost–benefit analyses. The studies that do demonstrate an association between drug testing and savings for business are often specific to one particular industry and may not hold true beyond that context. Finally, studies suggest that drug testing might not have the intended benefits in some environments, such as discouraging drug use overall.

Benefits of Drug Testing Programs On the other hand, there are a number of reasons why an employer may want to test for drug and alcohol use. First, the employer may wish to reduce workplace injury or to provide a safer working environment. For instance, drug testing has been shown to reduce the number of workplace injuries and personal injury claims. 53 Second, an employer may use drug tests to predict employee performance or to deter poor performance. A 2011 study by the Drug and Alcohol Testing Industry Association found that drug testing improved employee productivity, decreased absenteeism, and reduced turnover as well as employee theft and behavioral problems. 54 However, it should be noted that the validity of such studies, and the benefits of workplace drug testing broadly, are disputed. 55 Third, testing can reduce the employer’s financial responsibility to the state workers’ compensation system. The use of an illegal substance, which contributes to the claimant’s injury, may serve as a defense to the employer’s liability.

Thus, to be most effective, any workplace substance abuse program should incorporate (1) a written drug policy that has been drafted after input from employees, (2) a supervisory training program, (3) an employee education and awareness program, (4) access to an employee assistance program, and (5) a drug-testing program, where appropriate.

Federal and State Drug Testing Laws

In response to the continued problem of drugs in the workplace and injuries and accidents related to their use, former President George H. W. Bush enacted the Drug-Free Workplace Act in 1988, which authorized the drug testing (also called biochemical surveillance, in more legalistic terms) of federal employees under certain circumstances. It also required government service contractors with page 182contracts of $100,000 or more to be performed within the United States to publish a statement about the Act, to establish a drug-free awareness program, and to give each employee a copy of the workplace policy. (See Exhibits 4.13, “Executive Order 12564, September 15, 1986: Drug-Free Federal Workplace Act,” and 4.14, “Benefits and Drawbacks of a Drug-Free Workplace Policy (DFWP).” )

Exhibit 4.13 Executive Order 12564, September 15, 1986: Drug-Free Federal Workplace Act

I, Ronald Reagan, President of the United States of America, find that:

Drug use is having serious adverse effects upon a significant proportion of the national work force and results in billions of dollars of lost productivity each year;

The Federal government, as an employer, is concerned with the well-being of its employees, the successful accomplishment of agency missions, and the need to maintain employee productivity;

The Federal government, as the largest employer in the nation, can and should show the way towards achieving drug-free workplaces through a program designed to offer drug users a helping hand and, at the same time, demonstrating to drug users and potential drug users that drugs will not be tolerated in the Federal workplace.

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Exhibit 4.14 Benefits and Drawbacks of a Drug-Free Workplace Policy (DFWP)

THE BENEFITS

· Ridding the workplace of substance abuse can improve morale, increase productivity and create a competitive advantage.

· A comprehensive program may qualify an employer for discounts on workers’ compensation and other insurance premiums.

· The prevention of a single accident or injury may pay for the entire program costs for several years.

· Some contractors may need to have a DFWP to be eligible for business.

· Many employers have successfully formulated policies which deal with ethical and privacy issues, and have successfully controlled their responsibility for, and the costs associated with, treatment and rehabilitation benefits.

· Unions have initiated DFWPs with employers to promote good public relations and recapture work for their members.

· Having a DFWP sends a very clear message to employees, their families and the community as to the company’s position on illegal drug use.

THE DRAWBACKS

· A DFWP can increase distrust between management and workers, and degrade morale and productivity in some workplaces.

· A comprehensive DFWP could add significantly to the cost of doing business.

· False accusations, misidentification of employees as drug users, unjustified dismissals and violation of confidentiality obligations could prompt burdensome litigation.

· Identifying substance users may entail an obligation to provide costly counseling and treatment for a relapsing condition. It is not always easy to contain the financial drain, and health insurance premiums could rise.

· A DFWP, particularly one that features drug testing, can raise serious ethical and privacy issues.

· Where the workplace is organized, the employer faces additional negotiations with the union.

DRUG-FREE WORKPLACE POLICY CHECKLIST

1. What is our current company policy regarding the use of alcohol and other drugs?

2. How much of a drug or alcohol problem does our company have at the present time?

3. What is the nature of the problem (absenteeism, quality, productivity, safety, etc.)?

4. How much does this problem cost the company?

5. What type of DFWP would be most likely to improve the situation?

a. urine testing

b. impairment testing

c. under the influence testing

d. better supervision and quality control

e. Employee Assistance Plan

f. a combination of the above

6. If testing is involved, who will be tested?

a. applicants

b. employees in safety sensitive positions

c. all employees

7. Under what circumstances will testing be done?

a. preemployment

b. for cause

c. random

d. combination

8. What will be done with those who fail the test?

9. What action will be taken regarding those who refuse to be tested?

10. What would be the costs of such a program?

11. What would be the benefits? How much would the problems described in 3 and 4 above be reduced by the program? How great is the financial benefit of the reduction?

12. Do the projected benefits justify the costs?

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13. Which proposed components of the DFWP are cost effective?

14. How do the company’s employees feel about the proposed DFWP? Would they be more supportive of another option? Have we sought their input?

15. (If the company is organized) Has the proposed DFWP been negotiated with the union?

16. Is the proposed DFWP consistent with company values?

17. Is the proposed DFWP legal in the jurisdictions where it will be implemented?

CHOOSING A POLICY

The first step in developing a policy is to decide whether to have a DFWP. Some employers may choose instead to judge employees simply on the basis of performance. Once a company has made a basic policy choice, it can consider in more detail the objectives it intends to achieve. There are a variety of possible motivations for pursuing such a program:

1. Complying with legal requirements. Under federal law, some employers are required to establish DFWPs, including engaging in drug (and possibly alcohol) testing.

2. Reducing liability risks. Having a DFWP may be viewed as assisting in the defense against certain legal actions, although DFWPs may also generate other kinds of claims.

3. Reducing business costs due to accidents, absenteeism. and ill health. Eliminating drug use is seen as a way to promote safety and efficiency, improve the health of the workforce and curtail use of sick leave, medical benefits, and workers’ compensation.

4. Ensuring the integrity of employees. A potential cause of theft, pilferage, and blackmail is removed, and workers’ confidence in each other is enhanced.

5. Determining fitness for duty and corroborating evidence of misconduct. A DFWP may help establish uniformity in standards of behavior and in discipline imposed. To establish the DFWP the employer must determine the proper balance between punitive and rehabilitative elements of the program. Being identified as a substance abuser may lead to discharge, but there may also be an attempt at rehabilitating employees and returning them to duty.

6. Assuring public confidence in the business. The employer prevents embarrassment by taking genuine steps to deal with employees who are affected by substance abuse.

7. Promoting a “drug-free” society. Many employers, seeing themselves as responsible members of society, sense a moral obligation to support law enforcement efforts against illicit drugs. NIDA has stated its “belief that the fight against illegal drugs in the workplace is critical to the nation’s war against drug use.” It has encouraged private employers to adopt DFWPs.

Source: ABA Section of Labor and Employment Law, Attorney’s Guide to Drugs in the Workplace (1996).

In response to the Act, all federal agencies established individual drug-use testing programs designed to ensure the safety and security of the government and the public. For example, the Department of Defense has an employee assistance program that focuses on counseling and rehabilitation, in addition to self and supervisory referrals to substance abuse treatment clinics. In addition, the Act requires that federal contractors and grant recipients satisfy certain requirements designed to eliminate the effects of illicit drugs from the workplace. Accordingly, some federal contractors and all federal grantees have to agree that they will provide drug-free workplaces as a precondition of receiving a contract or grant from a federal agency. 56

The Act also provides that, for a drug-use testing program to be legal, federal employers must post and distribute a policy statement explaining that the unlawful manufacture, distribution, dispensation, possession, or use of controlled substances is prohibited. Discipline or sanctions against the offending employee are left to the employer’s discretion. However, if a criminal conviction arises from a workplace substance abuse offense, the employer is required to administer an employment sanction or to advise and direct the employee to an approved substance abuse treatment program. To protect the employee’s right to due process, the employer must educate the workforce of any drug/alcohol policy and testing procedures. In addition, laboratory and screening procedures must meet certain standards. In one case, Fraternal Order of Police, Lodge No. 5 v. Tucker, 57 the court concluded that the employees were denied due process because they were not informed of the basis of the employer’s suspicion and because they were not offered the opportunity to rebut the employer’s claims.

The Drug-Free Workplace Act also allows preemployment screening of job applicants. Many employers choose to implement preemployment drug testing in their workplace to avoid the costly medical care required to treat substance abuse. 58

The Supreme Court has weighed in with regard to the government’s use of drug-screening programs. For example, National Treasury Employees Union v. Von Raab 59 is a critical statement by the Supreme Court on the subject of drug-screening program standards for safety-sensitive positions and can be found as Case 2 at the end of this chapter. In National Treasury Employees Union, the Supreme Court found that that suspicionless drug testing of U.S. Customs Service employees applying for promotion to positions that involved interception of illegal drugs or required them to carry firearms was reasonable under the Fourth page 185Amendment, and noted that the “government’s compelling interest in safeguarding borders and public safety outweighed diminished privacy expectation in respect to intrusions occasioned by [a] urine testing program, which was carefully tailored to minimize intrusion.” 60 However, in Chandler v. Miller, 61 the same Court held that Georgia’s requirement that candidates for state office pass drug tests did not fit within the closely guarded category of constitutionally permissible suspicionless searches.

State laws also govern substance abuse testing. Therefore, employers are cautioned to evaluate programs according to the laws of the state or states in which their operations are located. For instance, the laws of California include the privacy provisions of its state constitution, which, unlike most state constitutional provisions, extend to private employers. Random testing is permitted in California for those in safety-sensitive work (though that definition remains open to interpretation) and an employer is under no obligation to hire or retain individuals who fail a drug test.

Drug Testing and “Legal” Marijuana Use

Attitudes toward marijuana use have become more lenient over the past couple of decades. As of 2016, 25 states, the District of Columbia, Guam, and Puerto Rico have legalized the use of marijuana for medical purposes. 62 Additionally, as of 2016, Alaska, Colorado, Oregon, Washington, and Washington, D.C., also have legalized marijuana for recreational use. Other states are expected to pass similar laws in the near future. A few cities also permit the use of marijuana. 63 Despite the recent legalization, using marijuana is still a criminal act under federal law, listed in the same category as cocaine, heroin, LSD, and ecstasy.

Notwithstanding the above, employers in all 50 states and Washington, D.C., are permitted to regulate the use of marijuana by employees while they are at work. 64 Courts have upheld employers’ right to discharge employees who have positive drug tests. For example, in 2015 the Colorado Supreme Court held that an “employee could be terminated for his use of medical marijuana.” 65 In addition, the Americans with Disability Act does not require employers to accommodate the use of marijuana, even for medical purposes.

As laws on marijuana use continue to change, employers should review their substance abuse policies to ensure that their restrictions concerning marijuana use are consistent with the restrictions permitted in their respective jurisdictions. Employers should also review their job descriptions in order to ensure appropriate categorization of safety-sensitive positions or otherwise to ensure that they justify a policy against marijuana use for testing purposes. As with all types of preemployment testing, employers should be sure to treat all similarly situated employees and applicants in the same manner. 66

Private-Sector Employers and Substance Testing While the Drug-Free Workplace Act does not apply to private-sector employers, an increasing number of private employers have implemented drug programs for their employees. Today, most of the larger corporations, including perhaps all of the Fortune 500 page 186companies, use some form of drug testing. Furthermore, according to one estimate, 45 to 50 million workplace drug tests are taken annually in the United States. 67 Private employers have generally followed the guidelines set forth in the Act in the institution of their own programs, and such programs have generally been upheld where reasonable procedures are followed.

Further, on June 23, 1998, the House of Representatives passed the Drug-Free Workplace Act of 1998, aimed at providing small businesses—which often lack the resources and infrastructure to conduct employee drug tests—with financial resources and technical assistance for implementing drug-testing programs. The three purposes of the Act are to (1) educate small business concerns about the advantages of a drug-free workplace, (2) provide financial incentives and technical assistance to enable small business concerns to create a drug-free workplace, and (3) assist working parents in keeping their children drug free. The Drug-Free Workplace Act of 1998 provides a $10 million grant program for nonprofit organizations that have the ability to provide technical assistance to small businesses in establishing drug-free policies.

Many states have enacted legislation designed to protect the privacy of private-sector employees. 68 These state laws vary in their approach; some states offer a great deal of protection for employees and may be classified as pro-employee (such as Connecticut, California, and Minnesota), while other states allow testing after satisfaction of only modest burdens and are classified as pro-employer (such as Utah).

The Americans with Disabilities Act and Substance Testing One additional issue raised by drug and alcohol testing involves the Americans with Disabilities Act. The Act, which applies to private-sector employers and is discussed in much greater detail in Chapter 13 , provides that individuals who currently use illegal drugs are not considered individuals with disabilities. However, if an employee or applicant is pursuing or has successfully completed a rehabilitation program and demonstrates that she or he has a disability based on prior use, she or he is covered by the Act and therefore entitled to reasonable accommodation.

Polygraphs

A relatively newsworthy area of testing is the polygraph or lie detector. While the actual number of polygraph tests administered is unknown, it is instructive that there are over 3,500 polygraph examiners practicing in the United States. There are currently 31 schools of polygraph analysis accredited by the American Polygraph Association, with 17 located in the United States. 69

polygraph

A lie-detecting device that measures biological reactions in individuals when questioned.

A polygraph test measures three physiological indicators of arousal: rate and depth of respiration, cardiovascular activity, and perspiration. The examiner asks a structured set of questions, and the subject is evaluated as honest or deceitful based on the pattern of arousal responses. The test has been criticized, however, because stimulants other than dishonesty may produce similar effects in an individual subject.

page 187The desire of employers to use polygraphs is perplexing when one considers the lack of evidence of their reliability. After reviewing the balance of research in connection with polygraphs, the Supreme Court in 1998 determined in United States v. Scheffer 70 that “[t]here is simply no consensus that polygraph evidence is reliable.”

The National Academy of Sciences (NAS) conducted a subsequent comprehensive review of the research on polygraphs and found that the majority of polygraph research is “unreliable, unscientific and biased,” noting that 57 of 80 studies that polygraph proponents rely on were flawed. Studies have reported accuracy ranging from 90 percent to as low as 50 percent (that is, no better than chance). The NAS report concluded that while polygraph testing may have some usefulness (resulting from subjects’ belief in its reliability), there was “little basis for the expectation that a polygraph test could have extremely high accuracy.” 71 Although the report urged federal agencies to stop using the tests as a screening technique, 15 agencies—from the FBI to the Postal Inspection Service—have continued or expanded their screening programs. Only the Department of Energy dramatically scaled back on screening after its own scientists protested. 72

Because of the large number of false positives and inaccuracies of the polygraph test, a loud outcry from those wrongly accused of improper behavior resulted in the enactment of the federal Employee Polygraph Protection Act (EPPA) of 1988. To a great extent, this Act put an end to private-sector use of the polygraph in selection and greatly restricts its use in many other employment situations.

The Act provides that an employer may not

1. Directly or indirectly require, request, suggest, or cause any employee to take or submit to any lie detector test (e.g., a polygraph, deceptograph, voice-stress analyzer, psychological-stress evaluator, and any similar mechanical or electrical device used to render a diagnostic opinion about the honesty of an individual).

2. Use, accept, refer to, or inquire about the results of any lie detector test of any job applicant or current employee.

3. Discharge, discipline, discriminate against, or deny employment or promotion to (or threaten to take such adverse action against) any prospective or current employee who refuses, declines, or fails to take or submit to a lie detector test or who fails such a test.

However, see Exhibit 4.15 for EPPA employer exemptions, as well as certain conditions under which private employers are permitted to administer a polygraph test.

Exhibit 4.15 Employers Exempted from EPPA

The Employee Polygraph Protection Act also provides that, except in limited settlement-related circumstances, employees may not waive their rights under the Act, nor is an employer allowed to offer financial incentives to employees to take the test or to waive their rights.

Violations of the Act are subject to fines as high as $10,000 per violation, as well as reinstatement, employment, or promotion, and the payment of back wages and benefits to the adversely affected individual. The Wage and Hour Division of page 188the Employment Standards Administration of the Department of Labor has the authority to administer the Employee Polygraph Protection Act.

In addition to the regulations enacted by Congress, at least 27 states and the District of Columbia have statutes that either prohibit or restrict the use of polygraph examinations for use in employment decisions. 73 Where a state law is more restrictive than the federal act, the state statute governs.

Genetic Tests

Genetic testing is a scientific development that involves the use of laser and computer technology. Scientists make diagnostic predictions by locating a specific disease-associated gene on an individual’s chromosomes. This type of testing evolved in the 1960s in connection with research regarding individuals who were “hypersusceptible” to chemicals used in certain workplaces. By testing an applicant’s genes, the researchers were able to ascertain which applicants would be expected to experience negative reactions to various chemicals.

genetic testing

Investigation and evaluation of an individual’s biological predispositions based on the presence of a specific disease-associated gene on the individual’s chromosomes.

By the time the Human Genome Project was completed in 2003, which was successful in mapping all of the genes of our human genome, genetic testing was able to provide tremendous amounts of information about an individual. While this information allows us to predict and treat countless health issues, people also began to fear what others might do with this information. There was a concern that employers might require genetic testing, and then treat certain individuals differently if they learned that an applicant or employee had a gene mutation that causes or increases the risk of an inherited disorder, for example. Other questions arose: If this information were uncovered during genetic testing, should the employer tell the applicant of the basis for her or his failure to be hired?

page 189In 2008, the federal government began regulating genetic testing in employment to prevent genetic discrimination. The Genetic Information Nondiscrimination Act of 2008 (GINA) makes it illegal to discriminate against employees or job applicants on the basis of genetic information. Genetic information includes information about an individual’s genetic tests and the genetic tests of an individual’s family members, as well as an individual’s family medical history. Title II of GINA prohibits the use of genetic information in making employment decisions; restricts employers from requesting, requiring, or purchasing genetic information; and strictly limits the disclosure of genetic information. While an employer may access genetic information under a few, extremely limited exceptions under GINA (see Exhibit 4.16 ), an employer may never use genetic information to make an employment decision because genetic information is not seen as relevant to an individual’s current ability to work. 74

Exhibit 4.16 Gina Exceptions

GINA provides six narrow exceptions to its prohibition against accessing genetic information:

1. Inadvertent acquisitions of genetic information do not violate GINA, such as in situations where a manager or supervisor overhears someone talking about a family member’s illness.

2. Genetic information (such as family medical history) may be obtained as part of health or genetic services, including wellness programs, offered by the employer on a voluntary basis, if certain specific requirements are met.

3. Family medical history may be acquired as part of the certification process for FMLA leave (or leave under similar state or local laws or pursuant to an employer policy), where an employee is asking for leave to care for a family member with a serious health condition.

4. Genetic information may be acquired through commercially and publicly available documents like newspapers, as long as the employer is not searching those sources with the intent of finding genetic information or accessing sources from which they are likely to acquire genetic information (such as websites and on-line discussion groups that focus on issues such as genetic testing of individuals and genetic discrimination).

5. Genetic information may be acquired through a genetic monitoring program that monitors the biological effects of toxic substances in the workplace where the monitoring is required by law or, under carefully defined conditions, where the program is voluntary.

6. Acquisition of genetic information of employees by employers who engage in DNA testing for law enforcement purposes as a forensic lab or for purposes of human remains identification is permitted, but the genetic information may only be used for analysis of DNA markers for quality control to detect sample contamination.

Source: U.S. Equal Employment Opportunity Commission, “Genetic Information Discrimination” (undated), https://www.eeoc.gov/laws/types/genetic.cfm (accessed April 22, 2016).

page 190It is important to note that GINA does not protect workers in every circumstance. For example, GINA does not apply to employers who have fewer than 15 employers. It also does not cover people in the military. 75

In addition to GINA, many states have laws that provide additional protection against genetic discrimination. As of 2016, 35 states and the District of Columbia prevent genetic discrimination in employment. 76

One additional issue raised by genetic testing is that genetic irregularities that substantially impair a major life activity may be considered protected disabilities under the Americans with Disabilities Act and the Vocational Rehabilitation Act. A genetic test may encourage discrimination based on myths, fears, and stereotypes about genetic differences.

Unique Considerations of HIV/AIDS Testing

The Americans with Disabilities Act (ADA) and the Vocational Rehabilitation Act protect employees and job applicants from discrimination based on their HIV/AIDS status. Therefore, during the interview process, the ADA limits employers with regard to the questions they can ask surrounding an individual’s medical conditions or HIV status, and prohibits preemployment medical exams. As noted earlier, before making a job offer, an employer may only ask applicants whether they can perform the job with or without accommodation.

With regard to HIV, specifically, the employer may only ask about an employee’s status or conduct a related exam if

1. An employee’s positive HIV status would pose a direct threat to health or safety in the workplace, or knowledge of the employee’s status is vital for the workplace.

2. The inquiry is conducted after the employment offer.

3. The same inquiry is asked of all employees in the same job category.

4. All employees in the same job category are asked to submit to the same medical exams.

This determination must be based on an individualized assessment of the applicant’s ability to safely perform essential job functions. However, arguments for HIV testing in the workplace generally have been unpersuasive. For the test to be justified, employers must demonstrate that the test serves a legitimate business purpose. Because HIV is not transmitted by casual contact of the sort that takes place in a work environment, an HIV test is improper for most positions. Second, the test reports only evidence the subject’s past status; the test does not determine the HIV status of the individual as of the day of the examination. Therefore, unless the employer monitors and restricts the employee’s off-work activities prior to the test and between testing, the inquiry is generally considered inefficient and ineffective.

The Equal Employment Opportunity Commission offers the example of a phlebotomist (someone who is trained to draw blood from a patient) who is HIV page 191positive. The EEOC explains that this employee would not pose a direct threat to a patient based on her or his HIV status and, thus, could not be denied employment because of it. Additionally, an employer’s fear about co-worker reactions to a new hire’s positive HIV status is not a valid reason to deny or withdraw an employment offer. Further, employers who discover that an employee has HIV/AIDS must keep this information confidential, regardless of how they obtain this information. 77

Management Considerations: Testing

There are three possible corporate approaches for testing employees for ineligibility. First, the employer may establish mandatory testing, which requires that all employees be tested for drug or alcohol use or some other form of ineligibility when they enter a specific program or at the time of their annual physical. Second, an employer may implement “probable cause” testing, where an employer tests employees only if there is suspicion of ineligibility, and testing is implemented for the purpose of discovering a safety, conduct, or performance problem. Third, employers may implement random testing.

The decision about what method to use for testing will depend on the goals of the employer. Does it want to test its entire workforce? Or merely potential problem employees? Or merely test after an accident or injury where drug or alcohol use is suspected? In any case, an employer should, first, look carefully at state and local laws in connection with specific test-related legislation, as well as at statutes regarding privacy and so on. Second, the employer should clearly articulate its policy regarding substance use, lie detectors, and other tests, as well as its purpose, the procedure by which the policy is enforced, and the appeals process. Third, the policy must be consistently implemented and diligently documented. Possible human and laboratory errors must be minimized. Fourth, all positive results should be confirmed with additional tests.

Performance Appraisals, Evaluation, and Discipline Schemes

Once a worker is chosen and hired, the next step in the employment relationship involves its management, which might include the employee’s professional development. Generally, employees want to enter organizations and rise as high as they can go, while employers want qualified employees who can handle what must be done to accomplish the job. Employees who want to succeed in their work do so by meeting their employers’ expectations in an exemplary way. Success is usually documented by both sides through performance appraisals (PAs) . Employers wishing to have employees best suited for the job need to identify these employees for promotion, retention, transfers, training, bonuses, and raises; and they gather this necessary information through the periodic evaluation of employees. Disputes may arise when an employer’s expectations of an page 192employee are not aligned with the employee’s understanding of the performance expected or offered; and they are most often brought to light through the evaluation system.

performance appraisal

A periodic assessment of an employee’s performance, usually completed by her or his immediate supervisor and reviewed, at times, by others in the company.

LO7

Above all, the purpose of the performance appraisal should be to identify those characteristics the employer hopes the employee will accentuate and to dissuade the employee from exhibiting characteristics not in keeping with the organization’s objectives. Performance appraisals have the potential for discriminatory effect because discrimination may exist in the way the employer utilizes the evaluations, as well as in the manner the appraisal is conducted.

Employers are not required to maintain poor performers. Termination as a result of inadequate work performance is justified by business considerations. It is the measure of adequacy that often results in an adverse impact or is the consequence of adverse treatment, which must be avoided by employers. (See Exhibit 4.17, “Realities about Performance Evaluations.” )

Exhibit 4.17 Realities about Performance Evaluations

1. An employer might be liable for giving a negative reference even when it is based on a valid performance evaluation.

2. An employer need not lower its standards or qualifications in order to accommodate an individual employee’s or applicant’s needs (such as a disability).

3. Performance appraisal systems, though inherently dependent on the evaluation of workers by other workers, can still rely on objective measures.

4. Performance incentive systems can be effective. They do not involve rewarding workers for doing the basics of their jobs, but instead recognize outstanding performance and leadership.

5. The greater legal challenges in evaluation structures are not always found in the objectives, motivation, or incentives, but often in areas of implementation, monitoring, and accountability.

Of the many ways in which an employer may assess employees’ performance levels, the most efficient and effective methods are those that utilize a variety of schemes to obtain the most complete job-related information.

Legal Implications of Performance Appraisal Systems

Given their potential for subjectivity, as well as biased or skewed results, performance appraisal schemes are susceptible to abuse and criticism. It is undeniable that it is integral to the proper management of any workplace to have the ability to evaluate the performance of its employees, but concerns remain regarding the efficacy and propriety of the evaluation systems available.

Moreover, courts differ greatly in their decisions regarding similar performance appraisal methods; therefore, a rational and predictable conclusion is almost impossible about the propriety of any single method. What one is left with is merely direction.

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Management Tips Testing

· Private-sector employers are not generally restricted by the Fourth Amendment protection against unreasonable searches. Therefore, as a private employer, you are allowed to conduct searches under a lower standard. On the other hand, common-law protections against invasions of privacy do apply in the private sector.

· You have an absolute right to determine whether someone is sufficiently healthy to do a job. The problem arises where your tests don’t quite tell you that information or where you are testing for eligibility beyond the job’s requirements. Make sure that your test will yield results that are relevant to the job in question.

· Health or eligibility testing should be conducted post-offer, preemployment.

· All tests should be validated; that is, they should be shown to test what they intend to test. Using an invalid test might subject you to liability.

· Restrict access to the information gained during testing. If you disclose the information to individuals who don’t have a need to know it, you may be liable for an invasion of privacy or for defamation should the information turn out to be false.

· If you choose to try a polygraph test on workers, be wary of the restrictions imposed by the Employee Polygraph Protection Act.

· Since being HIV-free or AIDS-free is seldom (if ever) a BFOQ, testing for HIV is most likely to be unwarranted and a wrongful invasion of privacy.

Disparate Impact

The legal implications of performance appraisals become relevant when their information is used as the basis for any employment-related decision. The Uniform Guidelines on Employee Selection Procedures apply to “tests and other selection procedures which are used as a basis for any employment decisions.” Therefore, the Guidelines regulate the design and use of performance appraisals. Improper performance appraisal systems are those that do not fairly or adequately evaluate performance but, instead, perpetuate stereotypes that have an adverse impact on protected classes.

Disparate impact may be determined by a number of methods, the most common of which is described in the Guidelines as the four-fifths rule . The four-fifths rule holds that there is a presumption of discrimination where the selection rate (for any employment decision) of the protected group is less than 80 percent of the selection rate of the non-minority group. For example, if the number of males and females at a firm is equal, but the performance evaluation system results in promotions of 85 percent of the males and only 3 percent of the females, a court will presume discrimination. The employer could always attempt to rebut this presumption, but the default is to presume discriminatory reasons for this result.

four-fifths rule

The minority group must perform at least 80 percent (four-fifths) as well as the majority group under a screening device or a presumption arises that the screening device has a disparate impact on the minority group and must be shown to serve a legitimate business necessity.

As with other areas in which disparate impact is shown, the employer may still defend the system used. As long as the performance appraisal was sufficiently job related, there must be some reasonable need for it, and some means by which to page 194ensure the system’s objectivity and fairness. If, for example, a checklist system for appraisal is instituted, the employer must show that the person doing the checking is reasonably free of bias, and that the list itself is a fair representation of what is to be expected of the reasonable or “common” employee. This is called validation and is strictly regulated by the Guidelines.

The U.S. Supreme Court provided some guidance to employers with regard to performance appraisal systems in Ricci v. DeStefano, 78 a decision that demonstrated how prevention of unintentional discrimination against some employees can lead to perceived intentional discrimination against others. Ricci involved a test by the city of New Haven, Connecticut, for promotion of firefighters. The city subsequently learned that the test resulted in a statistically significant lower pass rate for African-Americans than for other employees. Out of concern for potential liability, the city opted not to use the test for promotions. However, New Haven was then sued for discrimination by 18 firefighters (17 white and one Hispanic) who had already passed the test, claiming that they were denied their due promotions.

The court found that tossing out the test results amounted to intentional discrimination against those who did well unless the employer could demonstrate a “strong basis in evidence” that the test would lead to liability. To the contrary, as long as the test was “job related and consistent with business necessity” and the employer did not refuse to use other methods with less discriminatory impact, the employer needed to maintain the original test.

The holding in Ricci provides a strong incentive for employers to examine thoroughly any test before integrating it into an evaluation system. One effective strategy is to evaluate the passing rate of current successful employees in order to establish a benchmark for promotions overall.

Another example is provided by the Fifth Circuit in Rowe v. General Motors, 79 which reviewed a performance evaluation scheme that was based almost entirely on the recommendations of workplace foremen. The court concluded that this practice resulted in discrimination against African-Americans even though, on its face, the practice appeared to be fair and there was no evidence that General Motors had an intent to discriminate. The court explained, “It is clearly not enough under Title VII that the procedures utilized by employers are fair in form. These procedures must be fair in operation.”

Likewise, the court explained, the intent of employers who utilize such discriminatory procedures is not controlling since “Congress directed the thrust of the Act to the consequences of employment practices, not simply the motivation” (emphasis added). This seminal case in this field was decided in 1972 and perhaps a different result might be reached today, depending on the circumstances of a case. However, in that case, the judge remarked, “[w]e and others have expressed a skepticism that Black persons whose positions are dependent directly on decisive recommendations from Whites can expect nondiscriminatory action.” 80

Disparate Treatment

A performance appraisal also may result in disparate treatment, such as where a female employee is evaluated according to different criteria than are the male page 195employees. An example of this type of sexual stereotyping was at issue in the Hopkins v. Price Waterhouse case. 81 In that case, a female accounting executive was refused a promotion to partner based on her performance evaluation. During the evaluation, the plaintiff had been told that she needed to “take a charm school course”; maintain more social grace; “walk, talk, and dress more like a woman”; use less profanity; and act less “macho.”

The Supreme Court ruled in favor of the employee, even though the employer offered evidence of various non-discriminatory bases for the denial of the partnership. The Court found that, as long as the sexual stereotype and discriminatory appraisal were “motivating factors” in the employer’s denial, the motive was illegitimate. This basis was incorporated into Title VII in the Civil Rights Act of 1991, which amended Title VII of the Civil Rights Act of 1964.

While most of us would claim that we rate people based on equivalent factors, research has shown, in fact, that we do not. Raters are often influenced by physical or other traits or attributes such as national origin, age, accent, and so on. Research also has shown that raters can be swayed by physical attractiveness or body type, as well.

For example, a 2004 study found that tall people earn more per inch than their shorter friends. 82 Research shows that obese workers earn less than their non-obese co-workers with obese women faring much worse than obese men. 83 Even hair color can influence how much you earn: A 2010 study found that blonde Caucasian women earn over 7 percent more than non-blonde Caucasian women. 84 Employers can guard against this type of bias through objective and/or practical assessments.

People perceived as more attractive, for example, may be viewed as more intelligent and more competent, which could certainly have an impact on appraisers and their treatment of certain groups. Employers can guard against this type of influence through objective and/or practical assessments.

An employee disputing the performance appraisal also may prove a case using the disparate treatment analysis first articulated in McDonnell Douglas v. Green. 85 The employee must show that he or she

1. Is a member of a protected class.

2. Suffered an adverse employment decision as a result of a performance evaluation.

3. Was actually qualified to perform the responsibilities of the position.

4. Was replaced by someone with similar qualifications who is not a member of a protected class.

In connection with Scenario 3 where Lominy is considering his alternatives with regard to his evaluation of Gordie, Lominy must consider the disparate treatment implications of his decision. If Lominy bends the rules a bit for Gordie, in consideration of his recent life events, he may get into trouble unless he evaluates the life events that take place in the lives of each of his subordinates. Failure to do page 196so would result in his treating Gordie differently, simply because he knows about Gordie’s situation. While this might be fine in Gordie’s mind, the next person to come along might not be so happy about it. In Scenario 3, that is just what happens. Julietta has a record similar to Gordie’s. Suppose that she, too, has some difficulties in her life that have had an impact on her work performance. If Lominy does not consider these difficulties, he will be treating Julietta differently from how he treated Gordie, resulting in disparate treatment.

It is important to be aware of these issues, even where the difference in treatment is not the result of any intentional wrongful discrimination. If Lominy cannot show why there was a difference in the way he treated Gordie and Julietta, it may be difficult to prove that it was not the result of discrimination.

Defamation

Defamation takes place when one person makes an intentional false statement that harms another person. 86 Defamation can occur in connection with the publication of performance appraisals and employers should take similar precautions to avoid liability. (See Exhibit 4.18 .) In this situation, faulty performance appraisals are subject to claims of not only discrimination, but also wrongful discharge or negligent evaluation.

Exhibit 4.18 Defamation by an Employer

Defamation: May exist where the employer:

· States false and defamatory words concerning the employee.

· Negligently or intentionally communicates these statements to a third party without the employee’s consent.

· Thereby subjects the employee to harm or loss of reputation.

In other words, if the employer makes a false statement during the course of an employee evaluation, and that evaluation is transmitted to a third party (such as a future employer), the employee may have a claim for defamation. A false evaluation does not necessarily contain false information, but it may evaluate the employee on improper criteria (data on which the employee was told she or he would not be rated).

An evaluation also may be considered false where the rater does not include information that would explain or justify a poor appraisal, such as the fact that the employee’s poor task completion rate was due to a sight disorder, which has since been corrected. Finally, a false evaluation may exist where a rater revises a prior evaluation in an attempt to justify subsequent adverse action taken against the employee. Truth is a complete defense to defamation, and truth and honesty from raters should be ensured throughout the appraisal process.

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Performance Evaluations for People with Disabilities

A unique legal issue arises in connection with performance appraisals of individuals with disabilities. An employer is not required to lower quality or quality standards to accommodate an employee with disabilities; however, it must provide reasonable accommodations to enable the employee to perform her or his essential responsibilities, while not subjecting itself to an undue burden or hardship. The otherwise-qualified employee with a disability must be evaluated on reasonable job-related performance standards for the duties assigned to that position.

Discipline

As with any other area that involves actions directed toward employees, employee discipline is a sensitive domain, and one that must be approached with a critical eye. Such care has both legal and business justifications. As a matter of law, if an employer can show that its discipline of an employee was for “just cause,” it may be more effectively prepared to defend itself under EEO laws. In addition, there are sound business reasons for following such an approach. For example, if an employer ensures that there is “just cause” for discipline and discharge, employees are more likely to sense that they have been treated fairly and turnover is likely to be lower. Similarly, ensuring a “just cause” disciplinary approach whenever possible may serve to create a reputation for the employer that, in turn, will act as a positive inducement for prospective employees.

Regulation of employment decisions applies to any decision, whether involving retention, promotion, and raises, or demotion, termination, or other forms of discipline. All discipline decisions must be applied without discrimination and objectively administered. Discipline systems that have the purpose of educating the employee who is found to be in violation are generally considered by employees to be fairer and less arbitrary than traditional punishment-oriented systems of disciplinary action.

In general, “just cause” in discipline or discharge is determined by exploring three elements. First, one will consider whether the employee has received due process; that is, was the disciplinary process carried out in a fair manner? To reach this determination, it is relevant to consider the timeliness of the discipline and the adequacy of an employer’s investigation, ensure that the employee is aware of the charge made and is given an opportunity to respond, and ensure that an employee is not penalized twice for the same conduct.

The second element is whether there is adequate evidence of whatever charge has been made against the employee. This inquiry depends on the reliability and weight of the evidence or proof in support of the charges. The third element is whether the penalty chosen is appropriate. Here, questions of discriminatory discipline, the proportionality of the penalty versus the employee conduct, and the length and quality of the employee’s record are relevant. 87 A system that maintains consistency in application, that provides specific guidelines for attaining the varying levels of performance, and that communicates this information to employees is one likely to be deemed “fair.”

Furthermore, the most effective and efficient method by which to ensure appropriate use of disciplinary action is to factually and completely document each action taken (whether such action was written or oral) and its background page 198support. This assures employees of adequate feedback, and lawsuits will not hinge on the vagaries of a particular supervisor’s memory. Where no documentation is maintained, there is no evidence that the employee was given the opportunity to redress the infraction or poor performance.

Progressive discipline involves a set of steps before a challenging employee will be terminated for poor performance. In other words, the employee is given a standardized and articulated set of “chances” to improve behavior or performance before discharge occurs. Though tailored to the needs of the workplace, these steps may begin with an oral warning, followed by a written warning, light punishment, and so on until reaching a determination of discharge. Positive discipline refers to a progressive discipline process that involves counseling or other interventions that increase in severity or demands, rather than punishments. Where either process is in place, it is critical that the process be implemented across the board and in a nonarbitrary manner in order to ensure fair treatment of all workers. Failure to impose progressive discipline systems in a standard format for all covered workers may result in potential liability for disparate treatment. 88 Where the employer does follow this process in a committed way, the process itself may be protection against liability through its consistent application to all workers. 89

One useful measure of just cause was set forth by Arbitrator Carroll Daugherty in Grief Bros. Cooperage Corp., 90 now commonly known as the Seven Tests of Just Cause (see Exhibit 4.19 ).

Exhibit 4.19 The Seven Tests of Just Cause

· Did the employer give to the employee forewarning of the possible or probable disciplinary consequences of the employee’s conduct?

· Was the employer’s rule or managerial order reasonably related to the orderly, efficient, and safe operation of the business?

· Did the employer, before issuing discipline, make an effort to discover whether the employee violated or disobeyed a rule or order of management?

· Was the employer’s investigation conducted fairly and objectively?

· At the investigation, did the employer obtain substantial evidence or proof that the employee was guilty as charged?

· Has the employer applied its rules, orders, and penalties evenhandedly and without discrimination?

· Was the degree of discipline administered by the employer reasonable given (a) the seriousness of the employee’s proven offense and (b) the record of the employee’s service?

An employee who is subject to discipline has a right to request that a co-worker be present as a witness during an investigatory interview. This right is not limited to employees who are union members: Nonunion employees have a right to representation under Epilepsy Foundation of Northeast Ohio v. NLRB. 91

Documentation of discipline, as well as of appraisals, warnings, and commendations, should be retained in each employee’s file and should be given to the employee to provide her or him with the opportunity to appeal the action.

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Chapter Summary

· Employers believe that freedom of contract should permit them to hire whom they please. However, such statutes as Title VII and IRCA require the employer to ensure that all qualified employees are provided with equal employment opportunity and that decisions to hire are based solely on appropriate concerns and not on prejudice or bias that is neither supported nor relevant to business necessities.

· An ethic of non-discrimination must permeate the hiring process, from advertising the position to drafting the application form to making the decision to hire.

· One of the most effective means by which an employer can protect itself from claims of discrimination in the recruitment/application process is to have a clear view of the job to be filled and the best person to fill that job (i.e., an adequate, specific job description for each position within the company).

· After the employer has conducted the analysis, it should implement those results by reviewing the written job descriptions to ensure that they are clear, specific, and in line with the analysis; all nonessential job requirements should be deleted or defined as nonessential, and minimum requirements should be listed.

· Employers are cautioned, however, that the court or enforcement agency will look first to the actual job performance, then to the description only to the extent that it accurately reflects what the employee really does in that position. If the employer fails to include a function in the description, that may be used as an admission that the function is nonessential. If the function is nonessential, it is likely that an employment decision made on that basis will be suspect.

· Employers should ensure that recruitment procedures not only seek to obtain the most diversified applicant pool by reaching diverse communities but also encourage diverse applicants through the language used and the presentation of the firm.

· Employers should establish efficient, effective procedures to guarantee that they know whom they are hiring. If an employer wants a certain type of person to fill a position, ensure that the one hired is such a person. Failure to do so may result in liability under a theory of negligent hiring.

· Employers should review their applications to ensure they are asking only for information that is defensibly job-related or necessary to make a decision about whether to hire the candidate.

· Since employers are liable for negligent hiring based on what they knew or should have known, it is critical to do a thorough background check on each new hire. This may include new hires through employment agencies, as well, since those agencies do not always conduct background checks sufficient to insulate the ultimate employer.

· Though prior employers are not obligated to provide references beyond the individual’s position, salary, and dates of work, if the employer chooses to do page 200so beyond that basic level, the reference must be complete and honest to prevent foreseeable harm.

Management Tips Performance Management and Evaluation

· Documentation such as written performance appraisals can be your protection against wrongful lawsuits charging discrimination. As mentioned before, you are allowed to terminate someone for any reason except for certain prohibited reasons. As long as you document poor or deteriorating performance, you may generally terminate an individual on that basis and have protection against claims of discrimination.

· On the other hand, if you do conduct written performance appraisals but treat workers with similar appraisals differently, you may be subject to charges of discrimination.

· Where performance appraisals are conducted by a manager on the basis of stereotypes or prejudice, you are subject to claims of either disparate treatment or disparate impact. Therefore, make sure that all supervisors undergo training in connection with nonbiased reporting and evaluations that are free from prejudgments.

· Make sure that there are precautions against inappropriate disclosures. An employer may be subject to claims of privacy invasions or defamation under certain circumstances.

· If your employee manual or other materials state that you will conduct appraisals, failure to conduct them may be a problem. Make sure that you are willing to live with the claims you make regarding the regularity of appraisals and other promises.

· Testing for eligibility and ineligibility is a necessary component of the selection procedure. No employer would hire an unqualified employee if it knew the qualifications of the employee in advance of the hiring determination.

· Designing the appropriate preemployment tests in order to ensure applicants can perform the functions of the job is critical, not only to effective selection procedures but also to the prevention of liability for disparate results of your procedure.

· To keep an employer’s evaluation techniques within parameters that are relatively safe from criticism, the employer should first describe precisely what is required of each position to be evaluated. An adequate description will include the following:

1. Position title.

2. Department or division in which the position is located.

3. Title of supervisor (not name, as the individual may change while the supervisory position would not).

4. Function or purpose of position.

5. Scope of responsibility for accomplishing that purpose.

6. Specific duties and responsibilities.

7. page 201Knowledge, experience, or qualifications necessary for performance of the above duties and responsibilities (the connection should be apparent or explained).

8. Organizational relationship, persons to whom the employee should report, those employees who report to this supervisor, and those employees over whom the supervisor has direct supervisory responsibilities.

· No unwritten qualifications should exist. These may have a disparate impact on those employees outside the loop of information, pursuant to which employees learn of the “real” way of obtaining promotions and other workplace benefits.

· The employer should communicate to its employees the nature, content, timing, and weight of the performance appraisal and ensure that the employees understand each of the standards pursuant to which they will be evaluated.

· The bases for the evaluation should be specific and job- or task-defined, rather than subjective, global measures of job performance. For example, a performance measure such as “ability to finish tasks within specified time period” is preferable to “timeliness.” “Suggests new approaches” would be preferable to “industrious.” This is because the supervisor evaluating the individual is using baselines and vantage points such as the schedules that she or he has given the employee, rather than being forced to reach a conclusion about the employee’s timeliness in general.

· The employer should request justifications of ratings wherever possible. Some researchers have suggested that documentation should be required only where a rating is extreme; however, this may be construed by the court as bending over backward only in those circumstances where the rating may be questioned. To the contrary, where an employer maintains a policy that each evaluation should be documented, the consistency of treatment is a defense in itself.

· In addition to affording the employee the opportunity to be heard during the process, the employer should establish a formal appeals process, which the employee may follow subsequent to receipt of the final appraisal. This process may be implemented by the employer through its supervisors, a committee composed of representatives from all levels of the company, or a committee composed of the employee’s peers. Under most circumstances, appeals processes act as a means to air differences and to explain misunderstandings, deterring later litigation.

Chapter-End Questions

1. In the process of its recruitment of Peters, Security Pacific informed Peters that the company was doing “just fine” and Peters would have “a long tenure” at Security Pacific should he accept the position offered. In doing so, Security Pacific concealed its financial losses and the substantial, known risk that the project on which Peters was hired to work might soon be abandoned and Peters laid off. Peters accepted the position and moved from New Orleans to Denver to begin his new job. Two months later, Peters was laid off as a result of Security Pacific’s poor financial condition. Does Peters have a cause of action?

2. page 202After being molested by his guidance counselor, a high-school student sues his school district. The guidance officer had previously been arrested attempting to check into a hotel with a minor, although the charges were subsequently reduced to a misdemeanor. Is the school liable for negligent hiring, retention, and supervision? [C.A. v. William S. Hart Union High Sch. Dist., 53 Cal. 4th 861 (2012).]

3. Can an employer automatically exclude all applicants with criminal conviction records? What if the policy was limited to felony convictions?

4. In 1997, Bobby Randall was hired at Walmart. At the time, Randall was not a convicted felon but had been previously convicted three times on misdemeanor charges for indecent exposure. At the time of his hiring, Walmart did not have a policy in place that required criminal background checks for employees. In September 2000, Randall fondled a 10-year-old girl while on the job in the Walmart store in which he worked. The girl’s mother sued Walmart for negligent hiring, claiming that they should have known of his status as a sex offender through a background check. Was Walmart liable?

5. Phillips, an African-American woman, applied for a position as secretary at the Mississippi legislature as a “walk-in” applicant. Phillips worked in the same building, which was made up of approximately 80 percent African-American employees. She stopped by the office one day to ask if the office was hiring clerical help. She was told that the office was and she was given an application to fill out. After not hearing a response from the office regarding the position, she called and learned that a white woman with similar qualifications had filled the position, even though Phillips applied before this woman. The office defended itself, claiming only that it has a practice of not contacting walk-in applicants for positions. Phillips claims that this policy disfavors African-American applicants who work in the building and is, therefore, illegal based on disparate impact. What result?

6. In March 2011, Florida Governor Rick Scott signed an executive order that included a requirement that the state’s 85,000 state employees be subject to random drug testing. The text of the executive order explained that the testing is needed because “the State, as an employer, has an obligation to maintain discipline, health, and safety in the workplace.” The risks and costs of illegal drug use by state employees is too great a burden in light of the daily interaction of the public with state agencies, Governor Scott’s order reasoned. Prior to the law coming into effect, the union representing more than 50,000 (the majority) of the affected state employees (AFSCME Council 79) filed suit. The lawsuit charged that the drug-testing policy introduced by Governor Scott violates the Fourth Amendment. The union argued that to subject an employee to drug-testing at random intervals, regardless of whether that employee is suspected of drug use or holds a safety-sensitive position, is subjecting that employee to an unreasonable search. Is the random drug-testing of all state employees, as mandated by Governor Scott’s executive order, constitutional? [Am. Fed’n of State, Cty. & Mun. Employees Council 79 v. Scott, 717 F.3d 851 (11th Cir. 2013).]

7. In the summer of 2007, Ollie Harmon was hired by CB Squared, an auto repair company that operated several Jiffy Lube franchises. Within a year, Harmon had been promoted and was in charge of a number of service locations in the region. In October 2008, Harmon told several CB Squared executives that he had been approached with a job offer by a competing Jiffy Lube franchiser. Company President Michael Day contacted the competitor, which denied approaching Harmon. Day asked Harmon to take a polygraph test to verify his claim regarding the competitor’s job offer. Harmon agreed to take the test. He was later informed by Day that the test results revealed “deception.” When Harmon refused to provide further information about the alleged competing job page 203offer, he was demoted to a position that his employers were aware that he could not fulfill, due to his childcare responsibilities. Harmon responded to the demotion by providing two-week notice of resignation. He then filed a complaint against CB Squared, charging that the company had violated the Employment Polygraph Protection Act (EPPA) by requesting that he take the polygraph test, discussing the results with him, and effectively terminating him on the basis of those results. Does Harmon have a claim? [Harmon v. CB Squared, Inc., 624 F. Supp. 2d 459 (2009).]

8. Please respond to the following in connection with recruitment, selection, or employment procedures:

a. When, if ever, may an employer ask a candidate or employee for a photograph as part of recruitment, selection, or employment procedures?

b. May an employer ask a candidate or current employee to which organizations the individual belongs?

c. If a contract is intended to be at-will, must it include a statement to that effect?

9. An individual contacts you in connection with a reference for one of your worst employees, who was just recently terminated for poor performance. This individual asks whether you believe the former employee will perform well in a similar position at a new company. How do you respond? Is your response different if the former employee was terminated for stealing, and the individual asks whether this employee can be trusted?

10. Which of the following statements would be acceptable in a performance evaluation?

. “Even though Jacquie was out on a few religious retreats, she exceeded June sales goals by 10 percent.”

. “Although a new, young college graduate, Spiro was very capable in leading the sales meeting.”

. “Despite time off for medical leaves, Renee was able to surpass productivity of many of her colleagues.”

. “Though a bit tough to understand, Margeaux has received excellent reviews for her customer service.”

· The city of Bozeman, Montana, requires job candidates to list their social networking sites, usernames, and passwords on the city employee application. City Attorney Greg Sullivan explained that the city has “positions ranging from fire and police, which require people of high integrity for those positions, all the way down to the lifeguards and the folks that work in city hall here. So we do those types of investigations to make sure the people that we hire have the highest moral character and are a good fit for the City.” No prospective employee has yet to remove his/her name because of the requirement. Yet, with such high access to a prospect’s profile, it could become difficult for human resources to not be aware of a candidate’s ethnicity or even religious affiliation. Has the city justified its decision to ask for this information? Would you be comfortable if a prospective employer asked you for this information? Why or why not?

End Notes

1. 1. The authors have chosen to use the term Latinx as the gender-neutral plural replacement for “Latino(s) and Latina(s).” Previously, the term Latinos was the most often-used term to represent any gender-mixed group of Latin descent. However, that choice represents a male bias that we choose not to perpetuate. For more information and context on this term, please see Logue, J., “Many student groups are changing page 204their names to use ‘Latinx’ instead of ‘Latino’ and ‘Latina,’” Inside Higher Ed (December 8, 2015), https://www.insidehighered.com/news/2015/12/08/students-adopt-gender-nonspecific-term-latinx-be-more-inclusive ; Hayley Barrett, S., and O. Nñ, “Latinx: The Ungendering of the Spanish Language,” Latino USA (January 29, 2016), http://latinousa.org/2016/01/29/latinx-ungendering-spanish-language/ ; Reichard, R., “Why We Say Latinx: Trans and Gender Non-Conforming People Explain,” Latina (Aug. 29. 2015), http://www.latina.com/lifestyle/our-issues/why-we-say-latinx-trans-gender-non-conforming-people-explain (accessed August 11, 2016); Ramirez, T.L., and Z. Blay, “Why People Are Using The Term ‘Latinx,’"Huffington Post (July 5, 2016), http://www.huffingtonpost.com/entry/why-people-are-using-the-term-latinx_us_57753328e4b0cc0fa136a159 (accessed August 11, 2016); and Padilla, Y., “What Does ‘Latinx’ Mean? A Look at the Term That’s Challenging Gender Norms,” Complex (April 18, 2016), http://www.complex.com/life/2016/04/latinx/ .

2. 2. CareerXroads, “2016 Employee Referral Programs” (2016) http://www.careerxroads.com/careerxroads-benchmarks-and-research/2016-employee-referral-programs/ (accessed August 20, 2016).

3. 3. Petrone, Paul, “Here Is Why Employee Referrals Are the Best Way to Hire,” Linkedin Talent Blog (August 3, 2015), https://business.linkedin.com/talent-solutions/blog/2015/08/5-reasons-employee-referrals-are-the-best-way-to-hire (accessed August 20, 2016).

4. 4. E.E.O.C. v. Chicago Miniature Lamp Works, 947 F.2d 292 (7th Cir. 1991).

5. 5. Bertrand, M., and S. Mullainathan, “Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination,” The American Economic Review 94, no. 4 (September 2004), pp. 991–1013.

6. 6. Widner, D., and S. Chicoine, “It’s All in the Name: Employment Discrimination Against Arab Americans,” Sociological Forum 26, no. 4 (December 2011), pp. 806–23.

7. 7. Edo, A., N. Jacquemet, and C. Yannelis, “Language Skills and Homophilous Hiring Discrimination: Evidence from Gender and Racially Differentiated Applications,” Federal Reserve Bank of St Louis (2013).

8. 8. Margery Austin Turner, Michael Fix, and Raymond J. Struyk, Opportunities Denied, Opportunities Diminished: Discrimination in Hiring (Washington, D.C.: Urban Institute, 1991).

9. 9. Pager, D. “Race, Ethnicity, and Inequality in the U.S. Labor Market: Critical Issues in the New Millennium: The Use of Field Experiments for Studies of Employment Discrimination: Contributions, Critiques, and Directions for the Future,” The Annals of The American Academy of Political and Social Science 609, annals 104 (January 2007), pp. 104–33.

10. 10. Lu, S., “Employment Verification: A Crucial Check,” HireRight (March 9, 2015), http://www.hireright.com/blog/2015/03/employment-verification-a-crucial-check/ (accessed August 20, 2016).

11. 11. Austin, Jr., W. J., “Special Bulletin: So I Hired A Felon: An Update on the Law of Negligent Hiring” (August 19, 2014), http://www.wardandsmith.com/articles/update-on-the-law-of-negligent-hiring (accessed August 29, 2016).

12. 12. Harrell, E., “Workplace Violence: 1993–2009,” U.S. Department of Justice Special Report (March 2011), http://bjs.ojp.usdoj.gov/index.cfm?ty=pbdetail&iid=2377 (accessed August 28, 2016).

13. 13. Bureau of Labor Statistics, “National Census of Fatal Occupational Injuries in 2014” (September 17, 2015), http://www.bls.gov/news.release/pdf/cfoi.pdf (accessed August 20, 2016).

14. page 205 14. U.S. Department of Labor, “Workplace Violence” (undated), http://www.osha.gov/SLTC/workplaceviolence/index.html (accessed August 20, 2016).

15. 15. Harrell, E., “Workplace Violence: 1993–2009,” U.S. Department of Justice Special Report (March 2011), http://bjs.ojp.usdoj.gov/index.cfm?ty=pbdetail&iid=2377 (accessed August 20, 2016).

16. 16. C.A. v. William S. Hart Union High School Dist, 53 Cal. 4th 861 (2012).

17. 17. EEOC Enforcement Guidance on Application of EEO Laws to Contingent Workers (December 3, 1997).

18. 18. White, C., and J. Sompayrac, “Employee Screening Practices and the Temporary Help Industry,” unpublished manuscript.

19. 19. Duffy, E., “Employers Use Facebook in Hiring Process,” The Observer (online) (November 1, 2006), http://media.www.ndsmcobserver.com/media/storage/paper660/news/2006/11/01/News/Employers.Use.Facebook.In.Hiring.Process-2414357.shtml (accessed August 20, 2016); see also Rupe, A. L., “Facebook Faux Pas,” Workforce Management (March 2007).

20. 20. CareerBuilder, “Number of Employers Using Social Media to Screen Candidates Has Increased 500 Percent over the Last Decade” (April 28, 2016), http://www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?ed=12%2F31%2F2016&id=pr945&sd=4%2F28%2F2016 (accessed August 20, 2016).

21. 21. Ibid.

22. 22. CareerBuilder, “Number of Employers Using Social Media to Screen Candidates Has Increased 500 Percent over the Last Decade.”

23. 23. Ahearn, T., “Social Media Background Checks Conducted by Consumer Reporting Agencies Subject to Same Fair Credit Reporting Act Rules,” National Association of Professional Background Screeners Journal (July–August 2011), pp. 15–17.

24. 24. National Conference of State Legislatures, “Employer Access to Social Media Usernames and Passwords” (February 3, 2016), http://www.ncsl.org/research/telecommunications-and-information-technology/employer-access-to-social-media-passwords-2013.aspx (accessed February 29, 2016); Wright, A. D., “More States Ban Social Media Snooping: Nearly 20 States Now Bar Employers from Requesting Access to Employees’, Applicants’ Social Media Posts” (August 12, 2014), http://www.shrm.org/hrdisciplines/technology/articles/pages/social-media-snooping.aspx#sthash.4XbI7Hj4.dpuf (accessed February 29, 2016).

25. 25. Evangelista, B., “Facebook Warns Employers over Password Requests,” San Francisco Chronicle (March 24, 2012), http://www.sfgate.com/business/article/Facebook-warns-employers-over-password-requests-3431130.php (accessed August 20, 2016).

26. 26. Allstate Insurance Co. v. Jerner, Case No. 93-09472 (Fla. Cir. Ct. 1993), cert. denied, 650 So. 2d 997 (Fla. Ct. App. 1995).

27. 27. See Singer v. Beach Trading Co., Inc., 379 N.J.Super. 63 (2005); Davis v. Board of County Com’rs of Dona Ana County, 127 N.M. 785 (1999); and Randi W. v. Muroc Joint Unified School Dist., 14 Cal. 4th 1066 (1997).

28. 28. For a review of the status of this tort in each state in 2013, see “MLRC 50-State Survey: Employment Libel & Privacy Law” (The Media Law Resource Center, Inc., 2013).

29. 29. 513 U.S. 352 (1995).

30. 30. Loder v. City of Glendale, 14 Cal. 4th 846 (1997).

31. 31. 79 F.3d 661, 665–69 (7th Cir. 1996).

32. page 206 32. 422 U.S. 405 (1975).

33. 33. Gulino v. New York State Educ. Dept., 460 F.3d 361 (3rd Cir. 2012).

34. 34. Fennessey, G. A., “How to Use Pre-Hire Assessments,” Blog Posts (December 2015), http://www.leathersmilligan.com/how-to-use-pre-hire-assessments/ (accessed August 20, 2016).

35. 35. Shaffer, D., and R. Schmidt, “Personality Testing in Employment,” FindLaw.com (March 2008), http://corporate.findlaw.com/human-resources/personality-testing-in-employment.html (accessed April 7, 2017).

36. 36. Barrick, M. R., and Mount, M. K., “The Big Five Personality Dimensions and Job Performance: A Meta-analysis,” Personnel Psychology 44 (1991), pp. 1–26.

37. 37. Martin, B. A., Bowen, C. C., and Hunt, S. T., “How Effective Are People at Faking on Personality Questionnaires?” Personality and Individual Differences 32 (2002), pp. 247–56.

38. 38. “Personality Testing as Part of the Hiring Process: What You Need to Know,” Nutrition 411 (December 7, 2015), http://www.nutrition411.com/articles/personality-testing-part-hiring-process-what-you-need-know (accessed August 20, 2016).

39. 39. Walker, J. “Do New Job Tests Foster Bias?” The Wall Street Journal (September 20, 2012), http://online.wsj.com/article/SB10000872396390443890304578006283936708970.html (accessed August 28, 2016).

40. 40. Karraker v. Rent-a-Center, 411 F.3d 831 (7th Cir. 2005).

41. 41. 42 U.S.C. § 12112(d)(3)(C)-(4)(A).

42. 42. Schmidt, F., and J. Hunter, “General Mental Ability in the World of Work: Occupational Attainment and Job Performance,” Journal of Personality and Social Psychology 86 (2004), pp. 162–73; Rynes, S. et al., “The Very Separate Worlds of Academic and Practitioner Periodicals in Human Resource Management: Implications for Evidence-Based Management,”Academy of Management Journal 50, no. 5 (2007), pp. 987–1008; and Schmidt, F., “The Orphan Area for Meta-Analysis: Personnel Selection” (2006), http://www.siop.org/tip/Oct06/05schmidt.aspx (accessed August 28, 2016).

43. 43. See, e.g., Fuzy v. S&B Eng’rs & Constructors, Ltd., 332 F.3d 301 (5th Cir. 2003); and Jeffrey v. Ashcroft, 285 F. Supp. 2d 583 (U.S. District Ct. M.D. Pa. 2003).

44. 44. National Conference of State Legislatures, “State Medical Marijuana Laws,” (March 21, 2016), http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx (accessed August 20, 2016).

45. 45. Leonel v. American Airlines, Inc., 400 F.3d 702 (9th Cir. 2005).

46. 46. 24 F.Supp.3d 1219 (U.S. District Ct. S.D. Florida 2014).

47. 47. Baughman v. Wal-Mart Stores, Inc., 592 S.E.2d 824 (W. Va. 2003); Twigg v. Hercules Corporation, 406 S.E.2d 52 (W. Va. 1990).

48. 48. Thomson Reuters, “Uncovering the Hidden Signs of Workplace Substance Abuse” (August 19, 2016), http://corporate.findlaw.com/litigation-disputes/uncovering-the-hidden-signs-of-workplace-substance-abuse.html#sthash.hqoJ6ara.dpuf (accessed August 29, 2016); “A Drug Epidemic That’s Plaguing the US Workplace,” CNBC (January 26, 2016), http://thetestvault.com/prescription-drug-abuse-workplace/ (accessed August 29, 2016);

49. 49. National Business Group on Health, “An Employer’s Guide to Workplace Substance Abuse: Strategies and Treatment Recommendations” (August 2009), https://www.businessgrouphealth.org/pub/f3151957-2354-d714-5191-c11a80a07294 (accessed August 20, 2016).

50. page 207 50. National Council on Alcoholism and Drug Dependence, Inc., “Drugs and Alcohol in the Workplace” (April 26, 2015), https://ncadd.org/about-addiction/addiction-update/drugs-and-alcohol-in-the-workplace (accessed August 21, 2016).

51. 51. Engber, Daniel, “Routinely Drug-Testing Workers?” Slate (December 27, 2015), http://www.slate.com/articles/health_and_science/cover_story/2015/12/workplace_drug_testing_is_widespread_but_ineffective.html (accessed August 21, 2016); HireRight, “Employment Screening Benchmark Report” (2014), http://img.en25.com/Web/HireRightInc/%7B285b98c9-eeed-4c7bba6f8c0b1b693bdf%7D_HireRight_EmployeeBenchmarkingReport_2014_-_Final.pdf (accessed August 21, 2016).

52. 52. Cost Helper Health, “Drug or Alcohol Testing Costs,” http://health.costhelper.com/drug-alcohol-test.html (accessed August 28, 2016).

53. 53. Gerber, J., and G. Yacoubian, Jr., “Evaluation of Drug Testing in the Workplace: Study of the Construction Industry,” Journal of Construction Engineer and Management 127, no. 6 (December 2001), pp. 438–44.

54. 54. Fortner, N., et al., “Employee Drug Testing: Study Shows Improved Productivity and Attendance and Decreased Workers’ Compensation and Turnover,” The Journal of Global Drug Policy and Practice (December 2011), http://www.globaldrugpolicy.org/Issues/Vol%205%20Issue%204/Basic-11-22Efficacy%20Study%20Publication%20Final.pdf (accessed August 20. 2016).

55. 55. American Civil Liberties Union, Drug Testing: A Bad Investment (September 1999).

56. 56. U.S. Department of Labor, “Drug-Free Workplace Act of 1988 Requirements,” http://webapps.dol.gov/elaws/asp/drugfree/screenr.htm (accessed April 13, 2016).

57. 57. 868 F.2d 74 (3d Cir. 1989).

58. 58. “Drug-Free Workplace Act,” Employee Screening Services (January 5, 2016), http://www.yourdrugtesting.com/drug-free-workplace-act/ (accessed August 20, 2016).

59. 59. 489 U.S. 656 (1989).

60. 60. National Treasury Employees Union v. Von Raab, 489 U.S. 656 (1989).

61. 61. 520 U.S. 305 (1997).

62. 62. National Conference of State Legislatures, “State Medical Marijuana Laws,” (July 20, 2016), http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx (accessed August 21, 2016).

63. 63. Demaria, M., “These Are All the States That Have Legalized Weed,” Refinery 29 (August 9, 2016), http://www.refinery29.com/2016/04/107985/where-is-weed-legal (accessed August 21, 2016); Governing.com , “State Marijuana Laws Map” (May 25, 2016), http://www.governing.com/gov-data/state-marijuana-laws-map-medical-recreational.html (accessed August 21, 2016).

64. 64. Knapp, V., “The Impact of Legalized Marijuana in the Workplace,” Sherman & Howard (2014).

65. 65. Coats v. Dish Network, LLC, 350 P.3d 849 (Colorado S.C., 2015).

66. 66. Knapp, “The Impact of Legalized Marijuana in the Workplace.”

67. 67. Engber, D., “Why Do Employers Still Routinely Drug-Test Workers?” Slate (December 27, 2015), http://www.slate.com/articles/health_and_science/cover_story/2015/12/workplace_drug_testing_is_widespread_but_ineffective.html (accessed August 26, 2016).

68. 68. For a comprehensive list of state legislation related to drug testing, see OHS Health & Safety Services, Inc., “State Drug Testing Laws,” http://www.ohsinc.com/info/state-drug-testing-laws/ (accessed April 22, 2016).

69. page 208 69. American Polygraph Association, “Accredited Polygraph Schools” (August 4, 2016), http://www.polygraph.org/assets/Accreditation.Forms/accredited%20polygraph%20programs%208-4-16.pdf (accessed August 21, 2016).

70. 70. 523 U.S. 303 (1998).

71. 71. The National Academy of Science, Board on Behavioral, Cognitive, and Sensory Sciences, The Polygraph and Lie Detection. Washington, DC: The National Academies Press, 2003.

72. 72. Taylor, M., “Feds expand polygraph screening, often seeking intimate facts,” McClatchy (December 6, 2012), http://www.mcclatchydc.com/news/special-reports/article24741145.html (accessed August 21, 2016).

73. 73. Guerin, L., “State Laws on Polygraphs and Lie Detector Tests,” NOLO (2016), http://www.nolo.com/legal-encyclopedia/state-laws-polygraphs-lie-detector-tests.html (accessed April 4, 2016).

74. 74. U.S. Equal Employment Opportunity Commission, “Genetic Information Discrimination” (undated), https://www.eeoc.gov/laws/types/genetic.cfm (accessed April 22, 2017).

75. 75. U.S. National Library of Medicine, “What Is Genetic Discrimination?” Genetics Home Reference (April 20, 2016), https://ghr.nlm.nih.gov/primer/testing/discrimination (accessed August 21, 2016).

76. 76. National Human Genome Research Institute, “Genetic Discrimination” (May 2, 2016), https://www.genome.gov/10002077/genetic-discrimination/ (accessed August 21, 2016).

77. 77. U.S. Equal Employment Opportunity Commission, “What You Should Know about HIV/AIDS & Employment Discrimination” (undated), https://www.eeoc.gov/eeoc/newsroom/wysk/hiv_aids_discrimination.cfm , (accessed April 22, 2016).

78. 78. 129 S. Ct. 2658 (2009).

79. 79. 457 F.2d 348 (5th Cir. 1972).

80. 80. Ibid.

81. 81. 490 U.S. 228 (1989).

82. 82. Judge, T. A., and D. M. Cable, “The Effect of Physical Height on Workplace Success and Income: Preliminary Test of a Theoretical Model,” Journal of Applied Psychology 89 (June 2004), pp. 428–41.

83. 83. Dor, A., C. Ferguson, E. Tan, L Divine, and J. Palmer, “Gender and Race Wage Gaps Attributable to Obesity,” George Washington University Department of Health Policy (November 17, 2011), https://publichealth.gwu.edu/departments/healthpolicy/DHP_Publications/pub_uploads/dhpPublication_FA85CB82-5056-9D20-3DBD361E605324F2.pdf (accessed August 21, 2016).

84. 84. Johnston, D. W., “Physical appearance and wages: Do blondes have more fun?” Economics Letters 108 (July 2010), pp. 10–12.

85. 85. 411 U.S. 792 (1973).

86. 86. Guerin, L., “Defamation Lawsuits: Do You Have a Case Against a Former Employer?” NOLO (2016), http://www.nolo.com/legal-encyclopedia/defamation-lawsuits-do-you-have-case-against-former-employer.html (accessed April 11, 2016).

87. 87. Note, however, that there is long-standing arbitral precedent that the decision as to the severity of a penalty is a matter of management discretion and that the exercise of that discretion should not be disturbed unless it can be shown that it was exercised in page 209an arbitrary, capricious, or discriminatory fashion. See, e.g., Stockham Pipe Fittings, 1 LA 160 (1945).

88. 88. Chertkova v. Connecticut General Life Insurance, 71 FEP Cases 1006 (2d Cir. 1996).

89. 89. See Hanchard v. Facilities Development Corporation, 10 IER Cases 1004 (N.Y. App. 1995); Gipson v. KAS Snacktime Company, 71 FEP Cases 1677 (E.D. Mo. 1994).

90. 90. 42 LA 555, 557–59 (1964).

91. 91. 268 F.3d 1095 (D.C. Cir. 2001), cert. denied, 122 S. Ct. 2356 (2002).

Cases	Case 1 EEOC v. Consolidated Service System 209
	Case 2 National Treasury Employees Union v. Von Raab 211
	Case 3 Coats v. Dish Network, LLC 213

EEOC v. Consolidated Service System 989 F.2d 233 (7th Cir. 1993)

Defendant is a small janitorial firm in Chicago owned by Mr. Hwang, a Korean immigrant, and staffed mostly by Koreans. The firm relied mainly on word-of-mouth recruiting. Between 1983 and 1987, 73 percent of the applicants for jobs and 81 percent of the hires were Korean, while less than 1 percent of the workforce in the Chicago area is Korean. The district court found that these discrepancies were not due to discrimination and the circuit court agreed.

Posner, J.

***

Consolidated is a small company. The EEOC’s lawyer told us at argument that the company’s annual sales are only $400,000. We mention this fact not to remind the reader of David and Goliath, or to suggest that Consolidated is exempt from Title VII (it is not), or to express wonderment that a firm of this size could litigate in federal court for seven years (and counting) with a federal agency, but to explain why Mr. Hwang relies on word of mouth to obtain employees rather than reaching out to a broader community less heavily Korean. It is the cheapest method of recruitment. Indeed, it is practically costless. Persons approach Hwang or his employees—most of whom are Korean too—at work or at social events, and once or twice Hwang has asked employees whether they know anyone who wants a job. At argument the EEOC’s lawyer conceded, perhaps improvidently but if so only slightly so, that Hwang’s recruitment posture could be described as totally passive. Hwang did buy newspaper advertisements on three occasions—once in a Korean-language newspaper and twice in the Chicago Tribune—but as these ads resulted in zero hires, the experience doubtless only confirmed him in the passive posture. The EEOC argues that the single Korean newspaper ad, which ran for only three days and yielded not a single hire, is evidence of discrimination. If so, it is very weak evidence. The Commission points to the fact that Hwang could have obtained job applicants at no expense from the Illinois Job Service as further evidence of discrimination. But he testified that he had never heard of the Illinois Job Service and the district judge believed him.

If an employer can obtain all the competent workers he wants, at wages no higher than the minimum that he page 210expects to have to pay, without beating the bushes for workers—without in fact spending a cent on recruitment—he can reduce his costs of doing business by adopting just the stance of Mr. Hwang. And this is no mean consideration to a firm whose annual revenues in a highly competitive business are those of a mom and pop grocery store. Of course if the employer is a member of an ethnic community, especially an immigrant one, this stance is likely to result in the perpetuation of an ethnically imbalanced workforce. Members of these communities tend to work and to socialize with each other rather than with people in the larger community. The social and business network of an immigrant community racially and culturally distinct from the majority of Americans is bound to be largely confined to that community, making it inevitable that when the network is used for job recruitment the recruits will be drawn disproportionately from the community.

No inference of intentional discrimination can be drawn from the pattern we have described, even if the employer would prefer to employ people drawn predominantly or even entirely from his own ethnic or, here, national-origin community. Discrimination is not preference or aversion; it is acting on the preference or aversion. If the most efficient method of hiring [is] adopted because it is the most efficient (not defended because it is efficient—the statute does not allow an employer to justify intentional discrimination by reference to efficiency) just happens to produce a workforce whose racial or religious or ethnic or national-origin or gender composition pleases the employer, this is not intentional discrimination. The motive is not a discriminatory one. “Knowledge of a disparity is not the same thing as an intent to cause or maintain it.” Or if, though, the motives behind adoption of the method were a mixture of discrimination and efficiency, Mr. Hwang would have adopted the identical method of recruitment even if he had no interest in the national origin of his employees, the fact that he had such an interest would not be a “but for” cause of the discriminatory outcome and again there would be no liability. There is no evidence that Hwang is biased in favor of Koreans or prejudiced against any group underrepresented in his workforce, except what the Commission asks us to infer from the imbalance in that force and Hwang’s passive stance.

If this were a disparate-impact case (as it was once, but the Commission has abandoned its claim of disparate impact), and, if, contrary to EEOC v. Chicago Miniature Lamp Works, word of mouth recruitment were deemed an employment practice and hence was subject to review for disparate impact, as assumed in Clark v. Chrysler Corp., then the advantages of word-of-mouth recruitment would have to be balanced against its possibly discriminatory effect when the employer’s current workforce is already skewed along racial or other disfavored lines. But in a case of disparate treatment, the question is different. It is whether word-of-mouth recruitment gives rise to an inference of intentional discrimination. Unlike an explicit racial or ethnic criterion or, what we may assume without deciding amounts to the same thing, a rule confining hiring to relatives of existing employees in a racially or ethnically skewed workforce, as in Thomas v. Washington County School Board, word-of-mouth recruiting does not compel an inference of intentional discrimination. At least it does not do so where, as in the case of Consolidated Services Systems, it is clearly, as we have been at pains to emphasize, the cheapest and most efficient method of recruitment, notwithstanding its discriminatory impact. Of course, Consolidated had some non-Korean applicants for employment, and if it had never hired any this would support, perhaps decisively, an inference of discrimination. Although the respective percentages of Korean and of non-Korean applicants hired were clearly favorable to Koreans (33 percent to 20 percent), the EEOC was unable to find a single person out of the 99 rejected non-Koreans who could show that he or she was interested in a job that Mr. Hwang ever hired for. Many, perhaps most, of these were persons who responded to the ad he placed in the Chicago Tribune for a contract that he never got, hence never hired for.

The Commission cites the statement of Consolidated’s lawyer that his client took advantage of the fact that the Korean immigrant community offered a ready market of cheap labor as an admission of “active” discrimination on the basis of national origin. It is not discrimination, and it is certainly not active discrimination, for an employer to sit back and wait for people willing to work for low wages to apply to him. The fact that they are ethnically or racially uniform does not impose upon him a duty to spend money advertising in the help-wanted columns of the Chicago Tribune. The Commission deemed Consolidated’s “admission” corroborated by the testimony of the sociologist William Liu, Consolidated’s own expert witness, who explained that it was natural for a recent Korean immigrant such as Hwang to hire other recent Korean immigrants, with whom he shared a common culture, and that the consequence would be a workforce disproportionately Korean. Well, of course. People who share a common culture tend to work together as page 211well as marry together and socialize together. That is not evidence of illegal discrimination.

In a nation of immigrants, this must be reckoned an ominous case despite its outcome. The United States has many recent immigrants, and today as historically they tend to cluster in their own communities, united by ties of language, culture, and background. Often they form small businesses composed largely of relatives, friends, and other members of their community, and they obtain new employees by word of mouth. These small businesses—grocery stores, furniture stores, clothing stores, cleaning services, restaurants, gas stations—have been for many immigrant groups, and continue to be, the first rung on the ladder of American success. Derided as clannish, resented for their ambition and hard work, hated or despised for their otherness, recent immigrants are frequent targets of discrimination, some of it violent. It would be a bitter irony if the federal agency dedicated to enforcing the anti-discrimination laws succeeded in using those laws to kick these people off the ladder by compelling them to institute costly systems of hiring. There is equal danger to small black-run businesses in our central cities. Must such businesses undertake in the name of non-discrimination costly measures to recruit nonblack employees?

Although Consolidated has been dragged through seven years of federal litigation at outrageous expense for a firm of its size, we agree with the Commission that this suit was not frivolous. The statistical disparity gave the Commission a leg up, and it might conceivably have succeeded in its disparate-impact claim but for our intervening decision in EEOC v. Chicago Miniature Lamp Works, supra. Had the judge believed the Commission’s witnesses, the outcome even of the disparate-treatment claim might have been different. The Equal Access to Justice Act was intended, one might have thought, for just such a case as this, where a groundless but not frivolous suit is brought by the mighty federal government against a tiny firm; but Consolidated concedes its inapplicability. We do not know on what the concession is based—possibly on cases like Escobar Ruiz v. INS, on rehearing, holding the Act inapplicable to statutes that have their own fee-shifting statutes—but other cases, such as Gavette v. Office of Personnel Management, are contra. It may not be too late for Consolidated to reconsider its concession in light of our holding in McDonald v. Schweiker, supra, regarding the deadline for seeking fees under the Act.

AFFIRMED.

Case Questions

1. If the court in Consolidated ruled that, even though the statistics told another story, there was no evidence of “intentional” discrimination, would an unbalanced workforce due to word-of-mouth recruiting alone ever constitute disparate treatment?

2. Consider your and the court’s response to the above question. Would your decision be different if it could be shown that, in a certain small, all-white firm, recruiting was done only using word of mouth and this effort resulted in only white applicants. Would your decision remain the same?

3. If this case were tried as a disparate impact case, as discussed by the court, how would you balance the advantages of word-of-mouth recruiting against the possibility of a discriminatory impact?

National Treasury Employees Union v. Von Raab 489 U.S. 656 (1989)

The U.S. Customs Service implemented a drug-screening program that required urinalysis tests of service employees who wanted to be transferred or promoted to positions where there might be some contact with drugs, such as confiscation, or where the employee might have to carry a firearm or handle classified material. The program provides that the results of the test may not be turned over to any other agency without the employee’s written consent. The petitioners, a federal employees’ union and one of its officials, sued claiming a violation of the Fourth Amendment. The district court agreed and enjoined the program because the plan was overly intrusive without probable cause or reasonable suspicion. page 212The court of appeals vacated the injunction, holding that this type of search was reasonable in light of its limited scope and the service’s strong interest in detecting drug use among employees in certain positions. The Supreme Court affirmed in connection with positions involving contact with drugs and/or firearms but vacated and remanded the decision in regard to those positions that require handling of classified materials.

Kennedy, J.

***

In Skinner v. Railway Labor Executives Assn., decided today, we held that federal regulations requiring employees of private railroads to produce urine samples for chemical testing implicate the Fourth Amendment, as those tests invade reasonable expectations of privacy. Our earlier cases have settled that the Fourth Amendment protects individuals from unreasonable searches conducted by the Government, even when the Government acts as an employer and, in view of our holding in Railway Labor that urine tests are searches, it follows that the Customs Service’s drug testing program must meet the reasonableness requirement of the Fourth Amendment.

While we have often emphasized and reiterate today that a search must be supported, as a general matter, by warrant issued upon probable cause, our decision in Railway Labor reaffirms the longstanding principle that neither a warrant nor probable cause, nor, indeed, any measure of individualized suspicion, is an indispensable component of reasonableness in every circumstance. As we note in Railway Labor, our cases establish that where a Fourth Amendment intrusion serves special governmental needs, beyond the normal need for law enforcement, it is necessary to balance the individual’s privacy expectations against the Government’s interests to determine whether it is impractical to require a warrant or some level of individualized suspicion in the particular context.

It is clear that the Customs Service’s drug testing program is not designed to serve the ordinary needs of law enforcement. Test results may not be used in criminal prosecution of the employee without the employee’s consent. The purposes of the program are to deter drug use among those eligible for promotion to sensitive positions within the Service and to prevent the promotion of drug users to those positions. These substantial interests, no less than the Government’s concern for safe rail transportation at issue in Railway Labor, present a special need that may justify departure from the ordinary warrant and probable cause requirements.

Petitioners do not contend that a warrant is required by the balance of privacy and governmental interests in this context, nor could any such contention withstand scrutiny. We have recognized that requiring the Government to procure a warrant for every work-related intrusion “would conflict with ‘the common sense realization that government offices could not function if every employment decision became a constitutional matter.’”

Even where it is reasonable to dispense with the warrant requirement in the particular circumstances, a search ordinarily must be based on probable cause. . . . We think Customs employees who are directly involved in the interdiction of illegal drugs or who are required to carry firearms in the line of duty likewise have a diminished expectation of privacy in respect to intrusions occasioned by a urine test. Because successful performance of their duties depends uniquely on their judgment and dexterity, these employees cannot reasonably expect to keep from the Service personal information that bears directly on their fitness.

In sum, we believe that the Government has demonstrated that its compelling interests in safeguarding our borders and the public safety outweigh the privacy expectations of employees who seek to be promoted to positions that directly involve the interdiction of illegal drugs or who are required to carry a firearm. We hold that the testing of these employees is reasonable under the Fourth Amendment.

Case Questions

1. An approved drug use test must be conducted within reasonable parameters. In Capua, the court determined that a urine collection process may not be reasonable if “done under close surveillance of a government representative [as it] is likely to be a very page 213embarrassing and humiliating experience.” Courts will generally balance the employee’s rights against the employer’s stated basis for the test and determine whether the cause of the test is reasonable and substantial. For instance, in Skinner v. Railway Labor Executives Assn., the Supreme Court stated that the railway employees had a reduced expectation of privacy due to the highly regulated nature of the industry. In addition, societal interests, such as safety and security of the railways, may outweigh the individual employee’s privacy interests. When might this be the case?

2. Why do you think the Court made a distinction between positions involving contact with drugs and firearms and positions that require handling of classified materials?

Coats v. Dish Network, LLC 2015 CO 44, 350 P.3d 849 (2015)

Brandon Coats, a quadriplegic, has been in a wheelchair since he was a teenager. He has a Colorado state-issued license to use medical marijuana to treat painful muscle spasms caused by his quadriplegia. He consumes the medical marijuana at home, after work, and in accordance with his license and Colorado state law.

Coats worked for Dish Network for three years as a telephone customer service representative. After testing positive for THC, as a result of his marijuana use, in a random drug test, he was terminated for violating the company’s drug policy.

Coats brought an employment discrimination action against his employer, claiming that his termination was based on his state-licensed use of medical marijuana, in violation of the lawful activities statute, which made it an unfair and discriminatory labor practice to discharge an employee based on the employee’s lawful outside-of-work activities. The Colorado Supreme Court held that an activity (such as medical marijuana use) that is unlawful under federal law is not a “lawful” activity under the lawful activities statute, and the employee could be terminated for his use of medical marijuana in accordance with the Medical Marijuana Amendment of the Colorado state constitution.

Eid, J.

***

II.

We review de novo the question of whether medical marijuana use prohibited by federal law is a “lawful activity” protected under [Colorado’s “lawful activities statute”].

The “lawful activities statute” provides that “[i]t shall be a discriminatory or unfair employment practice for an employer to terminate the employment of any employee due to that employee’s engaging in any lawful activity off the premises of the employer during nonworking hours” unless certain exceptions apply. An employee discharged in violation of this provision may bring a civil action for damages, including lost wages or benefits.

By its terms the statute protects only “lawful” activities. However, the statute does not define the term “lawful.” Coats contends that the term should be read as limited to activities lawful under state law. We disagree.

In construing undefined statutory terms, we look to the language of the statute itself “with a view toward giving the statutory language its commonly accepted and understood meaning” People v. Schuett. We have construed the term “lawful” once before and found that its “generally understood meaning” is “in accordance with the law or legitimate.” See id. (citing Webster’s Third New International Dictionary (1986)). Similarly, courts in other states have construed “lawful” to mean “authorized by law and not contrary to, nor forbidden by law.” Hougum v. Valley Memorial Homes (defining “lawful” as used in similar lawful activities provisions); In re Adoption of B.C.H. (“Upon our review of the plain and ordinary meaning page 214of ‘lawful custody,’ . . . ‘lawful’ means ‘not contrary to law.’”). We therefore agree with the court of appeals that the commonly accepted meaning of the term “lawful” is “that which is ‘permitted by law’ or, conversely, that which is ‘not contrary to, or forbidden by law.’”

We still must determine, however, whether medical marijuana use that is licensed by the State of Colorado but prohibited under federal law is “lawful” for purposes of [Colorado’s “lawful activities statute”]. Coats contends that the General Assembly intended the term “lawful” here to mean “lawful under Colorado state law,” which, he asserts, recognizes medical marijuana use as “lawful.” We do not read the term “lawful” to be so restrictive. Nothing in the language of the statute limits the term “lawful” to state law. Instead, the term is used in its general, unrestricted sense, indicating that a “lawful” activity is that which complies with applicable “law,” including state and federal law. We therefore decline Coats’s invitation to engraft a state law limitation onto the statutory language. See State Dep’t of Revenue v. Adolph Coors (declining to read a restriction into unrestricted statutory language); Turbyne v. People (stating that “[w]e do not add words to the statute”).

Coats does not dispute that the federal Controlled Substances Act prohibits medical marijuana use. The CSA lists marijuana as a Schedule I substance, meaning federal law designates it as having no medical accepted use, a high risk of abuse, and a lack of accepted safety for use under medical supervision. This makes the use, possession, or manufacture of marijuana a federal criminal offense, except where used for federally approved research projects. There is no exception for marijuana use for medicinal purposes, or for marijuana use conducted in accordance with state law. Gonzales (finding that “[t]he Supremacy Clause unambiguously provides that if there is any conflict between federal and state law, federal law shall prevail,” including in the area of marijuana regulation).

Echoing Judge Webb’s dissent, Coats argues that because the General Assembly intended [Colorado’s “lawful activities statute”] to broadly protect employees from discharge for outside-of-work activities, we must construe the term “lawful” to mean “lawful under Colorado law.” In this case, however, we find nothing to indicate that the General Assembly intended to extend [Colorado’s “lawful activities statute”]’s protection for “lawful” activities to activities that are unlawful under federal law. In sum, because Coats’s marijuana use was unlawful under federal law, it does not fall within [Colorado’s “lawful activities statute”]’s protection for “lawful” activities.

Having decided this case on the basis of the prohibition under federal law, we decline to address the issue of whether Colorado’s Medical Marijuana Amendment deems medical marijuana use “lawful” by conferring a right to such use.

III.

For the reasons stated above, we affirm the decision of the court of appeals.

Case Questions

1. How does the court determine that Coats’ employment was lawfully terminated, despite the fact that medical marijuana use is permitted under Colorado law? Does it matter that the federal government is turning a blind eye to individuals who use medical marijuana (it has not overturned the statute classifying marijuana as a Schedule I substance) and is not seeking out medical marijuana users to prosecute, despite that it is illegal under federal law?

2. How should employers deal with the use of medical marijuana use by their employees? Should an employer simply prohibit all use of marijuana? Why may it be in an employer’s interests to permit the use of medical marijuana? How can employers, such as Dish Network, avoid such lawsuits in the future?