Unemployed Need Not Apply: Is It Illegal to Refuse to Consider Hiring the Jobless?

One of the perverse features of today's recession-punished labor market is some employers are refusing to consider hiring people who are unemployed. The situation was reported on last spring by CNN Money and other media. This week, the Equal Employment Opportunity Commission held a hearing to discuss whether it is illegal employment discrimination to refuse to consider hiring the unemployed.

What constitutes illegal discrimination? The discrimination has to be against a "protected class" -- a group that has suffered discrimination based on a status it can't change, like gender, race or age -- or shouldn't be forced to change, like religion. Some states protect additional groups, but the EEOC enforces federal law, so that was the hearing's focus.

What Does the Evidence Say?

Yes, It's Illegal

Christine L. Owens of the National Employment Law Project, Fatima Goss Graves of the National Women's Law Center, and Algernon Austin of the Economic Policy Institute testified that it's probably illegal discrimination to refuse to consider employing an unemployed person.

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Owens testified both to the widespread nature of the "No Unemployed Need Apply" (NUNA) phenomenon and its apparent discriminatory impact against two protected classes: nonwhite workers and workers over 40 years old. Both groups tend to be unemployed much longer regardless of their qualifications and, as a result, are particularly impacted by such a policy.

Graves added that in certain instances, women would be disproportionately hurt by a NUNA policy. She identified three: older women and women of color -- really a subset of the group Owens testified about; women in occupations dominated by men (because women in these fields are laid off first and for longer); and women who leave the workforce temporarily to be caregivers. Austin cited minority unemployment statistics to emphasize the impact on people of color.

No, It's Not Illegal

The other side was represented by James S. Urban, a partner with law firm Jones Day, who represents employers, and Fernan R. Cepero, speaking for the Society for Human Resource Management.

Urban directly challenged both premises: that NUNA exists, and that if it did, it would be discriminatory, citing employment statistics. Unfortunately, the witnesses' discrimination statistics weren't directly comparable, and so they basically talked past each other on the issue. For example, Owens focused on long-term unemployment, nonwhites and older workers. Urban focused on overall unemployment rates for nonwhites, particularly Hispanics, in his analysis.

Indeed, the testimony from Helen Norton of the University of Colorado Law School showed how complex the discrimination analysis would be. She noted that if an ad says the unemployed need not apply, they wouldn't apply. So discriminatory impact couldn't be measured by looking at who applied and was rejected.

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Fernan R. Cepero, speaking for the Society for Human Resource Management, didn't address whether a NUNA policy would be illegal, saying simply that it was a bad idea -- and that to his knowledge, it didn't exist. However, Cepero noted that in some occupations -- specifically IT and web design -- skills could quickly get stale, so if a job candidate was unemployed for a significant amount of time, it could be a legitimate concern to an employer.

Valid as that point is, it doesn't address the apparently discriminatory impact of refusing to consider unemployed candidates. For example, someone could have kept his skills fresh by taking classes. Or, at a previous job, he may have used cutting-edge software giving him skills that are still more advanced than someone currently employed. That's the problem with categorical bans.

Illegal or not, a NUNA policy is obviously wrong: At a time of high unemployment, the jobless include many talented, high quality workers. Employment status these days is a particularly poor proxy for worker quality. Let's hope the practice -- to whatever extent it exists -- quickly ends. And if it doesn't, here's hoping some class action lawsuits -- or EEOC action -- puts a stop to it.