Ch04 The Beginning of the Employment Relationship.docx

Title VII: The Beginning of the Employment Relationship Chapter Objective: The purpose of this chapter is to address the situations during the establishment of the employment relationship where legal issues may arise. the chapter first discusses the recruitment procedure and highlights the regulation of that area. The student will then be introduced to the idea of preferential treatment, though this topic is addressed in greater detail in its own chapter. Then, the chapter will focus on the gathering of information through the application and interview processes. Scenarios - Points for discussion Scenario One: This question raises the issue of recruitment which encourages all appropriate candidates to apply. First, will her request for recent college graduates dissuade older workers from applying, and would older workers be just as qualified for the jobs as would younger workers? Second, would the requirement of an engineering degree in the advertisement dissuade individuals without the degree from applying, where they might be appropriate candidates for the second position? If so, the firm may be subject to liability. Scenario Two: The practice of using only unsolicited resumes may work in some situations, but here Barbara is aware that its result is an uneven workforce. Where this is the result of a facially neutral hiring scheme, the firm may be subject to a claim for disparate impact and should consequently alter their recruitment practices to some extent. In this case, perhaps Barbara should begin to actively solicit the applications of individuals who are not white males. Scenario Three: The question here is whether Sarah should have investigated the employee's responses to the application questions. Depending on the question at issue and the job for which the individual will be hired, the firm may have an obligation to conduct a more extensive background check. In this case, being convicted of grand theft auto may have led Sarah to believe that this applicant is not appropriate for a position, so he may not have been hired had Sarah found out the truth. LECTURE NOTES I. Management Concerns in Recruitment Lecture Note: Because personal prejudices and biases often enter into the recruitment process, it is critical that students be conscious of their own biases as they discuss these issues in this course. To that end, sometimes I use an exercise which is also appropriate during the discussion on evaluation schemes in Chapter 16. I find photographs in magazines and advertisements of various individuals. I cut out the pictures of the individuals and make sure that you cannot tell what they do for a living. I then ask the students to tell me something about this person, like what is her religion. Generally, the students may begin this exercise by saying, "how would I know her religion?" But, you have to get them to give you their first impression. What is the first response that comes to mind. Does this person have children? Is she or he married? Where are they from? How much education have they had? Ask questions that may come into play in the work place, but we make judgments about someone before really knowing, like "will this person be flexible with others?" You'd be surprised how many conclusions everyone is willing to make without knowing a thing about the person. I enjoy cutting out pictures of people where I actually do know their occupation, age, etc. because then I can surprise the students after we go through each one and tell them who the person really is. A. Because human resources of a firm are considered to be its greatest asset, courts often grant a great deal of leeway to employers in connection with their recruitment practices. B. Discrimination is allowed, as long as it is not based on membership in one of the protected classes. That is to say that, in every hiring decision, discrimination occurs -but on acceptable bases. The employer is allowed to discriminate based on experience, education and so on. The employer may not discriminate on the bases if race, gender, and so on. The interesting point here is that there are some bases on which the student may believe it is unfair to base a decision, but they are allowed. For instance, I sometimes use the example of blondes. If I decide that I do not want any blondes working for me, I am allowed to discriminate on that basis because hair color is not a protected class. On the other hand, if I say that only blondes may work for me (and where hair color is not a BFOQ, like in a hair color advertisement), then that restriction may have the effect of keeping certain protected groups from obtaining that position. Blacks and Asians are less likely to have blonde hair so, while hair color is not protected, I would not be able to use this as a basis for my decision (because of the disparate impact). II. Recruitment A. If applicants are denied access to employment opportunities on the basis of membership in a protected class, they may have a claim against the potential employer for discriminatory practices. B. Statutes governing the recruitment process require that an employer not only recruit from a diverse audience, but also design employment announcements so as to encourage a diverse group of applicants. Where the employer utilizes recruitment practices which result in an adverse impact upon a group protected by anti-discrimination statutes, that practice may be wrongful even if the employer had no intent to discriminate. C. Federal statutory regulation of recruitment: discussed in Box 4-2. D. State statutory regulation of recruitment: Many states have enacted legislation specifically aimed at expansion of the federal statutes. Case Example: Pullar v. Independent School District No. 701, Hibbing, 582 N.W.2d 273 (Minn. App. Ct. 1998) Issue: Did the district court err in dismissing Pullar's complaint for failure to state a sex discrimination claim? Facts: A female applicant, Irene Pullar, for teaching position that involved coaching after school hours. The school district refused to hire her because she had young children, whose needs, the principal claimed, were incompatible with the responsibilities associated with coaching after school hours. Instead, it hired another woman who had less teaching and coaching experience than Puller but did not have young children. Puller brought an action against school district, alleging sex discrimination in violation of the Minnesota Human Rights Act (MHRA). The complaint also alleged that the school district "ha[d] frequently hired males for teaching positions that involved coaching responsibilities." The District Court dismissed the complaint for failure to state a discrimination claim under the Minnesota Act. The court found that the complaint did not sufficiently allege that the school district had a hiring policy that treated women and men with young children differently. Decision: The Court of Appeals held that because the complaint alleged that the school district had one hiring policy for women with young children and a different hiring policy for men, it alleged a claim under the MHRA even though the MHRA does not prohibit familial status discrimination in employment and the school district denied an applicant employment in favor of a member of the same gender. The court reversed the district court's judgment dismissing the complaint. 1. If an employer knows that an applicant will have problems meeting the responsibilities, why can’t they be pro-active decide not to hire the applicant due to the problems the applicant will encounter meeting his/her responsibilities? The employer does not know that the applicant will have problems due to a family situation. The employer is making a decision based on stereotypes which violates Title VII and also, in this case, the Minnesota Human Rights Act. Why do you think some applicants bring claims under the state human rights act rather than Title VII? In some of the cases, the complaints brought do not violate Title VII. Many of the state human rights act are broader than Title VII. In this regard, the state acts provide broader protections than Title VII. Also, some individuals may not want to bring a claim in federal court do to strategic or other considerations and therefore bring a claim in state court. In this case, what must an applicant show in the complaint in order to survive being dismissed for lack of stating a claim under the Minnesota Human Rights Act? A plaintiff may establish a prima facie case of disparate treatment discrimination by showing that (1) she is a member of a protected group; (2) she sought and qualified for opportunities that the employer was making available to others; (3) the employer denied her the opportunities despite her qualifications; and (4) the opportunities remained available or were given to other persons with her qualifications. A prima facie case must support an inference that the employer acted with a discriminatory motive to deprive a person of opportunities it made available to similarly situated members of the opposite sex. It should be noted that the elements of a prima facie case for discrimination vary. These elements are specific to Minnesota. Each state has its own elements to establish a prima facie case. Likewise, under Title VII, circuit courts vary in their analysis of discrimination and the elements need to establish a prima facie case. LECTURE NOTES Common law regulation of recruitment 1. Misrepresentation: A company representative who makes an intentional or negligent misrepresentation which encourages an applicant to take a job may be liable to that applicant for harm which results. a. 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. b. To be actionable, the applicant must show that the employer misrepresented a material fact, either intentionally or with recklessness as to its truth or falsity, that the applicant reasonably relied on this representation in arriving at the decision to accept the offer, and that she or he was damaged by this reliance. 1) The misrepresentation need not actually be a false statement; where a statement creates a false impression, the employer may also be liable for fraud. 2) Where the employer is aware that the applicant is under a mistaken belief about the position or the company, the employer's silence may constitute misrepresentation. 3) Where the employer hides certain bits of information, the employer's silence may again be considered misrepresentation. One employer in California may end up being liable to a number of employees’ spouses for misrepresentation made during recruitment regarding the firm's expectations for growth. In Meade v. Cedarapids, Inc. (9th Circuit), the Court of Appeals reversed a lower court’s granting of a summary judgment in the employer’s favor. The noted that couples usually make decisions as a family unit and “it is likely that the process of deciding whether to relocate for a new job involves convincing the spouse that the positive qualities of a new job outweigh the difficulties caused to the family.” 2. Fraud: Employers may also be liable for fraud in recruitment when misstatements are used to discourage potential applicants from pursuing positions. Various Recruitment Practices 1. Advertisements. The employer must insure that advertisements do not discourage any eligible applicants from applying (such as only encouraging young applicants, as in scenario one), that they are honest about what is required for the position, and that they are disseminated to a broad variety of potential applicants (i.e. one cannot merely advertise in newspapers that are distributed only to certain groups). 2. Word-of-mouth recruiting. Generally most people know and recommend others similar to themselves. Word of mouth recruiting generally results on a homogeneous work place. a. This type of recruiting is not necessarily harmful where precautions are taken to ensure a balanced applicant pool or where it is necessary for insuring hire of the safest and most competent workers. b. Benefits to this type of recruitment include the preliminary screening accomplished by the current employees before they even recommend the applicant for the position and the propensity 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. The practice is only subject to suspicion if it results in adverse impact against members of protected classes. Chicago Miniature Lamp Works and Consolidated Service System cases exemplify the distinction between disparate impact and disparate treatment. Ask students to consider questions posed in the text: What are the questions a court must answer to determine if word-of-mouth recruiting results in disparate treatment? Could word-of-mouth recruiting ever lead to liability for disparate impact? Case Examples: Equal Employment Opportunity Commission v. Chicago Miniature Lamp Works, 947 F.2d 292 (7th Cir. 1991) Issue: Whether the lower court erred in finding disparate treatment and disparate impact by Miniature by relying on EEOC statistical evidence and its word of mouth recruiting. Facts: Equal Employment Opportunity Commission (EEOC) sued employer charging race based discrimination against blacks. The United States District Court found employer liable under both disparate treatment and disparate impact theories. Employer appealed. Decision: The Court of Appeals held that trial court erred in relying on EEOC's statistical evidence in finding disparate treatment and disparate impact and that the word of mouth recruiting was not discriminatory. Case Questions: 1. Would an unbalanced work force due to word of mouth recruiting alone ever constitute disparate treatment? No 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. Probably not. This may be stronger evidence of disparate impact - used as an alternative theory to disparate treatment. 3. How would you balance the advantages of word of mouth recruiting against the possibility of discriminatory impact? Discuss whether a less discriminatory alternative is available. EEOC v. Consolidated Service System, 989 F.2d 233 (7th Cir. 1993) Issue: Whether a word-of-mouth recruiting effort, which resulted in 81 percent of hires being of Korean descent in a work force which is only 1 percent Korean, is a discriminatory practice. Facts: Consolidated Services System 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 hires were Korean, while less than 1 percent of the work force in the Chicago area is Korean. Mr. Hwang claims he relies on word of mouth to obtain employees because it is the cheapest method of employment. Hwang did buy newspaper advertisements on three occasions-once in a Korean-language newspaper and twice in the Chicago Tribune- but these ads resulted in zero hires. Decision: The hiring discrepancies were not due to discrimination. If an employer can obtain all the competent workers he wants, at wages no higher than the minimum that he expects to have to pay, without beating the bushes for workers- without in fact spending a cent on recruitment-he can reduce his cost of doing business by adopting just the stance of Mr. Hwang. 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. Discrimination is not preference or aversion; it is acting on the preference or aversion. If the most efficient method of hiring adopted because it is the most efficient, just happens to produce a workforce whose race pleases the employer, this is not intentional discrimination. 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 work force due to word-of-mouth recruiting alone ever constitute disparate treatment? No. 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? Probably not. This may be stronger evidence of disparate impact - used as an alternative theory to this disparate treatment case. 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? Discuss whether less discriminatory alternative is available. LECTURE NOTES 1. Nepotism. (See discussion and questions following Kraft case, earlier.) Nepotism is the practice of hiring members of the same family; and some employers rely on this to locate the most appropriate candidates. a. This practice may result in homogeneity, as the company becomes a conglomerate of a number of homogeneous families, with greater likelihood of discrimination resulting from a disparate impact. b. Nepotism policies are not, per se, illegal. When an employee or applicant challenges the policy, the court will determine whether it has an adverse impact on a protected class. If so, it will be found illegal unless the employer has a strong justification in favor of its business necessity. c. An anti-nepotism policy (one which states that the company will not hire family members) may also be discriminatory where it is not applied across the board. d. Courts have consistently upheld general anti-nepotism policies which provide that the company will not hire the spouse of a current employee, as long as there is no evidence of disparate impact, or the policy applies to employees at all levels of employment. 2. 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 make-up of the workforce. a. Closed processes where a present employee is identified and offered the open position may cause problems. Employers are less likely to have problems with hiring if they 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 that there is equal employment opportunity. 3. Venue recruiting. Employers may decide to conduct recruiting at a university or high school. a. Similar precautions must be taken in order to attract diverse applicants in a locale which may be either purposefully or unintentionally uniform. b. The same effect may result when an employer recruits with a preference for experienced applicants for entry-level jobs. 4. Walk-in applicants. (See scenario no. 2, above.) While this strategy may be effective in locating employees and reducing costs of actual 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. 5. Neutral solicitation. Neutral solicitation refers to the actual advertisement and the types of people who may be encouraged to apply. While selecting an appropriate source from which to choose applicants is crucial, it is also important to fashion the process to encourage diverse applicants. a. The announcement or solicitation should invite applications from all groups and should not suggest a preference for any one class of individual. 6. Resume Collection Concerns. Since applicants acquire certain rights simply by virtue of being “applicants”, it is crucial to control the processing of applications. Once an application is received, federal employers or contractors have a duty to keep records and collect information regarding compliance with selection or affirmative action requirements and other obligations. Other employers should retain this information as well, since (1) some statutes have record-keeping requirements, such as the Age Discrimination in Employment Act, and (2) one of the ways to refute an applicant’s claim of discrimination is through statistical analysis of the applicant pool. “Applicant” is not defined by any of the enforcement bodies such as the EEOC or the Department of Justice. It is a good idea for employers to define the term for purposes of possible litigation. G. Preferential Treatment 1. Preferential treatment, or more generally affirmative action, may be required by federal law, depending on the employer, the number of employees and the type of position available. 2. The difference between preferential treatment and affirmative action, as those terms are used in this section, is that preferential treatment means simply a preference offered to members of a certain class that is not offered to members of other classes; affirmative action provides for the most equal opportunity possible to members of various groups which have historically not been provided equal opportunity, and may include preferential treatment to education programs, referral services, pre-employment preparation or training for certain groups. 3. Title VII does not require preferential treatment be given to any specific protected class. In fact, the statute states that preferential treatment can not be used to remedy the existing number or percentage imbalance of a protected group. However, if a protected group has been discriminated against by the employer, the employer can consider an individual’s status as a factor in its hiring decision. Title VII states: Nothing in this title shall be interpreted to require any employer . . . to grant preferential treatment to any individual or to any group because of the race, color, religion, sex or national origin of such individual or group on account of an imbalance which may exist with respect to the total number or percentage of persons of any race, color, religion, sex or national origin employed . . . in comparison with the total number or percentage of any persons of such race, color, religion, sex or national origin in any community, . . . (Section 703(j)) 4. The Rehabilitation Act requires affirmative action programs for the employment of disabled employees, though not specifically preferential treatment. 5. The Vietnam Era Veterans' Readjustment Assistance Act of 1974 provides that government contractors with contracts of $10,000.00 or more must undertake affirmative action programs for the purpose of employing and advancing disabled and qualified veterans who were on active duty between August 5, 1964, and May 7, 1975. 6. Executive Order 11246, as amended, regulates the activities of those who have contracts of $10,000.00 or more with the federal government. a. The Order was signed before Title VII was enacted and requires similar employment actions; i.e., the Order prohibits a covered employer from basing any employment decision upon race, color, religion, sex or national origin. b. Contractors with contracts of over $50,000.00, must design and implement affirmative action programs whenever women or minorities are "underutilized", or under represented, in the work force. c. "Under-utilization" is defined by Revised Order No. 4 as "having fewer minorities or women in a particular job group than would reasonably be expected by their availability. d. The plan must also establish timetables for elimination of the disparity and address the satisfaction of these goals in the program. 7. The Civil Service Reform Act of 1978 provides that all federal government agencies implement programs designed to create "a federal work force reflective of the Nation's diversity." a. This general statement of intent provides the basis for involuntary affirmative action programs discussed in the affirmative action chapter. Case Example: Michael J. McGarry v. Board of County Commissioners Facts and Holding: Michael McGarry, a white male who resided in Pitkin County, Colorado, twice applied for a position as a building maintenance worker at the Pitkin County Airport Building Maintenance Department, and was twice rejected in favor of minority candidates. Pitkin County had a policy to give preferential treatment to candidates who were currently employees or residents of the County. The County also had a policy regarding affirmative action in hiring. Cumnock, the Conty Personnel Director, conducted an investigation in response to McGarry’s inquiries regarding the hiring decisions. In the first of two meetings regarding her investigation, Cumnock told McGarry that one candidate was hired because he was better qualified. At the second meeting, she informed McGarry that the candidates had been chosen because they were minorities. One month after receiving his second rejection from the County, McGarry filed a reverse discrimination charge with the EEOC against the Board of Commissioners of Pitkin County. The district judge granted the Board’s motion for summary judgment. The Tenth Circuit Court of Appeals reversed. Issue: Do the employer’s potentially conflicting policies on affirmative action and preferential treatment of internal candidates help support an inference of reverse discrimination in McGarry’s claim? Analysis: In looking at the evidence in the light most favorable to McGarry, the Court concluded that Cumnock’s contradictory statements regarding the reasons for the candidates’ selection constituted direct evidence supporting an inference of discrimination. The Court noted that these statements were made “against the backdrop” of the County’s policies on hiring. Case Questions: Compare Paragraph 10 of Policy 115 and the second paragraph of Policy 140 of the County cited in the decision. If you were an Employment Practices Consultant for the County, what changes, if any, would you recommend to these policies? Explain. [Student Discussion. Some ideas might include deleting Policy 115’s reference to “minorities, women, disabled, and other protected-group applicants.” Not only does this confuse Policy 115 with Policy 140, it creates the false image that only those named groups are “protected” from discrimination based on their membership in a group under a protected category. Another idea might be to make the presentation of the affirmative action plan in Policy 140 more positive and accurate. For example, the policy could read that the County “seeks to offer employment opportunities to qualified minorities, women, and the disabled.” This statement also does not restrict affirmative action to “minorities.” McGarry’s meetings with the County’s Personnel Director resulted in evidence that supported his claim against the County. How could the County avoid a similar result in the future? [Student Discussion. Investigations should be concluded fully before communicating results and findings to the employee who raised the concerns. A third party should be present at such a meeting. Personal opinions should not be expressed at such a meeting]. In April 1994, one month after filing his EEOC charge, the County advertised another building maintenance worker position. McGarry did not learn of the position opening until after the application deadline had expired and thus did not submit an application. Though his application was on file, the Board did not consider him for the position. McGarry added a retaliation claim to his lawsuit against the Board, and the Board moved for summary judgment on this claim as well. How should the court rule on the Board’s motion for summary judgment? [Student Discussion. The Court reversed the District’s Court grant of the defendant’s motion for summary judgment on the retaliation claim as well. The failure to consider McGarry was an adverse employment action, he had opposed an employment practice by filing an EEOC charge, and there was enough evidence to establish a causal connection between the County’s action and McGarry’s protected activity.] III. Information Gathering and Selection A. The application process. 1. Under most circumstances, the application requests information which will serve as the basis for later screening out applicants because of education or experience requirements. Questions which are business-related and used for a nondiscriminatory purpose are appropriate. 2. The text discusses the various types of information which may appear innocuous but may have problematic results. Asking for an applicant's name, for instance, may be a problem. The applicant with a surname which is related to a protected group may argue that she or he was denied a position because of presumed membership in that group. While the firm may not have made a decision on that applicant on the basis of her or his name, now the firm must justify the decision not to hire him or her. Where no name is asked, or where the applicant's names are removed from the applications prior to the decision-making process (and numbers are used instead, for instance), then the employer's decision is subject to less scrutiny. There are only a few questions that are strictly prohibited from being asked on an application and during the interview process by federal law. Any questions concerning disability, specific health inquiries, and worker’s compensation history are prohibited by the American with Disabilities Act of 1990. Questions regarding to age, sex, religion, marital status, nationality, and ethnicity are not prohibited by federal law but they are dangerous. Questions relating to these areas must be related to the position for which the applicant applies in order for an employer to be able to ask such questions. 1) Even if the employer does not base its employment decision on the responses of these inquiries, where the selection process results in a disparate impact against a protected group, the employer could be liable. Lecture Note: Application Form Exercise Find copies of an application form for any job; just use any basic form which asks the basic questions. Break the class into groups and ask them to review the application forms you are out. Ask the groups to circle any problem questions and a recorder should jot down the basis for the problem. After working, ask recorders how many problem questions they each found. Now, go over the form with the master and the recorder should note any additional problem areas that each group didn't have down. Generally, almost every question might have a problem or potential for discrimination, but it is important that the class see how each question must be business justified or how each question may lead to information which, if used, would be discriminatory. For example, raised from the name example above, asking for someone's address may lead to problems where the address is in a neighborhood which is predominantly Black, or Asian, and so on. Even if the employer does not use this information, the burden seems to shift to the employer to prove that it did not use the information in reaching an employment decision. Note that the problem here is that too much probing raises questions about invasions of privacy, while too little raises issues of negligent hiring. B. The Interview. Lecture Note: Exercise: Hands O.K., We're getting into the section on interviews. So, think about your worst interview, whether you were the interviewer or the interviewee. It can be bad because you were uncomfortable, you were nervous, pressured, angry, felt invaded, etc. Everyone got an idea? All right, you are going to go around the room and tell three people of this experience. Once you have told the third person, stick with her or him and be quiet so I know when everyone is matched up. Turn to your partner and look into their eyes. There should be no more talking from no on. Raise your hands to chest height and place your palms almost together, but do not touch. Now, without talking, figure out who is the taller of the two of you. This person will be the leader. Leaders, begin moving your hands very slowly, followers follow the leaders' hands with your hands. Leaders move slowly now. Now, move a little faster, faster, faster, do what ever you want, you don't even have to stay still. OK, STOP. How many of you felt that your leader was trying to help you to follow? How many of you thought that your leader was trying to trick you? Pick one of the tricked people: why do you think that? What gave you that idea? Weren't they just following directions? Was it the look in their eyes? The way they moved, the fact that they were laughing? What was it? Pick on of the helped people: Ask the same questions. Did you feel good, helped? See, you can convey an extraordinary amount of information without speaking at all. In an interview, the follower is the interviewee. The leader is the interviewer. That person may control the interview and you may experience similar feelings to what you just went through here. 1. Discrimination may occur during the interview in the same manner in which it is present on application forms. If it would be improper to ask a question on the application, it just as improper to ask for the same information in an interview. 2. Discrimination during the interview may occur not only through questions but also through the way in which the applicants are treated. Be certain to insure that all applicants receive the same type of treatment during the entire process. 3. There are four problem areas in connection with the interview. a. First, the employer must ensure that the interview procedures do not discourage women, minorities or other protected groups from continuing the process. b. 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, training of the interviewers is crucial in order 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 offers guidance on developing acceptable questions for an interview. As a general rule, valid questions must be uniformly applied to all applicants for the same position. [You may conduct a student exercise where students develop valid interview/application questions for a particular job announcement, and then have them practice “mock interviews” in pairs]. C. Background or Reference Check, Negligent Hiring. 1. The more responsibilities a position has, the more likely it is that the employer will verify all of the qualifications the applicant has listed on her or his application, such as experience and education. 2. It is important, as well, to insure that there is no undiscovered information which would disqualify the applicant from employment or which may subject other employees, clients or customers to a dangerous situation and the employer to a claim of negligent hiring. An employer is liable for negligent hiring where an employee causes damage which could have been prevented if the employer had conducted a reasonable and responsible background check on the employee. 30% of workplace attacks are committed by coworkers or ex-co-workers. Therefore, this should be a critical area of caution for employers. In order to state a claim for negligent hiring, the plaintiff must show: 1) The existence of an employer/employee relationship; 2) The employee's incompetence or inappropriateness for the position assumed; 3) The employer's actual or constructive knowledge of such incompetence or inappropriateness, or the employer's ability; 4) That the employee's act or omission caused the plaintiff's injuries; and 5) That the employer's negligence in hiring or retaining the employee was the proximate cause of the plaintiff's injuries (i.e. upon investigation, the employer could have discovered the relevant information and prevented the incident from occurring). Lecture Note: See scenario no. 3. The amount of background and reference checking necessary in order to be shielded from a claim of negligent hiring varies from situation to situation. A position which 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 which requires a great deal of personal contact would require an investigation into the applicant's prior experiences, etc. An employer must exercise reasonable care in hiring applicants who may, as a result of their employment and the employer's negligent failure to obtain more complete information, pose a risk to others. The standard of care to be met is that which would be exercised by a reasonable employer 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. 3. Checking on references. In order to carefully and adequately check on an applicant's references, the employer has several options. a. First, the employer may contact the reference in person, by telephone or by letter and request a general statement as to whether the information stated in the application/interview is correct. b. Second, the contact might be much more specific, posing questions regarding the applicant's abilities and qualifications for the available position. c. Third, the employer may undertake an independent check of credit standing through a credit reporting agency, military service and discharge status, driving record, workers' compensation record, criminal record or other public information in order to obtain the most complete information on the applicant. d. There are problems inherent in each form of query. 1) 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. 2) Certain information is not available to employers and 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 which statutorily protect disclosure of this type of information, the employer may be subject to a claim of invasion of privacy or other statutory violations. 3) There may also 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 convictions relevant to the job. 4) 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 which it seeks. It further requires the employer to obtain written authorization to obtain the report. 5) The reference and background information gathering process is a lengthy one and may be unmanageable given the employer's position requirements. 6) Employers may not be willing to offer any further information than that the applicant worked at that company for a period of time. Employers have cause for concern given the large number of defamation actions filed against employers based on references. e. See Box 4-6 4. The most effective means by which to avoid this potential stumbling block 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. a. 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. b. See Box 4-5. IV. Reference Checks: Potential Liability for Providing References? Various states have passed some form of law relating to reference checks or a general statutory privilege making employers immune from liability when giving information regarding a former employer unless the claims made were false or the employer did not act in good faith. Some of the states that have such laws include California, Georgia, Illinois, Oklahoma, and West Virginia. However, this protection does not go so far as to protect an employer who issues a negative reference in retaliation for a Title VII claim by a former employee. For example, in Robinson v. Shell Oil Company, a former employee claimed his employer had given a negative reference to a prospective employer because he had filed a charge of race discrimination with the EEOC after he was terminated. The Supreme Court ruled that former employees have the same right as current employees to sue on grounds that the were retaliated against for exercising their Title VII rights. 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. However, employers should be aware, that should an employer chose not to provide reference information on prior employees, they could be facing lawsuits and liability from the new/prospective employer. 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. 17 Daily Lab. Rep. No. 193 (Oct. 5, 1995). 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. In Randi W. v. Muroc Joint Unified School Dist. [fn. 14 Cal. 4th 1066 (1997)], the California Supreme Court reviewed a claim brought by former junior high school student who had been molested by the vice-principal. The vice-principal had received glowing recommendations from his former employers, including the Muroc School District that spoke of his “genuine concern” for students. Nevertheless, administrators at these other school districts knew that this former employee had been the object of complaints and discipline regarding sexual harassment of their students. The California Supreme Court found that a former employer owed a duty of care to third parties in making representations regarding a former employee’s character and qualifications that present a substantial, foreseeable risk of physical injury to third persons. While emphasizing that there is no affirmative duty to respond to requests for references, the court recognized a duty to respond fully and honestly after voluntarily undertaking to provide such references to avoid such foreseeable harm. The court held on the facts of the case that the former employers were liable for misrepresentations or nondisclosures in their employment references. The California Supreme Court found that a former employer owed a duty of care to third parties in making representations regarding a former employee’s character and qualifications that present a substantial, foreseeable risk of physical injury to third persons. While emphasizing that there is no affirmative duty to respond to requests for references, the court recognized a duty to respond fully and honestly after voluntarily undertaking to provide such references to avoid such foreseeable harm. The court held on the facts of the case that the former employers were liable for misrepresentations or nondisclosures in their employment references. One possible safeguard an employer can utilize is requiring written release from former employees before any information is released. However, the release should be voluntary with the former employer having an opportunity to discuss with an attorney and should include the employee’s agreement not to contest either his or her termination or the contents of the personnel file. V. Uniform Guidelines on Employee Selection Procedures A. The Uniform Guidelines on Employee Selection Procedures were enacted in 1978 in an attempt to assist employers to comply with Title VII. The Guidelines provide a framework for determining the proper use of tests and other selection procedures. B. The Four-Fifths Rule: The Guidelines are based on the concept that any selection procedure which results in an disparate impact (discussed in detail in the chapter on Title VII) will be considered discriminatory. The Guidelines therefore attempt to offer a benchmark for whether adverse impact exists. Disparate impact is said to exist where a selection rate for any protected class is less than 80% of the rate for the group with the highest rate of selection (the "four-fifths rule"). C. Test validation: While test validation is discussed in the proceeding chapter, the most significant aspect of the Guidelines relating to testing is that there is no requirement to validate the tests where no adverse impact results or has been shown. A considerable portion of the Guidelines relates to the validation of selection instruments. Test of least Impact: In addition, where two or more selection procedures are available which serve the employer's legitimate interest in an efficient and trustworthy manner, and which are substantially equal for their stated purpose, the employer is directed to use the procedure which has been shown to have a lesser adverse impact. 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 may be in the best interests of the employer to articulate the reasons in order to avoid the presumption of inappropriate reasons. 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 the witness stand, to say "I don't remember!" Moreover, the individuals who originally made the decision about this candidate may no longer be with the firm. Finally, a firm may choose to document in order to supplement statistical data proving a lack of discrimination. This paper trail may serve to prove that others who were similarly situated were treated the same way, not differently. On the other hand, documentation may also 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. The decision about whether to put on paper reasons for failing to hire is best left to individual employers who may choose to record this information, while instituting a monitoring system that will catch any areas of potential vulnerability. 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. 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 accepts the position and moves from New Orleans to Denver to begin his new job. Two months later, Peters is laid off as a result of Security Pacific's poor financial condition. [Peters would have a claim for fraudulent misrepresentation.] 2. Oakland Scavenger Company instituted a policy pursuant to which ownership of company stock was restricted to family members, all of whom were of Italian ancestry. Prior to the institution of this new rule, the company had a policy that only stock holders were eligible for the upper level, and more lucrative, jobs in the company. While the company did not dispute the adverse impact which this policy had on Hispanic and black employees, it attempted to justify its position by claiming that the purpose of the new rule was to protect its family members. Several black and Hispanic employees file suit. Bonilla v. Oakland Scavenger Co., 697 F.2d 1297 (9th Cir. 1982) [The employee could make out a prima facie case for a violation of Title VII by showing that the employer limited share ownership to persons who were of Italian ancestry and were either members of the family or close friends of a current shareholder and gave the better jobs with higher pay and more hours to shareholders employees. Thus, ruling in favor of employees.] 3. The manager of an apartment complex owned by K.M.S. Investments used a key during his off duty hours to enter a tenant's apartment and forcibly raped the tenant at knife point. In the investigation that followed the event, it was discovered that K.M.S. had not checked the manager's references and had not inquired as to a lengthy gap in employment. The tenant sued K.M.S. Investments for compensatory damages. Ponticas v. K.M.S. Investments, 331 N.W.2d 907 (Mn. 1983) [(1) Employer has duty to exercise reasonable care in hiring individuals who, because of nature of employment, may pose threat of injury to members of public; (2) evidence supported finding that owner and operator of apartment complex were negligent in failing to make reasonable investigation of apartment manager's background; (3) negligence was proximate cause of injuries to tenants.] 4. Clara Watson, a black woman, worked for Fort Worth Bank & Trust as a teller. Four years after working as a teller, she applied for the position of supervisor of the main lobby tellers, but her application was rejected, and a white male was selected for the job. Watson then applied for the position of supervisor of the drive-in section of the bank, and her application was rejected again in favor of a white woman. Watson filed a discrimination suit based on disparate treatment, but the bank presented legitimate and non-discriminatory reasons for each of her rejections; however, the bank did not have any objective formal criteria for evaluating any of the positions for which Watson applied; the bank relied mostly on the subjective judgments of the supervisors and short interviews with these supervisors. All four of the supervisors involved in Watson's promotion decisions were white. Watson v. Ft. Worth Bank & Trust, 47 FEP Cases 102 (1988) 5. Cone Mills Corporation had several recruiting procedures which gave preferential treatment to applicants who either had family members or friends working for the company. One of these procedures was to give priority to applicants who had family employed by the company; the other procedure was to have an unwritten policy that walk-in applications had to be renewed every two weeks which created a situation where only those walk-in applicants who had friends or family in the company would renew their applications because they would be the only ones informed of this unwritten informal rule which was not present in any manual or policy. These recruiting procedures were charged to be discriminatory towards blacks in general, especially black women because the informal network responsible for recruiting new employees was unavailable to them. The company claims that its procedures were not designed to be discriminatory; they were merely a method of creating a loyal family atmosphere within the plants. Lea v. Cone Mills Corp., 301 F.Supp. 97 (D.N.C. 1969) [A) Defendant's hiring procedures of granting initial hiring preference to former employees and close friends and relatives in inherently discriminatory against Negro females. The hiring preference of defendant will continue to place Negro females applicants at a competitive disadvantage; thus constituting prima facie case of discrimination. B) The renewal policy was also inherently discriminatory because it was not included in any written manual or other hiring policy to which plaintiffs would have access.] 6. The W.T.Grant Company recruited new "over-the-road" (OTR) drivers predominantly by word-of-mouth solicitation and recommendations by current employees. Barnett, a black man who was rejected for the OTR position, filed suit against the company on the basis that their word-of-mouth recruitment was excluding employment opportunities for blacks as evidenced by the all-white OTR driver work force. The company claimed that the lack of blacks on the OTR driver work force was due to the lack of interest on the part of blacks in these positions not the recruitment methods. There were other divisions in the company that utilized advertising and other recruitment alternatives, and the work forces in these divisions were much more racially mixed. The company claims that each division needs to be treated differently and denies any intention of discrimination. Barnett v. W.T. Grant Co., 518 F.2d 543 (4th Cir. 1975) a) Word-of-mouth hiring is discriminatory because of its tendency to perpetuate all white composition of a work force. b) Nonobjective hiring standards are always suspect because of their capacity for masking racial bias. c) Plaintiff in civil rights suit on charge of racially discriminatory employment practice was entitled to recover his costs and reasonable counsel fees.] 7. United Air Lines placed an advertisement for stewardesses in a New Orleans newspaper. This ad was placed under the heading "Help Wanted- Females Only." There was no additional ad placed under the "Help Wanted- Males Only" column. In the ad, United did verify its status as an equal opportunity employer. After reading this ad, Clarence Hailes, a white male, filed charges against United on the basis that the ad was sexually discriminatory towards the male sex. He claimed that the ad's location, the use of the term "stewardesses," and the lack of attention paid to the male sex made this ad a discriminatory ad. Hailes had never applied for the steward position at United, and he had never contacted United for any form of employment in the past. United claimed that Hailes cannot be considered an aggrieved party in this case because he had not been discriminated against in any way. Hailes claimed that he had applied for this position before with another airlines and had been rejected because of his sex, and he did not apply to United because he predicted the same outcome. Hailes v. United Air Lines, 464 F.2d 1006 (5th Cir. 1972) [Airline ad for "stewardesses" placed in "Help Wanted - Females" column of newspaper w/o corresponding ad in "Help Wanted - Male" column indicated improper preference for females which could not be neutralized by statement that airline was "Equal Opportunity Employer."] 8. Brown was interviewed by the personnel department of the North Houston Pole Line Company but, during the interview, the interviewer failed to obtain information about Brown's driving record. Nevertheless, after a twenty minute interview, Brown was hired. One week later, he caused a several car pile-up. One of the victims sued both the pole company for negligent hiring and Brown, who had received five traffic tickets for moving violations in the previous year. McAllister v. North Houston Pole Line Co., 667 S.W.2d 830 (Tx. 1983) [Evidence that employer did not check truck driver's driving record, that employer did not ask to see truck driver's commercial driver's license, that employer did not check truck driver's employment record, that employer did not test truck driver's driving skill or train him to drive its truck and that employer allowed truck driver to continue driving after accident and after employer learned of 5 speeding tickets before he was hired supported jury's finding of gross negligent entrustment against employer.] 9. 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% African American employees. She stopped by the office one day to ask if the office was hiring clerical help. She was told that they were and 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 has 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. What result? [Loosely based on Phillips v. Joint Legislative Committee on Performance and Expenditure Review of the State of Mississippi, 637 F.2d 1014 (Mi. ____). Court held that, in view of evidence that it was routine practice of the employer to make no further effort to contact walk-in applicants, black applicant did not establish that denial of employment was due to racial discrimination. Fact that building was 80% black, which was added by the authors, may slightly alter the finding of the court, since blacks may suffer greater denial rate. On the other hand, if non-walk-in rate of hire is balanced between races, then this would be a defense.] 10. O & G is a wire company which offers line positions in its factory at extremely low pay and in what would be considered by most to be poor working conditions. In order to obtain new workers, I & G relies exclusively on word-of-mouth from its predominantly Polish work force. Parents tell their children and friends tell friends. Given that the majority of the Polish-born work force have received technical training in school in Poland, O & G is continually provided with a supply of workers who can graduate to more skilled positions without the need of a formal training program. Keller, an Asian man, files an action against O & G, claiming that its practice of not advertising its open positions and merely relying on word-of-mouth discriminates against non-Polish workers. Is he correct? [Loosely based on EEOC v. O & G, 732 F. Supp. 72 (N.D. Ill. 1990) where the court held that he word-of-mouth recruitment practice had a legitimate business purpose and that the EEOC did not establish what less discriminatory alternative methods were available for O & G. It would be interesting to ask the class what alternative were available to O & G.]