As the country continues to climb out of the recession, key benchmarks that are mentioned frequently for measuring a return to economic stability include unemployment statistics. For example, a March 4, 2011 Bureau of Labor Statistics (BLS) report for February 2011 states that 13.7 million people were unemployed and that persons unemployed for at least 27 weeks comprised 6 million of the 13.9 million. BLS reported a national unemployment rate of 8.9 percent and broke that down among certain groups, such as whites (eight percent), blacks (15.3 percent), and Hispanics (11.6 percent).

The EEOC conducted a hearing last month to examine a potential problem based on these patterns of unemployment, particularly “the emerging practice of excluding unemployed persons from applicant pools.” Twenty-seven members of Congress wrote to the EEOC in November 2010, noted their “serious concerns regarding the recent news reports about the blatant discrimination against the unemployed,” and asked the EEOC to investigate whether this purported hiring practice had a disparate impact on minorities. Not surprisingly, the congressional letter referred to the unemployment crisis in the country and suggested that a hiring practice that excluded the unemployed from consideration would not assist economic recovery.

The EEOC received testimony from a law professor, employee rights advocates, the Society of Human Resource Professionals (SHRM), and a representative of employer interests, each of whom discussed issues related to hiring practices in the marketplace. For example, one witness testified about a global manufacturer whose job posting for a marketing position stated that “No Unemployed Candidates Will Be Considered At All” and a Texas electronics firm whose ad on a recruiting Web site seeking to hire an engineer stated that the company would not “consider/review anyone NOT currently employed regardless of the reason.” Additional information was presented about employers who would not accept applicants who had been out of work for more than six months. In addition to stating a concern about employers adopting this practice, witnesses stated that staffing agencies and headhunters were abiding by the directives of their clients not to consider the unemployed for available positions. Testimony from employee advocates suggested that older workers, persons with disabilities, and other minority groups would be disproportionately affected by an arbitrary barrier requiring current employment.

Testimony was offered on behalf of employers suggesting that the examples of exclusionary hiring practices were anecdotal and not indicative of any regular practice to categorically exclude the unemployed. For example, the SHRM member testified that his company in 2010 hired 260 applicants who had been unemployed for six months or longer. There also was discussion that employment inquiries about employment history are frequently important in interviewing for qualified job candidates. One witness suggested that the unemployment figures would not support the disparate impact statistical standard followed by the EEOC.

The overall focus of the hearing was to explore whether a systemic practice to exclude the unemployed existed and, if so, whether it could have a disparate impact on protected classes given the variances between the unemployment rates among different ethnic and racial groups. Whether there are facts suggesting more than isolated exclusionary employment practices or statistics to prove that job applicants have been excluded because of their membership in a protected class remains to be seen. Nevertheless, the fact that the EEOC conducted the hearing and believes that there is an emerging trend to exclude the unemployed from job applicant pools, and that 27 members of Congress have characterized the purported trend as “blatant discrimination against the unemployed,” means that employers can expect their hiring practices concerning the unemployed to be scrutinized. The issue also seems ripe for a disparate impact test case, perhaps even one brought by the EEOC itself against an employer.

Given the legal, political, and economic implications of unemployment, it would be very unwise for employers to adopt a policy that excludes unemployed job applicants. Even though there is a “business necessity” defense available in disparate impact cases, it is just that — a defense. A better practice would be to have clear job requirements and descriptions and to conduct screening interviews to assess skills and competencies for those job requirements, including to inquire about prior employment and periods of unemployment where appropriate. For example, determining whether a candidate had been terminated for cause would be relevant in most cases; however, whether a candidate had been laid off because of a position elimination might not be. Overall, the individualized consideration of factors relevant to the job is likely to yield the best qualified candidate and to avoid an allegation about discriminatory exclusion of the unemployed.