Why it matters: The newest category of protected class for employees: unemployment. A new bill introduced in both the House and the Senate would ban discrimination by employers on the basis of unemployment status. The Fair Employment Opportunity Act of 2014 follows similar legislation in locations such as New Jersey, New York City, Oregon, and Washington, D.C. New Jersey’s law recently survived a constitutional challenge when a state appellate court upheld the law’s ban on employment advertisements stating that job applicants must be currently employed for their applications to be accepted, considered, or reviewed. The court found that the law – which subjects employers to a $1,000 fine for the first violation, $5,000 for the second, and $10,000 for each subsequent violation – does not infringe upon employers’ free speech rights. Employers should be on the lookout for comparable legislation in other states.

Detailed Discussion

After first being introduced in 2011, a bill returned to both the House and the Senate earlier this month proposing to ban discrimination on the basis of unemployment status.

The Fair Employment Opportunity Act of 2014, sponsored by Reps. Rosa DeLauro (D-Conn.) and Hank Johnson (D-Ga.) in the House and Sen. Richard Blumenthal (D-Conn.) in the Senate, would prohibit employers and employment agencies from refusing to consider or offer a job to an unemployed person or advertise using language forbidding applications by the unemployed.

The bill includes a provision creating a civil action against an employer for a violation with possible recovery of actual, compensatory, and punitive damages for plaintiffs.

The same trio of legislators introduced a similar law in 2011. That bill did not progress far despite a hearing on the issue before the Senate Committee on Health, Education, Labor and Pensions and a public hearing held by the Equal Employment Opportunity Commission, which called the exclusion of unemployed applicants an “emerging practice.”

While the prior attempt at federal legislation stalled, New Jersey enacted an analogous law the same year. Employers in the state are prohibited from using advertisements stating that job applicants must be employed in order to be considered for a position. A first violation results in a $1,000 fine, up to $5,000 for a second violation, and $10,000 for each subsequent violation.

New Jersey employer Crest Ultrasonics ran afoul of N.J.S.A. § 34:8B-1 by using an advertisement seeking to hire a manager with “current and up-to-date” technical knowledge of the ultrasonic cleaning equipment business. Among other qualifications, the ad stated that applicants “must be currently employed.”

The New Jersey Department of Labor and Workforce Development investigated after a complaint was filed and ultimately issued Crest a $1,000 fine. The employer appealed, challenging the law on constitutional grounds as a violation of the First Amendment.

But because employment advertisements are a form of commercial speech, they are entitled to less protection and subject to a less stringent form of judicial review, the court said.

Upholding the law, the panel held that the statute’s content-based restrictions were narrowly tailored to directly advance a substantial governmental interest to increase opportunities for the unemployed.

“The modest restrictions that the state has placed upon job advertising under the statute are constitutionally valid, even though employers might not consider or ultimately hire most of the unemployed applicants who respond to such job postings,” the court wrote.

To read the Fair Employment Opportunity Act of 2014, click here.

To read the opinion in New Jersey Department of Labor and Workforce Dev. v. Crest Ultrasonics, click here