How to Drive Internal Compliance

To paraphrase the old stock brokerage firm E.F. Hutton TV commercial, “When the EEOC speaks, employers should listen.” The EEOC has repeatedly warned employers that removing discriminatory barriers in recruitment and hiring is at the top of its agenda. From commissioners to investigators, the EEOC is urging employers to focus on compliance to ensure there is no disparate impact in how protected category applicants are treated. With the resources and power of a government agency, the EEOC is well-suited to address recruitment and hiring discrimination claims so employers do not under-hire a certain protected group. Similarly, diversity executives are well-suited to drive internal compliance efforts.

Traditional hiring discrimination claims: Traditional discriminatory hiring claims come in two forms: disparate treatment claims, where the EEOC alleges the employer intentionally excluded certain minorities; and disparate impact claims, where an employer has a facially neutral policy, but that policy has a disproportionate impact on a protected group.

An often-used example of this latter impact claim is a minimum height requirement for firefighters. A height requirement appears neutral on its face and would seemingly apply equally to all candidates, but it has a disproportionate impact on women who are not as tall as men on average in the U.S. In this example, the EEOC would claim the height requirement is unlawful because it had a disparate impact on women.

EEOC General Counsel David Lopez has remarked that these hiring discrimination cases are often overlooked or flatly rejected by the private plaintiff’s bar since pursuing them can be expensive and time-consuming. Lopez noted that the EEOC’s growing bench of statistical experts and emerging national law firm model — which allows it to more effectively share and deploy resources — positions the government as the best-suited champion to pursue these claims. The EEOC’s promise to focus on this topic and its accelerating ability to do so effectively warrants close attention from employers.

Diversity executives should consider championing a self-audit — to be conducted at the direction of counsel — of an employer’s hiring trends to determine if there are any areas where there is a statistically significant hiring shortfall between what the company would expect to see given the applicants in a particular area or operating unit, and the actual hires for those areas. Such an audit could reveal any pockets of under-hiring the company could then proactively address by developing a viable explanation for those shortfalls, modifying practices and procedures, or both.

Claims involving background checks: A particular subset of disparate impact hiring cases requires special attention. For example, for years the EEOC presumed that any policy or practice that caused an adverse employment action to be taken solely because of an African-American or Hispanic person’s conviction record had a disparate impact on members of those protected classes; those groups were convicted at a rate disproportionately higher than the rest of the population.

The EEOC’s guidance provides that employers’ selection criteria regarding criminal history information must consider the following factors to demonstrate business necessity: the nature and gravity of the offense or offenses; the time that has passed since the conviction or completion of the sentence; and the nature of the job held or sought as related to the conviction. The EEOC takes an even harder stance on the use of arrest records in hiring decisions. According to the EEOC, a blanket exclusion of individuals with arrest records — without convictions — would almost never withstand scrutiny.

Last year was just a precursor to the EEOC scrutinizing employers’ use of background checks in hiring decisions. Diversity executives should challenge their employer to ensure company policies and procedures conform with federal and state laws as well as the factors set forth by the EEOC and determine if modifications are warranted.

Recruitment and hiring barriers to employment is a hot area for the EEOC. By focusing on compliance with its initiatives in this area, diversity executives can help employers stave off expensive administrative investigations or litigation.