A Renewed Focus on Discrimination in Recruitment and Hiring Causes of Recruitment Discrimination

This compliance manual notes five recruitment practices that may be given particularly careful scrutiny by the EEOC:

1. Illegal use of job advertisements and recruitment agencies. The compliance manual notes that job advertisements that specify race, ethnicity, or other protected categories are illegal. Similarly, asking a recruiter to use race, ethnicity, and other protected categories (e.g., age) in the hiring process is illegal. Indeed, the compliance manual notes that if discrimination occurs in the recruitment process, both the employer and the employment agency may be liable. Recruiters, employment agencies, and employers should beware; recruitment and hiring can create legal liability for all parties, not just the employment agency or the employer. You may be responsible for the discriminatory acts performed by another party.
2. Word-of-mouth recruiting. Although many organizations make extensive use of word-of-mouth recruiting, the compliance manual notes that this technique “in a non-diverse workforce is a barrier to equal employment opportunity if it does not create applicant pools that reflect the diversity in the qualified labor market.” Thus, caution is needed when over-relying on word-of-mouth recruiting to ensure that it is not creating barriers to hiring minorities.
3. Homogenous recruiting. The compliance manual notes that use of homogenous recruiting can be a cause of discrimination. The examples provided of homogenous recruiting include an instance where a largely white municipality that is situated next to a largely black municipality only hires its own residents and refuses to advertise in publications that circulate in the largely black municipality. You need to careful, therefore, in choosing applicant sources that do not result in the exclusion, or near exclusion, of protected groups.
4. Use of stereotyping in decision-making. In accord with current psychological theories, the compliance manual observes that racial bias is not always conscious, and that decisions infected by stereotyped thinking or other forms of less conscious bias may also be discriminatory. Organizations therefore need to be careful to avoid stereotyping when engaging in recruiting and hiring decisions, particularly since decision-makers may be unaware of their biases and stereotypes.
5. Discriminatory screening of applicants. Besides the obvious factor of using race (or, of course, other protected categories, such as gender) for screening applicants, the compliance manual notes that it is discriminatory to use a screening procedure that has “a significantly disparate racial impact” unless it can be shown to be “job related and consistent with business necessity.” The terms “disparate racial impact” and “job related and consistent with business necessity” are discussed next.

What is Disparate Racial Impact?

Disparate racial impact occurs when a screening device (e.g., educational requirement), or even a recruitment practice, produces a significant difference in the hiring of African-Americans (or other protected racial groups) compared to Caucasians. While a detailed discussion of how to test for disparate racial impact is beyond the scope of this article, suffice it to say that this may be demonstrated by comparing the percentages of African-Americans passing the test or getting hired versus the percentages of Caucasians passing the test or getting hired. Census data comparing the percentage of African-Americans in the workforce versus the percentage of African-Americans in the relevant labor market may also be used to demonstrate disparate racial impact.

What is Job-Related and Consistent With Business Necessity?

There is no one single accepted definition of “job related and consistent with business necessity.” For some recruitment and hiring practices – such as an objective test – legal and professional standards have emphasized the use of an appropriate validation study. One approach to validation involves showing that test performance is sufficiently correlated with job performance (i.e., a criterion-related validation study). Another approach to validation involves documenting that the test (e.g., a typing test) is closely related to the work performed (e.g., typing documents) on the job (i.e., a content validation study). In other instances (e.g., use of safety equipment), a screening procedure that reflects a direct and obvious relationship to successful performance of the job in question may be sufficient to prove job relatedness.

Suggestions for Recruiters and Employers

• Do you have standardized recruiting and hiring processes? While standardization of recruitment and hiring practices certainly helps diminish the chance of a lawsuit, it by no means guarantees freedom from lawsuits. Recall that disparities between racial or ethnic groups must be defended by proving job relatedness. Standardization of practices, including use of documented job requirements and qualifications, is not always enough to defend your organization in a disparate impact lawsuit, but it is a good start, as it will help in a disparate treatment lawsuit.
• Do your recruiting and screening practices indicate possible disparities? While highly sophisticated statistical analyses are likely to be used if there is a lawsuit, you can obtain a rough estimate, using simple percentages, as to whether any of your recruiting and screening practices cause disparity between various protected groups. For example, do African-Americans seem to be more heavily screened out with any tests that you use? Is the percentage of racial and ethnic minorities in your workforce similar to the percentage in the geographic area from which you recruit? How about various minimum requirements that you include, such as conviction records? Do they tend to screen out minorities in a greater proportion than Caucasians?
• Can you provide evidence that each of your recruiting and screening practices is job-related and consistent with business necessity? In addition to legal reasons, it makes logical sense that all of your recruiting and screening practices should be job-related. There should be documented evidence of job relatedness for any tests you use. To ensure that other practices are job-related, you may wish to consider how a jury would view them. It may also be helpful to have an external expert review your recruiting and screening procedures to determine how they compare with current “best practices” and recent research.
• Are you casting a wide net in your recruiting sources? Recall above that EEOC is particularly concerned about word-of-mouth and homogenous recruiting practices. Where do you recruit from? Are you sure that you are casting as wide a net as possible? Or, are you focusing too heavily on recruitment sources that are almost exclusively used by Caucasian males? You may need to consider broadening your recruitment program to include sources that target minorities and women.
• Are your recruiters and employment agencies familiar with discrimination laws? Do your recruiters understand the basic legal concepts discussed in the compliance manual? Are they knowledgeable as to what interview questions are illegal to ask? Have they had up-to-date training in these laws? Don’t wait to find out when it is too late; make sure that all of the recruiters you work with, whether they are external or internal to your organization, are knowledgeable and understand discrimination laws.
• Summary New and changing legal standards and requirements demand attention to ensure that you lessen your legal exposure. As EEOC focuses more on recruitment and hiring discrimination than in the past, your policies and practices in this area may come under greater scrutiny. Now is the time to audit your practices and make sure that your recruiters and hiring managers understand and use legally acceptable employment practices. This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

Who Is an Internet Applicant?

In its final ruling, the OFCCP carefully considered public comments on the proposed definition, making a few changes in the final version of it. Although the final definition is quite similar to the proposed definition, there are some significant differences. The final definition states that an Internet applicant is an individual who meets the following criteria:

1. The individual submits an expression of interest in employment through the Internet or related electronic means.
2. The company considers the individual for employment in a particular position.
3. The individual’s expression of interest indicates that he or she meets the basic qualifications for the position.
4. The individual at no point in the recruitment process (prior to receiving an offer of employment) indicates that he or she no longer is interested in the position.

In terms of the “basic qualifications for the position,” as indicated in the third criterion, a basic qualification must meet the following conditions:

• It must be a non-comparative feature of the job seeker. (For example, if the job candidate has three years of work experience, a comparative feature might be that the job candidate has among the highest number of years of work experience.)
• It must be objective. (The job candidate has “a degree in accounting” would be objective, for example, while the job candidate has “a good degree” would be subjective.)
• It must be relevant to performance and enable the company to accomplish business-related goals.

Implications for Organizations

The final definition clarifies, or was modified to address, various issues and concerns raised by commentators. Several of these issues are discussed next:

Q: Will this definition be used to determine whether discrimination has occurred in the hiring process? In defining an Internet applicant, the OFCCP states that this definition is for recordkeeping and data collection in connection with Executive Order 11246 only. It was not intended to be used for the purposes of determining discrimination. Moreover, the OFCCP clearly states that Census and other labor market data will be used to determine whether discrimination has occurred. Indeed, the OFCCP cites a court case indicating that the application process may not necessarily reflect the potential applicant pool, in that qualified individuals might be discouraged from applying because of qualification requirements that are themselves discriminatory. Organizations covered by the OFCCP should realize that compliance with this new definition does not necessarily mean that they have avoided discrimination. Many other factors need to be considered, such as the match of the workforce to relevant labor market data, the relevance of the job requirements, and so forth.

Q: Can a company still use “basic qualifications” when doing a resume database search? A concern that was raised in connection with the proposed definition was that it seemed to focus on a resume generation approach, whereby the employer advertises a position, listing specific basic requirements. The proposed definition was unclear as to how basic qualifications would function in a resume review approach, wherein rather than advertising a position, an employer searched an existing database to determine whether there are applicants who meet basic requirements. The final definition explicitly states that “basic qualifications” means qualifications that the employer has established in advance of such a search by making and maintaining a record of the required qualifications prior to such an endeavor. Thus, basic qualifications can be applied even when the company is using a resume review approach.

Q: Must a company include unsolicited resumes? The final definition explicitly states that a company may establish a protocol or standard procedure that individuals must abide by in order to be considered applicants. This may include excluding unsolicited resumes that are not submitted for a specific position. Of course, having such a protocol means that all managers must stick with this protocol; exceptions may raise questions as to whether someone who you are excluding is really an applicant or not.

Q: What about an application process that includes both internet and traditional applicants? A concern raised regarding the proposed definition was a situation where some applicants applied over the Internet, while other applicants mailed in an application through the traditional system (i.e., “snail mail”). The final definition offers several examples where this might happen. Very briefly, where a company allows for both Internet applications and traditional applications, the Internet applicant definition is to be used to cover both kinds of applicants.

Q: How will the OFCCP’s definition fit with other definitions? You may recall that last year, the U.S. Equal Employment Opportunity Commission (EEOC), in conjunction with the Department of Labor, the Department of Justice, and the Office of Personnel Management, announced a proposed definition concerning who is a job applicant in the context of the Internet and related technologies. At this time, however, the final definition from this group has not been announced. It remains to be seen how that definition will fit with the OFCCP’s definition.

Implications for Organizations

If your organization is covered by the OFCCP, you should consider the following suggestions:

• Since most organizations rely heavily on the Internet, it is critical to ensure that record-keeping reflects the OFCCP’s definition.
• Make sure that your applicant tracking systems are able to properly track applicants based on these criteria.
• Establish standard procedures and protocols for recruitment, particularly in regards to Internet applicants (e.g., how are unsolicited resumes handled?).
• Train hiring managers so that they follow your organizations’ procedures and protocols. Explain what “basic requirements” mean in this context. Remind hiring managers that exceptions to standard procedures can cause major problems during an OFCCP audit.
• Audit your recruitment and hiring procedures to make sure that these processes are in compliance with all OFCCP and EEOC rules and regulations.

In sum, whether you are a recruiter, an HR manager, or an attorney responsible for employment discrimination issues, you will need to stay tuned to developments in this area. For more information on the OFCCP’s definition, you should go to the Federal Register here.

1. Make sure the personality test is properly validated.
2. Review the test for possible legal problems, including potential disparate impact, possible privacy violations, ADA concerns, and other legal violations.
3. Review all test items so you are sure they are not offensive or leave a negative impression with job candidates.
4. Make sure you clearly understand how to use the results of the personality test. Contrary to the achievement tests that most of us are commonly exposed to, higher scores are not always better scores. Some jobs may require employees who score low on the attributes measured by these tests.

Finally, personality tests are not an automatic panacea for hiring problems. Learn what strengths they offer and make sure that you aren’t missing out on other, more effective testing options.

• “Tell me about a time when you led a team with members from diverse cultures. What was the most difficult problem you faced? How did you address the problem? What was the outcome?”
• “Tell me about a time when you mentored someone from a different culture. What problems did you face in that role? How did you address those issues?”
• Tell me about a time when you were responsible for setting up a new office or manufacturing facility in another country. Describe the country and situation. What was the greatest difficulty you experienced? How did you address it?”

The second approach to behaviorally-based interviews involves situational, or hypothetical, questions. Usually referred to as the situational interview (SI), this approach is based on the premise that “intentions are the best predictor of the future.” Like the BDI interview, SI questions should be helpful in assessing candidates’ cross-cultural skills. Depending on the nature of the position, here are some examples of SI questions that may be of help in selecting applicants with the appropriate cross-cultural skills:

• “Imagine you had to lead a team of employees from different parts of Europe, including France, Germany, and the Netherlands. The goal of the team is to take products that have been developed in North America and prepare a marketing campaign for the European Union. How would you go about leading this team?”
• “Assume you have a new employee from Japan. She seems to be having great difficulty adjusting to her new job, as she has made many mistakes and is avoiding talking with you. What would you do?”
• “You are asked to set up a new office to market our products in Latin America. What challenges would you expect to face and how would you overcome them?”

Of course, there are other tools that are available to assess cross-cultural skills, including personality tests, knowledge inventories, and measures of motivation for cross-cultural work. The T&D Approach to Cross-Cultural Skills There are two different T&D approaches for teaching cross-cultural skills. One approach, which emphasizes the more traditional “training” approach, utilizes a variety of “off the job” techniques. The focus of this approach tends to be informational, such as the political structure of the country and proper business etiquette. Various web-based tools have been designed towards this end, as well as games and simulations that require relatively large amounts of time and numbers of people. There are also some helpful videos that will introduce trainees to major issues and solutions regarding common cross-cultural problems. Well-designed lectures, combined with case discussions and various exercises, can also facilitate learning. An alternative model focuses on the “development” approach to T&D. The development approach focuses on providing a series of “on the job” experiences that can enable an employee to acquire good cross-cultural skills. The development approach to cross-cultural skills involves developing a set of experiences that an organization can offer to employees, ranging from relatively safe experiences (e.g., preparing a presentation on another country; attending a social function with people from other countries) to significantly more challenging experiences (e.g., leading a cross-cultural task force). Ultimately, an overseas assignment, even of relatively short duration, will serve as a valuable learning experience. Of course, one may use both the training and developmental approaches to create a program that takes advantage of both techniques. Employees could begin with a sequence of training activities, based on such methods as the Internet, videos, and readings, followed by a series of developmental experiences. Many organizations are beginning to recognize the importance of cross-cultural skills, especially given the many subtle differences between countries. PricewaterhouseCoopers, a global assurance, tax, and advisory services company, developed a program for top managers that sends them overseas on eight-week project assignments to assist poor countries with critical projects. Not only does this program help those countries, but it facilitates the development of critical cross-cultural skills that are useful to the company. As the world becomes increasingly global, companies will need to determine how to build their cross-cultural capabilities. To summarize, here are some suggestions for companies:

1. Determine the current and future importance of cross-cultural skills for your business.
2. Include an assessment of cross-cultural skills in your new hires, as appropriate.
3. Determine whether to “make” or “buy” cross-cultural capabilities.
4. Design effective T&D experiences and activities to ensure your cross-cultural capabilities match the requirements for your business.

1. Simply having diversity goals or winning diversity awards is not enough. The judge was not persuaded by Wal-Mart’s diversity policies and programs. Although the judge noted that the company kept statistics on gender composition of the workforce, he observed that there was no attempt to identify barriers to women’s advancement within the company. Furthermore, he noted that the goals established by Wal-Mart for the number of women in the workforce appeared to be largely “ad hoc” and subjective. That is, many managers made their own goals for female representation or simply set them as incremental improvements over last year’s targets. Moreover, the judge noted that diversity goals were not linked to such things as incentive pay, which in turn meant these goals were not always effective. The fact that the company had won national diversity awards and that diversity issues were addressed in executive discussions, handbooks, and training programs was not seen as enough by the judge to defeat class certification. One of the tools used by the plaintiffs’ experts was benchmarking, in which women’s representation at higher levels was compared to other companies in the retail business. Unfortunately for Wal-Mart, they did not fare well in this comparison.
2. Failure to document who the candidates are may backfire. A major issue in the case concerned the relevant “applicant flow” data for the analysis. Without going into the many details, the Wal-Mart case is based on a disparate impact approach to discrimination, which involves comparison of the plaintiffs’ group (i.e., women) to the majority group (i.e., men) in terms of pay and promotions. In comparing promotion patterns, however, a key question is who are the eligible, interested female and male candidates? What makes this particularly problematic in the Wal-Mart case (and in other cases) is that the company frequently did not document who the candidates were. The judge noted, for example, that for 80% of the actual support manager promotions, there were no data regarding applicants. Similarly, Wal-Mart did not have open postings for job promotions, and this may have further prevented women for moving up. The plaintiffs’ expert therefore argued that the number of incumbents in historical feeder positions was the appropriate number to use, a figure that did not work in the company’s favor.
3. Highly subjective promotion and pay decisions are susceptible to discrimination. The judge noted that while subjectivity is “inherent in, and in fact a useful part of, personnel decisions,” he also observed that “deliberate and routine use of excessive subjectivity” may lead to discrimination. The role of an effective recruiter is to help managers eliminate excessive subjectivity, while at the same time creating systems and processes that make effective use of manager’s expert knowledge of the jobs at issue. All too often, companies that have valid hiring systems fail to use sound, systematic promotion practices, leaving far too much discretion in the hands of managers who are relatively untrained in making valid and fair decisions. Such subjective decision-making processes become particularly problematic when the organization fails to provide mechanisms for ensuring sufficient accountability.

What Can Recruiters Do to Reduce These Problems? Now that I have identified some of the issues addressed by the judge in making the class certification, I will offer some suggestions to avoid these problems.

• Develop, monitor, and achieve objective diversity goals. It’s important that diversity goals be developed based on appropriate standards. Relevant standards may include census data, promotion rates within the organization, and representation in different competitor’s companies. There must be strong incentives provided for managers who are achieving predetermined diversity goals and penalties for managers who do not achieve their goals. Reasons for failing to meet goals must be determined and solutions formed. Recruiters will play a key role in setting and championing these efforts.
• Develop appropriate documentation for candidates. Not only must employees be informed of opportunities, but it is also important to document who applies for promotional opportunities and what promotion decisions are made. Appropriate statistical analyses may then be conducted to monitor for disparate impact against women, minorities, and other protected groups. Having the appropriate metrics and conducting regular audits, followed by appropriate actions, will help reduce class-action lawsuits.
• Develop effective systems for making promotion and compensation decisions. Effective HRM practices, such as competency modeling and structured interviewing, provide tools for valid and fair decisions. Coupled with managerial training and appropriate accountability systems, organizations can reduce their legal liability while simultaneously improving their effectiveness. Recruiters will play an increasingly important role in choosing and implementing such systems.

Conclusion While nothing can completely prevent a discrimination lawsuit from being filed, the Wal-Mart case contains many suggestions as to how companies can reduce the chances of a discrimination class-action lawsuit being successful. Most of these suggestions apply to any company, regardless of size or industry. The key, however, is that organizations must take a proactive stance. Rather than waiting for discrimination charges to be filed, organizations are urged to regularly review their HRM policies and practices, generate and analyze the relevant data, and make changes where appropriate.

1. The individual submits an expression of interest in employment through the Internet or related electronic data technologies.
2. The employer considers the individual for employment in a particular open position.
3. The individual’s expression of interest indicates the individual possesses the advertised, basic qualifications for the position.
4. The individual does not indicate that he or she is no longer interested in employment in the position for which the employer has considered the individual.

In terms of the third criterion, in order to be considered an “advertised, basic qualification,” the following three conditions must be met:

• The qualification must be a non-comparative feature. A non-comparative qualification is something that is either possessed or not possessed by the candidate (e.g., three to five years of marketing experience). A comparative feature would be a quality that could be used to compare one candidate to another candidate (e.g., the most years of marketing experience in the applicant pool).
• The qualification must be objective. The example given in the proposed rules for an objective qualification is a “Bachelor’s degree in accounting.” The example for a subjective qualification is “a technical degree from a good school.” While on the surface this condition sounds reasonable, I expect that many qualifications will have a component of subjectivity to them. For example, a qualification of “three to five years of marketing experience” appears objective on the surface, but in reality may be rather subjective, depending on how one defines “marketing experience” (e.g., is making sales presentations a marketing experience?).
• The qualification must be job related. Although no example is provided, the proposed rules state that the qualifications must be relevant to the performance of the job and enable the employer to accomplish business-related goals.

It should also be pointed out that it is not entirely clear what “advertised” means here. Would, for example, a checklist of job requirements, which must be completed by the candidate, be considered “advertised?” Comparison of the OFCCP Proposed Definition to the EEOC Proposed Definition Recall from my previous article that the EEOC proposed rule has the following three criteria:

1. The employer has acted to fill a particular position.
2. The individual has followed the employer’s standard procedures for submitting applications.
3. The individual has indicated an interest in the particular position.

Under the EEOC proposed rule, the trigger is in the hands of the candidate, who must express an interest in a specific position (EEOC criterion #3) and follow the procedures for submitting an application (EEOC criterion #2) in order to be considered an applicant. Under the OFCCP rules, it would appear that all the candidate must do is express an “interest in employment” (OFCCP criterion #1) and possess certain qualifications (OFCCP criterion #3). The trigger is primarily with the recruiter or hiring manager, who must have considered the candidate for employment in a particular open position (OFCCP criterion #2). Thus, under the OFCCP proposed rules, the employer seems to have a central role in defining who is, and who is not, an applicant. Well, you might be thinking, what difference does it make as to whether the candidate or the employer has the central role in determining who becomes an applicant. I would submit that a major practical difference occurs in the following situation. As described in my previous article, the proposed EEOC rules contained an example of a company that wishes to fill two vacancies at location X. In that example, the company had access to a resume database, from which it identified, and subsequently contacted, 200 recruits who had indicated availability to work in location X. The example continued with 100 of these candidates responding affirmatively and in a timely fashion to the employer’s inquiry. The conclusion in this example was that even if the employer decided to interview only 25 people for the position, all 100 of the candidates who chose to respond would be considered applicants. But if you apply the OFCCP criteria, it would seem that all 200 people identified by the company would be considered applicants, not just the 100 who actually responded affirmatively. Furthermore, one might question whether the requirement for “availability to work in that geographic location” is even going to meet the OFCCP’s criteria to be considered an “advertised, basic qualification.” As I noted above, what exactly does “advertised” mean? And, will “availability to work in location X” meet the third criterion above (i.e., relevant to the performance of the job and enabling the employer to accomplish business-related goals)? Thus, it would seem that in the case of a resume database, a company conducting a search may have produced more applicants under the OFCCP proposed rules than under the EEOC proposed rules. Now that you understand at least one major difference between the proposed EEOC definition and the proposed OFCCP definition, you might be wondering why OFCCP would have considered an alternative definition for its purposes. My speculation is that there was a concern on the part of the OFCCP that in order to avoid potential liabilities with EEOC’s definition, some companies may be contemplating the elimination of all advertisements for specific job openings. In their place, these companies might allow candidates to apply only for a general group of jobs or for no particular jobs at all. In that way, a company might dramatically reduce the number of Internet applicants, as defined by EEOC proposed rules. The OFCCP’s proposed definition would, however, define any of the Internet candidates considered by the company in this scenario to be applicants. Implications of the Proposed OFCCP Rules If your organization is covered by the OFCCP, you should consider the following suggestions:

1. Employers covered by the OFCCP may ultimately have to keep two sets of applicant records ó one set for the EEOC and one set for the OFCCP.
2. Make sure that you are properly recording who is and who is not an Internet applicant under the OFCCP and the EEOC rules. Any applicant tracking systems that are implemented must be able to properly track applicants based on these criteria.
3. When these proposed rules are finalized, you will need to carefully review your recruitment practices to ensure that they are in compliance with OFCCP and EEOC requirements.
4. Although standardized Internet recruitment systems may help prevent certain legal pitfalls, you will need to carefully monitor these processes to ensure that you are in compliance with all OFCCP and EEOC rules and regulations. As standardized Internet-based systems are increasingly used, I suspect that enforcement agencies and plaintiffs’ lawyers will make greater use of statistics to detect the presence of disparate impact.

In sum, whether you are a recruiter, an HRM manager, or an attorney responsible for employment discrimination issues, you will need to stay tuned to developments in this area. Although it is not known when the proposed rules will be finalized, or what they will ultimately look like, they are likely to affect the hiring process for years to come.

In order for an individual to be considered an applicant in the context of the Internet and related electronic data processing technologies, the following must have occurred:

1. the employer has acted to fill a particular position;
2. the individual has followed the employer’s standard procedures for submitting applications; and
3. the individual has indicated an interest in the particular position.

Several examples are provided to help clarify these standards, or “prongs.” In explaining the first two points, the provisions describe a company that searches an applicant database in order to fill two vacancies. Based on this search and a follow-up inquiry by the employer, 100 of the applicants respond with interest in position, but only 25 are interviewed. According to the provisions, those 100 people who responded in a timely way would be considered applicants, not just the 25 who were interviewed. On the other hand, the provisions indicate that certain individuals will not count as applicants under the three “prongs” listed above. For example, individuals who merely post their resume in a third-party resume bank or on a personal website do not count as applicants. If, however, the employer contacted these individuals and offered them the opportunity to apply, those candidates who followed the application process are likely to be counted as applicants. At this point, you might be wondering what the fuss is all about here. Will it really matter who is called an “applicant” and who is not? Before your read the three major reasons why companies and recruiters should be concerned about these provisions, it is important to understand that employers covered under Title VII of the Civil Rights Act and Executive Order 11246 are subject to the Uniform Guidelines on Employee Selection Procedures (the “Uniform Guidelines”) and therefore have an obligation to “maintain and have available for inspection records…which will disclose the impact which its tests and other selection procedures have upon employment opportunities of persons by identifiable race, sex, or ethnic group…” In turn, if the selection process has a disproportionate effect on a protected group, the organization would need to demonstrate that the selection procedure is job-related and consistent with business necessity. So then, what is all the fuss about? 1. Companies must gather too much information. One concern that has been raised is that the provisions will require far too much tracking of applicants. Because of the need to maintain records for race, sex, and ethnicity of applicants, more financial resources may be required on the part of companies to comply with these requirements. I predict that the greatest burden will be on companies that continue to use informal, un-standardized, Internet-based recruitment systems (e.g., where the company permits applicants to simply email their resumes to a company representative). A direct implication is that an applicant tracking system that gathers race, sex, and ethnicity for each candidate might be recommended for use by every company covered by these rules for each job opening that uses the Internet or related technologies. 2. The definition is too broad. A second concern is that the definition of an applicant is overly encompassing. Specifically, employer groups, such as the Society for Human Resource Management (SHRM), would have preferred a definition that would have precluded clearly unqualified candidates from being counted as applicants. In other words, some have argued for a fourth prong, which would require one to have to meet the minimum qualifications for the position in order to be considered a candidate. That the provisions do not require someone to meet even the most basic job requirements in order to be counted as an applicant means that the door is wide open for legal challenges. I believe that this will be particularly risky for companies in the Internet age. The advent of the Internet means that job testers, or people who act as job candidates with the intention of determining whether there is discrimination, will be able to apply for jobs anywhere in the country, and as long as they meet the three prongs described earlier, they might count as applicants. Second, the use of electronic systems means that many of the hiring criteria, whether they are job-related or not, will be documented electronically. This information can then be obtained by the plaintiff’s experts, reviewed for job relatedness, and attacked if they are not clearly job related. 3. The standard for job relatedness may be set too high. A third concern is that these provisions put into effect rules that heretofore may not have been quite so obvious to recruiters and managers. To understand this concern, let’s look at one of the examples provided by the EEOC. In this example, the provisions describe a situation where a search is conducted and two years of printing experience is one of the job criteria for hiring. According to the provisions, if disparate impact against a protected group were demonstrated, then the company would need “to show that two years of printing experience was job-related and consistent with business necessity for its printing positions.” Now, this position is not a new one; rather, the need to demonstrate that a selection tool is “job-related and consistent with business necessity” is taken directly from the Civil Rights Act of 1991. What is particularly noteworthy, however, is that there is no one single, universally accepted method for demonstrating the job relatedness and business necessity of minimum qualifications (MQs). Thus, there may be considerable debate as to precisely how a company must demonstrate the job relatedness and business necessity of an MQ. A closely related question is how high the bar should be set for proving job relatedness. The immediate implication is that at the very least, companies must pay much greater attention to all job requirements and selection criteria that they use to ensure that they are properly documented and as clearly job related as possible. Likewise, these provisions clearly state that any tests that are administered online are subject to the Uniform Guidelines. What this means is that any online tests (e.g., personality, aptitude, and so forth) will need to be properly validated if a legal challenge is mounted and disparate impact is determined to exist. Some Suggestions According to the EEOC, there are approximately 865,962 companies that are covered by these provisions. Chances are that you work for one of those companies. I suggest that the following advice should be carefully considered:

1. You should be able to justify all of the selection criteria that are used to screen and select applicants.
2. You need to be able to carefully track applicants and audit your hiring systems for possible disparate impact.
3. Where problems are indicated by your audits, you may need to make changes in your selection processes.
4. You need to educate line managers on these basic concepts so that they will support your audits and resulting modifications in the selection systems.

Note: I would like to thank Lisa Harpe (of Peopleclick Research Institute) for her thoughts regarding this topic.