It’s perfectly legal for an employer to decline to hire or promote someone even if he’s the only applicant. In fact, it may very well be a good business decision to wait under those circumstances.
Recent case: Darrell Poer, an attorney working for the Social Security Administration, testified on behalf of two black colleagues who sued their mutual supervisor for alleged discrimination. Some time later, the office in which Poer worked had an opening for a promotion.
The standard practice was to advertise the opening internally and then come up with a list of qualified candidates. Because the budget was tight, the agency did not want to pay relocation expenses and eliminated two of the three attorneys deemed qualified for the job because they lived in other parts of the country. That left just Poer on the list.
The agency official in charge of the promotion process then decided to close the listing rather than promote Poer.
Poer sued, claiming that the real reason had to be retaliation for his testimony on behalf of his co-workers.
The agency said it simply didn’t think it a good practice to choose from a field of just one candidate. Poer then argued that the hiring official could have petitioned higher-ups to pay relocation expenses in order to widen the pool.
The 7th Circuit Court of Appeals dismissed the case, concluding that there was nothing about the situation that pointed to retaliation. (Poer v. Astrue, No. 09-3473, 7th Cir., 2010)
Final note: As long as you base your actions on sound business reasons, courts are unlikely to second-guess your motivations. Don’t come up with those reasons later—write them down right away, at the time you make the decision.