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Be prepared to show business necessity if ­hiring rule excludes members of protected class

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in Discrimination and Harassment,Hiring,Human Resources

Hiring rules that end up excluding many applicants who belong to a protected class can spell big trou­ble. That’s because if the rule has a disparate impact on any particular protected class, it may be invalid and could become the basis for a lawsuit.

At a minimum, be prepared to show that the rule is based on business necessity.

Note: Everyone belongs to some protected class.

Recent case: Attorney Gregory Meditz sought a job with the city of Newark. Meditz, who is white, lived in a town outside Newark. He was turned down for the job even though he met all the qualifications other than being a Newark resident.

Meditz sued, alleging that the re­­quirement that employees live within city limits effectively had a disparate impact on white, non-Hispanic applicants. He used statistical evidence to show that there were very few white city employees in Newark, far fewer than their number in the local workforce would indicate should be present, absent discrimination.

A lower court rejected his argument, but now the 3rd Circuit Court of Appeals has reinstated his lawsuit. The appeals court said that the lower court should start over by first determining what the geographic range is for the relevant labor pool. It must do this by considering the geographic location, the flow of traffic, from what locations private employers within the city limits draw their em­­ployees and the commuting patterns in the area.

Then, once the geographic limits are established, the court should compare the percentage of white, non-Hispanic members of the larger labor force with the number of city em­­ployees who are white, non-Hispanics. Using complex statistical methods, the court must then determine whether low numbers of white employees are due to chance or discrimination.

All this will require the assistance of a statistician to analyze the numbers and explain their impact to the judge.

Then, and only then, can Newark try to argue that the residency rule is in place for business necessity. It will have to clearly articulate why em­­ployees must live within city limits. (Meditz v. City of Newark, No. 10-2442, 3rd Cir., 2011)

Advice: Before instituting any rule that screens out members of a protected class, look at your geographical area’s likely labor force. From how far away do your applicants come? Is your workforce racially and ethnically mixed in proportion to that geographic area?

If not, is it possible a hiring rule (qualifications based on education, residency, skill level, experience, etc.) might exclude some from being hired? Can you clearly justify the requirement? That’s probably not difficult with minimum education or skill levels, but it may become harder when the exclusion is based on experience or residency.

You may find it useful to have an expert review your workforce composition using your EEO-4 reports and census data on the workforce composition in surrounding towns and cities. That may identify any problem areas. Then see if there are ways to meet your hiring needs that don’t adversely affect a protected group.

The bottom line: You must carefully analyze all job requirements to make sure they serve a legitimate business purpose.

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