You never know which unsuccessful job applicant will sue. That’s why it is crucial to internally document why you rejected a candidate.
Bonus: You can also use the information for an informal internal audit to make sure a hiring manager isn’t inadvertently discriminating.
Recent case: Norman, a 59-year-old black man, applied for a position with a temporary agency. Based on a skills assessment, he was hired pending a reference check. However, he never got the job.
Norman suspected he wasn’t picked because of his race and age, and also because he has a minor criminal record. He sued.
The company countered that he wasn’t hired because two of his references were negative.
Norman did some checking with those references, who both said they would rehire Norman. Presumably that meant they hadn’t provided the poor references. Norman then argued the allegedly poor references were just an excuse not to hire him. He pointed out that a white job applicant who actually had served jail time was hired.
The court said Norman had enough evidence for his case to go forward. He’ll have a chance to persuade a jury that his references were good and that the white applicant got a break despite his criminal past while Norman didn’t. (Mallory v. Express Employment Professionals, No. 12-1645, DC MN, 2012)
Final note: Nothing looks worse in court than struggling to remember why you didn’t hire someone. Your credibility will be shot unless you can refer to notes made at the time you made the decision.
Always document why someone wasn’t hired. Be specific. List bad references by name and describe how you got the information. Who did the hiring manager speak with and when? That will help you counter discrimination allegations.