Technically, favoring friends and family members for jobs and giving them plum assignments isn’t illegal. But if nepotism results in an all or mostly white work force, applicants or employees from other protected categories (e.g., race, gender, national origin) can still sue, claiming illegal discrimination.
Recent case: Andrea Dybdal, who is black, worked as a financial advisor until she lost her job in a reorganization. While she was still working for the company, she noticed that her white supervisors hired family members and friends to fill open senior advisor positions. In fact, the company hired four new advisors who were either blood relatives or good friends of three white employees. The new hires all happened to be white.
Dybdal sued, alleging race discrimination. She claimed that the newly hired relatives and friends got lucrative assignments and training that she was not offered. For example, the others were allowed to turn down undesirable territories, while Dybdal was discharged after she also rejected such an offer.
The federal court hearing the case ordered a trial, ruling that a jury should decide if the nepotism masked race discrimination—and if the white new hires were treated better than Dybdal. (Dybdal v. The Variable Annuity Life Insurance Group, No. 06-CV-5686, ED NY, 2007)
Final note: Nepotism also can result in reverse discrimination. Consider, for example, the recent resignation of the New Orleans District Attorney, Eddie Jordan. A court zapped Jordan, who is black, with $3.7 million in judgments. When he took office, he allegedly fired white employees and hired black replacements. Litigators being a litigious bunch, it came as no surprise that the fired employees sued—and won.