On March 13, 2013, the New York City Council expanded the New York City Human Rights Law (CHRL)—already considered one of the broadest anti-discrimination laws in the nation—by passing new legislation (Int. No. 814-A) to add a new protected class for employers, similar to race, age, gender, etc.—an applicant's unemployed status. The new legislation, which was originally proposed by the City Council in March 2012 and passed in January 2013, was vetoed by Mayor Michael Bloomberg in late February. However, the City Council, by a vote of 44 to 4, decided to override Bloomberg's veto. The new law will take effect on June 11, 2013, 90 days after its enactment.
Parameters of the New Law
The law prohibits New York City employers with four or more employees (i.e., all those employers already covered by the CHRL) from basing employment decisions related to "hiring, compensation or the terms, conditions or privileges of employment on an applicant's unemployment." The terms "unemployment" or "unemployed," as defined by the new law, means "not having a job, being available for work, and seeking employment." Further, the law prohibits all employers, regardless of the number of employees, from "publish[ing], in print or in any other medium, an advertisement for any job vacancy in [New York City]…" that indicates either that "being currently employed is a requirement or qualification for the job," or that the employer "will not consider individuals for employment based on their unemployment."
Moreover, the law explicitly permits a disparate impact claim, not merely a disparate treatment claim. A "disparate treatment" claim refers to a claim by an individual that, because of his membership in a protected class, the employer treated him less favorably than other similarly situated individuals. A "disparate impact" claim, on the other hand, refers to a claim by an individual that the employer's neutral employment policy or practice (or group of policies or practices) resulted in a statistically detrimental impact on the members of a protected class. Such a claim is usually proven based on statistics—here, that the policy or practice has the statistically significant effect of keeping applicants who are unemployed from being hired.
Per the text of the new statute, an employer can only defeat such a disparate impact claim if it can prove as an affirmative defense that the policy or practice at issue (a) is based on a substantially job-related qualification (though even this can be overcome by the plaintiff establishing the existence of an equally workable alternate policy or practice that creates less of a disparate impact), or (b) did not contribute to the disparate impact.
Nevertheless, the law does permit an employer to inquire "into the circumstances surrounding an applicant's separation from prior employment." The law further allows an employer to consider an applicant's unemployment "where there is a substantially job-related reason for doing so." However, the law does not define or provide any guidance as to what constitutes a "substantially job-related reason."
In addition, employers are still allowed to consider "substantially job-related qualifications, including but not limited to: a current and valid professional or occupational license; a certificate, registration, permit, or other credential; a minimum level of education or training; or a minimum level of professional, occupational, or field experience." Moreover, employers may still publish job advertisements that contain substantially job-related qualifications. Further, employers may still give preference for job vacancies to its own current employees, and may also base compensation or terms or conditions of employment on an individual's level of experience. Finally, there are a few situations in which the statute is inapplicable, including hiring pursuant to civil service list rules and the exercise of rights under a collective bargaining agreement.
Ramifications
Because the new law has been inserted into the existing CHRL, all remedies and procedures available for other categories of discrimination apply equally to this new one. Thus, an individual who believes she or he has been discriminated against in violation of the law has the option to file a civil lawsuit in court for monetary damages, or to file a complaint with the New York City Commission on Human Rights. The types of damages available to an aggrieved applicant include back pay, front pay (or possibly an order to hire the individual), compensatory damages, punitive damages, and a civil penalty of up to $250,000.
What Employers Can Do
The new law will undoubtedly expose employers in New York City to a litany of lawsuits from rejected, unemployed applicants. Thus, it is important for employers to err on the side of caution by taking steps now, even before the law goes into effect, to protect themselves as best as possible. Here are some ways to do so:
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Scrutinize all job advertisements to remove any provisions indicating that being currently employed is a requirement or qualification for the job.
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Review all policies and procedures relating to hiring, even neutral ones, to determine whether they could result in excluding unemployed applicants in significantly greater numbers than employed applicants.
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Review and revise any equal employment opportunity statements contained in employee handbooks, job applications etc., to reflect the fact that the employer does not take an applicant's unemployment status into consideration when making hiring decisions.
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To the extent an employer utilizes recruiters or employment agencies in filling any job vacancies, the employer should institute a written policy prohibiting them from limiting the applicant pool to only those who are currently employed.
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If an employer determines that, for particular positions, there is a substantially job-related reason for eliminating candidates who are currently unemployed, be sure to run that by legal counsel and strongly document the basis for that determination. Because "substantially job-related reason" is not defined by the new law, anyone using that designation can expect to be heavily scrutinized—and given how broadly the CHRL already is interpreted, expect that to be an uphill battle for the employer.
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Train interviewers to refrain from asking certain questions or making certain statements that could potentially lead to liability. This is obviously going to be tricky, because past employment history is clearly relevant, and it will be very difficult to inquire about that subject matter without touching upon an applicant's current employment status. The best rule of thumb to use is to concentrate comments and statements on permissible topics, so that anything about employment status, if it arises, is touched upon as ancillary and not the primary focus. For example, rather than asking an applicant how long she or he has been out of work, or the reasons for any prolonged unemployment, interviewers should instead inquire as to why the applicant's previous employment ended.
Further, interviewers should focus on questions geared toward identifying whether the candidate possesses the requisite skills, qualifications and experience necessary to perform the duties and responsibilities of the vacant job position. Interviewers should also be trained to not author post-interview evaluations that make any reference to an applicant's unemployment (unless it is determined to be a substantially job-related requirement).
Diane Krebs is a partner in and Kuuku Minnah-Donkoh is an associate with Gordon & Rees in New York City.
Reprinted with permission from the March 22, 2013, issue of the New York Law Journal. © 2013 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.