New York City’s New Far-Reaching "Unemployment" Discrimination Law

by Holland & Knight LLP
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On June 11, 2013, New York City will join New Jersey, Oregon and Washington D.C. as one of the few jurisdictions with legislation prohibiting discrimination against unemployed job applicants. Passed by the New York City Council over Mayor Michael Bloomberg’s veto, the law prohibits New York City employers from basing job decisions with respect to hiring, compensation or promotion on an applicant's having been previously unemployed.

The New York City ordinance is unique among other similar statutes in that it allows lawsuits for damages by those who believe they were discriminated against based on their prior unemployment. The law also allows for claims that some policy or practice of the employer has had a disparate impact on a group of unemployed individuals.

What the Law Says   

The law defines "unemployed" or "unemployment" as "not having a job, being available for work and seeking employment." Accordingly, students not seeking work, prison inmates and others not seeking employment during times between jobs are not protected by this legislation.

The law applies to employers who have at least four employees. As with other "unemployment" discrimination laws, it prohibits employers and employment agencies from publishing an advertisement for any job vacancy that states or implies that current employment is a requirement or qualification for the position, or that the employer will not consider an individual for employment based on his or her prior unemployment. The New York City statute goes further, however, prohibiting employers from basing any employment decisions regarding hiring, compensation or the terms, conditions or privileges of employment on an individual’s unemployment.

Exceptions

Despite some sweeping language, the law admits certain exceptions:

  • The law does not prohibit an employer from inquiring into the "circumstances surrounding an applicants separation from prior employment" or from considering an individual's unemployment where there is a "substantially job related reason for doing so" — although what that might be is far from clear.
  • Employers are not prevented from setting compensation or the terms and conditions of employment based on an individual's actual amount of experience.
  • Employers may lawfully consider and post advertisements identifying "substantially job related qualifications," including "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."
  • Employers are also permitted to only consider applicants who currently work for that employer for promotional opportunities.

Remedies

Under the New York City ordinance, an individual who believes he or she has been discriminated against can make a complaint to the New York City Commission on Human Rights. If the Commission finds that an employer engaged in prohibited discrimination, it can issue a "cease and desist" order, require the employer to hire the applicant, award back and front pay and impose fines up to $250,000.

Individuals who believe that they have experienced unlawful unemployment discrimination can also bypass the Commission and sue the employer in court. If a private court action is brought, an individual can be awarded for damages (including punitive damages), injunctive relief and attorneys' fees and costs.

Disparate Impact Liability

Particularly noteworthy is the fact that the legislation establishes liability against employers who adopt any policy or practice that results in an adverse impact detrimental to "unemployed" individuals. In such a case, the prospective applicant could rely on statistical evidence (rather than direct evidence) to demonstrate that an employer used prohibited discriminatory practices. The employer would then be required to prove that the policy or practice was "substantially job related" or that it did not contribute to the alleged disparate impact. Alternatively, a prospective applicant could also demonstrate that an alternative policy or practice with less disparate impact is available to an employer. It would then be up the employer to prove that the alternative practice would not "serve the employer as well" as its actual practice.

The "disparate impact" provision applies to "any group protected by" the new unemployment discrimination ordinance. That leaves wholly unresolved who the proper comparison class will be for statistical analysis.

Open Question

Employers have traditionally asked applicants to account for gaps in employment on their resume or job applications. On its face, inquiring about gaps in an applicants resume is not a violation of the law, since that period might not be "unemployment" as defined by the new law. For example, if the individual was attending school, traveling or caring for a sick parent during the interval between jobs, then an employer would not violate that law by considering that fact in its employment decision. On the other hand, if the applicant responds to that inquiry by saying she was looking for work, an employer who rejects the candidate could be subject to a lawsuit alleging "unemployment" discrimination, even if its decision was based on entirely different considerations. It is also possible that employers who continue to ask such questions are subject to disparate impact liability unless they can establish, among other possible defenses, that the practice implicates "a substantially job-related qualification."

Proactive Steps

In light of the new ordinance, companies with operations in New York City should consider implementing preventive measures as follows:

  • Employers should review and revise employment advertisements and applications to ensure that advertisements do not require applicants to be currently employed.
  • Employers should review whether their application process and hiring procedures would violate the law by appearing to take into consideration an applicant’s employment status.
  • Employers should avoid discussing unemployment during interviews unless there is a substantially job-related reason for doing so, and should train recruiters and interviewers accordingly.
  • Employers should train staff involved in the hiring process about the change in the law; specifically, that an applicant’s unemployment status should have no consideration in the hiring process.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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