NEWS & ANALYSIS

Hiring 101 for Retail Employers

Hiring good employees is a challenge, especially in the retail industry. But by following a few tips, you can make better decisions and reduce your risk of defending an expensive lawsuit.

The ABCs

Although encyclopedic knowledge of employment laws isn’t necessary, it’s hard to make a good decision without knowing the basic rules. When it comes to federal laws about employees, you need some familiarity with Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Pregnancy Discrimination Act.  Each of these laws prohibits employers from discriminating against employees on the basis of one or more protected characteristics, which include race, religion, sex, disability, age, or pregnancy.

“Discrimination” is taking a negative employment action, or failing to take a positive action, because of a person’s protected characteristic. A negative employment action can include failure to hire, differential treatment, and termination (and a lot more). An employer can also get into trouble if its neutral policies affect protected groups differently. This is known as “disparate impact.”

“It’s important to be familiar not only with the federal laws, but also with the state and local laws where you operate.

States, cities, and counties may have their own rules, which sometimes go beyond what is required by federal law. For example, the state or city in which you operate may have a specific law prohibiting discrimination based on marital status, even though “marital status” is not a protected category under federal law. So it’s important to be familiar not only with the federal laws, but also with the state and local laws where you operate.

Discrimination based on sexual orientation and gender identity deserve special mention. Federal law does not explicitly prohibit LGBT discrimination, but the Equal Employment Opportunity Commission has taken the position that this type of discrimination is “sex discrimination” prohibited by Title VII. As we went to press, the EEOC’s position as it pertains to sexual orientation has not yet been tested in the courts. However, a number of courts have agreed with the EEOC on gender identity discrimination. In addition, many states and local governments have laws prohibiting discrimination based on LGBT status.

OK, let’s hire!

Your goal is to find the best person for the job, but that can be hard. If you know exactly which skills you need for the job, you’re more likely to find a good fit. An accurate job description can provide a good foundation for the defense of employment-related claims, from failure to hire claims to reasonable accommodation requests based on religion or disability, to wrongful termination suits.

As a retail employer, you may want to keep a “stash” of employment applications so that you can hire someone in a hurry. Tempting as that may be, try to minimize the number of applications you accept when you are not actually hiring. The smaller your pool of applicants, the better your EEO statistics are likely to be. To the extent that you can, require applicants to reactivate their applications after a certain period of time, such as 30 days. If 30 days is unrealistic, consider 60 or 90 days. Any limit is better than none. (Of course, you can’t “cherry pick” from your expired applications, so choose a number that you can live with.) Finally, require applicants to specify the job for which they are applying. Don’t let them get away with saying “Any.”

“If the interview question isn’t job-related, think about why you’re asking it.

Keep separate the applications that you “consider” and the applications that you receive but do not “consider.” (See “Dos and Don’ts,” below.) Keep all applications for at least four years, or the longest period in your jurisdiction for which an employee can file a failure-to-hire claim if it’s longer than four years.

(NOTE: If you are a federal contractor, the rules governing applicants are significantly more complex than described above, so be sure to check with your employment counsel.)

One of the most difficult parts of the hiring process is the interview. Well-designed interview questions are an effective tool in evaluating an applicant’s qualifications, experience, and personality by getting useful information that helps you make a good decision. At their worst, bad interview questions can set a company up for civil liability. One of the best ways to avoid liability is to be consistent. Ask all the applicants the same questions. That’s not to say that you can’t ask follow up questions specific to the individual applicant, but be wary if you find yourself, say, asking only female applicants if they want to be mommies. Avoid questions or comments about age, marital status, arrests, daycare needs, or National Guard or Reserve membership. If the question isn’t job-related, think about why you’re asking it. Don't make any promises about the length or terms of employment that you may not be able to keep.

A word of caution regarding internet and social media searches: you may find out more than you really wanted to know. For example, if you find out information about an applicant’s protected characteristic while Googling them (think: “Excited to be running in the Komen Race for the Cure tomorrow in honor of my Mom, Grandma and sisters!”), you can’t unlearn it.

“Social media searches may tell you more than you ever wanted to know.

Criminal background checks, credit checks, and drug tests/medical examinations should all be deferred until after a conditional offer of employment has been made. “Ban-the-box” legislation is so prevalent that it is wise for retailers with multi-state operations to simply wait until the post-offer stage. Credit checks are prohibited in many jurisdictions but are often allowed for employees who handle money, which means that they are generally allowed for the typical retail hire, but check applicable law to make sure.

The ADA prohibits any type of medical inquiry until after a conditional offer of employment has been made. “Medical inquiry” includes questions about workers’ compensation history and absences from previous jobs due to illness, as well as explicitly “medical” questions and physical or psychological examinations. Even if the medical inquiries are postponed until the post-offer stage, every offeree in the same job category must be treated the same (although individualized follow-up is all right), and the information cannot be used to discriminate against the offeree.

Dos and don’ts

DO know the duties, requirements, and background needed for the position for which you are hiring.

DO require applicants to specify which job they’re applying for. If they don’t, you won’t have to “consider” them, which will help your applicant-to-hire statistics.

DO require applications to be “reactivated by the applicant” after a pre-designated period of time, such as 30, 60, or 90 days, for the same reason.

DO retain applications for a minimum of four years.

DO avoid any interview questions that might elicit information about the applicant’s marital or parental status, religion, disability, or any other protected category.

DO avoid social media or internet searches unless you are sure you can put the results out of your mind if necessary.

DO postpone criminal background checks, credit checks, drug tests, and any medical questions or examinations until after you’ve made a conditional offer of employment.

DO hire the best person for the job.

DON’T keep a “stash” of stale employment applications and cherry pick from it when you need to hire someone.

DON’T throw out your applications too soon, but DO separate applications that you actually “considered” from those that you did not “consider.” “Considered” means you read the application and made a determination about whether the person could continue in the hiring process – even if your determination is “not qualified.” “Not considered” means the application had expired (for example, the application was more than 30 days old and you had a 30-day limit, or the applicant applied for “Any” position and you do not consider such applications).

DON’T be “politically incorrect” in the job interview.

DON’T do criminal or credit checks until after a conditional offer of employment has been made.

DON’T ask any questions that might elicit information about a disability (including psychological tests) until after a conditional offer of employment has been made, and even then only if you ask the same questions of all offerees in that job category.

NOTEWORTHY NUMBERS

RETAILER'S RECAP

Standing up for sitting down in California. Welcome to our new Los Angeles-Century City Office! Steve Katz gets us off to a great start with a blog post on the California Supreme Court’s recent decision on employers’ obligations to provide “suitable seating” for their employees, which is in addition to any obligation they might have to make reasonable accommodations under the Americans with Disabilities Act or the California Fair Employment and Housing Act.

Get into FOCUS, our firm’s new blog for women leaders in the workplace (and their friends and supporters). The blog has posts by Heidi Wilbur of our Denver Office on “Overcoming Stereotype Threats (and Butterflies)” and by Sarah Phaff of our Macon Office on Women’s History Month. If you haven’t subscribed already, please do!

Is your pay equity up to snuff? The Equal Employment Opportunity Commission proposes requiring employers to report compensation information on their annual EEO-1 reports. Here is the background, and some considerations for employers seeking to prepare for the new rule. Here are some reasons why the EEOC’s idea might not be so hot.

$89K “manager” isn’t FLSA-exempt, court says. The Fair Labor Standards Act and exemptions are hard enough for retailers to navigate, what with “assistant managers” and off-clock work. According to this court, even a manager making $89,000 a year isn’t necessarily exempt.

And, speaking of wage-hour . . . The U.S. Department of Labor’s final rule on overtime exemptions is imminent. The proposed rule more than doubled the salary threshold, meaning that many currently-exempt employees may become non-exempt when the final rule is issued and takes effect. It remains to be seen whether there will be any change to the “duties test.”

Workplace harassment investigations and normal people do not mix. That’s why you should leave it to your lawyer or your Human Resources representative. Te-he.

EEOC files first sexual orientation discrimination lawsuits under Title VII. The agency used to take the position that it had no jurisdiction over these types of cases. But now the agency is on record as finding sexual orientation discrimination to be a form of “sex discrimination” prohibited by Title VII. It will be interesting to see whether the courts agree.

NLRB finds unlawful Whole Foods’ policies against secret recording by employees. As David Phippen of our Washington D.C. Metro Office commented, “This is but one of many recent Board decisions finding that a common employer policy or workplace rule is unlawful under the current Board majority's expansive view of Section 7 rights and minimalist view of employer prerogatives. Whether the decisions generate positive or negative results for employees remains to be seen and is subject to debate. Many of the decisions seem simply to reinforce the current Board majority's view of the workplace as an adversarial environment and to attack legitimate employer policies intended to make the workplace more civil and productive, in the interest of both employers and employees.”