Recent EEOC Lawsuits Suggest a Prudent New Year’s Resolution for HR Professionals

As we reported several years ago, the EEOC has shifted its focus towards so-called “systemic” litigation  (EEOC Gearing Up for High-Impact “Systemic” Litigation, August 2006).  This initiative targets a pattern or practice, policy, or class case where the alleged discrimination has a broad impact on an industry, profession, company or geographic area.   Examples, according to the EEOC, include “discriminatory barriers in recruitment and hiring; discriminatorily restricted access to management trainee programs and to high level jobs; exclusion of qualified women from traditionally male dominated fields of work; disability discrimination such as unlawful pre-employment inquiries; age discrimination in reductions in force and retirement benefits; and compliance with customer preferences that result in discriminatory placement or assignments.”  The EEOC will likely be able to carry out its plans, having received a $23 million budget increase in 2010 for increased enforcement (including “systemic” discrimination), and requesting an $18 million budget increase for this year. 

Several recently filed cases suggest that the EEOC is keeping its word.  Last September, the EEOC filed a lawsuit alleging that a steel company’s alcohol testing policy violates the Americans with Disabilities Act (the “ADA”) (www.eeoc.gov/eeoc/newsroom/release/10-5-10.cfm).  The allegedly objectionable test is conducted pursuant to a nationwide policy of randomly administering alcohol breath tests to employees who are within their 90-day probationary period.  Unlike testing for the use of illegal drugs, alcohol testing is considered a medical examination under the ADA, meaning that it is permitted only when the outcome is “job related” and “consistent with business necessity.”  It can only be conducted when employers have a “reasonable belief, based on objective evidence, that a particular employee will be unable to perform the job or will pose a direct threat due to a medical condition.”  Likewise, random alcohol testing will not pass muster unless it is limited in frequency and duration to address the employer’s legitimate safety concerns, conditions that the EEOC does not believe are met in this case. 

More recently (December 2010), the EEOC sued a nationwide provider of postsecondary education, alleging that it had engaged in a pattern or practice of discrimination by refusing to hire a class of African-American job applicants with poor credit histories (http://www.eeoc.gov/eeoc/newsroom/release/12-21-10a.cfm).  The defendant allegedly has a practice of running background checks on all prospective employees, which the EEOC contends has an unlawful disparate impact on African-Americans.  Asserting that this hiring practice is neither job-related nor justified by business necessity, the EEOC has accused the defendant of violating Title VII of the Civil Rights Act of 1964. 

Although these two lawsuits involve two very different legal theories, the EEOC’s decision to file them should serve as a reminder for HR professionals.  First, both lawsuits challenge HR practices that some might consider fairly routine and common.  Also, unlike other areas of recent EEOC scrutiny such as English-only policies or religious discrimination, the practices challenged do not appear to have been on the EEOC’s radar until fairly recently. 

But perhaps most importantly, the cases involve the sorts of practices that HR professionals may face increasing business pressures to adopt, given current economic conditions.  With an unprecedented number of people looking for work, many job candidates have experienced credit troubles.  Already reluctant to hire new employees, companies are especially cautious about hiring employees who may bring additional risks.  Similarly, the federal government recently announced that the level of substance abuse is increasing for the first time in years. 

Given these factors, it logically follows that employers are increasingly considering the use of tools like credit checks and drug and alcohol testing to screen prospective and current employees.  Companies adopting aggressive employment screening measures that tend to reduce or eliminate the opportunities available will continue to be the subject of close scrutiny by the EEOC and other federal and state agencies.