NACE Journal, May 2022

Employers today are faced with a variety of issues, including how to best establish and maintain a diverse and inclusive workforce in accordance with applicable laws, statutes, and regulations. Given the ever-changing nature of employment laws, it is important to understand what is permissible or impermissible in diversity hiring and recruiting.

EEOC Laws

The Equal Employment Opportunity Commission (EEOC), the federal agency assigned to handle claims of discrimination in the workplace, addresses claims under federal Equal Employment Opportunity laws, including Title VII of the Civil Rights Act (Title VII), the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the Immigration Reform and Control Act (IRCA), the Uniformed Services Employment and Reemployment Rights Act (USERRA), and Title II of the Genetic Information and Nondiscrimination Act (GINA). States also have established agencies that handle claims falling under the auspices of state anti-discrimination laws, statutes, and regulations.

As specifically stated by the EEOC in its guidance, it is illegal for an employer to publish a job advertisement that shows a preference for or discourages someone from applying for a job because of their race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability, or genetic information. Accordingly, it is generally impermissible to post a job (either a permanent position or an internship) that only allows for certain individuals to apply. As will be discussed, there are exceptions to the general rule.

Generally, under both state and federal law, anti-discrimination laws provide protections for individuals based upon their “protected classifications,” which include race, color, religion, national origin, sex, age (older than 40), disability, sexual orientation, gender identity, and service in the armed services or reserve units. Some states have identified additional protected classifications, such as off-the-job conduct (for example, smoking and drinking).

Promoting Diversity

To promote diversity in the workforce, employers have developed and implemented certain practices and protocols, and the government has implemented initiatives. For example the Biden Administration implemented an executive order that included comprehensive plans for diversity, equity, inclusion, and accessibility with regard to federal employment. The executive order would require federal agencies to establish chief diversity officers; provide diversity, equity, inclusion, and accessibility trainings; address pay equity issues; and improve the collection of demographic data in the federal workforce. While the executive order only applies to the federal workforce, private employers are engaging in similar endeavors.

In this regard, private employers are taking more steps to provide diversity, equity, inclusion, and accessibility in the hiring process; establishing or encouraging diversity and inclusion committees; and expanding the collection of demographic information. Each of the foregoing endeavors comes with its own potential landmines.

AI in Recruiting and Screening

To create a more diverse, accessible, and inclusive workplace, some employers have taken the human element out of the hiring process by using artificial intelligence (AI) in the recruitment and screening of applicants for employment. While there are potential benefits to using AI in the hiring process, there are also legal ramifications that must be understood prior to implementing any AI hiring system.

While one of the goals of an AI system is to eliminate human intervention and, in turn, to eliminate any bias that may be involved in the decision-making process, that is not always the case. As an initial matter, employers must ensure that the AI being used provides equal access to all applicants. For example, individuals with disabilities must be provided accommodations to engage in any testing or other procedures used by the AI. If an employer fails to provide equal access to the AI to individuals with disabilities, it may be in violation of the ADA or various state laws.

Additionally, to the extent an employer requires an applicant to complete certain aspects of the AI interview online, it may have a detrimental impact on certain demographics who may not have unlimited access to the means to complete the requirements; this could have implications for federal and state anti-discrimination laws. Moreover, while the intent of the AI is to eliminate human bias, humans are still responsible for the creation of the AI, and bias may seep into the program.

For example, if an AI program searches social media, examines personality traits, requires an applicant to complete a test, or solely relies upon an individual’s grade point average, it may disproportionately exclude a certain class of individuals, therefore leading to a claim of discrimination. Accordingly, while the use of AI may be beneficial for employers, employers must thoroughly review the AI to determine that it does not contain any bias or factors that exclude individuals of a protected classification. If it does, this not only defeats the purpose behind use of the AI but may also expose the employer to potential liability.

DEI Committees

Employers, and in a similar vein colleges and universities, are also expanding the use of diversity, equity, and inclusion committees to promote a diverse and inclusive community. Such committees are beneficial to the workplace and the employees, but there are issues that may arise.

To the extent the committees are sponsored by or created by an employer, the employer needs to make sure that it does so on an equitable basis that does not exclude individuals of any protected classification. If an employer is going to sponsor or create a committee to promote diversity in the workplace, it cannot limit the participation in such a committee solely to underrepresented communities. The committee must be open to all employees, otherwise an employer will be subject to a potential claim of discrimination.

Collecting Demographic Information

Employers are also attempting to expand the collection of demographic information to determine areas where they need to improve on diversity and inclusion.

Employers may collect such information by using anonymous surveys, “tear-off sheets,” or other permissible methods. Obviously, the use of a protected class information cannot be used as screening criteria. In this regard, the EEOC has stated that “requesting preemployment information which discloses or tends to disclose an applicant’s race suggests that race will be unlawfully used as a basis for hiring.”

According to EEOC, there is a presumption that solicitation of such preemployment information will be used as a basis for making selection decisions. Therefore, if an organization requested such preemployment information and an applicant who is a member of one of the protected groups is excluded from employment, an organization’s request could be viewed as evidence of discrimination.

To comply with pertinent laws, applicants and employees must be informed that completion of any demographic identifying documentation is voluntary. Moreover, the person must be told that if they choose not to complete the form, it will not have any impact on the hiring decision or continued employment. Finally, the person must be advised that if they choose to complete the form, the information will only be used for statistical purposes and will not be used in the hiring or employment process. After the applicant or employee provides the information, it must be kept separate from any other materials and cannot be used in the hiring process or used in relation to any employment decisions.

While the information obtained may be beneficial, employers must look at the information gathered as a whole. Employers must look to the number of individuals who responded compared to the number requested to respond. If only a minimal number of people responded, the information will not be overly beneficial to an employer and cannot be used to review the demographics of the workplace. Employees should also be mindful of the questions that are being asked and the information that is being requested and be wary of responding if it appears the employer is not complying with the pertinent requirements and instead may be using the information for impermissible purposes.

Exclusive Programs

In addition to the collection of information and the formation of committees, employers are seeking other ways to promote diversity and inclusion in the workplace.

One method an employer may attempt to use is minority-only programs, e.g., internship programs open only to underrepresented students. While the goal of such a program may be beneficial, the result may open an employer to potential liability.

A minority-exclusive internship program designed to create a diverse workforce that takes several factors into account, including a student’s race, may survive strict scrutiny. An example of this type of program is a merit-based program, in which a student’s race was a “plus” factor in the selection process. A student’s race, however, should not be the decisive factor in the review and selection process.

Moreover, a private employer must comply with state, federal, and local anti-discrimination laws and cannot make a hiring decision solely based on an individual’s protected classifications. While employers want to use gender, ethnicity, or race as a hiring factor, the employer needs proof of prior job segregation, past or present discrimination, or a significant disparity in the work force that needs to be resolved, but it cannot be the sole factor used in making a decision. The fact that there has been a history of discrimination in the United States is not sufficient evidence. Also, the aspiration to diversify the company’s work force to meet global marketplace demands may not be considered an adequate justification to use gender, ethnicity, or race as a hiring factor.

Employers must also be mindful that when attempting to promote diversity in the workplace in this manner, it may also open the door to a “reverse discrimination” claim. Recently, a white male plaintiff brought a cause of action under Title VII alleging race and gender discrimination. In that case, Duvall v. Novant Health, Inc., the plaintiff alleged that the employer’s diversity and inclusion plan resulted in his termination and replacement by a female and/or underrepresented employee. The plaintiff claimed that his former employer’s diversity targets and its use of metrics resulted in the termination of white males who would otherwise not have been subjected to termination. The employer’s documentation further indicated that the plaintiff’s performance was not the reason for his termination. The matter went to a jury trial, and the jury found in favor of the plaintiff and awarded him $10 million dollars in punitive damages.

Conversely, in Bless v. Cook County Sheriff's Office, the Seventh Circuit Court of Appeals dismissed a plaintiff’s reverse discrimination case. In Bless, the Seventh Circuit reviewed the case under a modified version of the established McDonnell Douglas standard. The altered standard was as follows: The plaintiff must show that 1) background circumstances exist to show an inference that the employer has reason or inclination to discriminate invidiously against whites or evidence that there is “something fishy” about the facts at hand; 2) he was meeting his employer's legitimate performance expectations; 3) he suffered an adverse employment action; and 4) he was treated less favorably than similarly situated individuals who are not members of his protected class.

The added requirement was that the plaintiff show “something fishy” about the facts at hand. The Court indicated that a plaintiff could satisfy this by showing evidence that members of one race were fired and replaced by members of another race or that employers are under pressure from affirmative action plans, customers, public opinion, the EEOC, a judicial decree, or corporate superiors imbued with belief in diversity. The Court found that the plaintiff in Bless failed to meet the foregoing requirements and dismissed the case.

It should also be noted that the U.S. Supreme Court has agreed to hear a new challenge to the current affirmative action standard. While the case has not yet been decided, given the current make-up of the Court, there may be significant changes to the current state of the laws pertaining to affirmative action.

Given all of these factors, employers should be encouraged to take all possible steps to promote and develop a diverse, inclusive, equitable, and accessible workplace while ensuring their actions are in accordance with applicable laws.