Category Archives: Hiring

Massachusetts Limits An Employer From Asking Applicants About Salary History

An applicant’s wage history is often a factor employers consider in making hiring decisions. In fact, it is not uncommon for an employment application to ask how much a candidate made at their previous positions.  Various good faith reasons may support this question.  For example, how much an applicant was paid may indicate, beyond job title, how significant his or her job duties and experience have been.

Past wage history may also determine how much the new employer is willing to offer the candidate to entice their employment. The Massachusetts legislature recently considered this issue and determined that setting compensation based on wage history can unfortunately perpetuate market wage disparities based on gender or race.  In response, Massachusetts enacted a new pay equity law that prohibits employers from seeking wage history information from applicants.  A copy of the new law can be found here.

Pursuant to this new law, it will considered an unlawful act for an employer to:

  • Screen job applicants based on their wage, including benefits or other compensation or salary histories, including by requiring that an applicant’s prior wages, including benefits or other compensation or salary history satisfy minimum or maximum criteria; or request or require as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment, that an applicant disclose prior wages or salary history.
  • Seek the salary history of any prospective employee from any current or former employer; provided, however, that a prospective employee may provide written authorization to a prospective employer to confirm prior wages, including benefits or other compensation or salary history only after any offer of employment with compensation has been made to the prospective employee.

This new law will not be effective until January 1, 2018.

Takeaway: Employers hiring applicants in Massachusetts should be aware of this new law and take steps to edit their employment application forms and processes as necessary prior to January 2018.  Employers should continue to monitor this issue as similar laws might well be enacted in other states.

Can An Employer Refuse To Hire An Applicant For Being Too Obese?

Maybe – the Eighth Circuit Court of Appeals recently held that refusing to hire an employee due to his or her obesity does not constitute disability discrimination under the Americans with Disabilities Act (ADA) unless certain conditions are met.

In Morriss v. BNSF Railway Co., the employer maintained a policy that it would not hire an employee for a safety-sensitive position if the employee’s body mass index (BMI) was over 40.  After receiving a conditional offer of employment, the plaintiff underwent two pre-employment physical examinations for a safety-sensitive position.  At the first examination, his BMI was 40.9.  At the second examination, his BMI was 40.4.  Following the examinations, the employer revoked the offer of employment and stated that the employee was not qualified for the position “due to significant health and safety risks associated with Class 3 obesity ([BMI] of 40 or greater).”  The employee then sued.

On appeal, the Eighth Circuit Court of Appeals upheld the district court’s dismissal of the plaintiff’s claims on summary judgment.  The Eighth Circuit agreed with the lower court’s decision that the plaintiff failed to prove that his obesity was a disability protected by the ADA.

The ADA defines the term “disability” to include a “physical or mental impairment that substantially limits one or more of the major life activities” of an individual.  29 C.F.R. § 1630.2(g)(1).  The ADA further defines the phrase “physical or mental impairment” to include “any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more body systems, such as neurological, musculoskeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genitourinary, immune, circulatory, hemic, lymphatic, skin, and endocrine.”  29 C.F.R. § 1630.2(h)(1).

In Morriss, the plaintiff was unable to show that his obesity was a “disability” because he could not show that it was the result of an underlying “physical or mental impairment.”  In rejecting the plaintiff’s discrimination claim, the court explained that:

[A]n individual’s weight is generally a physical characteristic that qualifies as a physical impairment only if it falls outside the normal range and it occurs as the result of a physiological disorder.  Both requirements must be satisfied before a physical impairment can be found.  In other words, weight outside the normal range—no matter how far outside the normal range—must be the result of an underlying physiological disorder to qualify as a physical impairment under the ADA.

The plaintiff in Morriss was unable to satisfy this definition of disability because even his own doctor testified that he did not suffer from any medical condition that caused his obesity or any medical condition associated with obesity, such as diabetes, hypertension, cardiac disease, or sleep apnea.

Takeaway:  Obesity does not qualify as a disability under the ADA unless it is both outside the normal range of weight and is the result of an underlying physical impairment.

Are Your Employees Looking For New Jobs?

Yes – your employees are probably looking for new jobs. According to a recent article, the number of online job searches spikes in January.

The most popular day for online job searches on Monster.com is the first Wednesday after New Year’s Day. On that day, there are typically 70% more online job searches than average. But it’s not just that day. Rather, Monster.com reports that at least half of the most active online job search days occur in January.

Another job search site, Glassdoor.com, also reports that January is the busiest month for job-searching. Glassdoor.com recently conducted a survey, which found that 45% of U.S. adults are either actively looking for a new job or plan to do so within the next 12 months.

Employees’ interests in finding new jobs comes at a good time for them, too. In many markets, employers have more openings than they can fill, making candidates with relevant experience a valuable commodity.

Takeaway: Employers should expect that their employees may be looking elsewhere for work and should take steps to retain their most talented employees, if necessary. Conversely, for employers who are struggling to find quality candidates, now may be a good time to renew hiring efforts.

Avoiding Toxic Employees May Be More Beneficial Than Hiring Superstars

According to a Harvard Business School study, an employer’s decision to avoid employing a toxic employee may prove to be more than twice as profitable as the decision to hire a superstar.

The study analyzed data concerning over 50,000 employees at 11 companies to quantify the costs of employing toxic employees vs. the benefits of employing superstar employees.  The study defined “toxic employee” to include “a worker that engages in behavior that is harmful to an organization, including either its property or people” – for example, behavior that causes customer loss, loss of employee morale, increased turnover, or loss of legitimacy among important external stakeholders.  A “superstar,” on the other hand, was defined as a worker in the top 1% of productivity.

The study concluded that the average cost of employing a “toxic employee” was approximately $12,489 while the benefit of employing a “superstar” was approximately $5,303 on average.  The costs attributed to the toxic employee included the expense of replacing additional workers who quit their employment due to the presence of the toxic employee, but it did not include additional costs, such as litigation, regulatory penalties, or reduced employee morale – so it was likely an underestimate.  As a result, the decision to replace a toxic employee with merely an average employee, as opposed to a superstar, should still be an overall benefit to an employer.

Takeaway:  The decision to avoid hiring or to terminate a toxic employee may be up to twice as beneficial for an employer as hiring a superstar employee.

Minnesota Has More Job Openings Than Job Seekers

If you’re an employer struggling to fill open positions with qualified candidates, you’re not alone.

According to the Star Tribune, the number of job openings in Minnesota is now greater than the number of unemployed job seekers.  Specifically, in October of 2015, there were 97,977 job openings, but only 89,793 Minnesotans seeking jobs.  The labor shortage is due to the State’s strong economy and its continuing low overall unemployment rate.  In September of 2015, the unemployment rate in the Twin Cities metropolitan area dropped to 3.1%, its lowest level since 2000.  Statewide, the unemployment rate in Minnesota is 3.7%.  That compares with 4.3% in Wisconsin and 5.0% nationally.

The primary effect of the labor shortage for employers is that it is harder to recruit new employees.  Employers may need to offer greater benefits and incentives to applicants, or they may need to offer relocation to candidates from out-of-state to bring in new talent.  The labor shortage may also affect retention of existing employees, who may become subject to the recruitment efforts of competitors.

Takeaway:  There is no end in sight for the current labor shortage in Minnesota that is making it difficult for employers to recruit and retain qualified employees.

White House Takes Executive Action To Ban the Box For Federal Agencies

On November 2, 2015, President Obama announced new executive action to “ban the box” by requiring federal agencies to wait until later in the hiring process to inquire about an applicant’s criminal history. In addition, the President is supporting efforts in Congress to impose similar ban-the-box requirements on the entire federal government as well as federal contractors.

According to the press release, “the President is directing the Office of Personnel Management (OPM) to take action where it can by modifying its rules to delay inquiries into criminal history until later in the hiring process.” This action is intended to allow those with prior criminal histories to receive fair consideration for employment in the federal government.

The President’s executive action follows a number of states and municipalities that have adopted similar “ban the box” requirements. In Minnesota, ban-the-box legislation took effect in January of 2014. A number of other states have similar laws.

Takeaway: The recent executive action to ban the box for federal agencies is reflective of a broader trend towards requiring employers to wait until later in the hiring process to inquire about an applicant’s criminal history.

Questions That Employers Should Avoid During The Hiring Process

When recruiting and interviewing new employees, there are a variety of potential landmines that employers should do their best to avoid. Here are some of the topics about which employers should not inquire during the hiring process – either because they directly reveal a protected status or may indirectly reveal a protected status:

  • Marital status
  • Maiden name
  • Spouse’s name
  • Spouse’s work
  • Sexual orientation
  • Age or date of birth
  • Sex (unless a bona fide occupational qualification (BFOQ))
  • Height or weight (unless a BFOQ)
  • Race or color
  • Color of eyes or color of hair
  • National origin or heritage
  • Citizenship (but an employer may ask if an individual is legally permitted to work in U.S.)
  • Number or age of children
  • Public assistance information
  • Physical or mental disabilities
  • Person to contact in case of emergency
  • Dates of education
  • Religion or creed (including associations/memberships)
  • Union membership or sentiments

Takeaway: During the hiring process it is important not only to ensure that a candidate has the necessary qualifications and experience, but also to avoid asking for information that could arguably lead to a discrimination claim. For more tips on the hiring process, click here.

Can Employers Require Job Applicants To Pay For the Costs Of Background Checks?

Generally no – Minnesota law provides that, unless specifically authorized by law, no employer or prospective employer may “require an employee or prospective employee to pay for expenses incurred in criminal or background checks, credit checks, or orientation.”  Minn. Stat. § 181.645.

The primary exception for the rule is for teachers.  Minnesota law allows a school hiring authority to require any individual who applies to work in a school to pay for the cost of his or her legally required background check with the Bureau of Criminal Apprehension.  Minn. Stat. § 123B.03, subd. 1.

Takeaway:  Unless specifically authorized by law, employers in Minnesota may not require applicants to pay for the costs of their background checks.

What Employers Need To Know About The Supreme Court’s Abercrombie & Fitch Religious Discrimination Case

In EEOC v. Abercrombie & Fitch Stores, Inc., the U.S. Supreme Court reversed summary judgment in a case in which Abercrombie & Fitch was accused of religious discrimination due to its refusal to hire a Muslim woman whose headscarf was deemed inconsistent with the store’s “Look Policy.” No. 14–86 (June 1, 2015).

In the case, a woman interviewed for a job at Abercrombie & Fitch while wearing a headscarf. She did not inform the interviewer that she wore the headscarf for religious reasons, nor did she request an accommodation for her religious practices. The interviewer later consulted her supervisor about whether the headscarf would be consistent with the store’s “Look Policy,” which prohibited headwear. The interviewer informed her supervisor that she believed the woman wore the headscarf due to her faith. After the supervisor determined the headscarf would violate the company’s policy, the company decided not to hire the woman.

The Supreme Court held that there was sufficient evidence for a jury to conclude that the store violated Title VII by refusing to hire the woman to avoid accommodating her religious practices. Title VII requires employers to provide reasonable accommodations to an employee’s religious observances or practices unless it would impose an undue hardship on the conduct of the employer’s business. 42 U.S.C. § 2000e(j). The Court rejected the employer’s argument that it could not have discriminated against the applicant because it did not know for certain that she wore her headscarf for religious reasons and because she did not affirmatively request an accommodation.

The linchpin in the Court’s reasoning was the distinction between an employer’s “knowledge” and its “motive.” The Court explained that:

An employer who has actual knowledge of the need for an accommodation does not violate Title VII by refusing to hire an applicant if avoiding that accommodation is not his motive. Conversely, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed.

The Court further explained that “the rule for disparate-treatment claims based on a failure to accommodate a religious practice is straightforward: An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions.”

The Court strongly suggested that a plaintiff must prove that the employer at least “suspected” the practice in question was religious. Because there was no dispute that Abercrombie & Fitch suspected the woman’s headscarf was religious, however, the Court did not need to reach the issue of what level of proof was necessary to prove the employer’s suspicion.

Takeaway: Title VII prohibits employers from refusing to hire someone to avoid accommodating a “suspected” religious practice even if the employer does not know for certain that the practice in question is religious.

5 Things Employers Should Know About the Labor Market in Minnesota

Here are 5 things employers should know about the current labor market in Minnesota:

  1. The unemployment rate in the State of Minnesota as of March 2015 was 3.7%, which was below the nationwide average of 5.5%.
  2. The unemployment rate in the Twin Cities Metropolitan Area as of March 2015 was 4.0%.
  3. It is estimated that Minnesota has 51,000 more jobs today than it did a year ago.
  4. Since 2010, the job growth in the Twin Cities has been predominantly in the suburbs. The number of jobs in Minneapolis remained essentially flat while St. Paul lost jobs during that time period.  Dakota County gained the most jobs.
  5. According to a recent report, the unemployment rate in Minnesota is currently 0.33% below its historical average.

Takeaway:  The historically low unemployment rate in Minnesota likely means that it will be harder for employers to find qualified applicants for the foreseeable future.

Is LinkedIn’s Reference Search Function Subject To The Fair Credit Reporting Act?

No – the U.S. District Court for the Northern District of California recently dismissed a complaint alleging Fair Credit Reporting Act (FCRA) violations based on LinkedIn’s Reference Search function. LinkedIn’s “Reference Search” function is available to premium account holders. It is designed to generate a list of individuals who previously worked with a job applicant and who may be able to provide feedback about the applicant’s previous job performance.

In Sweet et al. v. LinkedIn Corporation, a group of rejected job applicants sued LinkedIn and argued that the Reference Search function did not comply with the requirements of the FCRA. No. 5:14-cv-04531-PSG (N.D. Cal., Apr. 14, 2015). The FCRA is a federal statute that regulates “consumer reporting agencies,” which provide “consumer reports,” such as background checks, for employment purposes. See 15 U.S.C. § 1681 et seq. Among other things, the FCRA requires consumer reporting agencies to “adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy and proper utilization of such information.” 15 U.S.C. § 1681(b). The FCRA also imposes requirements for employers who utilize consumer reports provided by consumer reporting agencies to assess job applicants, including obtaining written authorization from the applicant and notifying the applicant if an adverse decision is based in part on information contained in the consumer report.

In Sweet, the court granted LinkedIn’s motion to dismiss based on its conclusion that the Reference Search function on LinkedIn was not a “consumer report” for purposes of the FCRA. The court explained that “Reference Searches are not consumer reports because the information contained in these histories came solely from LinkedIn’s transactions or experiences with these same consumers.” The FCRA defines “consumer report” to exclude a “report containing information solely as to transactions or experiences between the consumer and the person making the report.” 15 U.S.C. § 1681a(d)(2)(A)(i).

The court also held that LinkedIn was a not a “consumer reporting agency” under the FCRA. The FCRA defines “consumer reporting agency” as “any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties . . . .” 15 U.S.C. § 1681a(f). The court reasoned that because the complaint alleged that the plaintiffs voluntarily provided their names and employment histories to LinkedIn, the complaint supports the conclusion that LinkedIn gathered the information for the purpose of carrying out the plaintiff’s information-sharing objectives – not for the purpose of creating consumer reports.

Takeaway: Because the Reference Search function is not a consumer report subject to the FCRA, employers who utilize the function are not required to comply with the FCRA requirements unless they conduct a separate background check that qualifies as a “consumer report.”

10 Essential Tips For Hiring Employees In Minnesota

Here are 10 essential tips for hiring new employees in Minnesota:

  1. Consider interview questions carefully to ensure compliance with applicable laws.
  2. For example, don’t ask about any categories protected by the Minnesota Human Rights Act.
  3. And because of the ban-the-box law, don’t ask about the applicant’s criminal background until the applicant has been selected for an interview or a conditional offer of employment has been made.
  4. If you run a background check on the employee, comply with the Fair Credit Reporting Act and Minnesota’s background check law.
  5. If the employee has a criminal background, follow the EEOC guidance for arrest and conviction records.
  6. To avoid a claim for tortious interference with contract, make sure the employee does not have a non-compete agreement that prohibits the employment.
  7. Memorialize the terms of the employment in a written offer letter or agreement that complies with Minnesota’s statutory requirements.
  8. To preserve the employee’s at-will status, include a magic at-will employment disclaimer in the offer letter or agreement.
  9. Verify the new employee’s eligibility for employment with a Form I-9 to avoid violating the Immigration Reform and Control Act.
  10. Report the new hire to Minnesota New Hire Reporting Center within 20 calendar days of the date of hiring.

Takeaway:  This list is by no means exhaustive, but it’s a good start.  Click on the links above for more information about any of the recommendations.