In a misguided effort to reduce unemployment, the New York City Council voted March 13 to override Mayor Michael Bloomberg’s veto, and passed an amendment to the New York City Human Rights Law (HRL), prohibiting employers from discriminating against the unemployed.
Under the law, employers can be held liable for employment discrimination if they consider an applicant’s unemployment status when making hiring decisions, unless "there is a substantially job-related reason for doing so."
The law also prohibits employers from including in any job advertisement a requirement that applicants be employed. However, the statute permits employers to limit the applicant pool to those currently employed by the employer.
The Human Rights Law, already considered one of the most employee-friendly statutes of its kind in the country, now has the dubious distinction of being the first to provide applicants with a private cause of action to sue for unemployment discrimination.
Though the council’s goal of reducing unemployment is laudable, its amendment to the HRL is more likely to have the opposite effect.
Fearful of expensive (and potentially frivolous) litigation, employers will become reluctant to even interview unemployed applicants. The statute permits employers to inquire "into the circumstances surrounding an applicant’s separation from prior employment." However, employers may fear that such questions could trigger a suit if they do not hire the applicant, no matter what the reason for their decision.
Further, expanding the already broad anti-discrimination laws of New York City may further discourage companies from doing business, and hiring employees here. As recently clarified in a recent article in the Law Journal by the commissioner and chair of the New York City Commission on Human Rights, employers are already subject to strict liability under the HRL ("City Rights Law Has Strict Liability," NYLJ, Jan. 3). Adding to the groundswell of regulations governing city employers will hardly encourage hiring.
One of the council members who sponsored the law, Vincent Gentile, posed the following question in a press release: "If you are otherwise qualified, how does being unemployed make you ineligible for a job…. Is a dentist somehow more qualified for a job as a bank teller than an out-of-work bank teller simply because the dentist is currently employed!?"
The more relevant inquiry is this: "Is an employed bank teller more qualified for a job as a bank teller than an out-of-work bank teller?" From the perspective of the bank seeking new tellers, if all other factors are equal, the answer is probably "yes".
As Bloomberg noted in his Feb. 22, 2013 letter explaining the reasoning for his veto of the law, the HRL is intended to prohibit "irrational discrimination." Equating the fleeting status of being unemployed with permanent immutable characteristics like race, which have no bearing on an individual’s qualifications, trivializes the purpose of anti-discrimination laws.
Unlike the color of an applicant’s skin, an applicant’s status as unemployed can speak to their qualifications. They may have been laid off or fired because of poor performance. Their skills may have atrophied. Employers should be able to consider an applicant’s employment status.
The sweeping and misguided nature of the amendment will also lead to difficult enforcement issues.
Some employers may be drawn to unemployed applicants, hoping to take advantage of their need for work by offering them below market salaries. Could those employers be subject to liability under this law for pay discrimination?
The law prohibits job postings from excluding unemployed applicants. Taken to its logical extreme, will employers violate the law if they advertise a preference for applicants with "recent experience"?
The new law is well-intentioned to help those who have long suffered in this economy. However, its effects, as likely as they are unintended, will be to deter employers from hiring those very people who are most in need of work.
Keith Gutstein and Ellen Storch are labor and employment law partners at Kaufman Dolowich Voluck & Gonzo.