Jasmine A. Williams
excerpted from: Jasmine A. Williams, “Unemployed (And Black) Need Not Apply”: a Discussion of Unemployment Discrimination, its Disparate Impact on the Black Community, and Proposed Legal Remedies, 56 Howard Law Journal 629 (Winter, 2013) (191 Footnotes) (Student Comment)
It is a sociological cliche [sic] that racial antagonism is intensified in periods of economic distress. . . . Because race is an important consideration in the competition for jobs, we can expect that whites and Negroes have attempted to shift the burden of the depression upon each other, but that as usual the dominant group has been more successful.
This statement was written in 1940 in reference to race and class during the Great Depression; however, the pattern it describes is just as clear today in American society. The overall unemployment rate has been extremely high over the last few years. The average unemployment rate climbed from 5.8 percent in 2008 to 9.6 percent in 2010. Throughout the “Great Recession,” the unemployment rate for the black community has been twice that of the population as a whole. In many black communities, unemployment has hit what some consider “crisis proportions.” It is likely that the true unemployment rate is even higher than officially reported.
The unemployment disparity between the black community and the general community is not surprising because it reflects the status quo existing long before the recession began. Several factors, such as racial discrimination and access to education, are offered to explain the gap. The country's desire to find a solution to fix the current unemployment problem has exposed a hiring practice with the potential to greatly exacerbate the already disturbing disparity between unemployment in the black community and unemployment in the overall community--discrimination against the unemployed.
The controversy of discrimination against the unemployed was brought to public attention in 2010 when a recruiter hired by Sony Ericsson to staff its Atlanta headquarters stated in a job posting, “[n] o unemployed candidates will be considered at all.” After this incident garnered wide public attention, the National Employment Law Project (NELP) published a report in July of 2011 reviewing the most prominent online job-listing websites over a four-week period. NELP researchers found that there were over 150 employment ads listed on Internet job sites that stated, “unemployed need not apply,” or listed “currently employed” under required job qualifications. Although the study done by NELP was fairly limited in scope, it nevertheless showed that “small, medium and large employers, for white collar, blue collar, and service sector jobs, at virtually every skill level” excluded the unemployed. Because this practice is used across a large segment of the job market and there are record numbers of unemployed people in the United States today, the proper way to resolve this problem is the subject of great debate. Lost in the debate, however, is sufficient focus on how to remedy the disparate impact these discriminatory hiring practices have on the African American community.
The public response has generally been outrage, especially among job seekers. Lawmakers have responded by enacting legislation to stop such practices in hiring advertisements. For example, New Jersey enacted a law banning language that discriminates against the unemployed in job advertisements, and several states have similar legislation pending. President Obama also included a measure banning such advertisements and creating a civil cause of action against employers who discriminate based on employment status in his 2011 Jobs Act.
While many people view this as a serious problem that must be solved, there are also many individuals who believe that the potentially adverse effects of this alleged “unemployment discrimination” have been greatly exaggerated. Some argue that the statistics used by NELP and other studies do not accurately reflect the limited scope of the practice. Regardless of how miniscule an effect this practice is believed to have, during these times of high unemployment and economic distress, any barrier to employment has the potential to be destructive to society. According to Michael Hirsch, “42.4 percent of the nation's 13.9 million unemployed workers have been out of a job for more than six months. That's by far the highest share of long-term unemployed since the government started keeping records a half-century ago.” “Expert[s] . . . warn[ ] that the longer a person goes jobless, the greater the atrophy in skills and ambition, and the more likely that person is to drop out of the workforce entirely.”
In 2011, the Equal Employment Opportunity Commission (EEOC) released a report showing that job hiring discrimination complaints reached a record high. This report indicates that “[t] he . . . [EEOC] received just shy of 100,000 charges from citizens during the 2011 fiscal year, the most logged in a single year in the agency's 46-year history . . . .” This report does not include claims related to discrimination on the basis of employment status. Employment discrimination experts attribute the increase in discrimination to the strained economy, claiming “less scrupulous employers have more opportunities to discriminate in their hiring.” It is clear that even if employers discriminating based on employment status affect a small percentage of jobseekers, taken in the aggregate with the heightened discrimination related to the economy, it is a serious issue that must be addressed.
Discrimination against the unemployed is having a negative impact on the job-seeking community in general. However, it is having an extremely adverse impact on the black community. There are many proposed solutions to this problem, although few propose to address the effect of the practice in the black community. These several prominent proposed remedies can be divided into two categories: private suits and legislative remedies. Private suits describe the proposal to create a cause of action that would allow applicants to bring lawsuits for discrimination based on unemployment status. Legislative remedies refer to proposed remedies such as hiring tax incentives and government-sponsored work training programs.
This Comment argues that a private cause of action is an inadequate and unrealistic remedy to address the problem of unemployment discrimination.
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I. NATURE OF THE PROBLEM AND ITS EFFECT ON THE BLACK COMMUNITY
There has been a continuous economic struggle for the black community in this country as a result of the lingering effects of enslavement and disenfranchisement. The Recession has only exacerbated these previously existing economic challenges. The Recession began roughly in the late 2000s, and there are several differing theories as to how it began.
The current Recession's effect on the black community has been compared to the impact of the Great Depression. In a discussion of the Great Depression, several explanations were offered for the higher unemployment rates of black workers both during and afterwards. One such reason for the higher unemployment rates amongst black people that has been explored is labor market discrimination. “[L] abor market discrimination, in the sense of unequal treatment of equally qualified workers, manifested itself in the form of discriminatory employment policies during the Great Depression. A related argument is that racist attitudes hardened during the Depression, worsening existing labor market discrimination.” Equally qualified black workers were “last hired and first fired.” This premise is just as true today. According to the Center for American Progress,
[T] he unemployment rate among African Americans rises faster than that of whites during a recession[, and] . . . the unemployment rates for African Americans tend to start to rise earlier than those of whites - and those rates tend to stay higher for longer than those of whites. This phenomenon can be described as “first fired, last hired” and is one of the key structural obstacles facing African Americans in the labor market.
Recent statistics clearly show the economic and social effects of the discrimination African Americans faced in this country. As of 2010, the overall poverty rate was 15.1 percent, however, 27.4 percent of African Americans were living in poverty. In 2010, the U.S. Bureau of Labor Statistics reported that unemployment among whites was 8.7 percent and unemployment among blacks was 16 percent. The same study has also documented the unemployment statistics for the black and white communities since 1972. The rate of unemployment for the black community has exceeded, and often doubled, that of the white community every year since 1972.
Given the social and economic challenges plaguing the black community, it is clear that a hiring practice penalizing the unemployed can be especially devastating. The disproportionate number of unemployed individuals in the black community, coupled with the other factors previously discussed, highlight the fact that this new form of hiring discrimination can adversely affect the black community and trigger extensive collateral consequences. The disproportionate lack of jobs leads to a lack of income--which leads to desperation--which increases crime in the black community, adding to an incarceration rate for blacks that is already disproportionately high. It is crucial that an adequate remedy be developed and implemented.
II. THE PROPOSED PRIVATE CAUSE OF ACTION
A. Proposed Cause of Action for Hiring Discrimination Based on Employment Status
The Fair Employment Act of 2011 was one of the first pieces of legislation proposed in response to the trend of employers showing a preference for job candidates who are currently employed. The bill, sponsored by Rep. Henry Johnson, would amend Title VII of the Civil Rights Act of 1964 to forbid employers from discriminating based on employment status. The bill proposes that Title VII be amended to include the phrase “employment status.” Under the bill, “unemployment status” means “being unemployed, having actively looked for employment during the then most recent four-week period, and currently being available for employment.”
The 2011 American Jobs Act included a similar provision. The provision, titled “Prohibition of Discrimination in Employment on the Basis of an Individual's Status as Unemployed,” seeks to: (1) prohibit employers from disqualifying an applicant because of that person's status as unemployed; (2) prohibit employers and employment agencies from publishing or posting advertisements that indicate that an unemployment status disqualifies an applicant from consideration; and (3) eliminate the burdens imposed on commerce created by such practices. The provision explicitly states that employers are still permitted to consider employment history as a consideration in hiring. This statement in the Act underlines the problem that will occur in enforcing this measure: what standards will be used to determine when an employer has focused too heavily on an individual's status as unemployed? If a new cause of action is enacted, courts will likely use the framework for a cause of action under Title VII of the Civil Rights Act of 1964.
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F. Other Criticisms of a Private Cause of Action
Plaintiffs in employment discrimination cases lose at much higher rates than other plaintiffs. A statistical study confirmed that plaintiffs in employment discrimination cases “win a lower proportion of cases during pretrial and at trial. Then, more of their successful cases undergo appeal. On appeal, they have a harder time both in upholding their successes and in reversing adverse outcomes.” Between the years 1998 and 2006, Title VII cases made up nearly seventy percent of employment discrimination cases in U.S. District Courts. Plaintiffs in these cases had a success rate of 10.88%. Plaintiffs also have difficulty surviving on appeal--a favorable verdict for the plaintiff is likely to be reversed while an adverse outcome is unlikely to be reversed. It is clear that there is an anti-plaintiff sentiment among courts in employment discrimination cases. An employment discrimination plaintiff already has a significant burden to overcome in addition to this biased sentiment.
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III. LEGISLATIVE AND ADMINISTRATIVE PROPOSED REMEDIES TO THE UNEMPLOYMENT DISCRIMINATION PROBLEM
A. Employment Development Programs
Several programmatic solutions have been proposed to address the problem of unemployment discrimination. One potential solution is a program that allows individuals to work for potential employers free of charge for a set number of hours in hope that the individual will become employed. Georgia implemented such a program. The Georgia Works Program allows job seekers to train with potential employers and work up to twenty-four hours a week for as long as eight weeks on a volunteer basis. The program gives potential employers an opportunity to assess the applicants at no cost and there is no obligation to hire a trainee. According to the Georgia Department of Labor website, about sixty percent of participants have received paying jobs through the program.
President Obama proposed a similar program as part of the 2011 American Jobs Act titled the Bridge to Work Program. The Act provides funds and guidelines for states to set up programs similar to the Georgia Works Program that allow people receiving unemployment benefits to become part of a work-training program and work at no cost to employers, preparing them to potentially become employed after a specified time period.
A program of this type has great potential to help remedy the unemployment disparity. The training and experience can make the job candidate more marketable for future opportunities. It may also help close the gap in a candidate's work history if he or she has been unemployed for an extended period of time. Although the purpose of the program is not to give employers free labor, employers benefit in being able to assess potential employees in a more practical and realistic setting. Potential employees are less likely to be denied based on superficial grounds and more likely to be assessed for their actual demonstrated work ability.
B. Employer Tax Incentives
Another potentially successful remedy to address the unemployment disparity issue is tax incentives for hiring long-term unemployed individuals. This is not a new concept. In 2010 Congress enacted the Hiring Incentive to Restore Employment Act (HIRE Act). Under that statute employers who hired unemployed workers before the end of the year could qualify for a 6.2% payroll tax incentive. The statute had the effect of exempting participating employers from their share of Social Security taxes on wages paid to newly hired workers who were previously unemployed and hired after a specified date.
The 2011 American Jobs Act proposed a $4,000 tax credit to employers for hiring individuals who have been looking for employment for over six months. This solution has tremendous potential to be successful. It is well documented that the government has great power to affect the behavior of its citizens through its power of taxation. However, this provision has also been aggressively criticized. In its current state, the provision allows the employer a tax break only for the year the long-term unemployed individual was hired. This creates a paradox because it gives the employer an incentive to then let go of the employee and hire a new unemployed candidate in order to continue to take advantage of the tax break. This issue can be remedied by potentially redistributing the current tax incentive so that instead of a $4,000 tax break for the year the employee is hired, the employer can instead receive a decreased tax break over the course of several years. A less persuasive remedy to this paradox would be to only allow employers to be eligible for a limited number of these particular tax breaks in order to deter employers from firing and hiring to repeatedly take advantage of the incentive.
C. Prohibiting Express Preference for Employed Applicants
Several states have enacted legislation making job advertisements that express a preference for currently employed applicants illegal. New Jersey passed such a law, and it became effective on June 1, 2011. Violators are subject to a fine no more than $1,000 for the first offense, $5,000 for the second offense, and $10,000 for each subsequent offense. The governor's message attached to the statute states that nothing in the act creates a private cause of action or allows an individual to sue an employer for violation of the act. While on its face this statute provides less protection for individuals by precluding a cause of action, this approach to ending unemployment discrimination is favored because it avoids increased litigation for employers and the challenge of defining a plaintiff's burden to be successful under such a cause of action. New Jersey legislators recognize that the statute may be a challenge to enforce, but it sends a message that such discrimination will not be tolerated. The 2011 Jobs Act also proposes a similar provision on the federal level.
Legislation banning a company from overtly expressing preference for currently employed applicants should be refined and enacted. The penalty perhaps should be somewhat harsher in order to encourage compliance and to effectively deter discrimination. Also, refinement is required to include companies that may not advertise a preference for employed applicants but utilize it as a major consideration for hiring. It would be unfair to impose an expensive burden on employers to report hiring strategies and require employers to keep records on all applicants. However, perhaps a more reasonable yet persuasive penalty would be to subject repeat violators to close monitoring of the company's hiring practices in order to look for patterns of discrimination based on employment status.
V. OTHER POTENTIALLY SUCCESSFUL SOLUTIONS
A. More Solutions Tailored to African Americans
There is no single action sufficiently adequate to solve the problem of discrimination against the unemployed. There must be several measures in place simultaneously to counter this unique and complex problem. All of the legislative and administrative remedies previously explored should be refined and implemented. However, there should be a special focus on the way this problem affects the black community. There should be more work programs and subsidized employment programs tailored specifically to minorities. Currently, the participants in these programs are limited to individuals receiving a form of government-provided unemployment compensation. However, organizations interested in promoting the welfare and progression of the black community should be eligible for government funds to create and run such programs. Such programs would be better equipped to prepare black job seekers for positions in a way that is more tailored to their individual unique needs, making it more likely that an individual would be successful in securing employment through the program. Allowing organizations to run such programs will also allow for more African Americans to be aware of the opportunity and subsequently take advantage of it. Presumably, it will increase the number of African Americans in the pool of potential workers participating companies have to select from.
B. Eliminating Incentives to Discriminate
Another approach is to attempt to eliminate some of the incentives employers have for discriminating against jobless individuals. There are several reasons offered to explain why employers exclude unemployed individuals from job opportunities. One is that because of large numbers of unemployed individuals seeking employment and the limited number of positions available, employers use long-term unemployment as a filter to easily narrow the field of viable candidates. Another reason is that employers presume that people currently employed likely have a stronger work ethic.
While these are very troubling reasons for excluding well-qualified applicants from consideration, they are valid reasons. They are valid in the sense that they make an employer's burden in the hiring process much lighter. In order to deter employers from utilizing this convenient method of hiring discrimination, there must be an incentive that significantly outweighs the convenience. The proposed legislation in its current state does not adequately achieve that goal. These laws are not likely to subject employers to any serious penalties, and they do not offer anything to counter-balance the expenditure of time, energy, and resources that goes into carefully screening large numbers of applicants.
Discrimination against the unemployed is having a terrible effect on our society. Unemployment rates are at sustained highs, and it is well-settled that the longer an individual remains unemployed, the more likely the individual is to never re-enter the work force. With African Americans having an extremely disproportionate rate of unemployment compared to that of the general population, discrimination against the unemployed is having a devastating effect on the African American community. It is clear that employment discrimination is still a major issue in our country today. The standards the courts apply for plaintiffs and employers are extremely complicated. An attempt to apply these standards to a claim as ambiguous as discrimination based on unemployment status would be a disaster. Also, even the classes that have historically received protection based on the authority of Title VII have great difficulty prevailing in court. A private cause of action will not be able to solve the problem for the black community or the general population. Emphasis for solving this problem should be on harsher penalties for employers that expressly discriminate against the unemployed in job ads, more job training programs, more employer tax incentives for hiring the unemployed, and programming specifically tailored to the needs of African Americans.
Whether or not these suggested measures are considered, at the very minimum it is important that the problem of unemployment discrimination be addressed. It must be addressed not only as it pertains to the community in general, but it must also be addressed based on the disproportionate effect it has on the black community. The African American community has a special interest in finding a viable solution. It is more than just jobs on the line; it is the future of the black community that is in jeopardy.
. J.D. Candidate, Howard University School of Law, Class of 2013.