In the News July 13, 2015

New Hiring Software Poses Affirmative Action Risk to Employers, Clare Draper Tells Law360

A nearly decade-old regulation from the Office of Federal Contract Compliance Programs (OFCCP) has not kept up with new technology that allows employers to screen thousands of job applicants, making companies vulnerable to government lawsuits and class actions.

The OFCCP’s Internet applicant rule is designed for affirmative action plans and conducting adverse impact analyses into government contractors’ hiring practices, said Clare Draper, partner in Alston & Bird’s Labor & Employment Group.

There are four prongs in the definition of a “job applicant,” he said. The most troublesome prong says the employer considered an individual for employment.

“The consideration prong is important,” Draper noted.

If an employer receives 100 applicants, but a human resources employee only looks at 10, then the rule says only those 10 were considered. Using a job search engine or hiring software, however, means all 100 applicants were considered when analyzing the employer’s hiring practices for discrimination.

“What the OFCCP said at the time they did this rule, is that electronic searches of pools causes consideration of an applicant,” said Draper. The employer “is making a decision with the use of an electronic search tool.”

If the software weeds out applicants based on education, job experience or another factor, and the result shows a disparity in hiring by race or gender, the employer could be liable for discriminatory hiring practices even if it was unintentional.

The U.S. Supreme Court held in Wal-Mart v. Dukes that there must be some “glue” that connects potential class members together. One method of proof is to show the company used a companywide test or evaluation method.

Even without discriminatory intent, that glue could be lack of a mitigating action, such as a randomizing tool.

“Anything in an electronic search that screens women or minorities out at a higher rate … any common factor that goes into that search could be the glue that Dukes is talking about,” said Draper.
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