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General Counsel: Know These Federal Employment Laws

By Jonathan R. Tung, Esq. on December 03, 2015 | Last updated on March 21, 2019

Being an employer is hard. With an increase of clients suing in-house lawyers, being an employer's lawyer isn't so great these days either.

Navigating employment law is tricky, dangerous business. For example, companies can get in trouble for the tests they employ to assess applicants and employees. The EEOC has released a general sheet covering the most common issues regarding federal laws. We'll go over some of the highlights here.

General Background

There are three federal acts that every employer's GC should be aware of:

These three federal laws all prohibit discriminatory employment tests in some fashion or another. Since 9-11, there has been a surge in employment testing and background checks. At the same time, employers have increased use of electronic resume scanning and online job applications in an attempt to streamline the employment process.

Types of Employment Tests and Selection Procedures

  • Intelligence, cognition, memory, intuition, arithmetic and reading comprehension
  • Physical stamina tests
  • Physical examinations and psychological evaluations
  • Personality tests and hypothetical circumstances tests
  • Criminal background checks
  • Credit checks

Title VII

Title VII prohibits employment discrimination based on race, color, religion, sex, or national origin. It is one of the few federal acts that places the onus of government limitation on private actors (private employers). This means that employers are potentially subject to strict scrutiny limits with regards to their employment practices.

Title VII permits employment tests of the type listed above so long as they are not "designed, intended or used to discriminate because of race, color, religion, sex, or national origin." Obviously, intentional discrimination via the tests will not be countenanced. The government cannot intentionally discriminate based on race, and neither can your company. Race, alienage, and national origin (generally known as the suspect classifications/groups).

But some will try and circumvent the spirit of the law and intentionally attempt to exclude or favor one of the suspect classes over the other by using tests they know will separate populations. Such tests are often difficult to spot at first because they do not use offending language. They only become clearly discriminatory when the results of employment or promotion clearly indicate that one group has been favored. This is known as disparate impact discrimination and Title VII forbids it under most circumstances.

Disparate impact discrimination is allowable only in narrow situations where the employer can show that testing procedure is job-related and consistent with a business necessity and no less discriminatory alternative is available. For all practical sakes, GC should be aware that this wall is an extremely tall one and should be presumed un-climbable.

ADA

Under the ADA, employers may not ask questions about an applicant's disability or require a medical examination until after a conditional job offer is made to that applicant. Once that job offer is made, the employer may proceeds with her tests, but must do so for all individuals applying for that job. Like Title VII, the test must be job-related and consistent with a business necessity.

Regarding employees, tests are also subject to this limitation and must be based on a reasonable, objective belief that the person cannot do the job described because of an apparent medical condition. And even then, reasonable accommodations must be given to that person.

ADEA

This federal law is sometimes known as the "over 40" law because it prohibits discrimination of people over 40 with respect to term, condition, living, or employment. In essence, employers must treat employees of 40 or over as if they were 35, 25, or 21. ADEA is, in broad strokes, the prohibition of the Title VII-type "disparate impact" discrimination but extended to age discrimination. In applying seminal case law of Smith v. City of Jackson, a selection test procedure that has a disparate impact must be justified by the employer by factors that are reasonable and not age related.

Employers' Quick Tips and Best Practices

  • Absolutely no tests should explicitly filter for age, race, sex, color, or national origin.
  • If disparate impact appears to be an issue, GCs should counsel employers to find reasonable justifications for the tests that are not based on age, race, color, sex, or national origin.
  • GCs should ensure that HR persons and other administering employees know the gravity and seriousness of potential employment suits under the federal laws.
  • Know and apply the applicable jurisdiction's laws. Most of them will mirror the federal Acts, but may also be more stringent.

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