In the not-so-distant past, applicants were happy to get an interview and disappointed if not offered a job. Today, these same disappointed unsuccessful applicants (and their lawyers) are on the lookout for any opportunity to file suit.

The questions in this section identify many of the ways unsuccessful applicants are becoming successful litigants. Hopefully, the information here will assist you in negotiating the sometimes hidden landmines which, when tripped, evolve into costly lawsuits.

Failure To Hire

Can an employer be sued by an unsuccessful applicant?
Yes. “Failure to hire” is a type of employment claim alleged when an applicant believes he/she was not hired due to some discriminatory reason (race, sex, color, origin, religion, gender, disability, age). A current employee may also bring this type of claim if he/she is not promoted into a position for which they have applied. Typically these claims are based on a violation of Title VII. An explanation of Title VII is found here. Traditionally, these claims are difficult to prove but if an employer fails to document the reasons why an applicant was not hired, that employer is susceptible to damages from this type of lawsuit. The goal is to present documented non-discriminatory reasons to justify the decision not to hire an unsuccessful applicant.

Applicant Screening

Should an employer implement an uniform applicant screening process?
Yes. Documentation of an uniform applicant screening process will provide a strong defense to a “failure to hire” claim. Below are 5 actions to create an applicant screening process:

  1. PREPARE A SPECIFIC JOB DESCRIPTION AND MINIMUM REQUIREMENTS
  2. IDENTIFY OBJECTIVE REASONS FOR DISQUALIFICATION FROM THE POSITION BEFORE BEGINNING THE HIRING PROCESS- for example:
    1. Did not meet minimum qualifications, did not meet education or experience requirements, incomplete application, failed drug and/or background check; cannot perform essential functions of the job
    2. Candidate Withdrew/Candidate Not Interested – could not reach individual to follow up, candidate no longer interested, cannot work the required hours or didn’t like the work environment, accepted another position during the recruiting process;
    3. Not best qualified– met minimum requirements but had poor interview, other candidates had stronger work history, references were not favorable;
    4. Candidate declined offer.
  3. CREATE A STANDARDIZED WRITTEN PROCESS TO FOLLOW WITH ALL APPLICANTS AND CONSIDER ALL APPLICANTS THROUGH ITS LENS (including a uniform set of questions to ask all applicants)
  4. HIRE THE SUCCESSFUL CANDIDATE AND RETAIN FILES FOR ONE YEAR FOR PURPOSES OF DEFENDING ANY SUIT THAT MAY BE FILED

Taking the steps identified here will put an employer in a strong position to defend a “failure to hire/promote” lawsuit. Here is an opinion from the Eastern District of North Carolina Federal Court in which we were able to obtain a dismissal of the failure to promote claim based upon racial discrimination. My client had a thoroughly documented process allowing us to prove the reason for not promoting the applicant was legitimate and non-discriminatory. This case is a good example of why an applicant screening process should be implemented to avoid these types of suits.

Are job descriptions necessary?
No, but here are reasons for creating job descriptions:

  1. Establishes essential job functions- doing this will give you a strong defense to any claim if an employee, for whatever reason, is unable to perform a documented essential job function.
  2. Establishes that the requirements of the job are consistent with a business necessity.
  3. Establishes objective basis for hiring, and more importantly not hiring, decisions.

Here are some reasons not to create job descriptions:

  1. Establishes written criteria which if not followed, may provide evidence for a claim;
  2. May require greater scrutiny of each requirement if suit is filed;
  3. Eliminates the ability to hire for a position that may be fluid and not particularly defined initially; and
  4. Failure to update job descriptions could render descriptions useless or provide evidence for a claim.

If you are committed to updating accurate job descriptions, they are useful in supporting termination decisions when an employee can no longer perform an essential job function. Often an employee who has been injured, whether on the job or otherwise, may not be able to perform essential functions of the job. If that employee is terminated, they claim that they are protected by the Americans with Disabilities Act; that they are being retaliated against for filing aWorkers Compensation Claim; or that they are being discriminated against (or retaliated against) because of their membership in a protected class under Title VII. A clear job description along with evidence that the employee cannot perform a documented essential job function provides a strong defense to a terminated employee’s challenge to the reason for termination.

Can an employer’s job application protect the employer from future lawsuits?
Yes, if the job application includes the following:

  1. An Equal Opportunity Statement to affirm from the outset that you are an equal opportunity employer and will not discriminate- the EEOC is always looking for this and will be skeptical of any defenses if such a statement is not identified.
  2. A statement that the position will be considered terminable by either party at any time for any reason (at-will employment) and that the application and/or the employee handbook is not intended to, and does not, create a contract if hired.
  3. A statement that certifies the responses in the application provide complete and truthful information and that any false information is grounds for not hiring or for immediate termination.
  4. Make it clear that this application is for the current opening and will not be retained for consideration for other positions.
Is an employer at risk of being sued if its job application asks whether the applicant has been convicted of a crime?
Yes. “Ban the Box” is the battle cry used in support of eliminating the question whether an applicant has been convicted of a crime from all job applications. Proponents claim that certain protected classifications have a higher rate of criminal conviction. They argue that the elimination of applicants due to a criminal conviction without other consideration may create an actionable discriminatory failure to hire claim under Title VII.

There is some opposition to these laws but the best practice is to remove the question from an application and run a criminal background check on only the “finalist” candidates. These actions will show that the employer strongly considered the candidate and provide evidence that the employer did not use a criminal conviction as a pretext to discriminate against someone based upon their race, color or national origin.

The Equal Employment Opportunity Commission (EEOC) has supported this movement and has prepared a lengthy and generally boring “guidance” document on this issue. Here is a brief summary of the guidance on this issue as provided by the EEOC http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm#I

Here is the entire EEOC guidance if you want to learn more: http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm#VB3

Here is a website urging the implementation of “ban the box” in every city and state: http://www.nelp.org/campaign/ensuring-fair-chance-to-work/

May an employer screen an applicant using social media?
Yes, an employer may but there are some risks discussed in this article. If an employer decides to use social media to screen applicants, it must consider the procedures discussed in the next article entitled: What procedures may help my company lawfully screen applicants using social media?

Also, not screening applicants using social media may expose an employer to a negligent hiring claim if an employee takes action consistent with information readily discoverable on social media prior to the hiring of the individual. It is likely that the more our society becomes entrenched in the use of social media, the more likely a jury will expect employers to use social media as a tool to screen applicants. Click here for a cool infographic regarding statistics about employers use social media in the hiring process.

What procedures can an employer implement to screen applicants using social media?
  1. Create a list of character traits which may conflict with the job
    1. discussion of unprofessional topics in posts (sex and drugs, but not necessarily rock & roll)
      poor judgment
    2. conducts themselves in a way that would bring disrepute upon your organization (photos of them in compromising positions, eg. engaging in illegal behavior)
    3. information inconsistent with application or resume
    4. information indicating violent tendencies
    5. information praising illegal activity
  2. Have a non-decision maker perform the searches and report only information that is relevant to the character trait list.

    The non-decision maker needs to understand what information, if given to the decision maker, could be used as a basis to claim that there was some illegal discrimination in failing to hire the applicant. Examples of information that should not be reported to the decision maker are: disabilities, religious affiliation, sexual orientation, medical conditions and the like. This will allow the decision maker to be shielded from a subsequent claim that he/she learned some fact through the social media search that could be argued became the basis of a discriminatory decision not to hire the candidate.

  3. Only search public non-protected sites.

    Do not pose as a friend or have anyone else attempt to gain access to otherwise private websites. Also, do not ask for or use passwords of the applicant. Doing so will open you up to a violation of the social media websites user agreement and a potential lawsuit under the Stored Communications Act.
    Beware of the applicant’s complaints about working conditions at former or current employer as these may be protected activities and should not be reported by the screener to the decision maker. This will avoid a failure to hire claim because an applicant engaged in a protected activity at a former job. An example is failing to hire an applicant because he/she filed a workers compensation claim at their last job.

What does the Fair Credit Reporting Act have to do with an employers evaluation of an applicant?
Generally speaking, the Fair Credit Reporting Act applies when an employer uses a “consumer reporting agency” to obtain a “consumer report” (includes driving records and criminal history). Under the Act a consumer report is any “written, oral or other communication” from a “consumer reporting agency” bearing on the employee’s: (1) credit worthiness; (2) standing; (3) credit capacity; (4) mode of living; (5) character; (6) reputation; (7) personal characteristics.

An employer must be vigilant in considering whether the information it requests is a “consumer report” from a “consumer reporting agency”. A California court determined that LinkedIn was not a consumer reporting agency and therefore the employer was not required to follow the FCRA procedures. Click here to read an article regarding this case. To learn more about trends in FCRA lawsuits click here for an excellent and informative article.

May an employer run a credit check to evaluate applicants?
Yes, however, the EEOC views a credit check of all applicants without any relevance to the particular job as potentially discriminatory. So the best practice is to have some legitimate business purpose in considering an applicant’s credit worthiness that relates to the actual job. If you decide to run a credit check, you must comply with the procedure found in the Fair Credit Reporting Act as described here.
May an employer screen an applicant based on the applicant’s criminal history?
Yes but it can be illegal if there is no legitimate business purpose in considering an applicant’s criminal history that relates to the actual job. This is why a job description identifying specific requirements for the job is extremely important from the outset of the application process. Before deciding to run a criminal background check, an employer should consider the following: (1) what position is the person seeking; (2) is it the type of position that requires someone with an unblemished criminal history or that conflicts with criminal convictions revealed in the criminal history.
If an employer decides to obtain criminal histories of applicants, then it must follow the standards set forth in the Fair Credit Reporting Act. Further if an employer obtains a criminal record, it should perform an individualized assessment of the information obtained.
May an employer disqualify an applicant from consideration if the applicant has a criminal record?
No. In many states an employer may not even ask if an applicant has a criminal record. However, once an employer obtains a criminal record, best practices dictate that it perform an individualized assessment of the information in the report. This includes (1) determining the seriousness of the criminal charges and their relationship to the job; (2) considering how long ago these occurred; (3) considering any objections from the applicant for the correctness of the report; (4) documenting why the particular information in the credit report should disqualify this individual.

Click here for the EEOC’s guidance on the subject.

What procedures are required by the FCRA to obtain a “consumer report” (credit report, driving record, or criminal background check) from a “consumer reporting agency” to use in the screening of applicants?
  1. An employer must obtain written consent separate from an application. Prior to the request of a “consumer report” from a “consumer reporting agency”, the FCRA requires an employer to notify the applicant that you plan to do so and get the applicant’s written authorization. This notice and authorization must be in a separate document that includes no other information.
  2. Provide a pre-adverse action disclosure. Once a report is obtained and there is information included in the report that causes the employer not to hire the applicant, the employer must, prior to informing the applicant of the decision, provide a separate notice stating the employer plans to take this “adverse action”. The “adverse action” is deciding not to hire this person. With this notice the employer must include two additional documents: (1) a copy of the credit report; and (2) a copy of the notice from the Federal Trade Commission entitled “A Summary of Your Rights Under the Fair Credit Reporting Act” which informs the applicant as to how to challenge any incorrect information that is the report among other things.
  3. Send an adverse action notice. Necessarily, as a result of the requirement to send a pre-adverse action disclosure, an employer must wait some period of time, presumably to allow the applicant to challenge any incorrect information upon which the employer may be basing your decision, before the employer makes its final decision. Once an employer allows a reasonable amount of time to pass and make a final decision regarding a particular applicant based upon his or her credit report, the employer must provide the applicant another document called “The Adverse Action Notice”. Specifically, the notice explains that the employer is not hiring the applicant and provides information on the applicant’s rights including their right to dispute the report and the right to obtain an additional copy.Tag: Applicant Screening,Background check, FCRA
May an employer drug test applicants?
Yes. However, an employer must follow the requirements of the Controlled Substance Examination Regulation Act, N.C.G.S. Chapter 96 Article 20 and applicable administrative rules North Carolina Administrative Code Title l3 Chapter 20. Here is a summary of the legal requirements:

  1. The collection of samples must be under reasonable and sanitary conditions with individual dignity preserved. (Although not required, it likely makes the most sense to have a person report to a testing facility.)
  2. If there is a positive result for a prospective employee, the laboratory shall confirm the result by second examination of the sample, utilizing gas chromatography with mass spectrometry or an equivalent scientifically accepted method.
  3. If there is a positive result, the laboratory must keep a sample of the confirmed positive for ninety days.
  4. An examinee shall have the right to retest to confirm positive sample at the same or another approved laboratory.
  5. When obtaining the sample, the examiner must provide examinees with written notice of their rights and responsibilities under the Controlled Substance Examination Act.
  6. Within thirty days of the time the results are mailed or otherwise delivered to the examiner, they shall give the examinee the following notice in writing: (a) any positive result and a document setting forth the examinees rights and responsibilities regarding retesting under N.C.G.S. § 95-232(f).
  7. Due to the cost and the specific technical requirements of drug testing, the best practice is to have testing done by an approved laboratory that has experience in complying with this law. Additionally, due to the cost, most employers make offers to applicants conditional upon passing a drug test. If the drug test is not passed by an applicant given a conditional offer, it is obvious that the best course of action is to allow the time period for this individual to appeal such a drug test to expire prior to taking further action.

How can an employer prepare for interviews in order to avoid asking questions that an applicant and/or the EEOC may find unlawful?
It may seem hard to believe that asking the wrong types of questions in an interview could cost an employer hundreds of thousands of dollars. Please know that certain mistakes made in the interview process can take the employer down this road. Following are guidelines designed to avoid a lawsuit based on questions an applicant perceives to be actionable under the law:

  1. Each question must be related to the applicant’s ability to perform the job in question. If an EEOC Charge is filed against your company based in part on questions asked in an interview, you must explain why the question was necessary to determine whether the applicant could perform the job.
  2. Prepare all your questions in advance. While this may seem like a lot of work, it will allow you to think about the first guideline and will also allow you to actually listen to the answers given by the applicant, rather than trying to think of the next question you are going to ask them.
  3. Ask all applicants the same questions. You are trying to determine which applicant would best fill the role and failing to give each applicant the “same” interview may ultimately be used by the applicant as an argument that you discriminated against them in the interview. Obviously, all interviews are not going to be the same, and you may think of certain questions based on the responses of the applicant. However, asking the same question of all the applicants will give you an objective basis upon which to evaluate the qualifications of each applicant.
  4. Avoid asking questions about age, citizenship/nationality, family/marital status, religion and potential disabilities except for those health issues that may disqualify them from being able to perform the basic functions of the job.
May my company require a fit for duty physical?
Yes but an employer should identify why the assessment is necessary for the particular job at issue. The job description is an excellent place to identify specific physical requirements such as weight lifting requirements.

Here is a specific policy for your consideration from the North Carolina Department of Health and Human Services.

Making An Offer

Should an employer consider offering an employment contract to the applicant?
Potentially. There are specific reasons an employer may want an employee under contract. As you likely know, North Carolina is an “at will employment” state. This means that either party can terminate the employment relationship at any time without notice for any nondiscriminatory or non-illegal reason. In most situations this is a protection that an employer would prefer to take advantage of. However, an employer may identify a high value employee or long term salesperson who is valuable enough that an employer wishes to contract with them for a certain period of time.

If an employer decides that an employment contract is necessary, it must include these provisions in order to transform an at will employment relationship to a contractual one.

  1. Identify the employment for a specific amount of time
  2. Identify the pay rate
  3. Specifically identify the reasons, if any, that either party may terminate the relationship for cause. It is generally best to identify what “for cause” means to the best of your ability.
  4. Make sure that the contract is executed prior to the new employee beginning work in order for the contract to be enforceable. This means that an employer must make the execution of the contract contingent upon the offer of the job so that the employer is giving the new employee the job in exchange for execution of the contract.If a contract is executed after the employee begins working, then there would need to be additional consideration paid or given to the employee to enforce the contract. This is often an issue with confidentiality and other types of agreements if they are not negotiated as being a part of the obligation agreed to by the applicant in exchange for the position itself. An employer would likely have a difficult time enforcing such a contract if the contract is executed after employment has begun and there is no additional payment of monies or other consideration.
Should an employer provide selected candidates with a written offer?
It is certainly not necessary to have a written offer of employment to an applicant; however, the more sophisticated the applicant and the more responsibility a particular job entails, the more likely an employer would want to have a written employment contract for the protection of your company.
What should an employer consider in drafting in a written offer of employment?
An employer may consider the following when drafting a written offer of employment:

  1. Identify the specific position.
  2. Identify the pay rate or salary.
  3. Identify vacation time.
  4. Identify any potential bonus plans.
  5. State as an employee what benefits the applicant may be eligible to participate in, and briefly summarize those.
  6. Include a statement that the employment is at will and explain what this means.
  7. Make the offer contingent upon the execution of any non-competition, non-solicitation, intellectual property and/or confidentiality agreement you may wish to make as a condition of employment.
  8. Clearly state that the offer is contingent upon any background screening your company may have instituted, including, but not limited to, background checks, credit checks, drug screenings, and any other background check you may not yet have performed.
  9. If a fit for duty physical is required, identify this requirement and make the offer contingent upon passing this physical.
  10. If the employer has any non-competition, non-solicitation, intellectual property and/or confidentiality agreements , identify these in the letter and send them with the offer. Indicate that the execution of these documents must occur prior to the applicant becoming an employee and that they must return these executed within a specific amount of time to continue to move the employment process forward.
  11. Additionally, include a statement which indicates that the offer letter contains the entire understanding of the employer and employee regarding the terms and conditions of the offer of employment and supersedes any and all prior negotiations, representations or agreements between the applicant and employer or any of its employments with respect to an offer of employment.
  12. Include an acknowledgment paragraph which states that the applicant acknowledges that they have not relied on any promise, representation, warranty, or other inducement to accept the offer of employment other than the ones contained in the offer letter. Additionally, include that no change or amendment to this offer or its terms would be effective unless in writing and executed by the applicant and an authorized representative of the company.
  13. Finally, have an execution line for the applicant to sign and return.

Meet The Contributor

Ryan Bolick Attorney

Ryan Bolick | Attorney

Ryan Bolick is based in the Charlotte office of Cranfill Sumner & Hartzog LLP, where he practices in the Employment Law group.

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