President Obama recently submitted a legislative proposal to Congress entitled the American Jobs Act of 2011 (the "Jobs Act"). The Jobs Act sets forth extensive legislation aimed at creating jobs and assisting unemployed Americans in their efforts to rejoin the workforce. In addition, the Jobs Act contains a set of proposed laws that could have potential ramifications for almost all private sector employers. This portion of the President's proposal, entitled the "Fair Employment Opportunity Act of 2011" (the "FEOA"), would treat unemployed job applicants as a protected class under Title VII.
The FEOA would prohibit employers with 15 or more employees from discriminating against job applicants on the basis of their status as unemployed. Specifically, the FEOA would make it an unlawful employment practice for an employer to fail or refuse to consider, or fail or refuse to hire, an individual based upon the individual's status as unemployed. It would also be unlawful for an employer to instruct an employment agency to disqualify an individual from consideration, screening, or referral for employment on the basis of the individual's status as unemployed. Likewise, employment agencies would be prohibited from refusing to consider or refer an individual for a job on the basis that the individual is unemployed. The remedies available for these violations would be the same as those available under Title VII, such as injunctive relief, reinstatement, lost wages, punitive damages, emotional distress damages, and reasonable attorney's fees and costs.
It would also constitute an unlawful employment practice under the FEOA for employers and employment agencies to publish advertisements which state or otherwise indicate that unemployed individuals are disqualified or will not be considered for employment opportunities. The remedies available for such a violation would include injunctive relief, reimbursement of any costs expended as a result of the violation, liquidated damages not to exceed $1,000 for each day of the violation, and reasonable attorney's fees and costs.
Under the FEOA, the Equal Employment Opportunity Commission ("EEOC") would have enforcement power with respect to complaints of discrimination on the basis of an individual's unemployed status. As under Title VII, individuals would be required to obtain a right-to-sue notice from the EEOC prior to filing a private lawsuit against an employer for unemployment discrimination.
Despite providing unprecedented new protections for the unemployed, the FEOA would provide some leeway for employers and employment agencies. The FEOA would not prohibit employers and employment agencies from considering an individual's employment history, or from examining the reasons underlying an individual's unemployed status, in assessing the individual's ability to perform the job or otherwise making an employment decision about the individual. However, employers and employment agencies would need to proceed cautiously when inquiring into the reasons underlying an applicant's unemployment—anything more than a minimal investigation could be seen as taking the unemployment status into consideration in deciding whether or not to consider or hire the individual, which could expose the employer or employment agency to liability if the individual is not ultimately considered or hired for the position.
The entire Jobs Act currently remains pending before Congress, and even if it is passed, the FEOA states that it would not be applied retroactively, such that current hiring practices with respect to applicants' unemployed status should not result in liability. Nonetheless, employers and employment agencies would be well-advised to look carefully at their hiring methods and to assess the role an applicants' unemployed status currently plays, if any, in their hiring decisions.
The full text of the Jobs Act, including the FEOA, is currently available on the White House website at www.whitehouse.gov. For further information about how the FEOA could potentially affect your business, please contact your local Gordon & Rees attorneys.