Miami Employment Lawyer Blog

In a previous blog entry, we wrote that "Rejecting Job Applicants Because of Their Credit Report May Constitute Illegal Discrimination." We are happy to report that many state senators and legislators are now seeking to make the use of credit checks for job applicants illegal. See "States May Ban Credit Checks on Job Applicants" published in The Miami Herald on March 1, 2010. Indeed, in the midst of the recession that has gripped the nation (and the world for that matter), people are losing their jobs and the lack of available jobs naturally leads to them getting behind in paying their bills, which in turn makes their credit scores go down. Then, employers refuse to hire them because of their credit score. It becomes a vicious circle. However, the fact that a prospective employee has a poor credit report is simply not an indicator of whether the employee can do the job or whether he or she will perform well.

The discriminatory aspect of this issue is that studies show that minorities generally have worse credit reports than non-minorities. Therefore, when a company has a practice of rejecting applicants because of their credit reports, then that practice, which has a disparate impact on minorities, may be a violation of Title VII of the Civil Rights Act of 1964. Unless the policy of rejecting job applicants because of their credit report is related to the job and consistent with business necessity, the practice may constitute illegal discrimination.

Continue reading "States Try to Curb Credit Checks for Job Applicants as Illegal Discrimination" »

Section 599.221(8) of the Florida Statutes provides that food and hotel workers that have a communicable disease cannot be employed by a licensed food and hotel establishment. That requirement, however, may be a violation of federal law. Specifically, the Americans with Disabilities Act (ADA) states that employers are required to provide a "reasonable accommodation" to the known disability of an employee, except in the case that it creates and an "undue hardship" on the business. This means that the employer must change aspects of the job so that the individual with a disability can perform the job. However, the employer is not required to provide a reasonable accommodation if it causes significant difficulty or costs the employer a lot of money, taking into account the size and financial resources of the employer. In addition, Under Title II of the ADA (the public accommodation provisions), a license in any occupation cannot be denied simply because the candidate for the license has been diagnosed with HIV or AIDS.

With respect to occupations in food service and hotel establishments, a recent Guidance Memorandum issued by the U.S. Department of Justice (DOJ), which is the government agency charged with enforcement of the public accommodation provisions of the ADA, gives us an indication as to such restrictions will be viewed. In its Guidance Memorandum, the DOJ clarified that the ADA protects individuals with HIV and AIDS in professions such as barbering, massage therapy and home health care assistance. More specifically, the Guidance Memorandum states that public and private licensing agencies are prohibited from denying a license to an individual because of he or she has been diagnosed with HIV or AIDS. According to the DOJ, individuals with HIV and AIDS still face obstacles in obtaining state licensure in these occupations because of what it termed "overly broad state licensure requirements." The DOJ reasoned that "excluding individuals with HIV under these licensure requirements is unnecessary and discriminates against these individuals in violation of the ADA" because HIV is not communicated through casual contact. As a result, the DOJ stated that agencies that required a doctor's certification that an individual is free from "communicable diseases" must exclude diseases not transmitted through casual contact, such as HIV.

Based on this rationale, Florida laws that requires food service and hotel workers to be free from communicable diseases are overly broad and may be a violation of federal law. Specifically, Florida law (Section 599.221(8)) provides that "[a] person, while suffering from any contagious or communicable disease, while a carrier of such disease, or while afflicted with boils or infected wounds or sores, may not be employed by any establishment licensed under this chapter [food and hotel services], in any capacity whereby there is a likelihood such disease could be transmitted to other individuals." As indicated by the DOJ Guidance Memorandum, that law must exclude diseases not communicated through casual contact, such as HIV. To make matters worse, the Florida Division of Hotels and Restaurants also provides that Public Food Service Catering Establishment employees "must be free of open sores and skin infections, respiratory infections, upset stomach, diarrhea or other communicable diseases." That requirement may also be a violation of federal law.

Under the ADA, individuals can be denied employment or access to opportunities only if they pose a "direct threat" to the health or safety of themselves or others that could not be eliminated through a reasonable accommodation. But irrational fears and stereotypes cannot result in a determination that there is a direct threat to public safety. As the DOJ states, "[p]eople with HIV or AIDS should not be denied access to their chosen profession because of outdated laws or unfounded stereotypes and fears."

Continue reading "Florida's Requirement that Food Service and Hotel Workers Must be free of HIV/AIDS may be a Violation of the Americans with Disabilities Act" »

I have seen a disturbing trend in the South Florida job market. Many clients have come into my office in Miami stating that they have been rejected for a job based on information in their credit report. Indeed, the practice of disqualifying a job applicant because of his or her negative credit history is becoming increasingly widespread. A recent study by the Society of Human Resource Management found that almost half of employers nowadays use credit checks as a screening measure for new employee hiring. In addition, a study by the University of Florida also found that almost half of all retail employers now use credit checks as a job screening tool.

This practice, however, may constitute unlawful discrimination. Specifically, Title VII of the Civil Rights Act of 1964 prohibits hiring practices that disadvantage minorities, even if the practice is facially neutral, unless the company can prove that the practices are related to measuring a person's capability to do a job. The Supreme Court of the United States stated long ago in Griggs v. Duke Power Company, 401 U.S. 424 (1974) that a facially neutral hiring practice that has a disproportionate impact on minorities is illegal unless it is job related for the position in question and consistent with business necessity. In addition, recently, the U.S. Equal Employment Opportunity Commission's (EEOC) assistant legal counsel noted that rejecting job applicants based on financial criteria such as a poor credit rating may have a disproportionate impact on minority groups.

With respect to credit checks, the evidence is overwhelming that minority groups have a worse credit score than non-minorities. In fact, in a study by the Federal Home Loan Mortgage Corporation (Freddie Mac), it was found that both African Americans and Hispanics have statistically significantly lower credit scores that their White counterparts. Furthermore, even the Federal Reserve found in 1991 that African American borrowers obtain loans far less often and on worse terms than non-minorities, concluding that there is widespread and institutionalized discrimination in the nation's banking system. Also, an article in the University of Miami Law Review in 2005 found that African Americans make up a disproportionate percentage of debtors in bankruptcy, which further affects a person's credit score. Therefore, it is unquestionable that minorities have on the average lower credit scores than non-minorities. As such, the use of credit checks in hiring practices will have a disproportionate impact on minorities and may constitute unlawful discrimination.

Because of these reasons, Courts are beginning to apply Title VII concepts to these types of employer practices. In fact, as early as 1974, a U.S. District Court in Illinois found that a police department could only use financial information in their background checks if using the information did not have an adverse impact on minorities or if it is job related and consistent with business necessity. See United States v. City of Chicago, 385 F. Supp. 543 (N.D. Ill. 1974). Recently, in 2004, an EEOC charge was filed against the Johnson & Johnson Company alleging that an employee was denied a position because of a credit check. That case resulted in a settlement that changed the way that the company uses credit checks in their hiring practices. Even the EEOC in a 2006 Directive for its Compliance Manual stated that the practice of screening job applicants based on credit history would be subject to challenge under the discrimination laws.

Despite this alarming trend, there may be some relief coming in the future. An example is the bill introduced on August 10, 2009 by Wisconsin State Representative Kim Hixon that seeks to prohibit the use of credit checks as a job screening tool by employers. According to Rep. Hixon, Assembly Bill 367 will stop employers from using poor credit history as a deciding factor for employment.

Continue reading "Rejecting Job Applicants Because of Their Credit Report May Constitute Illegal Discrimination" »