E-Recruiting Ushers in Legal Dangers

March 29, 2002

Most companies are already recruiting online, posting jobs and acceptingrésumés on the Internet, and corresponding with job candidates by e-mail. Inthe coming years, digital recruiting and hiring are expected to continue theirexplosive growth. By 2008, the Department of Labor predicts, employers willspend 10 times as much on electronic recruiting as they do today. But withe-recruiting comes many new legal liabilities. Joseph Beachboard, a partner inthe labor and employment law firm Ogletree, Deakins, Nash, Smoak & Stewart,identifies the five biggest e-recruiting risks and what you can do to safeguardyour company.

What’s the first issue that arises when a company institutes an onlinerecruiting system?
One of the legal risks is that employers, feeling overwhelmed by the amountof résumés they get, turn to résumé-screening software. That way they don’thave to look at every single résumé that comes in; the screening softwarehelps select the best applicants [by screening for certain words or phrases].Well, that approach only works as well as the software, and there’s asignificant legal risk in making a poor selection in your résumé-screeningsoftware.
What can happen with the wrong software?
Depending on how it sorts, it may exclude groups of people from variousprotected categories. There was a lawsuit against Walt Disney World, allegingthat their screening software created a sort of reverse selection process.Rather than deleting résumés, it picked out the ones that had the words orphrases the company was looking for. The argument was that the words used by thescreening software were not necessarily the same words that members of theAfrican-American community would use to convey information. They might very wellbe qualified for that job, but they didn’t use the terms that thisrésumé-screening software was using, because they were terms that wouldprimarily be used by Caucasians. The case was settled relatively quickly. There’svery little information on what the words were.
What’s the second potential problem with e-recruiting?
It concerns the impact e-recruiting has on who you consider for a job andultimately hire -- and how that affects the diversity of your workplace. Byusing online recruiting as a means of identifying potential employees, are youexcluding large portions of the population? For instance, there’s the argumentthat more young people use the Internet than old people. So if you relyexclusively on e-recruiting, then you’re probably going to get more youngapplicants than older applicants. There are also arguments that generally, fewerminorities than whites have computers. So you might be excluding some of thosepeople by primarily requiring that applications be done electronically. That cancreate disparate impact: certain protected groups have less chance to be hiredthan others.
And the third issue to watch out for?
You’ve got the question of who is an applicant. Many employers -- if theyhave federal contracts -- must answer this question in order to meet obligationsto the Office of Federal Contract Compliance Programs. These employers arerequired to track what’s called applicant flow data. They’re required tokeep an eye on who’s applying for jobs and what protected categories theseapplicants are in, and then how many of those people are actually hired forthose jobs. If you’re a federal contractor, the OFCCP will review thatinformation and make sure you’re hiring people to work on federal contractsthat reflect the general population. Even if you’re not a federal contractor,you still have to keep information about who’s applying, because you may besued for discrimination; the EEOC may come in and challenge your hiringpractices.
How does e-recruiting figure into this?
Who your applicants are and where they fall in the different protectedcategories is important information. The question is: As you get theserésumés, how can you possibly track them all? Considering that someone cansend a résumé to literally thousands of employers, it creates a very bigproblem to track who is considered to be an applicant. So that’s a huge issue.
And the fourth trouble spot?
There’s an issue with the collection of the information itself. Can youproperly comply with all the different hiring requirements that might apply inyour state, and still find yourself [in gray areas in another state]. Californialaws place a lot more limitations on the amount of information employers cancollect than might be the case in Texas. So if you’re collecting informationfrom someone in California, and you’re based in Texas, but you’re doing itall electronically, whose law governs? Could you be collecting information fromthat California person that would be lawful if you were both in Texas, but maynot be in California?
What’s the final area of concern?
In the electronic context, there’s more risk of getting yourself intotrouble by making a comment or asking something that you wouldn’t in thehard-paper format. If you’re advertising in a newspaper, you have X amount ofcharacters, so you’re pretty succinct. On Web sites, you can go into as muchdetail as you want. You can put pages of information up there about who would bethe best candidate. That can be good for the applicant, but depending on thenature of the information, can also come back and be pointed to as evidence ofdiscrimination.
The second component of that is the general informality that exists online.If an HR person starts engaging in an e-mail correspondence with an applicant,people aren’t as careful in those e-mail discussions. They might say somethingor ask for some information that would be improper, something that may latercome back [to haunt them] when the applicant doesn’t get the job: "See, itdidn’t have anything to do with my qualifications; it was because she or helearned I was Asian or disabled or gay."
Let’s address these problems. First, what’s your advice to an HRprofessional considering résumé-screening software?
Make a very educated decision about the right software for your company. Youshould probably involve your labor counsel to make sure you’re making theright decision and to evaluate whether that system creates any specific legalrisks.
Second, how can HR avoid disparate impact in its e-recruiting?
To begin with, it would be a mistake to abandon traditional methods ofrecruiting. When you start e-recruiting, you obviously broaden the number ofapplicants who can apply, because it’s much easier. But as we discussed, youcan limit the pool of people in protected categories: older workers andminorities, arguably. So you still have to maintain the traditional methods ofrecruiting. You also have to constantly be reviewing the results of youre-recruiting system and asking yourself: Are we drawing the right mix of peoplefor this job from the standpoint of avoiding a disparate-impact issue? You needto constantly check to make sure you’re achieving the results of creating adiverse workplace and thereby insulating yourself to some degree from liabilityand litigation.
What about the question of who is and who isn’t an applicant?
An applicant is defined by most of the federal agencies as someone who’sexpressed an interest in a job. Well, that’s pretty darn broad. You could justwalk in and say, "Wow, this looks like a nice place to work!" Now, have youjust expressed an interest and therefore become an applicant for that job? Someagencies would say yes. So you must have a very detailed system [narrowing thedefinition] that says: If you’re going to apply for a job -- not just inquireabout hiring -- you have to go through this application procedure, and you haveto submit something in writing that says you’re interested in a specificposition.
What else?
As part of that procedure, I think it’s important that the company maintaina dialogue with the individual -- thanking them, alerting them that they’vereceived the résumé. Some employers are sending voluntary self-identificationforms electronically now. If you were governed by the OFCCP, that would be astandard part of your application procedure. But you can also design somethingthat would be sent back to you electronically, and that will help you gather andkeep that information.
What about the state-law quandary?
The most critical thing is to limit the information collected to that whichHR legitimately needs to make the hiring decision. Be circumspect in whatinformation the company is collecting. Because I don’t think any HRprofessional is going to know what the law is in all 50 states. That would beone remarkable HR person.
How should HR address the informal nature of e-recruiting?
Employers need to stick to the application procedure they draft. People tendto be a little less formal online, and it’s easy to slip away from it becauseyou’re in a hurry and just want to send a note back to this applicant. Thereare a lot of things that can go wrong, and if people don’t stick to theseprocedures, they’re going to be finding themselves in a lot of trouble downthe road.

Workforce, April 2002, pp. 70-72 -- Subscribe Now!

The information contained in this article is intended toprovide useful information on the topic covered, but should not be construed aslegal advice or a legal opinion. Also remember that state laws may differ fromthe federal law.