During Obama’s LinkedIn town hall today, he touched on a provision in his jobs bill that’s supposed to prevent employers from basing their hiring decisions on a job-seeker’s employment status. Because the long-term unemployed are less likely to get hired, the bill would make it illegal for a company to “discriminate” against people who are out of work.
As you can imagine, the law would have some disastrous unintended consequences. From the Oregon Business Report:
As a practical matter, any unemployed person rejected from a job could demonstrate a prima facie claim for discrimination simply by showing he or she was unemployed and then didn’t get the job. Further, the cases will invariably turn on “yes you did, no I didn’t” factual disputes about the hiring decision: did the employer make the decision because of reasons underlying the person’s unemployment (lawful) or simply because the person was unemployed (unlawful)?
Not only would snubbed job applicants be able to effortlessly sue the employers who turned them down, but it would also be exceedingly difficult for the employers to get the cases dismissed before trial. Which of course translates into a lot of hefty legal fees for employers – and a lot of happy employment lawyers:
Because of those subtle factual nuances, and procedural rules that presume the truth of a plaintiff’s allegations until trial, it could be virtually impossible to get even baseless claims dismissed before trial, such as at summary judgment. That makes defending those cases much more difficult and expensive.
Would the risk of a crippling lawsuit make an employer more or less likely to hire? The answer is obvious. And not only is the law a disincentive for job-creation, it also could end up having the opposite intended effect for the long-term unemployed. An employer might not even consider an unemployed applicant, rather than take a chance and bring him in for an interview. Because if the candidate isn’t hired, the company could open itself up to legal trouble. The law could end up being devastating for unemployed people.