E-Recruiting ushers in legal dangers

Workforce, April, 2002 by Gillian Flynn

Most companies are already recruiting on line, posting jobs and accepting resumes on the Internet, and corresponding with job candidates by e-mail. In the coming years, digital recruiting and hiring are expected to continue their explosive growth. By 2008, the Department of Labor predicts, employers will spend 10 times as much on electronic recruiting as they do today. But with e-recruiting comes many new legal liabilities. Joseph Beachboard, a partner in the labor and employment law firm Ogletree, Deakins, Nash, Smoak & Stewart, identifies the five biggest e-recruiting risks and what you can do to safeguard your company.

What's the first issue that arises when a company institutes an online recruiting system?

One of the legal risks is that employers, feeling overwhelmed by the amount of resumes they get, turn to resume-screening software. That way they don't have to look at every single resume that comes in; the screening software helps select the best applicants [by screening for certain words or phrases]. Well, that approach only works as well as the software, and there's a significant legal risk in making a poor selection in your resume-screening software.

What can happen with the wrong software?

Depending on how it sorts, it may exclude groups of people from various protected categories. There was a lawsuit against Walt Disney World, alleging that their screening software created a sort of reverse selection process. Rather than deleting resumes, it picked out the ones that had the words or phrases the company was looking for. The argument was that the words used by the screening software were not necessarily the same words that members of the African-American community would use to convey information. They might very well be qualified for that job, but they didn't use the terms that this resume-screening software was using, because they were terms that would primarily be used by Caucasians. The case was settled relatively quickly. There's very 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 and ultimately hire--and how that affects the diversity of your workplace. By using online recruiting as a means of identifying potential employees, are you excluding large portions of the population? For instance, there's the argument that more young people use the Internet than old people. So if you rely exclusively on e-recruiting, then you're probably going to get more young applicants than older applicants. There are also arguments that generally, fewer minorities than whites have computers. So you might be excluding some of those people by primarily requiring that applications be done electronically. That can create disparate impact: certain protected groups have less chance to be hired than others.

And the third issue to watch out for?

You've got the question of who is an applicant. Many employers--if they have federal contracts--must answer this question in order to meet obligations to the Office of Federal Contract Compliance Programs. These employers are required to track what's called applicant flow data. They're required to keep an eye on who's applying for jobs and what protected categories these applicants are in, and then how many of those people are actually hired for those jobs. If you're a federal contractor, the OFCCP will review that information and make sure you're hiring people to work on federal contracts that 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 be sued for discrimination; the EEOC may come in and challenge your hiring practices.

How does e-recruiting figure into this?

Who your applicants are and where they fall in the different protected categories is important information. The question is: As you get these resumes, how can you possibly track them all? Considering that someone can send a resume to literally thousands of employers, it creates a very big problem 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 you properly comply with all the different hiring requirements that might apply in your state, and still find yourself [in gray areas in another state]. California laws place a lot more limitations on the amount of information employers can collect than might be the case in Texas. So if you're collecting information from someone in California, and you're based in Texas, but you're doing it all electronically, whose law governs? Could you be collecting information from that California person that would be lawful if you were both in Texas, but may not be in California?

What's the final area of concern?

In the electronic context, there's more risk of getting yourself into trouble by making a comment or asking something that you wouldn't in the hard-paper format. If you're advertising in a newspaper, you have X amount of characters, so you're pretty succinct. On Web sites, you can go into as much detail as you want. You can put pages of information up there about who would be the best candidate. That can be good for the applicant, but depending on the nature of the information, can also come back and be pointed to as evidence of discrimination. 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 something or ask for some information that would be improper, something that may later come back [to haunt them] when the applicant doesn't get the job: "See, it didn't have anything to do with my qualifications; it was because she or he learned I w as Asian or disabled or gay."