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PRESENT:

JACQUELINE A. BERRIEN Chair
STUART J. ISHIMARU Commissioner
CONSTANCE S. BARKER Commissioner
CHAI R. FELDBLUM Commissioner
VICTORIA A. LIPNIC Commissioner

ALSO PRESENT:

P. DAVID LOPEZ General Counsel
PEGGY R. MASTROIANNI Associate Legal Counsel
BERNADETTE B. WILSON Program Analyst

This transcript was produced from a DVD provided by the Equal Employment Opportunity Commission.

C O N T E N T S

  1. Announcement of Notation Votes
  2. Out of work, out of luck? Denying employment opportunities to unemployed job seekers

Panel 1: U.S. Department of Labor's Latest Unemployment Data

William E. Spriggs, Assistant Secretary for Policy, U.S. Department of Labor

Panel 2: Unemployment Status Screening

Christine Owens, Executive Director, National Employment Law Project

Fernán R. Cepero, Vice President for Human Resources, The YMCA of Greater Rochester, Society for Human Resource Management

James S. Urban, Partner, Jones Day

Helen Norton, Associate Professor of Law, University of Colorado Law School

Panel 3: Impact on Unemployed Persons

Fatima Goss Graves, Vice President for Education and Employment, National Women's Law Center

Algernon Austin, Director of the Race, Ethnicity, and the Economy Program, Economic Policy Institute

Joyce Bender, CEO, Bender Consulting Services

P R O C E E D I N G S

(9:32 a.m.)

CHAIR BERRIEN: Okay, good morning, everyone. The meeting of the Commission will now be called to order. And thanks to everyone in our audience and who is watching online as well as to our witnesses for being here today.

In accordance with the Sunshine Act, today's meeting is open to public observation of the Commission's deliberations and voting. And at this time, I'm going to ask Bernadette Wilson of the Commission's Executive Secretariat to announce any notation votes that have taken place since the last Commission meeting.

Ms. Wilson?

MS. WILSON: Good morning. And before we begin, can I ask if there is anyone in need of interpreter services?

(No response.)

MS. WILSON: Okay. Good morning, Madam Chair, Commissioners. I'm Bernadette Wilson from the Executive Secretariat.

Weíd like to remind our audience that questions and comments from the audience are not permitted during the meeting. And we ask that you carry on any conversations outside the meeting room, departing and reentering as quietly as possible.

Also, please take this opportunity to turn your cell phones off or to vibrate mode.

I would also like to remind the audience that in case of emergency, there are exit doors to the right and left as you exit this room. Additionally, the restrooms are down the hall to the right and left of the elevators.

During the period January 18th, 2011 through February 14th, 2011, the Commission approved a subpoena determination by a notation vote.

Madam Chair?

CHAIR BERRIEN: Thank you Ms. Wilson.

And again, thanks to everyone for joining us today. I will note in advance that Commissioner Lipnic will have to leave early. Commissioner Feldblum will be testifying immediately after today's hearing on Capitol Hill. So it's going to be really critical today that we remain on schedule. And we want to allow all of the Commission to participate in as much of the meeting as possible. So we will certainly be using our lights today. And weíre going to begin with opening statements. And I'll start.

The purpose of today's meeting is to examine the practice of excluding currently unemployed people from applicant pools. This issue came to the Commission's attention when a series of news reports emerged about companies and recruiters posting job announcements requiring that applicants be currently employed or stating that unemployed persons would not be considered. In these reports, recruiters and human resource professionals acknowledged that, even where bans were not included in ads, the practice may be taking place behind closed doors when employers asked that unemployed candidates be excluded from the pools that they received for consideration.

After seeing initial news reports however, we did further inquiries about the practice. And the EEOC received inquiries from outside advocates, media representatives, and members of Congress concerning this issue and whether the practice might violate any federal law. The Department of Labor received similar inquiries.

Given our enforcement authority, the potential significance of this emerging practice and recurring questions about its legality, I instructed my staff to begin gathering more information on the practice of excluding the unemployed and to reach out to stakeholders, including researchers, scholars, the Department of Labor, advocates, equal employment experts, and others to begin to consider the possible responses that the Commission might take to these reports.

It became clear to me that the Commission and its stakeholders, including job seekers, recruiters, and employers, could benefit from a public meeting to gain further insight about this practice and particularly to take a closer look at these and other questions:

First, is this a practice that is isolated, or is this a practice that is more widespread?

Second, what reasons might employers have for engaging in the practice?

Third, what are potential disparate impact or disparate treatment concerns related to the practice?

Fourth, in light of unemployment statistics, how would the practice impact persons protected by federal equal employment laws?

And, fifth, if indeed businesses are concerned about whether this practice violates equal employment law, are there any best practices that exist to help them avoid violating the law, and yet, achieving their hiring goals?

We have invited a distinguished group of panelists here today to help the Commission answer these questions. This meeting continues the Commission's examination of hiring discrimination and barriers to entering and reentering the workforce.

In October 2010, our public meeting focused on employer use of credit history as a screening tool. And subsequently we considered the impact of the economy on older workers and job seekers.

We greatly appreciate the time that today's panelists committed and have committed to helping the Commission examine this issue. And we thank all of you whoíve travelled both near and far for your efforts in joining us today.

Before we begin our first panel with Assistant Secretary Spriggs, Iíd like to invite my fellow Commissioners to make brief opening statements. And I will begin with Commissioner Ishimaru.

COMMISSIONER ISHIMARU: Well thank you, Madam Chair. In the interest of the schedule, Iíll be brief. I want to welcome Secretary Spriggs, always good to have him.

This is an interesting issue. And I think the one thing that I am very interested in hearing, is less about whether this exists or not, because I think that's an open question of, does this happen, does it happen often, how widespread is it? But really, the question in my mind is, why would an employer want to do this? Whatís the rationale? Whatís the driver for this? And I know we have representatives from the business community here. And it would be helpful to me to find out, is there a rationale for doing this? What would it be? And I think that will be helpful as we think about this issue going forward.

So I welcome the witnesses, looking forward to the testimony.

CHAIR BERRIEN: Thank you, Commissioner.

Commissioner Barker?

COMMISSIONER BARKER: And I'll follow Commissioner Ishimaru's example, and will keep this brief.

I also want to thank Secretary Spriggs for sharing his time to be here and the other panelists for coming and sharing your expertise and your experiences.

I think itís very appropriate that the Commission examine this issue today because we are all very focused on the economy, the loss of jobs, the more than 13 million Americans who are unemployed, and how that impacts their lives. And, as a federal agency, it is our job to do whatever we can to support the administration's efforts to get people back to work. So I think this is a timely topic.

What we are going to examine today is what I hope is an isolated occurrence because I believe that there will be testimony supporting the fact that it just simply does not make good business sense to summarily refuse to consider people who are unemployed when you are looking for good, qualified people to do the work of your business.

But with that in mind, I look forward to the testimony. And thank you all for coming today.

CHAIR BERRIEN: Thank you, Commissioner.

Commissioner Feldblum?

COMMISSIONER FELDBLUM: Thank you. Madam Chair, thank you so much for holding this hearing. And Iím actually very pleased that we got letters from the Hill saying that they were concerned about this issue.

I guess I have a slightly different take than my previous two Commissioners here. I don't think itís an open question that itís happening somewhere. It seems like, you know, from various of the websites that people have looked at or comments from recruiters that some employers have decided this is just simply an efficient way of weeding out the large number of applicants.

It also doesn't seem to be an open question that it makes sense to do. I'm not expecting to hear from any of our business folks as to why some employers would do that, partly because, as I see it, the representative from SHRM is saying it doesn't make any business sense to do it, so clearly thereís no job.related and consistent with business necessity reason. And Mr. Urban also, from at least the written testimony, is saying, he doesn't think he sees people that he knows doing this.

So I think the question for us is, for those employers who are doing it, what do we as a Commission want to say to them? So that requires two legal questions for us to drill into. And I am looking forward to hearing that from our witnesses.

Given the statistics .. and thank you, I am very pleased, Secretary Spriggs, that youíre going to be talking to us about it. What do we know about the statistics of disparities in employment status? And in particular, .. and only one or two of the witnesses, at least in their written testimony, talked about this .. what do we know about the impact on women, who are disproportionately care.givers in our society, who step out of the workforce for a period of time? Whatís happening to them when they deal with this issue, from at least those employers who might be doing it?

So number one, what are the statistics? And then, two, whatís the legal analysis, because thatís our job as a Commission, to say to those employers who might be doing, "This is what we think might be legally problematic if we think there is something legally problematic."

So thank you, Madam Chair, for holding this meeting.

CHAIR BERRIEN: Thank you to all members of the Commission for your opening remarks. And Iíd like to briefly review ..

COMMISSIONER ISHIMARU: Our friend? Commissioner Lipnic?

CHAIR BERRIEN: I'm sorry. I apologize, Commissioner Lipnic please?

(Laughter.)

CHAIR BERRIEN: Commissioner Lipnic, please?

COMMISSIONER LIPNIC: That's okay. She's trying to accommodate my schedule.

CHAIR BERRIEN: I am.

COMMISSIONER LIPNIC: Thank you for that.

And my apologies up front to the witnesses. Iím sorry that I have to leave a little bit early today.

First of all, I want to thank the Chair for holding this hearing. Dr. Spriggs, welcome back. And I want to second the comments of all of my colleagues, both in terms of .. I actually do think itís a bit of an open question in terms of how much this practice is going on. So I sort of look at this as an evidentiary matter today and look forward to the testimony along those lines.

Certainly in terms of our unemployment situation .. and, Dr. Spriggs, you were here, what, two months ago, when we were talking about this. Certainly there are optimistic estimates that we may within five years get to the point of having recovered so much of the jobs that weíve lost during the great recession, but those are optimistic estimates.

At the same time .. and I think this is relevant to this morning's discussion .. there was a story in the Washington Post probably within the last month, I think, detailing how we are seeing significant increases in job openings while at the same time still suffering record unemployment. And at least one of those reasons .. and this has been the case for a long time .. is the skills gap that employers are finding themselves unable to find qualified workers for skilled job; for example, in the manufacturing and health sectors. And while this may seem primarily a question of job training and education, insofar as it gets to the issues of workers becoming and staying current in the skills necessary in the Twenty.First Century workforce, I think it certainly bears on our discussion today.

This, as my colleagues have mentioned, is an area which we have not as a Commission previously examined in depth. We are writing largely on a blank slate. And, as I mentioned, I view this as a learning session today. Certainly everything about the great recession and the need for so many Americans to find jobs, requires this agency especially to be vigilant about employers' hiring practices and ensure that we do not allow the unemployment situation to provide an opportunity for discrimination.

In that light, I have a number of questions that I will invite our witnesses to focus on in their testimony today when we get to that. And those who .. if I miss your testimony, I promise you I will read it. And my staff will be here and give me the full brief on it.

Iím certainly curious about how prevalent the practices are that we are examining. Are employers engaging in a widespread practice of excluding jobless workers for consideration for open positions? If so, are these Fortune 500 employers with sophisticated HR operations? Are they small Mom and Pop businesses? Are they entrepreneurial start.ups who may have little awareness of their obligations under equal employment laws?

To date, certainly what evidence weíve seen has been largely anecdotal and has come to us through scattered media reports. So I hope today that we may be able to wrap our minds around the scope and nature of this issue with a little more precision.

Finally, Iíll just add that I would ask our witnesses today to offer up their suggestions as to what employers can do in the real world and in the practical application of screening tools. And as the Chair mentioned, weíve been having a series of hearings about hiring practices and things that may, illegally or perhaps legally, screen people from certain jobs. And in a day and age where a single job opening can literally result in thousands of resumes, given the ease of the internet; it is hardly efficient, if not downright impossible, for an employer to cull every resume line by line, person by person, or reference by reference. But I am certainly interested in what each of you today will suggest that employers use as best practices in filling job openings.

Thank you to our witnesses again for your time. And thank you Madam Chair, for holding this hearing.

CHAIR BERRIEN: Thank you.

And now to the ground rules. Each panelist will have up to ten minutes for their oral testimony. All panelists' written testimony, which will often be longer than their oral testimony, will be available on the ďMeetings of the CommissionĒ page of the EEOC website, which is www.eeoc.gov.

We will be using the timing lights for the panelists' testimony and for the question and answer session that follows. The yellow warning light will go on when one minute remains. And the red light will indicate when time has expired. And again, in light of the time constraints of some members of the Commission, I will ask that we pay particular attention to our timing lights today. Thank you.

And we'll begin with Dr. William Spriggs, the Assistant Secretary for Policy at the Department of Labor, who we appreciate joining us again and providing his expertise. He will be discussing the Department of Labor's research into this .. he will be discussing the relevant labor statistics and the Department of Labor's response to the congressional inquiry concerning this practice.

Thank you.

ASST. SEC. SPRIGGS: So, thank you, Chair Berrien. And thank you to the other Commissioners for inviting me back. And itís nice to be back after the swearing.in ceremony for so many of you. So Iím very happy about that, too. And I want to thank the Commission for this hearing. As you mentioned, we did receive communication from the Hill on this issue. Iíll get into that a little later. But our Solicitor's initial response was that unemployment is not a protected group. And so the jurisdiction for the Department of Labor is questionable. However, there could be .. and we'll talk about the statistics in a moment .. disparate impacts of using that criteria. And, of course, thatís your bailiwick. So Iím glad that weíre working together on this since this is one of those areas where this may be the better forum than at the Department.

As was mentioned, the great recession has created a real calamity for us. Since 2008, the number of unemployed workers has increased by 55 percent, from 8.9 million to 13.8 million in January. Workers are facing unbelievable competition for openings. In January, we documented at the Bureau of Labor Statistics' 3.1 million job openings. So that gives you a ratio of about nine applicants for every two jobs.

In a slack labor market like this, employers, of course, are going to very likely up the ante on job applicants. An example of one of the things they might do where they are upping ante is that they may want to make sure that workers are currently employed or only very recently unemployed. Even if they don't openly post that, then there is every possibility that in screening the applications, they may institute a screening like that on the applicant. So it's very difficult for us to give you a quantification of how common this is since it may not be something that is openly stated in the application.

However, there is the issue of the characteristics of the unemployed, the long.term unemployed, and employees who are facing looking for a job from that position. And so the issue of whether thereís a potential for disparate impact is there. When employers exclude the unemployed from the applicant pool, they are more likely to be excluding Latinos and African Americans from consideration because Latinos and African Americans have much higher unemployment rates.

Latinos and African Americans are over.represented in the pool of the unemployed. The pool of the unemployed worker is 45 percent either Black or Hispanic. In contrast, when looking at employed workers, 31 percent of employed workers are either Hispanic or Latino. So, in other words, the chances of considering an ethnic/racial minority applicant are decreased by one.third when one limits unemployed workers, when they are excluded from the applicant pool.

Among the racial/ethnic groups, because of the higher unemployment rate that African Americans face, their exclusion is more severe. So they're most affected by this since they account for 10 percent of the employed, but 18 percent of the unemployed.

Disabled workers are also differentially impacted, reducing their opportunity for consideration by almost 50 percent.

So, taken in the aggregate, women and older workers don't seem to face this same burden. The disproportional impact seems less for them when you compare whoís in the pool of the unemployed versus who is in the pool of the employed. Again, this is taking the numbers in the aggregate and whether from the aggregate numbers there would be a disparate impact.

You could also consider this from the perspective of let's look at the share of workers that are excluded by looking at their unemployment rate and just seeing which share of their workforce would be most impacted. Again, since African Americans and workers with disabilities have higher unemployment rates, a large share of these workers would be excluded on that basis. The employment status requirement would end up excluding 15 percent of African Americans, 14.8 percent of disabled workers, and about only 7 percent of non.Hispanic whites.

Employers may also consider unemployed workers if they have been without work for a short period of time. So if we look at this from the perspective of those who have been long.term unemployed, then we see that some of these similar patterns hold. So if you look at only those who are short and medium.term unemployed; that is, those who have been unemployed less than 26 weeks, then an additional group gets included. And that would be workers who are older.

33.8 percent of unemployed workers are 40 or older while among the long.term unemployed, 52 percent are 40 and older. So the pool of applicants is limited. If you think about the short.term spell of unemployed, then older workers are going to be disproportionally impacted if we're going to go after people who have been facing long.term unemployment.

And again, the same thing happens for African Americans. The share of long.term unemployed is three points higher than the share of those who are short.term unemployed among African Americans.

So, just to quickly summarize, depending upon which exclusion, whether we're talking about unemployed or the long.term unemployed, there is the strong indication that there's the potential for disparate impacts among racial minorities, among workers with disabilities, and among older workers.

Now, of course, we haven't given you an analysis by occupation. This may differ if you look at specific occupations. And so that would have to be factored in.

Within what the Department itself can do, of course, we have a big concern because we are the job trainer for America. And many of the job.training opportunities we have are given to unemployed workers. We're trying to get them into jobs. So we definitely feel we have a stake in what would happen. And the vision that Secretary Solis has given for us is that we want good jobs for everyone. We have made sure that our job.training efforts are trying to lift up all boats and give everyone the opportunity to have the skills that employers would be seeking.

So, of course, we don't want, after we train these workers, to have them face a barrier that, "You got the training, but, by the way, you are unemployed. So why would we want you?" So thatís sort of our stake in it.

We have a specific tax credit that we help with. And that's the HIRE - Hiring Incentives to Restore Employment Act. This is a payroll tax exemption provided to employers to exempt 6.2 percent of the Social Security tax on wages paid to the qualifying employees. And that program gave a tax credit from March through December of last year. For each qualified employee retained for these 52 consecutive weeks, businesses were eligible for a general tax credit up to a maximum of $1,000. So that's our stake in this.

The Solicitor for the Department did get a congressional inquiry. And weíve shared with you the letter that we received as well as the Solicitor's response. The Solicitor felt that under current federal civil rights laws, unemployment status itself was not a protected class. And so nothing in what we do at the Department could speak to having unemployment position as an act of discrimination in itself. And your hearing is going to help to perhaps lay the record in your sense of whether there is disparate impact of such a regulation or use by employers.

And if you look at what we do, you often meet with our Office of Federal Contract Compliance Programs, where we do enforce fair hiring standards through Executive Order 11246. And we also have our Civil Rights Center, which enforces Section 188 of the Workforce Investment Act of 1998. And these laws are supposed to make sure that there isn't discrimination, either for those who are getting federal assistance, including private employers, but also for the provision of on.the.job training.

So your guidance would be helpful here, again, because unemployment itself or by itself doesn't come under a protected status. And hopefully you will be helping us through this hearing in thinking through the implications of the disparate impact.

So Iím looking forward to your questions.

CHAIR BERRIEN: Thank you Assistant Secretary. And weíll begin with Commissioner Ishimaru for questions.

COMMISSIONER ISHIMARU: Great. Thank you, Madam Chair.

Secretary Spriggs, has the Department of Labor looked at this specific issue of unemployment status as a screen? Do you know if any of the elements of the Department of Labor have studied the prevalence of it, whether it exists, whether youíve been in contact with the state employment agencies or unemployment agencies, who may have a better feel for this around the country?

ASST. SEC. SPRIGGS: We haven't heard from our state workforce agencies about this. Our job.training providers have not reported to us that that was one of the barriers that they were facing.

But, again, we don't know whether this is something that takes place without making a big public display that we won't consider applicants who are unemployed. We did look at some postings. And in looking at those postings, we didn't find that was a common thing for people to state. And again, it's difficult because there are some situations in which a worker may be required to have certain clearances or something that means that they would have been employed at the time. So it wasn't clear from what we were able to see, but it isn't something that we screen for.

COMMISSIONER ISHIMARU: That's all I have, Madam Chair. Thank you.

CHAIR BERRIEN: Thank you, Commissioner.

Commissioner Barker?

COMMISSIONER BARKER: You mentioned something I thought was interesting. You mentioned that to get a better look at the problem, that we should perhaps look at the industry.wide, you know, industry by industry numbers. And I guess, is that information readily available? Do you collect unemployment data by individual industry? And how far down is that broken down? Is it wide categories or is it narrow job descriptions?

ASST. SEC. SPRIGGS: Well, of course, the catch is that the workers are responding are not in the industry .. they are unemployed at the moment. But we do ask workers, what do they consider their primary occupation? So we do have unemployment rate for workers by occupation. We do know what the worker would have considered as their primary industry, but the sample sizes get very small because the number of unemployed workers is a small subset of the household sample. So we can't reliably break that down very far. We can on an annual basis give you some indication of what unemployment rates look like by industry. And it's much of what you would expect. Construction is hit very hard. Construction workers have been hit very hard by this recession. They have a very high unemployment rate. So it does vary by industry. It's not the same. So the potential for differences in the disparate impact could be different by industry because of that distribution.

Workers, however, are more pliable. So when you think of a construction worker as an example, some of those same skills are used in other industries. So you might be a forklift operator in construction, but thatís also something in warehousing.

So I think the aggregate number helps you understand the potential for disparate impact a little bit more than whatís true for an industry since a worker can transfer their occupation to different industries.

COMMISSIONER BARKER: Thank you.

CHAIR BERRIEN: Thank you.

Commissioner Feldblum?

COMMISSIONER FELDBLUM: Thank you. Thank you Dr. Spriggs, for this. It seems from the written testimony that we got that there were two sort of areas where this problem might be occurring. One is the websites where people actually said, you know, "Must be employed." It certainly seems as if thatís not the widespread practice. If it were a widespread practice, I think it would have come to the attention of the Department of Labor. And perhaps the main utility of that is that itís raised this as an issue for us to look at.

The second way in which this seems to be happening from the testimony, which seemed, at least had more resonance for me in terms of reading it, is those situations where there are actually recruiters or headhunters who are looking to get them. And then they think "Oh, thatís a real possibility" and "Oh, youíve been out for four months" or "Youíve been out for a year." You're going to be a tougher sell.

That, obviously, is not something thatís going to be public. I mean, the only way to find out about that is through the anecdotal sort of conversations. And that's part of what weíll hear.

But it seems the statistics for that might also need to be different in terms of who weíre looking at for disparate impact. And so my question to you is around, what statistics we have around, women who are unemployed.

So Iím assuming that in terms of the unemployment statistics for women, you're counting women who have been in work, been unemployed, let's say seeking unemployment benefits, and are therefore, in that statistic, okay, as versus women who have been out of the workforce for one to four years for care.giving reasons, et cetera.

Can you describe to us a bit what statistics you have and under that latter group, how you would collect them, et cetera?

ASST. SEC. SPRIGGS: So the unemployment rate includes job losers, as you mentioned. And it also includes new entrants. And, as you mentioned, typically young workers and women make up sort of a bigger share of new entrants as part of the component of unemployment rate.

We didn't break down the problem among new entrants. There is a huge problem going on now for new entrants because young people are facing unbelievable unemployment rates today. There are unprecedented levels of unemployment among young people. So new entrants, generally speaking, are having an exceedingly hard time in this labor market.

So, to answer your question, I mean, I suppose we could do a separate thing among new entrants.

COMMISSIONER FELDBLUM: But I guess my question is, there are some people who aren't even yet a new entrant, but they've just been out of the workforce. At some point they might want to come back. It feels more like the only way to get that statistic is just this gross statistic of the number of women in the population who are not employed. I mean, it used to be 80 percent, right, 70.80 percent of women were not employed? They were at home taking care of kids. Now thatís shifted. So you have about 60.70 percent. It's an exact flip. But you still have this huge percentage of women who are at home working. They're not employed, but they're not even going to be under your new entrant statistics. But they could if it is true that recruiters are thinking, "If you've not been in the workforce, we're not going to be interested in you." That group would have to be impacted.

ASST. SEC. SPRIGGS: So I wasn't careful enough. We say, "new entrant" but what we really mean is, you didn't lose a job, you are entering the labor market.

COMMISSIONER FELDBLUM: How do you distinguish between the woman who is now wanting to enter versus the woman who might want in a year from now to enter the workplace?

ASST. SEC. SPRIGGS: Well, if you were currently, let's say, 42 and you had been out of the labor market for care.giving for the last 8 years and now you were looking for a job, then you would be a new entrant.

COMMISSIONER FELDBLUM: How do you, the Department of Labor, know that that person is now looking for a job?

ASST. SEC. SPRIGGS: Right. So when we do the household survey and ask people about, "What did you do last week? if you were actively looking for a job but didn't have one, you are unemployed.Ē

Then we ask, "Did you lose a job? Are you on temporary layoff?" And we also ask the person, "Are you entering the labor force?" So that 42.year.old woman would show up as a new entrant.

COMMISSIONER FELDBLUM: Do you have a question that says ..

ASST. SEC. SPRIGGS: She may have been in the labor market eight years ago, but ..

COMMISSIONER FELDBLUM: No. I get it.

ASST. SEC. SPRIGGS: .. she didn't lose a job. She is looking for a job for ..

COMMISSIONER FELDBLUM: Right. Do you have a question that says, "Would you be interested in looking for a job a year from now?" Is there any question like that?

ASST. SEC. SPRIGGS: We don't ask about a year from now, but we do ask about discouraged workers. So, it could be that given the current labor market, you are that same 42.year.old person. But looking at how the labor market is, that you feel discouraged from looking. So I would like to be in the labor market, but I don't think there's a point in me searching.

COMMISSIONER FELDBLUM: Right.

ASST. SEC. SPRIGGS: So you would show up as a discouraged worker.

COMMISSIONER FELDBLUM: Okay. I guess one thing, so it seems to me that we don't have a question that captures someone who is not a discouraged worker, is not looking for a job next month, but might be interested in reentering the workforce anywhere from one to five years from now. I mean, for that, we just have to assume it's potentially everyone, you know, who might want to at one point come back into the workforce.

ASST. SEC. SPRIGGS: That's correct.

COMMISSIONER FELDBLUM: Okay. Thanks.

CHAIR BERRIEN: Thank you.

And Commissioner Lipnic?

COMMISSIONER LIPNIC: Thank you, Madam Chair.

Dr. Spriggs, just to follow up a bit on Commissioner Feldblum's questions, in terms of the Bureau of Labor Statistics surveys, if you were to design or add a question, which I know is not an easy thing to do, to the survey, to try to get at this, what would that be as someone whoís schooled in data collection and numbers and ..

ASST. SEC. SPRIGGS: I would have to think about that.

COMMISSIONER LIPNIC: Right.

ASST. SEC. SPRIGGS: I'm not sure how we would do someone who wasn't interested right now but might be interested. I mean, certainly ..

COMMISSIONER LIPNIC: Well, actually, not necessarily to her point, but just overall, if we're trying to get at better information about not how long people have been unemployed but whether, if applying for a job, if somehow their unemployment status is being taken into consideration by a potential employer. Do you think thatís possible for BLS to come up with something, a survey, that would somehow account for that?

ASST. SEC. SPRIGGS: Well, I mean, we can provide you with a table among new entrants. Clearly .. and the point is well.taken Ė that by definition, anybody whoís now looking, is going to be screened out by this process. And because a higher share of unemployed women tend to be new entrants to the labor market compared to, say, men, then you're going to screen out. You would have a disproportionate impact among those who are new entrants on women. Now, again, this is a unique labor market because young people are also by definition new entrants. And they have suffered unbelievably in this labor market.

COMMISSIONER LIPNIC: And in terms of unemployment, though, setting aside new entrants, isn't it the case that in this recession, more men have been unemployed than women, more men have lost their jobs than women?

ASST. SEC. SPRIGGS: The unemployment rate for men went up at a higher rate than for women. And normally those two unemployment rates tend to move together. Again, because construction and manufacturing were hit very hard, then a lot of the job losers were men. So this is a case in which a lot of workers are affected, but, nonetheless, there are these disparate impacts because there are a higher share of the unemployed, who are going to be African American, older workers, or Latino, and/or are disabled. So, though this is a problem that a lot of people should be concerned about, itís one of those instances where there are still these disparate impacts.

COMMISSIONER LIPNIC: And I guess I would just add and suggest, Madam Chair, that we work with Dr. Spriggs in the Labor Department to the extent we can in trying to design, think about how we would actually get at some data collection to have a better understanding of the true nature of this issue.

So, thank you.

CHAIR BERRIEN: Thank you. And we certainly welcome the opportunity to work with you in those ways Dr. Spriggs.

Following up on a question of research methodology, first of all, could the Department of Labor in your view design some sort of study that would allow for a broader assessment of whether this practice is occurring and where it might be occurring?

ASST. SEC. SPRIGGS: That would be very hard. A very small portion of job openings are publicly posted. So it would be hard because it's not clear what that might tell you because, again, the jobs that aren't posted are going to be the bulk of the job openings. And we don't know what takes place in those cases. We do have the survey of BLS for job opening and labor turnover, which is the only place where we gather information on openings. I mean, potentially it's the case that questions could be asked in that survey about the openings, but that would be difficult, given the way that that survey is constructed to try and get at information about how those openings are made public and what are the conditions, again, because you have many different occupations and it's kind of a difficult survey to add questions to.

CHAIR BERRIEN: In light of your point that most job openings are not posted publicly, does that make the existence or finding that some of the job postings in recent months have excluded or included express exclusions for unemployed workers more or less significant in your view?

ASST. SEC. SPRIGGS: In this job market, a greater share of workers are trying to seek openly posted jobs because their own networks aren't as good. A lot of their friends are unemployed as well. So it probably has a bigger impact in the current labor market than might be true when we're at full employment and people are using informal networks as their way to find jobs. So this may have a greater impact than would be true in a full employment situation.

CHAIR BERRIEN: And in the letter that the Solicitor of Labor wrote in response to Congressional inquiry, there was a reference to the Workforce Investment Act nondiscrimination provision. And I believe that the Solicitor suggested that under certain circumstances, the Workforce Investment Act might reach this practice if it was discovered.

Can you describe for us what the enforcement structure is for the Workforce Investment Act nondiscrimination provision? Would it be parallel or overlapping with our jurisdiction? Is there something we would need to do to coordinate that?

ASST. SEC. SPRIGGS: I think it's something where you could help the Center for our CRC. I'm thinking through best strategies for enforcement. That's a small office. And I think that typically what they are doing is giving advice to state agencies on making sure that thereís compliance with civil rights standards, but I think this would be a good point for working together.

CHAIR BERRIEN: Thank you, Dr. Spriggs. I don't have any other questions. I want to thank you for your testimony this morning, for joining the Commission again, and for providing us with such useful information. Thank you.

And if our second panel could now approach? That is Christine Owens, Fernán Cepero, James Urban, and Professor Helen Norton. Thank you.

And, as we complete the seating, I just want to remind everyone that our format will be, weíll hear from all four panelists first. Iíll introduce each of you briefly. And then at the conclusion of the testimony from this panel, we will begin the question and answer session. Thank you all for being here.

And weíll begin with Christine Owens, who is Executive Director of the National Employment Law Project. Thank you, Ms. Owens.

MS. OWENS: Thank you.

So, Chairwoman Berrien, General Counsel Lopez, and Commissioners, on behalf of the National Employment Law Project, I want to thank you for devoting your meeting today to this important issue of the exclusion of qualified applicants from employment opportunities simply because they are unemployed.

This is a practice that, regardless of its magnitude, adds to the difficulty that millions of unemployed workers are facing today in navigating the toughest job market any of us have ever experienced or the nation has experienced in decades. We appreciate the opportunity to be an important part of this important discussion.

NELP is a national nonprofit organization that engages in research, education, and advocacy on behalf of low.wage and unemployed workers and individuals facing unfair and unlawful barriers to employment.

Our work on behalf of the unemployed brings us into regular contact with jobless workers and the problems they encounter in finding work. And in our efforts to restore employment opportunities for people with criminal records, we have developed substantial expertise in Title VII's application to barriers to employment that may be neutral on their face but that operate to exclude people disproportionately on prohibited bases.

In my remarks today, Iím going to focus on three different sections. First is some of what we know. And I wish we knew more about the real incidence of this practice; second, to discuss again briefly the potential impact on protected classes of this practice; and, finally, to end with some suggestions about what may be done.

As Chair Berrien noted, the news accounts about the exclusion of unemployed workers first began to surface this summer. And in answer to one of your questions, Commissioner Lipnic, it was with respect to a Fortune 500 company, a global phone manufacturer that was advertising a position in Atlanta, where it was expanding its operations. And the ad said, explicitly said, "No Unemployed Candidates Will be Considered at All."

Leaving aside legality, I think people were shocked by that language in a job market where unemployment was really high and there were many unemployed candidates who would be qualified for the position.

And other stories around the same time and since that time have again documented anecdotal examples of advertisements that include explicit prohibitions against unemployed candidates or candidates whoíve been unemployed for a certain period of time, or have language that says, "Must be currently employed in the industry" or "Must have been employed in the industry within the last six months" or "the last year."

Now the implications of these advertisements take on real life for us at NELP because we actually talk to unemployed workers every single day. And in my testimony, Iíve described several examples, which Iíll go over really quickly here. And interestingly, most of the workers who contact us, are older workers. And most of them are women and maybe just because they're freer to talk about it and feel somewhat less stigmatized by the unemployment.

There was a 53.year.old woman, Michelle from Illinois, who was laid off in 2008 after working successfully for 19 years as an IT help supervisor. After many months of job searching, she was actually contacted by a headhunter, who had seen her resume and thought she was qualified for a position he was filling. But after he learned she had been unemployed for more than a year, he told her apologetically that he could not recommend her because his client, who we don't know the identity of, expressly had advised him not to refer anyone whoíd been unemployed for six months or more.

When we last spoke to Michelle, she was still unemployed; sheíd exhausted all of her unemployment benefits; she had to restructure her mortgage, which affected her credit rating; she had applied for Food Stamps; and she had gone on welfare, a first for her, a 53.year.old woman who had been gainfully employed most of her adult life.

We had similar conversations with 45.year.old Kelly from Colorado, a former operations analyst who applied for a job a staffing firm had advertised to implement a particular software program that Kelly had previously implemented at another job. The agency called her right away because she had the qualifications, but as soon as she said she had been unemployed for a long period of time; the recruiter said, "I'll send your resume in, but it's going to be a tough sell because of your long employment gap."

Angela from Texas, a similar experience, a recruiter reached out to her because he had seen her resume online. But then, the e.mail that he sent included an express caveat that said, "Must be currently working in pharmaceutical sales," which she had done, "or must have left the industry within the last six months." And she had been unemployed longer than that.

And then 55.year.old Jendera from California, writes that she received a call from a recruiter, who thought she was a good fit for a 6.month contract position, but that once he learned of her unemployment for more than 6 months, he told her he would not refer her for the job.

These accounts from these workers who had been directly excluded from job opportunities are echoed, I think significantly, in remarks from people who represent staffing agencies. Either they are themselves recruiters or they work with the agencies to try to place people.

And as we noted, and Dr. Spriggs noted, and all of you have noted; there is no official data on this, I wish there were. I'm not sure how BLS could do it, but I wish there were such data. But I think it's particularly significant that these representatives of staffing agencies have said, "There seems to be a growing practice.Ē One HR consultant from New Jersey said that the first question every recruiter asked her is, ďIs your candidate currently employed?" And if the person isn't, she says they're not interested.

A vice president from Adecco, which is Adecco Group North America, the world's largest staffing firm, was reported to have said to CNN Money that companies' interest only in applicants who are currently working "is more prevalent than it used to be." He said I don't know how often it happens, but I can tell you "that three out of the last four conversations I've had" it's come up.

And an article posted last month on The Ladders, which is an online job research site, quotes the communications coordinator at another prominent staffing firm as saying, "Not all companies are doing this, but it certainly has become an issue."

Whatís startling, are the lengths to which companies and recruiters are going to communicate this, such as including the phrase, "Unemployed candidates will not be considered" right in the posting.

In sum, while we don't have hard and fast data, the anecdotal evidence from job postings and ads; the accounts of unemployed workers whoíve talked to us; and, I think significantly, the comments from these staffing firm representatives, suggest that there may be a disturbing and growing trend of excluding jobless workers from consideration for job openings, regardless of their qualifications.

And I really want to emphasize that our concern is not, if people are not qualified, they shouldn't be considered. Every single case that I cited in terms of workers who have talked to us, involves people who were qualified; in fact, were reached out to and it was only because of their unemployment status that they were not advanced in the process.

This refusal, unfortunately and unfairly, limits the opportunities of otherwise qualified applicants. And beyond that, as Dr. Spriggs has testified and others will testify this morning; it is a practice that appears likely to have a disproportionate impact on the groups protected under the federal civil rights laws that this Commission administers.

Title VII and the Age Act both prohibit practices that are neutral on their face but have a disparate impact because they limit, segregate, or classify individuals in ways that will deny or limit employment opportunities based on a prohibited basis.

As Dr. Austin will testify later this morning, the evidence is particularly strong that African Americans are affected by this exclusion. Their unemployment rate is more than twice as high as that of white applicants. And so any outright exclusion of unemployed workers is going to impact African Americans.

At NELP, we focus an awful lot on the long.term unemployed and whatís happened to them in this economy. And with respect to that group, there is also no question that exclusions of people who have been out of work for at least six months or longer is going to have a disparate impact on long.term unemployed workers.

Dr. Spriggs talked about some of this testimony. And I have data in the tables on my written testimony which shows that among workers who are 45 and older, which is how the BLS data breaks out, .. I'm aware that the Age Act is 40 and older .. that older workers are as likely to be unemployed for more than 6 months than to be unemployed for less than 6 months. And the reverse is true for younger workers.

So I have the red light. I just want to say again this has been a great hearing. We really appreciate the opportunity to discuss this. We encourage the Commission to continue to explore it and to encourage state fair employment practice agencies to do as well.

And I just would like to add to Commissioner Feldblum's point. I think that focusing on staffing firms might actually be a useful thing to do because, again, the random searches of job ads suggests that this exclusion is often coming up in ads placed by firms, I suspect because employers request them to do so. But I think focusing on staffing firms may be a good way to get at the incidence of how often this is happening.

Thank you very much.

CHAIR BERRIEN: Thank you, Ms. Owens.

And next we're going to turn to Fernán Cepero. Am I pronouncing that right?

MR. CEPERO: Cepero.

CHAIR BERRIEN: Cepero. Thank you. Vice President of Human Resources for the YMCA of Greater Rochester and State Director of the New York State Society for Human Resource Management. Thank you, Mr. Cepero.

MR. CEPERO: Thank you.

Chairperson Berrien and distinguished Commissioners Ishimaru, Barker, Feldblum, and Lipnic, thank you for the opportunity to testify on behalf of the Society for Human Resource Management, or SHRM.

I have 15 years of experience as a human resource professional focusing on recruitment, employment development, and succession planning. As you know, SHRM provides its 255,000 members with educational resources on effective human resource practices and strategic workforce issues. For that reason, we appreciate your highlighting fair and equitable employment practices, in this case as they relate to Title VII of the Civil Rights Act of 1964.

While some employers might purposely violate employment laws, SHRM is unaware of widespread recruiting practices that involve blanket exclusions of the unemployed. The stakes involved are too high for that.

According to SHRM research, the average cost per hire for all industries in 2009 was $1,978. In knowledge.based industries, such as high tech, the cost was $3,045. In addition, it took an average of 27 days to fill a position, with the time rising to 35 days for high tech. Open positions mean lost productivity. Yet, poor hiring decisions can be costly. As I said, the stakes are high.

Allow me to focus now on just a few steps of a typical hiring process. Our search may begin by posting job openings in print, online, and in social media. We can also turn to networking, employee referrals, and job fairs.

Employers may also use staffing firms for specific job categories, such as IT, and they may turn to staffing firms when hiring needs exceed their in.house processing abilities.

As for focusing on the best candidates, SHRM research found that 56 percent of employers identified skills directly applicable to the job as being the most influential. Next were characteristics for good fit, 42 percent; professionalism, 32 percent; and passion, 20 percent. With that many factors in play, a large applicant pool benefits the employer. Screening out the unemployed is counterproductive.

At my employer, the YMCA of Greater Rochester, we work with three public agencies to help us recruit and place the unemployed. In 2010, we hired 260 staff that had been unemployed 6 months or more. And 91 percent of those people are still with us.

Granted, our experience is not universal. Some employers have struggled to find qualified candidates with the right skill set, despite high unemployment. A candidate who has been out of work for a while may have stale or obsolete skills compared to candidates from recent paid or volunteer experiences. Certain IT positions in IT and web design are examples.

SHRM encourages us to target and hire from a diverse group of candidates. For instance, the Society is working with the Department of Labor's Office of Disability Employment Policy, that and the Department of Defense, to encourage hiring individuals with disabilities and returning veterans.

SHRM also produces a monthly survey called, Leading Indicators of National Employment, or LINE, that forecasts trends in the U.S. private sector workforce. The LINE report released this month shows a rise in vacancies.

Human resource professionals in both the manufacturing and service sectors reported more difficulty recruiting for key positions compared with one year ago. The ongoing post.recession rise in productivity could mean that employers are relying more on fewer employees who have higher skills.

In conclusion, SHRM is unaware of any trend in excluding the unemployed from consideration for jobs. Whatever the economic climate, employers are simply focused on finding the right people for the job, whether currently employed or not. And SHRM members recognize that blanket exclusions raise concerns under Title VII.

As the Commission explores this issue and its potential discriminatory impact, SHRM welcomes the opportunity to assist you with your educational efforts to employers.

Thank you for the invitation to participate in today's meeting. And I look forward to answering any questions that you may have.

CHAIR BERRIEN: Thank you very much, Mr. Cepero.

And now we'll turn to James Urban, whoís a partner at the Jones Day law firm and based in their Pittsburgh office.

MR. URBAN: Thank you. Good morning Commissioners. I thank all of you for inviting me here this morning and affording me the privilege of addressing you. My name, as you heard, is James Urban. Iím a partner in the law firm of Jones Day. My firm has offices all over the United States: right here in Washington, D.C.; Atlanta; Boston; Cleveland; Chicago; several offices in Texas; several offices in California, and Iím resident in the Pittsburgh office. Iíve been a partner at Jones Day since 1998, and I have represented and counseled employers for roughly 15 years.

You should know currently Jones Day acts as principal outside counsel for about half of the Fortune 500 companies. We also serve privately held companies, financial institutions, investment firms, health care providers, retail chains, foundations, and educational institutions.

The employers to whom I personally have counseled, represent the cross.section of the industries that drive this nation's economy. I'm talking about automotive, aluminum, steel, rubber, telecommunications, power generation, high technology, just to name a few.

With that background in mind, Iíd now like to tell you about my specific experience with employer hiring practices and then discuss with you the law that governs disparate impact theories of employment discrimination and how it might apply to this issue that has brought us all here today.

First, I must tell you that the employers to whom I provide counseling, invest a great deal of resources in an attempt to comply with federal, state, and local civil rights laws as they relate to employment. Practices and policies are reviewed, revised, vetted, multiple times. Managers are trained and then trained again, almost on an annual basis. When difficult employment issues arise, seasoned HR people are brought into the mix to offer their advice. And experienced legal counsel is often consulted also to make sure that the civil rights laws are followed.

Second, while Iím aware of and I have reviewed some of these assorted media reports regarding employers who reportedly have excluded applicants from hiring because they are unemployed, I must tell you I personally have never experienced an employer with such a policy or practice. I thought perhaps this was some trend I was missing. So this past week I went and grabbed some "Help Wanted" sections from some newspapers: Chicago Tribune; Washington Post; my hometown newspaper, the Pittsburgh Post.Gazette. I went through it page by page. I found not one ad that says the unemployed need not apply. And I haven't discovered anything remotely close to that in any of these advertisements that are in here.

Now this is all consistent with my personal experience that employers want, at the end of the day, to identify, hire, and place in their operation, the best candidate that is available. To that end, they solicit, they welcome, and they consider all qualified candidates regardless of their employment status.

In many cities, there are still free employment papers that advertise want ads. As we all know, there are internet postings, whether they be specific job sites or the websites of employers that list job postings. Then, of course, there is the newspaper.

The reason that employers engage in this coverage, widespread coverage, is so that they can bring into their pool of candidates, all qualified candidates.

And with that in mind, Iíd like you to stop and think about what is involved with hiring an employee. Thereís a lot of time, thereís a lot of money invested. You have to spend the time and the money to post the job. Managers have to spend time reviewing the applications that come in. For many jobs, there's money that's spent in aptitude tests, skill tests, drug testing, things of that nature that many jobs require. Managers then spend time in hiring decision meetings. There is money spent on post.offer physical examinations. There is time spent in post.offer information gathering, records, payroll, things of that nature. Some hires for jobs are paid signing bonuses. Some hires require the payment of a finder's fee.

Once the employeeís on the payroll, thereís time spent having that employee, that new employee, review literature related to the company. There is time spent in general orientation. There is time spent in specific job orientation.

At least one authority that I saw, estimated that the overall cost of hiring an employee is 38 percent of what you paid the employee who departed, the job you're filling. So if that employee who departed was making $50,000, according to this authority, youíre going to spend about $19,000 hiring a replacement.

With that sort of investment in mind, my overall point is that employers, itís been my experience, go to great lengths to make sure theyíre getting the right person the first time. If the employer fails to do so, if you hire somebody that turns out to not be the right hire, if things don't work out; youíll be starting over from scratch, probably in nine months to a year. And all that time and money you invested the first time around to hire that individual who did not work out, thatís all wasted. So the circumstances are such that you must invite all qualified candidates. In some cases, the best qualified candidate for an open job may be somebody whoís currently employed, but in other circumstances, the best qualified candidate is going to be someone whoís unemployed.

Now, are periods when an applicant has been unemployed not scrutinized? I can't sit here and tell you that theyíre not, they certainly are. But when they are, itís my experience that itís not with any intention of discriminating against one person or any one group of people. My experience with employers across those diverse industries that I mentioned when I began my comments, is that current unemployment or any period of past employment is, at most, only a subject of inquiry if the applicant's credentials are such that you bring that person in for an interview. In such a case, a good practice is to question the applicant during the interview about that period of unemployment. It may be that the applicant simply was let go as part of a reduction in force that was economically driven and impacted many people. And in that case, it's likely that that period of unemployment would not weigh against that candidate, selection of that candidate.

However, you may have circumstances where individuals are unemployed because they were discharged for cause. And the facts or reasons underlying the discharge for cause, such as maybe the person engaged in an incident of workplace violence; that may weigh against further consideration of that candidate. But at the end of the day, it's not the unemployment that is excluding the individual from consideration, if indeed that occurs; it is the reason for the unemployment, an example of which I just gave, that may exclude the candidate.

In sum, itís my experience and belief that there is not, there is not, a widespread practice among employers to disqualify applicants on the basis of unemployment. And I submit to you that the anecdotal examples that weíve seen and heard about in media reports over the past year, when viewed in the broad scope are isolated examples.

Iíd now like to turn to some discussion of the legal analyses that would control cases such as this if we were going to go down the path of whether or not thereís disparate impact.

Iíd like to at the outset to point out that the national unemployment averages for African Americans, Hispanics, and certain other groups unquestionably, unquestionably, raise societal concerns. However, when we begin to talk about those national averages in terms of forming the basis for a disparate impact claim under Title VII; I think we need to look more closely at the legal requirements for presenting a case of disparate impact. Many of you are familiar with the law that controls such an analysis. A disparate impact violation is established when an employer is shown to have used some specific employment practice, neutral on its face, but causing a substantial adverse impact on a protected group, and which cannot be justified as serving a legitimate business goal of the employer. Title VII at Title 42 sets forth the criteria. For a person to establish a prima facie disparate impact claim, he must show that a particular employer used a particular employment practice that caused disparate impact.

Now the Commission has taken the position over the years that evidence of adverse impact exists when the selection rate for a particular group, race, sex, or ethnic group, is less than four.fifths, or 80 percent, of the rate of the group with the highest rate of selection. In other words, the selection rate for Hispanic applicants, for example, would need to be less than 80 percent of the selection rate for white applicants to establish disparate impact.

With that in mind, I went and looked at the national averages supplied by the Bureau of Labor Statistics as they relate to certain protected groups. And itís my view that the numbers do not meet the EEOC's threshold for disparate impact. That is, the BLS unemployment statistics for Hispanics, for example, do not establish disparate impact under the EEOC's rules, simply do not satisfy the four.fifths threshold. For example, according to BLS statistics, the most recent employment rate for Hispanics is 11.9 percent. For whites, the rate is 8 percent. Those numbers are from January 2011. Turning those numbers around, they can be interpreted to mean 88.1 percent of Hispanics and 92 percent of whites are employed. The four.fifths rule applied to these numbers reveals that the employment rate for Hispanics exceeds 80 percent of the employment rate for whites. The fact is that more than 90 percent, 88.1 divided by 92, of the rate for whites, Hispanics are employed. The same rule holds true for national unemployment rates for African Americans. The BLS unemployment national averages do not establish disparate impact for any of the identified groups.

Now let me give you an example. Let's take a technology development company thatís looking to fill 11 positions, 11 open positions. Let's assume that the candidate pool consists of 100 individuals, 70 of whom are white and 30 of whom are Hispanic. Applying the current unemployment rates, let's assume that eight percent of the white applicants, for a total of five, were unemployed and they were stricken from consideration for that reason. Let's also assume that roughly 12 percent, a total of 4, of the 30 potential Hispanic candidates were unemployed and stricken from consideration for that reason. The adverse impact ratio is 93 percent. Applying the four.fifths rule, there is no statistical evidence of disparate impact.

Now, thatís not the only way you can analyze statistics. If you also looked at it from a standard deviation standpoint, I can tell you thereís no statistical evidence of adverse impact under that analysis either, because the deviation is less than one. And, as you all know, a result of less than two standard deviations is generally considered insignificant.

Furthermore, big picture, other factual evidence has to be considered when you are looking at a pool of candidates. For example ..

CHAIR BERRIEN: Mr. Urban? I'm sorry. Can you begin to wrap up?

MR. URBAN: Absolutely.

CHAIR BERRIEN: Thank you.

MR. URBAN: There are other job factors that contribute to whether or not applicants may apply for a job. And those are many, and they are diverse.

At end, Title VII requires that a person making a claim of disparate impact offer just not national or even regional unemployment averages but statistical evidence, firm statistical evidence, of a kind and degree sufficient to show that the particular practice by the particular employer in question is having disparate impact. We all need to keep that in mind.

Thank you. I look forward to your questions.

CHAIR BERRIEN: Thank you.

And finally, weíll turn to Professor Helen Norton from the University of Colorado Law School.

PROF. NORTON: Good morning, Chair Berrien and Commissioners Ishimaru, Barker, Feldblum, and Lipnic. Thanks so much for the opportunity to join with you today.

Recent job announcements reveal that employers have required applicants for a wide range of jobs to be currently employed as a condition of further consideration. These jobs include freight handlers, restaurant managers, sales representatives and other salespersons, litigation associates, mortgage underwriters, electrical engineers, apartment maintenance technicians, and executive assistants. The breadth of these jobs suggests that this is not an isolated phenomenon.

Other witnesses today have and will explore the relevant demographic trends and other data that suggest this practice's potential to impose a disparate impact on the basis of race, sex, national origin, age, and disability. My testimony today seeks not to draw any definitive conclusions but, instead, to identify a number of questions and concerns that this practice raises with respect to federal anti.discrimination law.

Now, as you know, that law includes prohibitions on intentional discrimination. There are at least two situations where an employer's current employment requirement would trigger such concerns: first, if an employer were to impose this requirement on some workers and not others; if, for example, an employer required female but not male applicants to be currently employed as a condition of further consideration; and, second, if an employer were to use current unemployment as a surreptitious means of excluding applicants based on protected class status; if, for example, an employer intentionally used a current employment requirement to screen older workers or workers with disabilities.

Current employment requirements are more likely to raise concerns about impermissible disparate impact discrimination. Plaintiffs seeking to establish illegal disparate impact discrimination must start by demonstrating that the challenged practice causes an adverse impact based on protected class status. There are a number of ways in which a plaintiff might make such a showing.

Labor market analysis is an especially appropriate tool when the challenged practice likely skews the actual applicant pool by deterring potential applicants who realize that they cannot satisfy the requirement in question.

And this would be the case, for example, when a job announcement expressly lists "current employment" among the requirements for the job. Faced with such an announcement, many prospective applicants who are not currently employed will simply not apply for the job.

Under this analysis, the qualified labor market represents those in the relevant geographical area; in other words, the geographical area from which the employer draws candidates for this particular job, who otherwise possess the relevant job qualifications.

So, as an example, consider, say, a school located in a certain metropolitan area thatís requiring applicants for teaching positions to be currently employed as a condition for consideration.

To determine whether this practice has an adverse impact against African Americans, weíd compare the percentage of African American teachers; in other words, those who have the required teaching credential, in that metropolitan area who are currently employed with the percentage of white teachers in that metropolitan area who are currently employed. And the plaintiff establishes the requisite adverse impact if the difference between those 2 selection rates is statistically significant or satisfies the 80 percent rule.

If, on the other hand, the employment practice is, instead, used as a screen later in the process; in other words, if an employer does not require current employment as a condition of application but, instead, screens applicants who are not currently employed later in the process, applicant flow analysis may be more appropriate.

Applicant flow analysis compares the selection rate under the requirement, the current employment requirement, for protected class members who apply for that position with applicants in the comparator group. And again, if the difference between those two selection rates is statistically significant, or satisfies the 80 percent rule, then the plaintiff has established the requisite adverse impact.

The demographic data offered by Dr. Spriggs and I believe to be offered by other witnesses today, suggests that a current employment requirement has the potential to impose an adverse impact in a number of contexts.

I want to make clear that the outcome of any adverse impact analysis will depend on the job in question, would depend on the geographical area from which the employer draws candidates for this job, and the characteristics of the relevant labor market.

Please note that some geographical areas have different unemployment rates than others. Please note that some jobs have different unemployment rates than others. And those factors must be considered in evaluating the adverse impact.

Now a plaintiff who proves that a practice imposes an adverse impact, has established a Title VII or an ADA violation, unless the employer or the employment agency can demonstrate that the challenged practice is job.related for the position in question and consistent with business necessity.

Even if the employer or the employment agency so demonstrates, the plaintiff will still prevail, if he or she can prove the availability of a less discriminatory employment practice that achieves the employer's interest in selecting individuals who can successfully perform the job in question.

By requiring careful examination of employment practices that impose a disparate impact along with possible alternatives to such practices, federal anti.discrimination law enhances not only equal access to job opportunities, but also a commitment to true merit selection.

And as the Supreme Court has observed, nothing in the Civil Rights Act precludes the use of testing or measuring procedures, obviously theyíre useful. What Congress has forbidden, is giving these devices and mechanisms that pose disparate impact, controlling force unless they demonstrably prove a reasonable measure of job performance.

So at this stage of the Title VII or the ADA analysis, the employer is required to prove that the challenged job requirement reliably assesses the candidate's ability to perform the job in question.

So, with this in mind, I want to explore several possible explanations that an employer might offer to justify a current employment requirement and some of the questions that arise when considering those justifications.

Some employers may use current employment as a signal of quality job performance under the theory that those currently employed, especially in a tough economy, must be strong performers. But this correlation is decidedly weak as there are many reasons why one might be employed at any time, and especially during a tough economy, that have nothing to do with job performance. And these reasons include having been in school or in a training program; having to leave a job because of spousal relocation; having lost a job because of lack of seniority during employer downsizing; having lost a job because the employer eliminated an entire division or shut down altogether; and having left employment temporarily due to illness, injury, disability, pregnancy, or family care.giving responsibilities. A blanket reliance on current employment serves as a poor proxy for successful job performance.

As another possibility, some employers may use current employment as a proxy for relevant experience, but this also raises concerns. First, this justification would not be job.related for the position in question and consistent with business necessity with respect to entry.level jobs or jobs in which candidates receive relevant training on the job.

Second, even for those jobs that require state.of.the.art knowledge of rapidly changing technologies or practices, current employment may still be an impermissibly blunt instrument for evaluating relevant experience and knowledge.

More accurate and potentially less discriminatory alternatives include more individualized assessments, such as posing problems or questions in interviews or tests that measure relevant knowledge, as well as asking questions that reveal recent experience or recent education or training.

For example, the candidate may be currently unemployed because he or she has been in school receiving relevant training. The candidate may have been employed until very recently, or the candidate may have used a period of unemployment to add to their training and knowledge base.

As another possibility, a recent media report suggested that some employers might be using a current employment requirement simply to reduce the number of applications received. And that sort of justification, the notion that it facilitates the employer's speed and ease in processing applications; has no relationship to candidates' successful job performance and, thus, is not job related for the position in question.

So my aim here has been to note that this practice raises questions and concerns that deserve further attention as equal employment opportunity law seeks to ensure that access to job opportunities is free from discrimination in tough economic times as well as in good.

Again, I appreciate the opportunity to join you today, and I look forward to our continued discussion.

CHAIR BERRIEN: Thank you, Professor Norton.

And we'll turn now to the questions from our Commissioners. Commissioner Ishimaru?

COMMISSIONER ISHIMARU: Well thank you, Madam Chair. Iím tempted just to wait and listen to the questioning from my colleagues, but I think I will jump in.

I want to welcome Professor Norton, a former colleague of mine at the Department of Justice. Welcome back to Washington. Itís always good to see you.

Mr. Urban, I had to chuckle a bit when you were looking at the want ads and didn't find anything there. I'm assuming the same would hold true for statements like, "No blacks need apply," "No women need apply," things like that. That doesn't show up in the want ads either.

And, yet, it may not be a true indication of exclusionary practices that go on in the workplace today. Not to ascribe any to your clients, but it does happen. And the newspaper want ads are far from a good measure of the extent of discrimination or exclusion that may be going on in the workplace.

MR. URBAN: Well, my reason for looking at the want ads was because at least I understood one of the ways that we arrived at this topic of discussion was that there were specific ads that were telling unemployed individuals, "You need not apply." And as I said, I was not aware of any employer who was engaging in that practice.

My purpose for looking at the want ads was to see if there were others of whom I was not aware of, who might be doing it. And as I testified in my comments, I didn't see anything. But I would agree with the premise that you suggested there a moment ago.

COMMISSIONER ISHIMARU: Right, right. Mr. Cepero and Mr. Urban, maybe you can help me in my earlier sort of broad question in my opening statement is, what might be the rationale for businesses to use a requirement like this, a screen?

Professor Norton laid out possible examples, but you two I would assume would have a closer relationship with businesses and know how business owners, how HR people think. And itís a difficult job to try to cull out who is going to be a good candidate for our business.

What would be job.related and consistent with business necessity for this requirement of using current employment status? Mr. Cepero?

MR. CEPERO: Well my experience, I don't see that thereís any business necessity to have that as far as a requirement for hiring candidates.

I will say in the outreach that I had done in my volunteer role in the Society for Human Resource Management, we do a lot of outreach training to small businesses, who may wear multiple hats ..

COMMISSIONER ISHIMARU: Sure.

MR. CEPERO: .. office manager, HR processing. And we found that many of them are unaware of what they can and cannot do and what they can and cannot put in their advertising for jobs. So one of the things that we do is outreach training for them to increase their knowledge as far as what they can and cannot do.

But for the majority of the employers that I interact with, I haven't found that they use that as a justification for ..

COMMISSIONER ISHIMARU: So you know of no business reason for using a screen like this? And I would assume that would be SHRM's position as well or did they ..

MR. CEPERO: Yes.

COMMISSIONER ISHIMARU: It would be? Mr. Urban, is ..

MR. URBAN: Well, I think it would have to be fact.specific. Again, I've never had an employer ask me if they can do this. And so I've never taken an employer down the analysis of ..

COMMISSIONER ISHIMARU: Right.

MR. URBAN: .. "Well, what's the job required?" and "What is your reason for wanting to do this?" and "Is it job.related?" We did hear an example here of an advertisement I think for a pharmaceutical sales rep, where it said if you hadn't worked in the industry in the past ..

COMMISSIONER ISHIMARU: Six months.

MR. URBAN: .. six months, ..

COMMISSIONER ISHIMARU: Right.

MR. URBAN: .. you need not apply. I don't counsel any pharmaceutical companies. My wife was a pharmaceutical sales rep. And I can tell you that the rules that govern individuals in that profession have greatly changed from month to month, from year to year, how you can approach doctors, what you can say to a doctor. And I don't know if thatís the reason behind it.

Again, Iím not aware, but you would have to explore it, conduct the analysis, and determine whether there is a legitimate business reason.

COMMISSIONER ISHIMARU: But can you see any legitimate business reason for having something like this? Iím having trouble figuring out why a business would want to use this screen unless it's for convenience purposes, unless it's for not wanting to go through all of the applications, which, you know, if you're getting thousands through the internet, you know, that on a certain level is a logical screen that this is one way to cut so we don't have to go through all of these resumes.

But from a business point of view, in trying to get the best qualified people, or a pool of qualified candidates in front of you, I'm having a hard time understanding why a person's current employment status would be relevant? Can you see any reason why it would be relevant?

MR. URBAN: Well Commissioner, again I'll say it would be fact.specific related to the job, but Iíll reiterate what I said during my comments was, the best practice is to invite all qualified candidates so that you can select the best person for the job and not have to be doing the same thing over nine months later.

COMMISSIONER ISHIMARU: Madam Chair, can I retain the balance of my time if thereís any left over for a question or two?

CHAIR BERRIEN: Can you go forward because it's going to be a .

COMMISSIONER ISHIMARU: I don't have anything more for now.

CHAIR BERRIEN: I don't know that weíll be able to come back around with our time limits, but okay. If we can turn now to Commissioner Barker?

COMMISSIONER BARKER: Ms. Owens, I had a question, a couple of questions, for you. Your comment toward the end about suggesting it might be wise to focus on recruiting companies, I thought it was very interesting because it's been my understanding that most of the testimony and underlying articles that weíve all read in the newspaper have pointed to recruiting firms, rather than companies, employers themselves.

But you also suggested that you could only assume that they were screening out people who aren't currently employed at the instruction of employers.

Isn't it also possible that the recruiting companies themselves are doing that for some of the very reasons that Commissioner Ishimaru pointed out? I mean, these folks get paid based on getting a candidate who is actually hired into the hands of an employer. So couldn't they be doing it themselves just to cut to the chase and cut the numbers?

MS. OWENS: I assume that's the case, Commissioner Barker. My comment really also goes to what some people, some of the workers who have contacted us, have told us directly. And who knows whether the recruiting firm was being candid with the workers who contacted us? But they have said that the recruiting firm, the staffing representative said, "This is what the employer requires. The employer has told me not to send anyone whoís been unemployed for longer than six months"? But certainly, I think either could be the case. Either it's at the employer's direction or that it is more convenient as a sort of weeding tool for the staffing firm.

COMMISSIONER BARKER: You know, and I would think, too, that itís an awfully easy out to blame it on, "Oh I would be referring you, but, you know, the bad employer won't let me," when, it may be the recruiter himself.

MS. OWENS: That certainly could be, but obviously in either case, if thereís an unlawful disparate impact; thereís a respondent whoís responsible for it. And it could be the employer or the recruiter.

COMMISSIONER BARKER: Or the recruiter.

MS. OWENS: To the unemployed worker, I'm not sure it matters.

COMMISSIONER BARKER: Yes. And the other point I was going to ask you is you talked about the global phone manufacturer, where .. you know, this is an example that you gave of an actual employer that advertised that you had to be employed. That advertisement, did I understand that it was just for one position for ..

MS. OWENS: I believe it was for one position.

COMMISSIONER BARKER: It was one marketing position?

MS. OWENS: Right, one position.

COMMISSIONER BARKER: So it wasn't like this company was moving into an area and advertising for hundreds of positions? It was a single position?

MS. OWENS: Right.

COMMISSIONER BARKER: Okay.

MS. OWENS: Although Professor Norton mentioned various kinds of ads that one could see doing an internet search on some of these jobs' websites. And one of the things that I was struck in looking at some of those kinds of ads is that there are firms, for example, that recruit for restaurant managers. And they will say, "We're recruiting to fill positions in ten different cities, and we have hundreds of positions." And then that exclusion is expressly in there.

So I think that, again, we don't know the incidence, but that to the extent it happens, it happens across industries. It can happen involving a single job or many different jobs. We just don't know the incidence.

COMMISSIONER BARKER: And there again you're talking about a recruiter's ad?

MS. OWENS: Right, correct.

COMMISSIONER BARKER: Okay. That's all the questions I have.

CHAIR BERRIEN: Thank you.

Commissioner Feldblum?

COMMISSIONER FELDBLUM: Thank you.

Mr. Cepero and Mr. Urban, I appreciate the fact that you don't have personal experience of this because neither you in your business or you for your clients are doing this, but what do you make of the comments that various people working for staffing agencies, that Ms. Owens repeated? What do you make of those comments? Do you think theyíre lying? Do you think theyíre hallucinating? I mean, what do you make of their comments, Mr. Cepero and Mr. Urban?

MR. URBAN: Well, I can't sit here and tell you, "They're lying," "They're not lying" because I simply don't know. I think you need to consider some of the dynamics that take place when an employer contracts with a staffing company, a recruiting company, however you want to characterize them.

The recruiting company is usually paid if they place the employee, okay? And that industry is extremely competitive, okay? So if I'm in a Fortune 500 company, I may be being solicited by dozens of recruiting companies telling me they can find me the best candidates.

The staffing companies, the recruiting companies, they are obviously the screener of the candidates. And from their perspective, it's my belief that they have to forward along to their client, the employer, what they perceive to be viable candidates with the fear or thought that, "If I don't provide viable candidates, I'm not going to be given another opportunity to further place people."

COMMISSIONER FELDBLUM: I'm going to interrupt you right there in terms of my time because your testimony today was very illuminating because you have, in fact, answered for me the question as to why, I mean, Commissioner Ishimaru's initial question as to why this might be happening. You said all that time and money is wasted if it's not the right person.

So I can't imagine clients saying, "Look, you know, I've got hundreds of people potentially that are going to be coming through. Just get me someone whom I know I can talk to the supervisor they worked for three weeks ago. That's just going to be easier for me."

And of course, it's very important to note the staffing agencies because, of course, under Title VII, there are three entities that are covered: employers, unions, and employment agencies. So whether they're doing it on their own, because they think "Oh, I'll get the right person, and all that time and money won't be wasted and I'll get hired again," or because they're doing it because the employer asked them, that's an equal liability if, in fact, there is disparate impact.

So now I want to move to my second question. The other place that I found your testimony incredibly illuminating, the written testimony, and then you repeated it.

I actually don't know very much about the four.fifths rule. I'll learn about it. I mean, I've heard about it, but your testimony was the most compelling evidence I've seen that we might need to take a look at this rule.

So this is a question to Ms. Owens and Professor Norton. If you asked a person on the street this question, "This group is twice as unemployed as another group. And then thereís a rule that says, 'We're not going to hire unemployed people.' Do you think it would have a disparate impact?"; I mean, I think a person would say, "Yeah."

And then you go through this nice statistical analysis you did. And guess what? There isn't. So I look at that and say, "Is there something wrong with this four.fifths rule as applied to this situation?"

So I'm just curious about whether you think that Mr. Urban's testimony has illuminated for us an important thing to look at in terms of this 80 percent rule.

PROF. NORTON: I think Mr. Urban's testimony was relying on one set of factual assumptions. And I think if you change any of the numbers in that set of factual assumptions, you could come to a very different outcome under the 80 percent rule. He was looking at nationwide employment data. And he was not screening for any sort of relevant qualifications.

Understandably, he's offering a hypothetical, but if you're actually, if the Commission is actually doing adverse impact analysis, you've got to ask more penetrating questions. You've got to ask, "What's the job? What's the geographical area from which this employer is drawing candidates for this job? What are the qualifications? Do you need a teaching credential, et cetera?"

And you're going to have to have some granularity in your data. And I'm predicting that, depending on the area, some areas are much harder hit in terms of unemployment. And depending on the sector and the type of job again, variable rates of unemployment; you will find disparate impact under the 80 percent rule.

COMMISSIONER FELDBLUM: Well that makes me feel better because, I mean, I thought, "There's got to be something wrong with this 80 percent rule if it ends up with this sort of counterintuitive result.

So what do you say, Mr. Urban, to Professor Norton's comment there about the more granular analysis?

MR. URBAN: Well, I think, for instance, if you look at a specific job within a specific metropolitan statistical area and say we're looking at teachers for my hometown of Pittsburgh, Pennsylvania, and assuming that 99 percent of white teachers are employed; youíd still have to find, I think, a pretty low number, like in the high 70s or right around 80 to be able to satisfy the four.fifths rule.

COMMISSIONER FELDBLUM: So maybe we do still have to look at it in this particular situation. Let me just ..

MR. URBAN: Statistics are crunched many different ways.

COMMISSIONER FELDBLUM: Right. Again, I think to me this is what I felt after reading the testimony, that there are lots of people who do things because it does seem to make sense and it's easy for them and they're not thinking about the consequential impact of that. They don't say, "Get me only someone whoís been working the last six months" because they're intentionally trying to not have a qualified older person or a qualified Black .. they're not thinking that way.

But the whole concept of disparate impact is to force people to stop, think, and justify something that might be having that impact.

So I guess I just want to say .. and this is just to Ms. Owens .. I mean, NELP has just done an incredible amount of work generally. I sort of feel like saying, on behalf of the unemployed people of America, you know, they really have an advocate in you.

You know, I don't know exactly how much, again, the jurisdiction of the Commission really does depend for me on these legal questions. That's an important piece. But in terms of raising awareness that people might be using this either because employers are pressing them for exactly the reasons that Mr. Urban I think so clearly noted; I hope that there will be some utility in that.

Thanks.

CHAIR BERRIEN: Thank you.

Commissioner Lipnic?

COMMISSIONER LIPNIC: Thank you Madam Chair.

Just to follow up on Commissioner Feldblum's comment, in terms of raising awareness, I agree with that. And you would hope that, given this recession, that so many more people in this country are not six degrees but maybe three degrees separated from someone or two degrees separated from someone whoís been unemployed.

And so you would hope that an employment gap on someone's resume would not be a screen. Assuming that it is, though, and assuming that where I think Commissioner Ishimaru was headed, that it can be, for convenience or whatever reason.

And I want to ask both Mr. Urban and Mr. Cepero this. What would you advise your clients or SHRM members to do if they are getting resumes, which they have to be getting, with gaps in people's employment situation, whether it's six months or six years, which can be for all sorts of reasons, as we all know? What do you advise them to do when they see that employment gap? And I'll start with you, Mr. Cepero.

MR. CEPERO: What I would advise them is they have to, as human resource professionals or as lawyers; they have to make every effort to reach out to the demographic of the population in which their companies are operating. And if they really truly want to have a representation in their candidate pool, they have to have it open to everyone and not have decision.making factors that say, "Well, this group can't apply" or, "This group should apply." So it has to be open to all would be my advice to them.

MR. URBAN: You need to consider all qualified applicants. And if there is a gap in time ..

COMMISSIONER LIPNIC: Can I interrupt you there for a second? So, if qualified ... how are you advising them to determine qualified if ..

MR. URBAN: By looking at things ..

COMMISSIONER LIPNIC: .. if they're having a six.month absence or, like I said, a six.year absence on there?

MR. URBAN: Well, you're looking at their experience, their training, their education, whether or not they come recommended, those sorts of things. If there is a gap of unemployment, I think you need to inquire into the circumstances, but the fact that someoneís unemployed, generally itís been my experience; employers do not use that as just some automatic disqualification mechanism because you need to keep in mind here and I think one thing we're losing track of, if someoneís unemployed, there are also aspects of such a candidate that make them favorable. For instance, I run a Little League in Pittsburgh. A guy who I've coached with for many, many years, a great friend of mine, is a skilled craftsman. He has periods of unemployment between construction projects that he's always at the field getting the field ready, that sort of thing. However, he may, at the drop of a hat, be unable to make a game, and I'll have to cover for him, the reason being a job becomes available. The fact that he himself is available to work .. and this is construction, an industry weíve talked about here today is greatly impacted. Skilled craftsmen in construction, if they're available to work; that makes them favorable. If we need to install an air conditioning unit on the roof of this building this weekend, we need people who are available. That gives him perhaps a leg up. There are also issues like being able to start immediately. I just said that. You may be able to negotiate a salary if you're the employer that's more favorable, as opposed to if you're trying to hire someone away from someone else.

If you're hiring someone whoís currently employed, thereís a chance that they may go back to their current employer and say, "I have this opportunity, so and so is interested in hiring me. Iím really not interested in leaving, what can we work out here?"

When youíre dealing with an unemployed person, youíre not fighting that fight when youíre trying to hire that person. You have a better ability if that person is indeed the best candidate for the job to bring him into the fold, get him on the job immediately, and get rolling.

COMMISSIONER LIPNIC: Well you also have much greater bargaining power ..

MR. URBAN: Exactly.

COMMISSIONER LIPNIC: .. at that point in time.

MR. URBAN: Well, that was my point when I said, "salary."

COMMISSIONER LIPNIC: Okay. But given that and that you want, you know, a diverse pool, you want a qualified pool, again, to this question of, in the current employment situation, if you are getting thousands of resumes for one position; then what would you advise employers to do in terms of, again, if they see that, some type of employment gap, on the resume? And yes, I mean, we certainly want the employers to get the qualified person for the job, but given the situation that we're in .. and, again, I'm making an assumption here that this may be occurring if they are seeing with one job thousands of resumes and they're saying, "This is as a matter of convenience easy for us to just knock off anyone who hasn't been employed in the last six months." What are you advising them about that?

MR. CEPERO: That would not be exhibiting due diligence as far as the recruiting and selection process. They really need to examine why there are employment gaps. Again, as some of the panelists mentioned, they could be going back to school. They could have been caretaker for a family member or they could have been sick themselves. But they could be coming in with skill sets and competencies that you otherwise might be dismissing just from the fact that they were unemployed for a period of time.

So my advice is due diligence to the recruitment process. And it's just too easy and too convenient to just set a candidate or an applicant aside simply because they were unemployed.

MR. URBAN: I would agree.

COMMISSIONER LIPNIC: I have nothing further.

CHAIR BERRIEN: Thank you, Commissioner.

Mr. Urban, in your written testimony and in your testimony today, you used the term, "legitimate business reason." And I wanted to ask you if that is intended to be interchangeable with "business necessity" or is that a different standard?

MR. URBAN: Are you referring to once the complaining party has established a prima facie case, it's up to the employer to establish business necessity?

CHAIR BERRIEN: Yes.

MR. URBAN: Correct.

CHAIR BERRIEN: So just so I'm clear, the term of "legitimate business reason" is different or you intend it to be considered as a different framework than the standard under Title VII? Is that correct?

MR. URBAN: No. It's business necessity.

CHAIR BERRIEN: Okay, and I also wanted to ask Mr. ..

MR. URBAN: The standard is business necessity.

CHAIR BERRIEN: Thank you.

Mr. Cepero, I wanted to ask you, the Society for Human Resource Management actually published a brief article on this topic earlier. I just wondered if, to your knowledge, if thereís been any follow.up by SHRM to that article or if there were inquiries to SHRM as a result of that article, if you're aware?

MR. CEPERO: To my knowledge I'm not aware of that.

CHAIR BERRIEN: The earlier testimony by Professor Norton focused on the framework for assessing disparate impact. I'd like to ask if any of the panelists could speak .. I believe only Professor Norton addressed the possible disparate treatment issues that this practice could raise and particularly that an employer may be asking some, but not others, about periods of unemployment or may treat or consider a period of unemployment differently. Was that a part of your analysis or consideration, Mr. Urban, in looking at the practice or did you only consider disparate impact?

MR. URBAN: I'm not sure I understand the question, Madam Chair.

CHAIR BERRIEN: The question is, when Professor Norton testified, she made the point that if an employer were to treat employment history or some gap in employment history different for candidates .. and I believe she used the example of male and female candidates .. that that might raise disparate treatment concerns and suggested that we also consider that. And I wanted to determine whether your testimony reaches the possibility of disparate treatment in how employment history is used by employers.

MR. URBAN: My testimony was directed at disparate impact. I did not address disparate treatment.

CHAIR BERRIEN: If you took the hypothetical Professor Norton suggested, which was male candidates are not asked about gaps in employment history but female candidates are, would you agree that that would be a disparate treatment issue for the Commission to consider?

MR. URBAN: Well, I think it would be fact.specific, obviously. I guess ultimately it would depend upon whether individuals were selected over other individuals, I guess, males over females.

Itís tough to answer that kind of in a general sense, I think. Every fact, circumstance is different.

If you are considering relative to, say, white males, or you're not inquiring with respect to white males into periods of unemployment but you are for others, you know, arguably, there could be some disparate treatment there. It would depend on the facts though, and how things play out.

CHAIR BERRIEN: And in your testimony, you talked about counseling or having your firm reaching many Fortune 500 companies and your practice reaching a broad cross.section of industries as well. Are search firms or staffing firms at all a part of the practice that ..

MR. URBAN: I have not personally counseled any staffing firms. And Iím not aware of whether my firm does that. Iím not aware of any that we have counseled, I can tell you that.

CHAIR BERRIEN: Ms. Owens recommended that one thing the Commission might do is to take a closer look at the practices of screening firmsí recruiters, placement firms. And Iíd like to know if anyone else on the panel has any either reaction to that recommendation or other recommendation to offer the Commission in going forward.

PROF. NORTON: Well, I'll second that. I thought that was a terrific idea. As Ms. Owens pointed out, the anti.discrimination laws apply to employment agencies, just as they do employers.

So, regardless of whether the employment agency is doing this at the request of the employer or the employment agency is doing it on their own volition; if they are engaged in a practice that has an unjustified disparate impact, they are violating the anti.discrimination law, so they deserve your attention as well.

CHAIR BERRIEN: Mr. Cepero, you mentioned that your agency has a program to bring people back into or bring people into the workforce. And, as I think many of us have said, we are interested in identifying any best practices that might ease the opportunity for people who have a period of unemployment to move into the workforce. Is there anything in that program that may speak to the issues that weíve been addressing today?

MR. CEPERO: Well, we actually work with three agencies that help us bring in candidates and particularly that have been unemployed. As far as best practices are concerned, itís a partnership, if you will, where theyíre helping the candidates prepare themselves for the selection process and the recruitment process. And they are, in addition, providing incentives to not only us but to employers to seriously consider these candidates, such as covering their benefits or covering part of their salary for a particular period of time.

CHAIR BERRIEN: Thank you. I don't have any other questions. We have a third panel, but before we move to that panel, we are going to take a brief break. I want to thank the entire panel for your time, for your participation. On behalf of the Commission, thank you for both being here today and for the preparation and submission of your testimony.

And all bios for these panelists and all of our panelists are also going to be on the website. We did very abbreviated versions of the introductions, but all of our panelists are extremely accomplished and have brought deep experience to our discussion today. So we thank you.

MR. URBAN: Thank you, Madam Chair.

CHAIR BERRIEN: We're going to break for ten minutes.

(Whereupon, a recess was taken.)

CHAIR BERRIEN: If the witnesses for the third panel could take their seats, please? Thank you. Ms. Bender, please join us.

And we'll turn to the third panel as we resume our meeting today. And we have three panelists: Joyce Bender, Algernon Austin, and Fatima Goss Graves. Thank you all very much for joining us today. And thank you for the time you have committed to be not only a part of the meeting but for preparing your testimony. We appreciate it.

Weíll begin with Fatima Goss Graves, who is Vice President for Education and Employment at the National Women's Law Center here in Washington.

MS. GOSS GRAVES: Thank you.

Good afternoon, Chair Berrien and Commissioners. I am Fatima Goss Graves, and I am Vice President for Education and Employment at the National Women's Law Center. The Center has been involved in virtually every major effort to secure and defend women's legal rights.

I appreciate your invitation to testify today. And I just wanted to start by saying that I really believe that an understanding of the role of women, both in the workforce and how theyíve fared during the recession and during the economic recovery is essential background for understanding the way in which the practice of excluding the unemployed may impact women.

In 2007, just before the recession began, women were 46.2 percent of all workers. But that relative parity between men and women workers and the aggregate masked disparities in women's employment in certain occupations. And some of those occupations offered relatively high pay for workers with relatively low educational levels and so provided particularly desirable jobs.

To give you some specific examples, in construction and extraction positions, some of which have been described today and include positions like construction laborers and carpenters; women made up just 2.2 percent of those workers in 2007. And likewise, among protected services occupations, a category in which security guards fall; women composed 20.5 percent of workers in those occupations.

And these occupations have two things in common. They offer women an opportunity to make decent wages with relatively modest levels of education and positions in these occupations disproportionately have gone to male workers.

Thus, as women have continued to struggle to gain a foothold in certain occupations where theyíve been historically under.represented, we fast forward to the recession, where the economy shed nearly seven and a half million jobs and entire industries disappeared and many formerly profitable businesses were forced to make painful layoffs. And men lost seven of ten jobs between December 2007 and June 2009, while women lost only three during the same period, leaving some commentators to call the most recent recession, a "mancession."

And thereís no doubt that the recession has had a particularly dramatic impact on male workers and especially men of color. But what has received less attention is that the recovery is also leaving women behind.

Since the beginning of the recovery in July 2009 through January 2011, men have gained 438,000 jobs while women have actually lost 366,000 jobs. And from January 2010 to January 2011, a period where the recovery really accelerated; women filled fewer than one in 20 of the 984,000 jobs that were added, even though they lost roughly 6 in 20 during the recession.

So with this lopsided recovery, itís not surprising that women's overall unemployment rate has actually risen during the economic recovery while men's overall unemployment rate has declined.

As the last panel described, it would be difficult for an employer to justify the practice of excluding the unemployed from applicant pools without evidence supporting the validity of the practice in predicting employee performance. And even if the employer could identify a business need, it must also explore a less discriminatory alternative to that practice.

And there are at least three reasons that employers' exclusion of the unemployed from applicant pools may have an adverse impact on women. First, when an employer restricts applicants to those who have been employed at some point within a recent time period, such as the last three or six months; the restriction is likely to have a disparate impact on certain categories of women.

Overall, unemployed women were more likely than men to be long.term unemployed for 27 weeks or more in January 2011. And certain categories of older women are especially disadvantaged. Among unemployed workers from age 45 to 54, women were unemployed more than 2 months longer than their male counterparts. And, additionally, women aged 55 to 64 were unemployed three weeks longer than men of the same age during this time period.

The difference in the length of unemployment is also particularly pronounced for women of color. For example, African American women were unemployed more than 2 months, or 8 and a half weeks longer than white males in January 2011.

Second, excluding the unemployed from applicant pools may have a disparate impact on women in certain sectors and in certain occupations for which women experience greater unemployment than men, many of which are the nontraditional fields for women that I described before.

Although the overall unemployment rate is far lower for women than men, women's unemployment rate exceeds men's in several fields that are nontraditional for women, including construction or extraction; protective services occupations; production occupations; and architecture and engineering.

Thus, even in occupations that may have contracted during the recession, such as construction, which has received a lot of attention today; itís critical that as those sectors recover, women do not encounter yet another needless obstacle to obtaining employment in fields that have high wages.

Third, employers that restrict applicant pools to those who are already unemployed impose a risk of a disparate impact on care.givers, some of whom leave the workforce temporarily to care for young children or ailing parents or disabled family members. And I have to say I was glad to hear Mr. Cepero note that he would advise human resource professionals that care.giving would be one of the reasons that excluding the unemployed would not make sense.

There also is a risk that exclusion of the unemployed may be used as a proxy for excluding care.givers or a risk that it could be applied to only care.givers or to even only mothers. And I think thatís something for the Commission to think about.

Although women now make up nearly half of the workforce, mothers in households with infants are far less likely than coupled fathers with infants in the household to be employed. So based on pre.recession data around middle socioeconomic status individuals, 98 percent of coupled fathers of infants were employed; whereas, 46 percent of coupled mothers and 66 percent of single mothers were employed. These women spent substantially more time than coupled men providing child care, and they significantly scaled back working time in order to finance the additional time they needed for child care.

And, moreover, women accounted for 66 percent of care.givers for elderly or disabled family members. And a greater share of these female care.givers than male care.givers report that they have given up working entirely as a result of their care.giving responsibilities: 12 percent versus 3 percent, respectively.

As Dr. Spriggs noted, care.givers who have not actively sought employment in previous months and are not actively looking, are not reflected in unemployment statistics. But, nevertheless, their formally unemployed counterparts when female care.givers do decide to return to the workforce will be shut out of positions open only to individuals with current employment. And I think itís important to think about howwe in thinking about where women are and what the impact on women would be, how we would be able to capture that population.

Iím not aware of any evidence demonstrating the exclusion of unemployed applicants is job.related for particular occupations, and I didn't hear any from the preceding panels, nor could I even imagine a rationale that would be consistent with Title VII or the ADEA. Instead, the exclusion of the unemployed from applicant pools seems similar to or comparable to job selection devices that courts have routinely concluded violate Title VII. And, like these selection devices, the exclusion seems unrelated to bona fide job qualifications.

The media reports that I have seen suggest that employers assume the practice will winnow the applicant pool to a manageable size, leaving those who are most qualified or desirable. But there are a number of problems with this rationale, including that itís widely recognized that the employers now face one of the most qualified applicant pools in recent memory because of the high unemployment rates and sluggish hiring.

And even assuming that employers who underwent only limited layoffs retained their most valuable employees, which is an assumption I think that you can't necessarily make; many individuals who are not employed lost their jobs as a part of mass layoffs or business closures or left the workforce temporarily to become care.givers, all entirely unrelated to the employee's work performance.

And, second, I believe these unsupported generalizations about the unemployed are reminiscent of and are likely to exacerbate stereotypes about care.givers; in other words, the unfounded assumptions that care.givers, and especially mothers, are less competent or less committed to their employers.

And finally, to the extent that limiting job applicants to those who are currently or recently employed helps employers winnow the applicant pool, employers could adopt alternative practices, some of which were discussed on the prior panel, that are standard for many businesses, such as screening by human resource specialists or calling references. And they would have the same effect without the disparate impact.

So, in sum, the use of an individual's current or recent unemployment status as a hiring selection device is a troubling development in the labor market. And I have serious policy concerns about the use of this practice, but even if I were to set those policy concerns aside; the fact remains that restricting applicants from unemployed job seekers already runs afoul of Title VII. And I think it would be important for the EEOC to provide guidance to the corporate community and making clear that discrimination against the unemployed could violate Title VII under a disparate impact theory.

Again, thank you very much for the opportunity to testify today. And I look forward to any questions.

CHAIR BERRIEN: Thank you, Ms. Graves.

Next, we'll turn to Dr. Algernon Austin, Director of the Race, Ethnicity, and the Economy Program at the Economic Policy Institute.

DR. AUSTIN: Good morning, Chair Berrien, Commissioners Barker, Feldblum, Ishimaru, Lipnic, General Counsel Lopez, and Legal Counsel Mastroianni. Thank you for giving me this opportunity to address you today.

I direct the Economic Policy Institute's Program on Race, Ethnicity and the Economy. In this capacity, I work to advance policies that enable people of color to participate fully in the American economy. Since the start of the great recession, my program has been carefully tracking the unemployment rates for Hispanics, African Americans, Asian Americans, and American Indians.

An important context for the discussion today is the fact that the country is in the midst of a significant jobs crisis. We need over 11 million jobs to return us to the unemployment rate we had at the start of the recession in December 2007.

While all racial groups have seen significant increases in their unemployment rate since the start of the recession, people of color have seen some of the largest rises. Today, I will speak to the current unemployment condition of African Americans, Hispanics, Asian Americans, and American Indians.

First, Unemployment among African Americans. African Americans face a persistent jobs crisis. Since the start of the recession, the white unemployment rate peaked at 9.4 percent. But based on historical patterns, an unemployment rate of 9.4 percent, if it were applied to African Americans would be considered a low unemployment rate. The black unemployment rate peaked at 16.5 percent, 7.1 percentage points higher than the white peak.

In January of this year, the white unemployment rate was 8 percent. For blacks, it was 15.7 percent, basically twice as high as the white rate.

Scholars who study African American unemployment know that generally the black unemployment rate is about twice the white unemployment rate. We can measure this two.to.one black.to.white ratio precisely from the 1970s to today.

The two.to.one black.to.white unemployment rate ratio is not primarily due to differences in educational attainment between black and white workers. For example, if we restrict our view to workers with a Bachelor's or higher degree; we see that in 2010, the white unemployment rate was 4.3 percent for this population while the black unemployment rate was 7.9 percent, or 1.8 times the white rate. Thus, all black workers, regardless of educational attainment, are more likely to be unemployed than white workers.

Unemployment among Hispanics. Hispanics face a similar problem of high unemployment as African Americans but to a somewhat lesser degree. As mentioned above, since the start of the recession in 2007, the white unemployment rate peaked at 9.4 percent. The Hispanic unemployment rate peaked at 13.2 percent, 3.8 percentage points higher.

In January of this year, the Hispanic unemployment rate was 11.9 percent while the white rate was 8 percent. This yields a Hispanic.to.white unemployment rate ratio of 1.5.to.1 in January. A Hispanic unemployment rate that is 1.5 times the white rate is the typical pattern that we have seen since 2000.

As with African Americans, we see a sizable difference in the unemployment rates for Hispanics and whites, even when we restrict our view to workers with a Bachelor's or higher degree.

Among college.educated workers, the Hispanic unemployment rate is 1.4 times the white rate. Thus, in general, Hispanics are more likely to be unemployed than whites.

Now, Hidden unemployment disadvantages among Asian Americans. Overall, the Asian American unemployment rate is lower than the white rate. But, as I have shown in my research, there are hidden disadvantages for Asian Americans in the labor market. From 2007 to 2010, the Asian American unemployment rate for college.educated workers has been higher than the comparable white rate.

Additionally, data from the Bureau of Labor Statistics shows that in the middle of last year, Asian Americans had the highest long.term unemployment rate of America's major racial groups. In the second quarter of 2010, 51.7 percent of unemployed Asian Americans had been unemployed for more than 6 months and 39 percent of them had been unemployed for more than a year. These long.term unemployment rates were slightly higher than the rates for African Americans, the group that is typically the worst off in unemployment statistics.

Thus, college.educated Asian Americans are not as successful at finding work as one might assume from the aggregate national data. And once Asian Americans are unemployed, they may face significant challenges in finding work again.

Unemployment among American Indians. The available data for measuring American Indian unemployment is less than ideal. But what the available data show is that American Indians have a very high unemployment rate.

My research shows that American Indians had an unemployment rate of 15.2 percent in the first half of 2010 while the white rate was only 9.1 percent. This yields an American Indian.to.white unemployment rate ratio of 1.7.to.1.

In regions with the highest concentrations of Native peoples, I have found some of the highest Native.to.white unemployment disparities.

While nationally, the Native unemployment rate is 1.7 times the white rate, in Alaska and in the Northern Plains states, the ratio is higher. In Alaska, the Native.to.white unemployment ratio was 3.to.1 in the first half of 2010. In the Northern Plains states, it was 2.5.to.1.

Thus, nationally American Indians are more likely to be unemployed than whites, and the disparities are greatest in many places where the density of the Native population is the greatest.

The nation is currently experiencing a high level of unemployment. Unfortunately, because the pace of job growth has been slow, we will remain in a state of high unemployment for the next few years. This means that many communities of color will be in a state of very high unemployment into the foreseeable future because communities of color have unemployment rates above the national average. For example, it is not likely that the black unemployment rate will fall below 10 percent before 2014.

The unemployed population is disproportionately made up of people of color. Although blacks make up 12 percent of the labor force, they make up 20 percent of the unemployed. Hispanics make up 15 percent of the labor force, and they also make up 20 percent of the unemployed. Native Americans, too, are over.represented among the unemployed, especially in Alaska and the Northern Plains states. Asian Americans have a low overall unemployment rate, but once they become unemployed, they seem to have difficulties finding work. And college.educated Asian Americans are not as successful at finding work as their white peers.

All of this means that any practice which disadvantages currently unemployed workers relative to similar employed workers, will likely have a disproportionate negative impact on people of color.

Thank you.

CHAIR BERRIEN: Thank you Dr. Austin.

And now we turn to Joyce Bender, who is CEO and founder of Bender Consulting Services, also the Chair of the National Epilepsy Foundation Board and Secretary of the Board of the American Association of People with Disabilities. Thank you.

M S. BENDER: Thank you Madam Chair, Commissioners, and distinguished guests. I have to tell you not only am I honored, but I am so excited that youíre looking at this issue for Americans with disabilities that it will be hard for me to not jump out of this chair, but I will try to do so.

MS. BENDER: And I do thank you for what you are doing. I mean it. I really do mean that.

As you mentioned, I am the CEO of Bender Consulting Services in Pittsburgh, by the way. And what we do is we focus on the recruitment and employment of Americans with significant disabilities.

In addition, I am the National Chair of the Epilepsy Foundation and host of the Internet talk radio show, "Disability Matters With Joyce Bender."

But interesting is that before I started Bender Consulting Services, for 16 years of my life, I was in the search industry, prior to founding Bender Consulting Services in 1995. So may I tell you to answer a few questions that were asked here?

The company says to the search consultant. The search consultant doesn't think this up on their own. The company says, "And we want a really good candidate, why don't you recruit someone from a competitor of ours?" They do not say, "Go find an unemployed person, we'll consider them also." Therefore, if you are in the search industry, and you want that fee, that's what you're going to do. That's probably why I was not as successful in the search industry. But, do you understand what I mean? It isn't just the search firm. They don't get this idea on their own. They get this idea from the company that says, "We want the best person available." And to answer your question, Commissioner Ishimaru, when you asked, "Why do they do this?" it is because they perceive that people who are unemployed are inferior. "Hey, why did they lose that job? Whatís wrong with them anyway? They won't be as productive, I want the best person." Thatís the answer to that question.

So the company I founded, Bender Consulting Services, we have over 90 percent of our employees are entry level in experience. Why? Because of the great unemployment of Americans with disabilities.

And it is my experience, which has included reviewing countless employment practices and policies, I can say without a doubt that the practice of excluding persons with disabilities who are currently unemployed is having a tremendous negative impact on employment, and in their case, unemployment. For example, we know from the Department of Labor's Bureau of Labor Statistics, 80 percent of Americans with disabilities are not considered to be in the labor force. Of the remaining 20 percent that are considered to be in the labor force, 13.6 of those individuals are unemployed. So do the math. You can see how terrible this is.

So the majority of these applicants, not only are they currently not employed, they do not have work experience. And I want to mention to you, that includes a situation of being currently unemployed for people we love and want to help so much. Who would that be? Veterans coming back from Iraq and Afghanistan, who now have post.traumatic stress disorder, traumatic brain injury, whatever it may be. What do you think that requires? Time off to rehabilitate.

I myself had traumatic brain injury. So of course, I was not available for employment at that time. I have epilepsy and a hearing loss. So I am in this group of Americans with disabilities. But if you have an accident, if youíre in a car accident, yes, youíre off during this time when youíre going through rehabilitation. So now if you would go to get a job, are you currently employed? No. And this is a tremendous problem.

I want to also point out, we don't even get to the interview. You know, it's not that we get to the interview and then they say, "Okay, you don't have current work experience." We don't even get to the interview because of this I must have current work experience.

And by the way, this is what they say to me all the time. "Oh, Joyce, weíd love to hire people with disabilities. We don't discriminate. Weíd love to hire them. But you know they have to have current work experience. Now if they had current work experience, why, weíd hire so many people. Weíd bring them all in here."

Now of course, this is not overt discrimination, but in my opinion, it is a spin for discrimination. It makes it easy to not bring this person in if your reason is, must have current experience.

I do have an example of an ad. Remember you asked about the want ads? Well thereís another thing you have to remember. The majority of ads are not in the paper. They're on the internet or on their website.

So here is a current posting that an employer would not review a resume .. and this is in the aerospace industry .. would not if they are not currently employed, regardless of the reason. Don't even send the resume, regardless of the reason. Remember the veterans? Remember me with traumatic brain injury? We're not currently employed. Don't even send that resume because we will not hire you.

If a high percentage of working.age Americans with disabilities are considered to be, ďnot in the labor force or unemployed,Ē you have an extremely large labor pool of talent that is being ignored, that is being left out.

And over the years, I found a few forward.thinking employers that are helping out but not enough, not enough that it would change the employment of people with disabilities.

As a matter of fact, the CEO of Bayer .. now this is a multibillion.dollar company .. he's known me for years. He feels for people with disabilities. They can't get an interview. Why? Don't have current work experience. He actually has joined this project with me to provide them with current work experience. And what is my point? Why would the CEO of a multibillion.dollar company think this was so important unless, of course, he realized this is an issue.

And, beyond hurting people with disabilities, when you put them in this situation because, as you know, you will never ever ever ever be free in this country until you have employment; can't buy a house, car, can't live that American dream until you have employment, employment is freedom, can't be free without it.

William Julius Wilson, in his book, ďWhen Work Disappears,Ē talked about the impact of perceived futility. You know what this is? This is when you don't get the interview, you don't get past the gate screener, you don't get anywhere over and over and over and over for years. What happens to you? Your whole self.efficacy is diminished. You now believe, "Well, I guess I won't be able to work. Oh, I can't do the job." Well, you don't have the ability to do the job. And you know what happens then? Pull out of the labor force. Thatís why there are people with disabilities that have given up. They are not even trying now because they see how hard it is to gain employment.

Well, we within the disability community cannot, and will not, accept exclusion in any form at all. This is especially true in the case of equal opportunity in employment. Moreover, all of our national goals right now where we're trying to increase the employment of Americans with disabilities; hear me now, never going to happen. With this practice, it will not happen, because if you must have current experience; you're not going to get the interview. Itís shameful, itís shameful in this country that over 80 percent of Americans with disabilities are not even counted in the labor force. We want to work, just like everyone else and, according to me, with equal employment, that includes recruiting policies under the ADA. And if those recruiting policies under the ADA are violating my chance or other Americans with disabilities from gaining employment; it is unlawful, it is unlawful.

The Americans with Disabilities Act has stated that, but weíve been living with this problem for over 20 years. See, as far as I am concerned, again, although it is not an overt discriminatory comment, it is not that the hiring manager .. and this has been going on for over 16 years, since I started the company. I hear it every time. Although they're not saying, "Oh, Iíd never hire a person with a disability," to me in my opinion, it is a form of discrimination. Itís an easy way out. Itís an easy way out.

So in closing, I have seen this impact, and Chair Berrien, I mean it. What youíre doing is historic, by looking at this, we really applaud you for even having this hearing today.

Dr. Martin Luther King, Jr. said, "Our lives begin to end the day we become silent about things that matter." Thank you for not being silent.

CHAIR BERRIEN: Thank you, Ms. Bender. Thanks to this entire panel for your testimony. And the Commission as a whole, not only I, but the Commission as a whole, appreciates that you all are here today to help us as we examine this issue. And thank you on behalf of the Commission.

Iíll begin with Commissioner Ishimaru?

COMMISSIONER ISHIMARU: Great. Thank you, Madam Chair.

I want to welcome Joyce Bender back to the EEOC. Joyce Bender came to testify back a number of years ago on employment of people with disabilities. And, as we all recall, she was a fabulous witness, as she was today.

The rest of the panel, thank you very much, very, very helpful.

I guess I have sort of a basic question about unemployment statistics. And you all can tell me from your perspective how it plays for you. Itís my understanding that when you look at the unemployment statistics collected by the Department of Labor, itís looking at people currently looking for a job, actively looking for a job. Do people drop off at some point if theyíre no longer looking for people with disabilities? I would assume that that number is vastly understated.

Can you talk about that for a minute, all of the panelists, please?

MS. GOSS GRAVES: Sure. And I think that in the exchange between Dr. Spriggs and Commissioner Feldblum, this came up with regard to care.givers. So the unemployed statistics are going to capture those who say that they are looking for a job.

COMMISSIONER ISHIMARU: Right then.

MS. GOSS GRAVES: Right, or planning to look for a job. And there is a number for people who say they have been so discouraged that they aren't looking for a job. So, you know, I think sometimes people try to add those two numbers together to get a sense; but you cannot get a real picture of people who are currently out of the workforce, who are not currently looking for a job, who are not looking for a job because they are currently care.giving but are looking ahead.

COMMISSIONER ISHIMARU: Are those numbers generally available with people just out of the workforce?

MS. GOSS GRAVES: So the statistics I provided about care.giving I'll tell you aren't .. they did not come from BLS. They came from other studies.

COMMISSIONER ISHIMARU: Other sources, sure.

MS. GOSS GRAVES: And we did try to look to see if we could get information about care.givers out of the workforce, generally whether they were looking for employment or not. And we were not able to get those statistics.

DR. AUSTIN: Yes. So your question is an excellent one because, yes, the Bureau of Labor Statistics data, in the definition of unemployed; you have to be actively looking for work, you have to have actively been looking for work for the past four weeks, the prior four weeks. And therefore, individuals living in communities with very high levels of unemployment, theyíre like, you know, "I tried this for several months. I know there are no jobs available. I have friends whoíve been looking. I know they haven't found anything." So individuals in circumstances like that may not be actively looking for work because they have a very good sense that there's nothing available right now. And the moment they do that, they're no longer counted as unemployed. They're counted as not in the labor force.

So in communities, in African American communities, in American Indian communities that have persistently high levels of unemployment; the unemployment rates are very low. They significantly underestimate the rate of joblessness in those communities. And what we see, so, for example, among African Americans, when we had a very good labor market in the late 1990s, we saw a significant increase in labor force participation and in employment if you look at the employment rate, which is a different measure. So yes, these numbers for all groups underestimate the amount of joblessness. And particularly for groups that have persistent high levels of unemployment, the degree that they underestimate is larger.

MS. BENDER: Yes. I would add to that. Obviously this occurs in the disability community if 80 percent are not part of the labor force.

COMMISSIONER ISHIMARU: Right.

MS. BENDER: But what makes it even worse is, I have met people that have been unemployed for quite a while. And then at the very end I found out, "Oh, by the way, I have epilepsy." In other words, they don't want to tell anyone they have a disability due to the stigma, which means they're not even counted in that number. There are people in other words, that due to the stigma and barriers that exist, do not want to say, "I have bipolar disorder," "I have epilepsy," whatever it may be. And yet, theyíre unemployed. Why theyíre afraid then, to say that is that theyíre thinking, "Wow, if Iím unemployed now, let me just add, telling them I have bipolar disorder, I'll never get the job." So youíre right.

COMMISSIONER ISHIMARU: So they aren't captured in the community of people with disabilities who are unemployed because they don't identify.

And for people who are under.employed, is that also something that skews the unemployment data? If you take the job because you need to pay the basic bills and you'll take any job; you're counted as employed, but you are certainly not employed to the fullest level and you may just be employed to a subsistence level, I would assume.

DR. AUSTIN: Right, right. So there are two ways that you could kind of think of under.employed. I mean, there is under.employment, and the BLS does capture this information. You know, "I'm working part.time, but I really need a full.time job."

COMMISSIONER ISHIMARU: Right.

DR. AUSTIN: So we know that those numbers are significant. But then, there is also under.employment is like, "I have a college degree. I want to get a job for college.educated workers that pay a good salary, but I can't find that job, so I'm going to take a job that requires less education, less skills, less pay." So there is also that going on. And in this economy, one can imagine that thatís going on more because there are so few jobs and because employers can have .. you know, it's their market, and they can pick and choose. So they can up the skill requirements for all of the jobs that theyíre offering.

So there is both those types of under.employment that go on in the labor market.

COMMISSIONER ISHIMARU: And finally, does a skewing of this data have a disproportionately larger impact on women, people of color, people with disabilities?

DR. AUSTIN: Yes. If you look at the under.employment that includes the unemployed, the involuntary part.time, those whoíd like a full.time job but are working part.time, and those recently discouraged workers, you know, "Iíve been looking. I can't find anything. I'm not .. I give up," at least temporarily; those rates are against .. that under.employment statistic, those rates are significantly higher for African Americans and Latinos than for whites.

COMMISSIONER ISHIMARU: Thank you. Thank you, Madam Chair.

CHAIR BERRIEN: Thank you.

Commissioner Barker?

COMMISSIONER BARKER: I don't have any questions. Iíd just like to thank the panel for taking the time to share your expertise with us. Thank you all very much.

CHAIR BERRIEN: Commissioner Feldblum?

COMMISSIONER FELDBLUM: Thank you.

First, Dr. Austin, that was one of the most clear descriptions I have heard of unemployment data, you know, in a while.

DR. AUSTIN: Thank you.

COMMISSIONER FELDBLUM: So I hope that this does get on our website so I can just send people to that. Okay?

Second, Ms. Graves, thank you so much for bringing the data that there is in terms of the impact on women. Again, I think that often what happens in the media is thereís a particular piece, "Oh, it's a mancession. That means women haven't been affected." And I think you just gave a really good explanation of why we need to be caring about the impact on women.

And of course, Ms. Bender, you know, this is clearly near and dear to my soul of increasing employment of people with disabilities. I am very appreciative that Chair Berrien has asked me to represent the Commission this afternoon at the Senate committee, Government Operations, which is looking at the President's Executive Order that says we want to hire 100,000 more people with disabilities in the federal government. And Iím sure youíll appreciate that one of the things I say is, you know, weíve heard that clarion call before. In fact, in 2000, there was an Executive Order to hire 100,000 people with disabilities, didn't happen. And I think the time for words and clarion calls are over, and the time for results has begun.

So I appreciate that you are giving us a sense of a particular thing that is hampering employment of people with disabilities.

So I think my one comment is actually to Commissioner Lipnic. So hopefully sheíll just watch this later on the Web as well because I so appreciated her question in the last panel when she said, to the panel "Okay, What do you say to these companies that are getting 1,000 resumes for one job? I mean, what do you say to do?" And the very appropriate answer that was given by Mr. Cepero of, "Well, my advice would be that they're not doing due diligence in recruitment and hiring if they're simply using the thing of current work experience. You would not be doing due diligence."

My reaction to that if I was the company, that's what I heard, Iíd say, "Thank you for sharing. Nice, but it's working for me at the moment to use that because I've got 20 very qualified people in the pool with current work experience." So unless we do something to have them feel like they shouldnít be using that, saying that it's not doing due diligence or that it's not necessary won't do much for me as an employer.

I think there are two ways to get at it. One is the subject of this hearing, which is, is there actually a potential discriminatory action, a violation of law?

And again, as I said before and I have said in every hearing, Iím very committed to working within our jurisdiction. So I think itís important for us to understand the possible disparate impact implications. And I think that this has been helpful for that.

The second is sort of what the President has done with his Executive Order, is to say, "If you care about diversity, you are hurting yourself by having this rule." Okay? Now, there is no affirmative action responsibility on the private sector, that we have jurisdiction over, but there is an affirmative action responsibility in the federal sector. I mean thatís the existence under the current laws.

So, I think this has been very helpful in terms of giving us a sense of some of the potential barriers. I think it's the responsibility, not only of us at the Commission, but our colleagues at the Department of Labor, the Congress, the private sector to all be working together to figure out how to potentially change this.

CHAIR BERRIEN: It looks like there's time if anyone wanted to respond in any way to Commissioner Feldblum's question or statement?

COMMISSIONER FELDBLUM: Oh, no. That was intended as a statement, ..

(Laughter.)

COMMISSIONER FELDBLUM: .. a compliment and a statement.

CHAIR BERRIEN: Okay. All right. Iíd like to ask just a few questions. Dr. Austin, turning to your testimony, you have a graphic in your testimony that indicates long.term unemployment rates across different racial groups. And I believe the cutoff was 52 weeks of unemployment?

DR. AUSTIN: Yes.

CHAIR BERRIEN: And given the exchange earlier with Commissioner Ishimaru, this group of people whoíve been unemployed for 52 weeks or more are people who are still under the BLS data considered in the labor market?

DR. AUSTIN: Yes, yes. These are people still looking for work.

CHAIR BERRIEN: And weíve heard at least one description of how these policies have been expressed is that they have some sort of duration; so current employment or employment within the past six months, for example. So your data suggests that every group except, perhaps Hispanics, would be disproportionately included in the group of people whoíve been unemployed for more than six months. Is that right?

DR. AUSTIN: Yes, if you're looking specifically at the population, this population that has been unemployed for more than a year. But thatís a particular slice. Thatís just a slice of the total unemployment.

CHAIR BERRIEN: You also have a graphic about unemployment. And you talked a bit in your testimony about unemployment variation among college.educated people?

DR. AUSTIN: Yes.

CHAIR BERRIEN: Is it possible with that data, or through other kinds of research that youíve conducted, to determine the experience of college graduates, recent college graduates, who may not have entered the job market yet or have been able to in this economy?

DR. AUSTIN: Yes, yes. Iíve done some work. It's not included here, but Iíve done work looking at recent college graduates. And the picture, the overall picture, is basically the same. The numbers are higher because they're younger. They're recent college graduates.

And as Dr. Spriggs pointed out, the labor market for younger workers, for youth, is the worst that weíve seen, itís incredibly high. I think for recent black college graduates, if I remember correctly; itís about a third, not college graduates, but high school graduates, about a third are unemployed. Itís better for black recent college graduates, but also I think it might have been around 16 percent for recent black college graduates.

I have the research available. I don't have it with me right now. But you see similar patterns again that we see overall but just much higher because of the problems in the youth labor market.

CHAIR BERRIEN: Ms. Graves and Ms. Bender, you both have referred to a subset of the care.giving population and particularly those who are care.givers for veterans, disabled veterans. And the issue of impediments to hiring people with disabilities obviously is a part of our jurisdiction, but the subset of questions related to care.giving for veterans may be an area where we would share responsibility or share interest with something like the Veterans Administration but possibly others. And I wondered if you have any particular recommendations to us about addressing the issues related to care.giving for veterans, disabled veterans particularly.

MS. GOSS GRAVES: Well, you know, one of the reasons I noted it in my testimony was because women were more likely to be those care.givers. So in some ways, in that way, I think it probably would fall under the EEOC's jurisdiction, but I do think it would be important to work together with Department of Veterans Affairs but also with OFCCP on this because of the Executive Order and thinking about affirmative obligations as well.

MS. BENDER: Yes, I was going to say, if you could work with OFCCP; that would have the largest impact ever, because with the Rehab Act, the one group that is not accountable for showing data, how theyíre doing affirmative action is, Americans with disabilities. Now, if that happened, you would see an enormous surge in the employment of veterans with disabilities, Americans with disabilities. If there is anything at all you can do, if I had to suggest one thing that would have the biggest impact, thatís what it would be.

CHAIR BERRIEN: Dr. Spriggs testified earlier that many jobs are never advertised at all, even taking into account, Ms. Bender, your point that many jobs are not advertised in newspapers anymore and they're only advertised online. I think, Ms. Bender, you may be particularly able to address this, but I welcome anyone's comment on this. Would you speak a bit to the part of the job market or the part of jobs that never appear in advertisements and what the experience is for people who are unemployed currently in trying to obtain those jobs?

MS. BENDER: Well yes, youíre right on target because remember I told you I was in the search industry before. Many, many jobs, theyíre never advertised, never. Iím not meaning just 20 percent, Iím meaning probably 60.70 percent. They are not advertised. You know, they either go out to a search firm, they go to their referrals, they use their own website or Facebook or something, you know, trying to find people. But, it's not that they put an ad in the paper. And often it's not they put an ad on their website. I can tell you the majority of times I was in that industry, they never advertised it. They went out on their own, through a search firm, through their friends, through whomever to find those people. So thatís very perceptive you mentioned that, because thatís a fact.

DR. AUSTIN: I would just add that this, the not advertising positions, there is the issue that, you know, how widespread it is and, like Dr. Spriggs suggested, itís very widespread. But itís also important to keep in mind that itís really all types of positions. I mean, thereíve been research done by the Restaurant Opportunities Center looking at the restaurant industry. And in that industry, again, word of mouth, you know, the employer tells the server, "Hey, I need another server. Who do you know?"; tells the bus people, "Hey, I need another bus person. Who do you know?" So it's not an advertised position.

But the other thing that happens with that is the best server positions tend to be, the people working in that position tend to be disproportionately white. So then you have a network thatís also predominantly white going to the sort of .. so basically these patterns reinforce the current employment patterns and occupational segregation patterns that we see. So it's across a wide range of occupations that we see this. And the fact that these positions are not advertised and are not really open, reinforces the current inequalities that we see in the labor market.

CHAIR BERRIEN: All right. Thank you all very much. Thanks to this entire panel.

And we will now turn to any closing comments or statements by members of the Commission, beginning with Commissioner Ishimaru.

COMMISSIONER ISHIMARU: Well, thank you, Madam Chair.

I want to thank Dr. Austin particularly. Addressing groups who sometimes aren't talked about, Asian Americans, American Indians, I appreciated that.

I also appreciated the fact that you looked at not just the aggregate data, but you disaggregated it. And you found problems within groups that sometimes gets piled over. And it shows the importance of data generally, that we need the information to do the analysis so that there may be a problem, in fact, in front of our face, but if you look at the aggregate data, you won't see it. So I truly appreciate all of that and all of the testimony today.

You know, this was very helpful, Madam Chair. I am delighted that we did this hearing. I hope this gives our people in the field information to start thinking about a possible problem out there and that the use of employment status may, in fact, be a violation of our laws, our jurisdiction, and that we can't dismiss it out of hand, and that for employers, it raises serious questions of liability if, in fact, there is a disparate impact. There may be disparate treatment issues, as Professor Norton pointed out, but certainly on the disparate impact front, without a business necessity, without a justification for it; the signs point to this being a problematic issue.

And I would hope, Madam Chair that we look at our own internal procedures here to make sure that we are collecting the right data when people come into our offices, that our people know that this is a problem. And problems like this are a problem, that because it does not say on its face that I was excluded because I was of a certain race or I have a disability; that there may be these facially neutral practices that may work to exclude people disproportionately, and thereís no business justification.

Again, a disparate impact is one of those issues thatís a longstanding legal matter and under our jurisdiction, decided by the Supreme Court nearly 40 years ago, back in 1972, right?

CHAIR BERRIEN: Yes.

COMMISSIONER ISHIMARU: And 20 years ago, when I worked for the Congress, we dealt with the whole question of codifying disparate impact on a bipartisan basis and passed twice a codification of disparate impact into Title VII. And I think it's one of those issues that has stood the test of time and that our people should know it and should be using it as one of the tools we have.

So, Madam Chair, I thank you for calling the hearing. I thought it was very helpful and hopefully will serve our people well and serve as fair warning to the communities generally that this is an issue out there that may raise questions under our jurisdiction.

CHAIR BERRIEN: Thank you, Commissioner.

Commissioner Barker?

COMMISSIONER BARKER: I think the key word is "may." You know, this is not like so many areas of our jurisdiction that thereís clearly defined discrimination. Thereís a big question mark here. And I think itís important today that we all explore that question mark. You know, what I take away from this is that employers, by and large, are not doing this; that these are isolated situations. They are occurring, but they are not doing it. And employers, by and large, want a diverse population, and they go to great extents and great expense to try to get diversity, true diversity, within their ranks.

Nonetheless, there has been evidence that this is occurring and I think the smart thing for us to do since we are, our primary mission, we have stated our primary mission, is to educate and prevent violations. So if that is, in fact, our primary mission, then, our take.away today I think is that for those recruiting agencies or whoever may be using unemployment in general as a screening tool; we need to educate them on not only the risks, but the fact that itís not a best practice, even if itís not against the law; itís just not a good practice, and try to strongly discourage the use, regardless of whether it can be proven as disparate impact, that we know, educate, and discourage the use?

And I want to thank again all of the panelists who have come today because weíve heard a lot of different views from people with expertise. And it has been very helpful. Thank you all.

CHAIR BERRIEN: Thank you, Commissioner.

Commissioner Feldblum?

COMMISSIONER FELDBLUM: Thank you.

Well, I think I made my closing statement before, even though I didn't know it, when I started.

(Laughter.)

COMMISSIONER FELDBLUM: So I think the only two things I want to say here are, number one, our primary mission is to stop unlawful employment discrimination. Thatís what the statute says.

We do it through education and training, through charge processing and investigation, and through litigation. We do it through those three equal pieces. I think what weíve heard today is helpful for all of those.

Second, I have to say that I do think that this hearing moved us forward in terms of seeing how this might be used in a more blatant way than just what we would have gotten from just the particular website and I think, in particular, Ms. Bender's testimony in terms of how this is absolutely commonplace, at least that sheís been experiencing in terms of people with disabilities.

So I think you have given us work to do. And I appreciate that.

CHAIR BERRIEN: Thank you.

And I have said before and will repeat again to all panelists who are still present and to those who have had to move on to other duties; the Commission as a whole has benefitted tremendously from your participation today. And I think itís especially remarkable because the issues that were addressed today are truly emerging issues. And so these were not necessarily areas where you could dust off something that was written 20 years ago, update it, and say, "Here we are." You took a fresh look at a fresh and emerging set of issues in a way that I think was very, very thoughtful and has helped us greatly as we consider our next steps.

In my view, one of the most important things that this Commission can do, and the reason that the issue of hiring has been a recurring emphasis of our public meetings; is in the current economic climate, there are more people than have been a part of the job.seeking population for a very long time. Dr. Spriggs said it more eloquently than I just did, but he essentially said, "We are dealing with a moment in history when the experience of job seekers is especially important for the Commission." And certainly, from our opening days, the issue of discrimination in hiring has been one of the critical concerns of the Commission because, as we all know, part of a successful life as an employee, and part of a successful and productive economic life; is to get your foot in the door in the first place. And so the things that may prevent people from getting their foot in the door in the first place and particularly anything that may violate the statutes that weíre charged with enforcing are of great concern to the Commission.

I thank all of the members of the Commission for their attentiveness, for their exploration and very serious thought that has been given to how the Commission can be most helpful in addressing this issue. And I look forward to hearing more from all of you as well as other researchers, members of the public, and advocates who may be able to help inform or direct or guide what we do in the future.

So, with that, Iíd like to thank all of you for being here. And I believe if we have a motion, we are prepared.

COMMISSIONER BARKER: So moved.

COMMISSIONER FELDBLUM: Second.

COMMISSIONER ISHIMARU: Discussion? I would like to point out for the record that we're ahead of schedule and we're going to get Commissioner Feldblum to her hearing on time.

(Laughter.)

CHAIR BERRIEN: Absolutely. Thank you.

DR. AUSTIN: Thank you.

(Whereupon, the foregoing matter was adjourned at 12:42 p.m.)