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CM-631: Employment Agencies

631.1 Introduction

(a) General

(b) Employment Agency Defined

(C) Scope of Employment Agency Definitions

631.2 Private Employment Agencies

(a) General

(b) Specific Individuals or Entities

(c) Commission Decisions

631.3 Public Employment Agencies

(a) General

(b) Specific Individuals or Entities

(c) Commission Decisions

(d) Court Cases

631.4 Covered Activities

(a) General

(b) Applicable Theories

(c) Name and Single Sex Preference

(d) Referral

(e) Classification

(f) Acceptance of Job Orders

(g) Job Opportunity Advertisements: Publish or Print

(h) Or Otherwise to Discriminate Language and Other Client Processing Activity

(i) Preferential Treatment

(j) Retaliation

(k) Commission Decisions

(l) Court Cases

631.5 Exempt or Excused Activities

(a) General

(b) Specific Activities

631.6 Employment Agency As Employer

(a) General

(b) Discrimination Against Employees

(c) Commission Decisions

631.7 Emp1oyment Agencies and the ADEA

(a) Introduction

(b) Private Employment Agencies

(c) Public Employment Agencies

(d) Covered Activities

(e) Employment Agency As Employer

(f) Exempt or Excused Activities

631.8 How To Investigate

(a) General

631.9 Cross References

(a) Theories of Discrimination, § 604/804

(b) Affirmative Action, § 607

(C) Terms, Conditions, and Privileges of Employment, § 613

(d) 704(a) Retaliation, §614

(e) Segregating, Limiting, and Classifying Employees, § 613

(f) Citizenship, Residency Requirements Aliens, and Undocumented Workers, §622

(g) Bona Fide Occupational Qualification, § 625/825

(h) Unions, § 630

(i) Ads, Recordkeeping, and Notice, § 632

 

SECTION 631
EMPLOYMENT AGENCIES

631.1 Introduction

(a) General -

The general prohibitions against discrimination in Title VII are directed at three main entities employers, employment agencies, and labor organizations. Discrimination by employers and by labor organizations is treated in other sections of this manual. This section treats discrimination by employment agencies; it completes the coverage of those entities most likely to affect the employment market and employment opportunities.

Due to the effect employment agencies can have on the employment market and employment opportunities, many provisions of the Act specifically refer to emp1oyment agencies. Section 701(c) broadly defines employment agencies. Section 703(b) sets out general, nondiscrimination prohibitions which govern employment agencies in their relations with employers, clients or job applicants, and employees. Other specific provisions preclude an employment agency from printing or publishing job ads containing discriminatory limitations, preferences, or specifications absent a BFOQ (§704(b)); neither can they grant preferential treatment to any individual or group because of a numerical imbalance (§703(j)); nor can employment agencies retaliate against any individual because of the exercise at a protected right (§704(a)).

Still other provisions exempt or excuse employment agencies from violating the Act while engaging in certain classifying or referring activities or practices which would otherwise be discriminatory. The specific provisions are as follows: §703(e)(2) deals with religious educational institutions, §703(e)(l) addresses the notion of BFOQ; §703(f) relates to members of the Communist Party, §703(g) covers national security, §703(i) deals with Indians living on or near reservations; and §713(b)(1) deals with reliance on Commission interpretation or opinion.

The provisions dealing with prohibited activities are treated in §631.4 of the manual, while those dealing with exempt or excused activities are covered in §631.5.

(b) Employment Agency Defined -

Section 701(c) provides that:

[t]he term 'employment agency' means any person regularly undertaking with or without compensation to procure employees for an employer or to procure for employees opportunities to work for an employer and includes an agent of such a person.

This broad and apparently uncomplicated definition has several component parts which are set out below.

(1) Any Person - Person is broadly defined in §701(a) as follows:

[t]he term 'person' includes one or more individuals, governments, governmental agencies, political subdivisions, labor unions, partnerships, associations, corporations, legal representatives, mutual companies, joint-stock companies, trusts, unincorporated organizations, trustees, trustees in bankruptcy, or receivers.

Some of the individuals or entities which have been evaluated as employment agencies are set out in §631.2(b) and §631.3(b).

(2) Regularity - The determination of whether the activity occurs regularly is a factual determination. In its simplest sense, 'regularly" means other than rarely or infrequently.

(3) With or Without Compensation - A person need not be paid or compensated in any manner, whether by direct payment, perks, or favors, in order to be subject to the provisions governing employment agencies.

(4) Procuring Employees - This process entails securing prospective employees or potential job applicants for an employer. This effort need not result in an interview or an offer of employment for the activity to constitute procuring. The individual, or employment agency need not actively solicit the prospective employees or job applicants; it is enough if applicants come to them. Also, the procuring of applicants need not be for employment with any specific employer.

(5) Procuring Opportunities - The securing of employment opportunities for the prospective employees or job applicants need not be from specifically predesignated employers or even as the result of action initiated by the individual.

(6) Employer - The issue of whether an employer with which an individual or entity deals must have fifteen or more employees before the individual or entity is liable as an employment agency under Title VII is now CDP. See Appendix 605-N.

(7) Agent - An agent is a person or entity acting for or on behalf or another called the principal, with the implied or express consent or authority of the principal.

(c) Scope of Employment Agency Definition -

The definition of an employment agency, regardless of its component parts, may be broad enough to encompass the activities of a noncontracted, unreimbursed agent who contacts employers about available jobs and regularly passes this information to the principal for the benefit of job seekers.

As another indication of the potential breadth of the definition of employment agency, the court in Kaplowitz v. University of Chicago, 387 F. Supp. 42, 8 EPD § 972 (N.D. Ill. 1974), suggests by way of dicta that the purposes of Title VII are best effectuated if the definition of emp1oyment agencies is given a liberal construction. (See § 631.2(b)(2), where Kaplowitz is discussed.) The EOS should also refer to Rogers v. EEOC, 454 F.2d 234, 4 EPD ¶7597 (5th Cir. 1971), where the court reasoned that Title VII "...should be accorded a liberal interpretation in order to effectuate the purposes of Congress to eliminate…discrimination."

In terms or potential limits, the court in Kaplowitz suggests that the definition of what constitutes an employment agency is limited in part by the manner in which the individual or entity functions. A law school placement service which has as its main function the placement of the school's graduates, which is in turn a substantial and significant activity of the law school and the primary employment source of graduates, is engaged in an employment agency function. Again, by way of dicta, the law school was found to be operating an employment agency. (Compare Bonomo v. National Duckpin Bowling Congress, Inc., 469 F. Supp. 467, 20 EPD ¶30,044 (D.C. Md. 1979), discussed in §631.2(b)(5).)

Another limit on the broad definition of an employment agency is that the individual or entity must engage in the activity on a regular basis. As is indicated above, whether the activity is conducted regularly is a fact question. In addition, an individual or entity that calls itself an employment agency, and has no other major activity, is still an employment agency even if it is largely unsuccessful in placing applicants. Success or failure in placement efforts is not considered in the definition and should not be determinative, as long as the employment agency function is conducted regularly.

An additional issue which limits the otherwise broad definition of employment agencies is whether each or any employer with which an individual or entity deals must have fifteen or more employees before the individual or entity is liable under Title VII as an employment agency. This issue is now CDP. See Appendix 605-N.

631.2 Private Employment Agencies

(a) General -

Private employment agencies are any individuals or entities that meet the §701(c) definition of employment agency, which is set forth in §631.1(b) above. Private in this sense means nonpublic (i.e., not an entity of federal, state, or local government). Public entities were partially exempt from Title VII coverage (see §631.3(a). below) prior to the 1972 amendments to Title VII.

As an aid in determining which specific entities or individuals are employment agencies, the EOS should refer to those specifically treated in §§631.2(b) and 631.3(b), below. The listed cases are merely illustrative of how courts have created specific problems. They are set out to provide guidance, not to make those issues CDP. The court cases and Commission decisions covered in those sections generally evaluate the individual or entity in terms of its principal function or major activity. If the principal function or major activity is to procure employees or employment opportunities, its activities or practices should be analyzed and evaluated in terms of this manual section.

(b) Specific Individuals or Entities

(1) Newspaper - A traditional activity engaged in by newspapers is to accept job advertisements from employers, employment agencies, labor organizations, or job seekers and publish them in its editions. In this manner, the public is made aware of available job openings. This activity does not bring newspapers within the definition of employment agencies in §701(c) either as employment agencies or their agents. A newspaper's regular function in this context is not to procure employees or employment opportunities, but to print job ads upon the request or a third party. (See Brush v. San Francisco Newspaper Printing Company, 315 F. Supp. 577, 2 EPD ¶10,249 (N.D. Cal. 1970), aff'd per curiam, 469 F.2d 89, 5 EPD ¶7981 (9th Cir. 1972), cert. denied, 410 U.S. 943, 5 EPD ¶8463 (1973).)

The court in Brush also concluded, after analyzing the language of §704(b) and its legislative history, that a newspaper's activity in placing advertisements as requested, does not make it liable under that section. The language of §704(b) is directed at activity by employers, employment agencies, or labor organizations, not newspapers. Newspapers are also not in a position to screen advertisements for violations or Title VII. There probably will not be enough information in the advertisement copy received by a newspaper to determine, for example, whether sex is a BFOQ for a particular job. Such a determination, as well as the necessary facts, must remain with the employer. Brush. To the extent that a newspaper doesn't exercise control, or actively classify advertisements, it is not liable as an employment agency or employer. Morrow v. Mississippi Publishers Corp., 5 EPD ¶18415 (S.D. Miss. 1972); Commission Decision No. 74-117, CCH EEOC Decisions (1983) ¶16429; and Commission Decision Nos. 75-002, 75-003, 75-004, and 75-005, at CCH EEOC Decisions (1983) ¶ ¶16467, 8469, 6488, and 8470, respectively.

(2) Law School Placement Service - the court in Kaplowitz v. University of Chicago, 387 F. Supp. 42, 8 EPD ¶9762 (N.D. Ill. 1974), also found, by way of dicta, that a law school placement service is an employment agency. The Law school met the §701(c) standard of procuring "for employees opportunities to work for an employer" by its placement activities. Career employment was a major activity of the law school, and the school's placement office provided the primary source through which employers hired the school's graduates. The substantial interest and significant involvement in finding job opportunities brought the law school within the definition of an employment agency.

(3) Teacher/Counselor - A state court found, based on a state statute patterned after Title VII, that a teacher who held regular meetings to counsel male graduates on job hunting techniques and provided them with job leads constituted an employment agency. New York City Commission on Human Rights v. Boll, N.Y.S.2d , 8 EPD ¶ 19651 (N.Y. S.Ct. N.Y. Co. 1974). In that case a female graduate was denied admittance to an all male club that met weekly in the teacher's private offices. In the meetings, male graduates were provided with the following: information on interview techniques; use of broadcast letters as opposed to resumes; advice on specific difficulties encountered in job searches; general advice; and assistance with letter writing. Additionally, the teacher maintained a collection or job leads and received new information on job opportunities weekly. Although this undertaking generally met with success, it did not have to be successful in order to make the teacher liable as an employment agency, nor was compensation for the teacher necessary to sustain liability. The result of this determination was that the teacher could not exclude female graduates from the weekly sessions.

(4) Professional Golfers Association - Using a principal function or major activity test (see §63l.1(c)), the local chapter of a professional golfers association was found to be an employment agency. The constitution of the national association has as its objective to assist unemployed members in finding positions and to improve the economic opportunities of members. The bylaws and constitutions of the local chapters are consistent. Accordingly, the local in question, as a matter of policy and practice, assists members in securing employment and sponsors playing events to put members before the community of potential employers. Also, members only receive nominal fees for their participation in playing events. Based on these factors, the court in Naismith v. Professional Golfers Association, 85 F.R.D. 552, 21 EPD ¶30,415 (N.D. Ga. 1979), found that the association was an employment agency. As such, it was prohibited from discrimination on the basis of sex.

(5) Duckpin Bowling Congress - A professional sports' congress that accredits and appoints tournament and tour directors does not become an employment agency because of this limited activity. Its overall function or major activity is the regulation and administration of the activities of its members engaged in the sport of duckpin bowling. It promulgates rules and regulations, monitors tournaments and tours, qualifies tournament and tour directors, and regulates the conduct of its member participants in the sanctioned events. The accreditation and appointment of tournament and tour directors is only an ancillary function and not a major activity; therefore, it is not an employment agency. Bonomo v. National Duckpin Bowling Congress, Inc., 469 F. Supp. 467, 20 EPD ¶30,044 (D.C. Md. 1979).

(6) Union Hiring Hall - Section 701(e)(1) recognizes a union hiring hall or office as an entity which procures employees or employment opportunities. This activity does not, however, make the entity an employment agency, because the specific function of a union is to represent its members. This job-procuring function is merely ancillary to that representation. (See §630 on Unions where referral practices of union hiring halls are discussed.)

(7) Licensing Agencies - The primary function of a licensing agency is to register employees or applicants and possibly to also regulate their activities. This does not make it an employment agency within the meaning of §704 (b)(1). (See National Organization For Women v. Waterfront Commission of New York Harbor, 468 F. Supp. 317, 19 EPD ¶9233 (S.D. N.Y. 1979) (involving a state agency; see §63l.3(b) below); and Commission Decision No 81-22, CCH EEOC Decisions (1983) ¶6825 (finding jurisdiction over a State agency on other grounds).)

(c) Commission Decisions

In Commission Decision No. 84-2, CCH Employment Practice Guide, ¶6840, the Commission found a university's Career planning and placement service to be an employment agency within the meaning of Title VII where it regularly took job listings from employers and referred current students and alumni to those employers. The issue of whether Title VII jurisdiction extends to the school's placement service and a foreign corporation arose when a former student obtained a job interview through the placement service, and was subsequently not considered for the position because she twice missed scheduled interviews. She alleged that both the foreign corporation and the university discriminated against her on the basis of her sex, the former because it denied her an interview and the latter because it acted as an employment agency for a company that discriminated against women. Both the employer and the university raised jurisdictional arguments as defenses to the charge.

In Commission Decision No. 74-117, CCH EEOC Decisions (1983) ¶6429, the Commission found, based mainly on the legislative history of Title VII, that a newspaper that does no more than publish or classify help-wanted ads in the manner requested by the employer is not an employment agency within the meaning of §704(b). The proscriptions of §703(b) governing the activities or practices of an employment agency as an employer are also not applicable when it acts in this limited capacity. (Accord, Commission Decision No. 75-128, CCH EEOC Decisions (1983) ¶6538.)

In Commission Decision No. 72-0066, CCH EEOC Decisions (1973) ¶6292, the Commission found a newspaper respondent in violation of both §§7O3(e) and 704(b) when it published its own ads for an "Advertising Trainee" with the caveat that "career minded men will be interviewed" (Compare Commission Decision No. 74-117, CCH EEOC Decisions (1983) ¶6429, where a newspaper was found not to be an employer when it published or classified ads for others.)

631.3 Public Employment Agencies

(a) General -

The definitions of person, employer, and employment agency in §§701(a), (b), and (c), respectively, were revised by the 1972 amendments to the Act. These eliminated the partial exemption from Title VII coverage for an "agency of the United States, or an agency of a [s]tate or political subdivision of a [s]tate." (See Commission Decision No. 76-129, CCH EEOC Decisions (1983) ¶6691, finding jurisdiction over a state employment service's pre-1972 activities as an employment agency because it was part of "the system of state and local employment services receiving federal assistance" (quoting §701(c)) but not as an employer regarding its own employees; and Legislative History, Section by Section Analysis, Congressional Record (H. 1769 and 1861) March 8, 1972.)

In a pre-1972 amendments case, the court in Schattman v. Texas Employment Commission, 459 F.2d 32, 4 EPD ¶7679 (5th Cir. 1972), cert. denied, 409 U.S. 1107, 5 EPD ¶8099 (1973), considered the above provisions. Based on its evaluation, the court found that a state employment service was not covered under the Act as an employer with respect to its own employees, even though it was covered as an employment agency as a recipient of federal assistance for its referral activities. (See also Commission Decision No. 76-10, CCH EEOC Decisions (1983) ¶6605, which found that the Commission lacked jurisdiction over the Title VII claims of two employees of a state school who were discharged prior to these 1972 amendments which extended the Acts coverage to state and local government employees.)

The effect of the 1972 amendments was to include state and local government entities within the definition of employment agencies without relying on their involvement with the United States Employment Service or their receipt or federal assistance. (See definition and functions of employment agencies in §631.1 (b).) State employment agencies, such as the one involved in Schattman, also became liable as employers with respect to discrimination against their own employees. (See Vick v. Texas Employment Commission, 6 EPD ¶8933 (S.D. Tex. 1973), aff'd in part and rev'd in part, 514 F.2d 734, 9 EPD ¶10,203 (5th Cir. 1975).)

(b) Specific Individuals or Entities

(1) State Employment Commission -Prior to the 1972 amendments to Title VII, state entities were covered as employment agencies under the Act only to the extent that they received federal assistance. The limits on coverage were removed by enactment of the 1972 amendments. (See discussion in §631.3(a), above.) The "or otherwise to discriminate" language in section 703(b) was interpreted to include employees of state employment agencies. (See Vick v. Texas Employment Commission.) It was also interpreted to include activities involving denial of unemployment compensation. A State employment service's denial of unemployment compensation can clearly be "inextricably intertwined" with its referral activities. For instance, failure to follow up on agency referrals can lead directly to denial of unemployment compensation benefits. And, if there is discrimination in the referral, that discrimination directly influences the agency's activity in awarding or denying unemployment compensation. (See Commission Decision Nos. 76-129, 78-46, 76-139, CCH EEOC Decisions (1983) ¶¶669l, 6729, and 6701 respectively; and §631.4(h)(4).)

(2) State Waterfront Commission - The court in National Organization For Women v. Waterfront Commission of New York Harbor, 468 F. Supp. 317, 19 EPD ¶9253 (S.D. N.Y. 1979), found that a state waterfront commission merely served as licensing and registering agent for certain dock hiring agents and employees. Those functions do not make it an employer or employment agency within the meaning of the statute. It offered no services to persons it registered, paid no wages, procured no workers or job opportunities, and exercised no control over individual hiring decisions.

(3) County Personnel Board - A county personnel board that engages in referral activities, such as administering the civil service system, giving examinations to potential employees, conducting interviews of potential employees, and submitting a referral list of potential employees to the employer, is an employment agency within the meaning of §701(c) of the Act. (See Dumas v. Town of Mount Vernon, Alabama, 612 F.2d 974, 22 EPD ¶130,715 (5th Cir. 1980).)

(c) Commission Decisions

In Commission Decision No. 78-22, CCH EEOC Decisions (1983) ¶6584, the respondents were the state bureau of personnel and the state fair employment practices agency. The state bureau of personnel announced and filled vacancies for itself; it also announced but did not fill vacancies for the fair employment practices agency. The state bureau of personnel is functioning both as an employer ad as an employment agency.

In Commission Decision No. 78-24, CCH EEOC Decisions (1983) ¶6573, the respondents were a state and a county social service agency. The state respondent interviewed job applicants and sent a list of eligible candidates to the county respondent which had sole authority to hire anyone from the top six candidates referred. The state respondent is functioning as an employment agency.

(d) Court Cases

In Vick v. Texas Employment Commission, 514 F.2d 734, 9 EPD ¶10,203 (5th Cir. 1975), a state employment agency was found, by use of the 1972 amendments which expanded Title VII coverage to state governments and their agencies, to be subject to the Act for discrimination against its own employees. (Note that this case is post Schattman v. Texas Employment Commission, 459 F.2d 32, 4 EPD ¶7679 (5th Cir. 1972), cert. denied 409 U.S. 1107, 5 EPD ¶8099 (1973).)

631.4 Covered Activities

(a) General -

Section 703(b), which contains the general antidiscrimination prohibitions for employment agencies, provides in part that:

[i]t shall be an unlawful employment practice for an employment agency to fail or refuse to refer for employment, or otherwise to discriminate against, any individual ...or to classify or refer for employment any individual on the basis of his [her] race, color, religion, sex, or national origin.

The component parts of the general provision which are set out below include failing or refusing to refer, classifying or referring, or otherwise discriminating against any individual.

(1) Fail or Refuse to Refer - This provision prohibits employment agencies from honoring discriminatory employer preferences or otherwise not referring women or minorities because of their Title VII status. Since this is the activity employment agencies are most likely to be engaged in, it should receive the utmost attention. (See §631.4(d).)

(2) Classify or Refer - Categorizing, grouping, or classifying job applicants, jobs, or employers on a prohibited basis and making referrals based on those categorizations is also prohibited by §703(b). This provision is violated by employment agencies establishing and maintaining job or job applicant files which are in turn used to make discriminatory referrals. (See §631.4(d).)

(3) Or Otherwise to Discriminate - The "or otherwise to discriminate" language broadens the general prohibitions beyond referral and classification activities and includes: segregating facilities or job applicants, maintaining a discriminatory referral environment, conducting interviews or job counseling on a discriminatory basis, administering discriminatory tests, discriminating against its own employees; and denying unemployment compensation benefits. (See §631.4(h).)

Like the other prohibiting language in §703 directed at employers and labor organizations, this language is broad in scope. Except for referral and classifying activities of an employment agency, no specific prohibited practices are mentioned. These general prohibitions, used in conjunction with the "or otherwise to discriminate" language, allow for broad coverage of an employment agency's activities.

(b) Applicable Theories -

To determine when the Act is violated, the principles set out in §604, Theories of Discrimination, are applicable. Disparate treatment occurs when protected group or class members are treated differently from other similarly situated employees through the non-uniform application of the same policy or practice or the use of different policies or practices for protected group or class members. Here the prohibitions concern the policies or practices of an employment agency used for its clientele or potential job applicants. Policies or practices of an agency affecting its own employees are treated separately in §631.6.

Example - Disparate Treatment - R, an employment agency, kept information cards on each employer with whom it placed or attempted to place job applicants. Racial and sexual preference was denoted on the cards, as well as other information about the employer and its job needs and demands. As a matter of policy, R strictly adhered to expressed employer preference particularly where race and sex were concerned. CP, a Black female job applicant, asked her job counselor at R's employment agency to refer her to a management trainee job at a particular employer. R refused to refer her because its information card indicated that the employer preferred a White male for the management trainee job. R, instead, attempted to get CP to accept a referral for a secretarial job at the same employer, arguing that CP would then be in a position to work her way up the ladder. CP refused, and upon learning the reason for the refusal to refer, filed a charge alleging race and sex discrimination. Since investigation revealed that CP's allegations were true, that sex was not a BFOQ, and that R could not otherwise justify its actions, R committed acts of race and sex discrimination.

The adverse impact theory is also applicable to evaluate policies and practices of employment agencies. It occurs when a neutral written or unwritten policy or practice acts to disproportionately affect protected group or class members and the employment agency is unable to justify the policy or practice as a business necessity.

Example - Adverse Impact - R, an employment agency, administered prescreening tests to all job applicants before referring them to particular jobs. Black job applicants scored lower than White job applicants on the tests. This resulted in Blacks being disproportionately excluded from many job referrals as R refused to refer job applicants who scored below a pre-established numerical cut-off point. CP, a Black job applicant who failed to reach the cut-off point and who was not referred, filed a charge alleging that the test, although neutral on its face, adversely impacted against Blacks. Investigation revealed that Blacks scored lower than Whites on the tests, that substantially fewer Blacks received referrals as a result of poor test performance, and that the test was not validated to establish its relationship to any of the jobs to which R referred job applicants. Since R could not otherwise justify use of the tests as a business necessity, the Act was violated.

The other theories of discrimination, perpetuation of past discrimination, accommodation, and retaliation, are also applicable to charges alleging discrimination by employment agencies. (See §604, Theories of Discrimination.)

Following are specific activities or practices with suggestions as to how they should be analyzed and evaluated. The general principles set out above and in §b04, Theories of Discrimination, should be applied where pertinent.

(c) Name And Single Sex Preference -

The use of names such as, "Steno Girl" or "Steel Man", may occasionally be found in titles used by employment agencies. In both instances, there is an apparent sex preference; however, use of a name, in and of itself, does not constitute a violation of Title VII. With reference to race discrimination, names such as "KKK Employment" or "Freeman's Bureau" illustrate occasions where use of a name may be adequate to establish an inference of discrimination. However, a state court in Phillips v. New York State Human Rights Appeal Board, N.Y.S.2d , N.E.2d , 5 EPD ¶8649 (N.Y. S.Ct. App. Div. 1973), found that an agency using "girl" in its name was not ultimately guilty of discrimination where the agency did not restrict its employees to females and did not deny males an opportunity for employment because of their sex. (Compare Commission Decision No. 72-0157, CCH EEOC Decisions (1973) ¶6298, where the Commission found that an employment agency that accepted employer preferences and placed job advertisements under the heading "Men's Employment Agencies" discriminated by indicating a sex preference.)

Employment agencies which classify or refer individuals on the basis of religion, sex, or national origin may use the bona fide occupational qualification exception which is set forth in §703(e) of Title VII. (See also §631.5(b)(l).)

(d) Referral -

As the primary function of employment agencies, referral activities, which are specifically treated in §703(b), are involved in the bulk of case and decisional law dealing with employment agencies. Discriminatory failure or refusal to refer occurs where women or minorities are not sent to particular employers for particular jobs because the employment agency believes males or nonminorities are preferred by the employers.

Example I -Discriminatory Referral Activities - R, an employment agency, handled only clerical, secretarial, and semi-professional listings. Apart from an advertisement in the telephone book, it did not advertise its services. By virtue of its past performance, it enjoyed a good reputation among employers. Prior to enactment of Title VII, all of its referrals were Whites, as a matter of policy. It subsequently changed that policy. Its present, stated policy is to accept as clientele and refer all qualified job applicants, regardless of race or sex. But, in order to maintain its good reputation among employers, the employment agency accepted as clients only those individuals referred to it by prior successful placements with whom it kept in regular contact. CP, Black, learned of R from the telephone book and went to R seeking a referral. Upon R's refusal to accept her as a client because she was not referred to it by a prior client, CP filed a charge alleging discrimination. According to CP, R's policy of accepting for referral only job applicants referred by prior clients resulted in the disproportionate exclusion of Blacks, as virtually all of R's prior clients were White. Consequently, there was little likelihood Blacks would be referred by prior clients. Investigation revealed this to be true, therefore, the policy is discriminatory.

Example 2 - Discriminatory Referral Activities - R, an employment agency, dealt with multiple employers and had a mixed clientele. CP, a Black job applicant, alleges that, in response to a job advertisement by R for available secretarial positions, she contacted R and asked to be referred. CP alleges that she was not referred, while similarly situated, less educated White job applicants were referred. She also alleges that, as a matter of policy and practice, R only refers Black job applicants to service, domestic, and unskilled laborer positions, while White job applicants are referred to secretarial, clerical, and semiskilled and skilled positions. R acknowledged that CP's allegations were true, but that its policies and practices were justified because otherwise employers would not deal with it and its business would suffer. The reasons given do not justify the discriminatory referrals, therefore, R is in violation of the Act.

In Example 1 above, the employment agency's apparently neutral policy nonetheless results in disproportionate exclusion of Black job applicants. In Example 2, the employment agency, based on its assumptions or beliefs about employer preferences, is violating Title VII by its refusal to refer and by its actual referrals since both are based on the race of the job applicants. Also, if the employment agency's policies or practices are in response to expressed, discriminatory preferences of employers, the Act is still violated. In this instance, the employer and the employment agency are responsible for the resultant discrimination. Similarly, an employer that lists its available jobs with an employment agency, such as the one in Example 2, in reliance on the agency's discriminatory practices, shares responsibility for the resultant discrimination. (See Commission Decisions in §631.4(k), below; and Sex Discrimination Guidelines, 29 C.F.R. §1604.6(b) which dictate that an employment agency which accepts an unlawful job order with a sex specification shares responsibility with the employer.)

Despite the potential joint responsibility with employers as suggested above, an employment agency need not evaluate each employer and job order for discrimination. In Kaplowitz v. University of Chicago, 387 F. Supp. 42, 8 EPD ¶9762 (N.D. Ill. 1974), the court recognized that an employment agency fulfills its responsibility by lawfully referring the job applicant. It is not required to consider whether the prospective employer discriminates in the terms and conditions of employment.

The EOS can also refer to Commission Decision No. 77-32, CCH EEOC Decisions (1983) ¶6583 (where the employment agency fulfilled its obligations by making an employer aware of EEO law and referring a female contrary to the employer's expressed sex preference for males), Commission Decision No. 79-63, CCH EEOC Decisions (1983) 16799 (where the Commission recognized that an employment agency is not in a position to ascertain and evaluate the lawfulness of an employer's affirmative action plan or program), Sex Discrimination Guidelines, 29 C.F.R. §1604.6(b); and §631.4(f).

In addition to the above, §703(j) indicates that an employment agency need not make preferential referrals to correct an imbalance in the employer's workforce. The EOS should refer to §631.4(h) and §607, Affirmative Action, for a treatment of affirmative action problems from the perspective of the employer.

(e) Classification -

Section 703(b), the general prohibition against discrimination by employment agencies, prohibits classifying job applicants for employment based on race, color, religion, sex, or national origin. This provision is violated when an employment agency establishes job order files or job applicant files on a prohibited basis and is unable to justify the practice with legitimate, nondiscriminatory reasons or as a business necessity.

When faced with a classification problem, the EOS should remember that, more so than employers or labor organizations, employment agencies are apt to have information on file categorized by each job applicant, each job, and each employer (see §631.7(a)). This should facilitate gathering information necessary to make statistical comparisons.

Example - Discriminatory Classification - R, an employment agency, deals primarily with clerical, secretarial, sales, domestic, and service jobs. Job order cards received from employers are filed under these designations. R also maintains job applicant files. CP, a Black female with the requisite qualifications, requested referral to a sales position. She was informed then and on several subsequent occasions that no sales positions were available, although immediate openings for domestics were available. After CP refused a referral for a domestic position, R informed her that it could no longer be of assistance in her job search. CP learned that White job applicants were referred to sales positions during this period and filed a charge alleging race discrimination. Investigation revealed that R placed letters indicating sexual and racial preference on job orders it received. Virtually all secretarial, clerical, and sales positions (some were designated as male and others as female positions) were designated as suitable for White job applicants, while all domestic and nearly all service positions were designated as suitable for Black job applicants. Additionally, job applicant files were separately maintained based on sex and race. R's employees were directed to adhere to the designated files when making referrals. The job and job applicant classifications maintained by R are discriminatory and cannot be justified in terms of convenience.

(f) Acceptance of Job Orders -

The employment agency's acceptance of job orders entails receiving a written or verbal indication from an employer of an available or potentially available job. The Act would be violated if the emp1oyment agency accepted and filled job orders precluding referrals of women and minorities and was unable to justify its action as legitimate and nondiscriminatory, or as an exception, or as a business necessity.

Specific exceptions are provided in §703(e) for religion, sex, or national origin if there is a BFOQ reasonably necessary for the normal operation of a particular business or enterprise. (See §625, Bona Fide Occupational Qualifications and §631.5(b)(1).) In handling cases where sex is alleged to be a BFOQ and employment agencies are involved, the EOS should look to the Sex Discrimination Guidelines, 29 C.F.R. §1604.6(b). The guidelines recognize that an employment agency is not a guarantor of nondiscrimination by employers respecting job orders with a sex specification. Employment agencies, however, share responsibility for filling job orders with unlawful sex specifications, if they know the sex specification is not based on a BFOQ. In Barnes v. Rourke, 8 EPD ¶9772 (M.D. Tenn. 1973), the court found an employment agency liable for the job applicant's back wages where it refused to refer a female job applicant to fill a job order based on an expressed employer preference for males, but where there was no sex BFOQ. In that case, the employment agency made no effort to ascertain whether sex was a BFOQ. On the other hand, an employment agency does not share the responsibility for tilling a job order with an unlawful sex specification where: (1) it does not have reason to believe the employer's claim of a sex BEOQ is without substance, and (2) it maintains written records available to the Commission of those job orders. Sex Discrimination Guidelines, 29 C.F.R. §1604.6(b). The guidelines suggest that, where the case law on a particular type of job is clear and the matter has also been treated in Commission opinion or decision, an employment agency may be unable to show it had no reason to doubt the validity of a job order with an unlawful sex specification.

For job orders for the WIN program or for veterans, the EOS should refer to §631.5(b)(5).

(g) Job Opportunity Advertisements: Publish or Print -

Under a provision addressing other unlawful employment practices, §704(b) makes it unlawful for an employment agency "...to print or publish or cause to be printed or published any notice or advertisement relating to employment… indicating any preference, limitation, specification, or discrimination, based on race, color, religion, sex, or national origin...." unless it is based on a BFOQ respecting religion, sex, or national origin. This provision prohibits practices or activities by employment agencies which express or imply a preference for applicants for a particular sex, religion, or national origin, if there is no sex, religion, or national origin BFOQ. (See §625, BFOQ, and §632, Ads, Recordkeeping, and Notice.)

This provision is violated when an employment agency places a job opportunity listing in a newspaper or in some other communications medium in a column entitled "help wanted male," when the sex BFOQ is not applicable. (See Sex Discrimination Guidelines, 29 C.F.R. §1604.5, and Commission Decision No. 75-021, CCH EEOC Decisions (1983) ¶6473.) In this regard, the EOS should remember that newspapers are not responsible for whether the job advertisements are placed in male, female, or neutral columns. Newspapers generally exercise no control and do nor take an active part in classifying job advertisements. They just accept job advertisements and place them according to the employment agency's directions. (See Brush V. San Francisco Newspaper Printing Company, 315 F. Supp. 577, 2 EPD ¶10,249 (N.D. Cal. 1970), aff'd per curiam, 469 F.2d 89, 5 EPD ¶7981 (9th Cir. 1972), cert. denied, 410 U.S. 943, 5 EPD ¶8463 (1973); Morrow v. Mississippi Publishers Corp., 5 EPD ¶8415 (S.D. Miss. 1972), and §631.2(b)(1).)

Employment agencies are obligated to list job opportunity advertisements in such a manner that no protected group or class members are discouraged from applying. Suggestions on permissible and impermissible language can be found in §632, Ads, Recordkeeping, and Notice. Reference can also be made to advertisements placed by employers. (See Commission Decision No. YNO 9-082, CCH EEOC Decisions (1973) ¶6005 (attractive lady wanted); Commission Decision No. 72-0066, CCH EEOC Decisions (1973) ¶6296 (career-minded men wanted), Commission Decision No. 68-8-48E (1968) (unreported) (unusual opportunity for the man thinking of his future); and Commission Decision No. 68-11-515P (1968) (unreported) (real sharp girl wanted).)

Aiding an employer in meeting its affirmative action obligations by advertising exclusively for minorities also violates §704(b). (See Commission Decision No. 79-63, CCH EEOC Decisions (1983) ¶6799.) However, as long as exclusive advertising is not involved, employment agencies may assist employers in meeting affirmative action obligations by advertising to encourage minorities arid women to apply. Exclusionary advertising techniques, which indicate that only minorities and women need apply, result in Title VII violations.

(h) Or Otherwise to Discriminate Language and Other Client Processing Activity -

Along with specific language dealing with referral and classification activities or practices, §703(b) also makes it unlawful for an employment agency to otherwise discriminate. The effect of the "or otherwise to discriminate" language is to greatly broaden the scope of unlawful or prohibited practices or activities.

Employment agencies are precluded, because of the "or otherwise to discriminate" language, from establishing or maintaining a discriminatory atmosphere where there is racially segregated interviewing or counseling, or other client processing activity. (See Commission Decision No. 70-172, CCH EEOC Decisions (1973) ¶6071.) In this respect, an analogy can be drawn to Title VII provisions regarding employers. (See Rogers v. EEOC, 454 F.2d 234, 4 EPD ¶7597 (5th Cir. 1971).)

The "or otherwise to discriminate" language has also been interpreted to preclude an employment agency's discrimination against its own employees. An employment agency's employees are "uniquely situated" so that internal discrimination can have a chilling effect on the Title VII rights of the agency's clientele. (See Commission Decision No. 71-1598, CCH EEOC Decisions (1973) ¶6271.) This subject is treated in §631.6.

Many practices are covered under the specific headings which follow.

(1) Segregation of Facilities or Clientele - With respect to segregated facilities, discrimination was found to occur where no facilities were provided for Black interviewers to interview the employment agency's Black clientele. In this case, interviews with Black job applicants had to be conducted other than at the employment agency. (See Commission Decision No. 70-172, CCH EEOC Decisions (1973) ¶6071.) Discrimination has also been found where the employment agency provides separate seating or waiting rooms for Black job applicants. (See Commission Decision No. 7-4-338 (January 1968) (unreported), and Commission Decision No. 7-2-868 (1968) (unreported).) The EOS should also refer to §618, Segregating, Limiting, and Classifying Employees, where comparisons can be made to facilities segregated by the employer.

With respect to segregation of an employment agency's clientele, discrimination existed where interviews were conducted or counseling was provided on the basis of race or sex. (See Commission Decision No. 70-172, CCH EEOC Decisions (1973) ¶6071; and Commission Decision No. 72-0157, CCH EEOC Decisions (1973) ¶6298.)

Where an employment agency maintains racially or sexually segregated card files, and fails to activate a Black job applicant while activating White job applicants, discrimination has also been found. (See Commission Decision No. 70-172, CCH EEOC Decisions (1973) ¶6071; and Commission Decision No. 70-200, CCH EEOC Decisions (1973) ¶6089.)

(2) Administration of Tests - Where an employment agency administers prereferral tests as the basis for making referrals, Title VII can also be violated. In such a case, adverse impact occurs where Blacks are disproportionately excluded from referrals because tests are administered, and they cannot be justified based on their job-relatedness. Accordingly, in Commission Decision No. 71-762, CCH EEOC Decisions (1973) ¶6187, and Commission Decision No. 72-0157, CCH EEOC Decisions (1973) ¶6298, the Commission found that use of unvalidated tests by employment agencies which disproportionately excluded Black Job applicants resulted in violations of Title VII.

Disparate treatment, in regard to testing, can occur where pre-referral tests are administered to women or minority job applicants but not to other similarly situated job applicants.

(3) Interviewing and Counseling Clientele - Discriminatory interviewing or counseling activities or practices occur when, for example, Blacks only interview Blacks or males only interview males. Employee and client preferences do not justify the practice. Assigning interviewers or counselors based on employer or job specialty is, however, not automatically discriminatory. This may occur where a female employee with extensive experience in the area is responsible for interviewing and counseling secretarial and clerical job applicants. As long as such an employee also interviews and refers male secretarial and clerical job applicants, the Act is not violated even though virtually all of the job applicants she sees are females.

Discrimination can also occur where women or minority job applicants are not interviewed or counseled, or are interviewed or counseled only for certain jobs. For example, where one employee is assigned to interview and counsel the Black job applicants and is further instructed to direct them only to certain employers for certain jobs, prohibited discrimination occurs, absent a legitimate, nondiscriminatory reason or a business necessity. (See Commission Decision No. 70-172, CCH EEOC Decisions (1973) ¶6071; and Commission Decision No. 70-200, CCH EEOC Decisions (1973) ¶6089.) Generally, Black job applicants are counseled to take low paying, service, laborer, or domestic jobs. (See Commission decisions referred to above.)

(4) Awarding Unemployment Compensation Benefits - As an indication of the breadth of the "or otherwise to discriminate" language, a state or municipality's administration of the unemployment compensation program is encompassed within the phrase if it is "inextricably intertwined" with its employment referral activities or practices. The result is that discriminatory denial of unemployment compensation can result in a violation of Title VII. In Commission Decision No. 76-129, CCH EEOC Decisions (1983) ¶6691, the employment service was responsible for both programs and an alleged failure to accept a referral resulted in denial of unemployment compensation benefits. (See also Commission Decision No. 76-139, CCH EEOC Decisions (1983) ¶6701.) This situation should be contrasted to that in Vick v. Texas Employment Commission, 514 F.2d 734, 9 EPD ¶10,203 (5th Cir. 1975), where there was no showing that the awarding of unemployment compensation benefits was influenced by the employment service's referral activities.

(i) Preferential Treatment -

Section 703(j) clearly states that no part of Title VII shall require an employment agency to give preferential treatment to an individual or group because of race, color, religion, sex, or national origin to help an employer correct a statistical imbalance in its work-force, i.e., when there is a disproportionate number of employees from one particular Title VII group. If an employment agency works to help an employer correct such a situation, it cannot refer only members of the underrepresented Title VII group(s) to fulfill the employer's affirmative action obligations. Rather, the employment agency can help by making special efforts to recruit and refer qualified members of the underrepresented group(s), so their numbers increase among those applicants referred to the employer.

(j) Retaliation -

Under §704(a), it is unlawful for an employment agency to discriminate against any individual because (s)he opposed an employment practice prohibited by Title VII, or because (s)he made a charge, testified, assisted, or participated in any manner in an investigation, proceeding or hearing under the statute. The way in which employment agencies frequently violate this provision is by deviating from normal client processing procedures once a job applicant has opposed or opposes something (s)he perceives as an unlawful employment practice. For example, a §704(a) violation might occur where a Black applicant recognizes that the employment agency assigns particular counselors to Blacks because of their race, refuses to be processed by those counselors, and the agency makes no referral whatsoever. It is also a violation where a female job applicant insists, absent a BFOQ, that sex not be used as the basis for her referral, and the agency in turn refuses to refer her at all. Finally, it may be a violation of §704(a) if a client who has been discharged by a prior employer after participating in a Title VII proceeding then seeks a referral from the employment agency and is rebuffed. In each instance, the agency has violated this provision if it has no adequate justification for its actions.

Additionally, employees of employment agencies are protected by this provision when they act to protect the Title VII rights of the agency's clientele. (See Commission Decision No. 71-1598, CCH EEOC Decisions (1973) ¶6271, and §614, 704(a) Retaliation.)

(k) Commission Decisions

In Commission Decision No. 70-172, CCH EEOC Decisions (1973) ¶6071, the Commission found that an employment agency discriminated with respect to referrals when Blacks were referred to certain employers for service, domestic, and laborer jobs, and Whites were referred to higher paying, better jobs. The employment agency also automatically referred Blacks to certain employers for certain jobs and Whites to other employers and jobs based on a specific filing system for employers.

In Commission Decision No. 70-200, CCH EEOC Decisions (1973) ¶6089, the Commission found that an employment agency discriminated with respect to referrals by refusing to refer a Black job applicant to sales positions, while referring White job applicants to those positions. Discriminatory referral activity also included reactivating the applications of White job applicants, while failing to reactivate the applications of similarly situated Black job applicants. Additionally, statistical data gleaned from the files revealed discriminatory job classifications by which Blacks were relegated to domestic and service jobs.

In Commission Decision No. 70-692, CCH EEOC Decisions (1973) 6146, the Commission found no discrimination with respect to an employment agency's referral activities since a substantial number of Blacks were referred, and no evidence of disparate treatment existed.

In Commission Decision No. 74-64, CCH EEOC Decisions (1983) ¶6419, the Commission found that a state employment agency did not violate Title VII by giving a preference to veterans when it made referrals. Despite potential adverse impact against females, the preference is specifically authorized by Title VII. (See also Commission Decision No. 78-45, CCH EEOC Decisions (1983) ¶6728, where a state employment agency does not discriminate on the basis of sex even though only males are referred to vacant WIN Program positions.)

In Commission Decision No. 75-268, CCH EEOC Decisions (1983) ¶6452, the Commission found that an employment agency which refused to refer a White job applicant because it was helping the employer meets its affirmative action obligations violated the Act. Employment agencies can aid employers in this regard by making special efforts to recruit qualified women and minorities and by having large numbers of qualified women and minorities among the job applicants referred.

In Commission Decision No. 76-64, CCH EEOC Decisions (1983) ¶6648, the Commission found that an employment agency discriminated against a White applicant by refusing to make a referral based on its honest, but mistaken, belief that the employer's affirmative action commitment dictated the nonreferral.

In Commission Decision No. 79-63, CCH EEOC Decisions (1983) ¶6799, the Commission found discrimination where an employment agency advertised for a minority lab assistant and refused to refer a White client. The employer's affirmative action obligation as a federal contractor was not an adequate defense. Additionally, the employment agency was not in a position to ascertain and evaluate the employer's affirmative action program. The employment agency was obligated to advertise in a manner that does not impermissibly exclude Whites. (See also Commission Decision No. 76-64, CCH EEOC Decisions (1983) ¶6648; Commission Decision No. 75-268, CCH EEOC Decisions (1983) ¶6452; and 29 C.F.R. §1604.6.)

In Commission Decision No. 70-0517, CCH EEOC Decisions (1973) ¶6298, the Commission found that an employment agency which administered and made referrals based on an unvalidated test that disparately impacted upon minorities, violated the Act. The employment agency also violated the Act by assigning counselors to its clientele on the basis of sex.

In Commission Decision No. 78-45, CCH EEOC Decisions (1983) ¶6728, the Commission found that a state employment agency did not violate the Act even though only males were referred to vacant WIN Program positions. Such a referral scheme is specifically authorized in a subsequent statute dealing with the WIN Program. (See also Commission Decision No. 74-64, CCH EEOC Decisions (1983) ¶6419, where veterans' preference referrals were found not to violate the Act.)

In Commission Decision No. 79-46, CCH EEOC Decisions (1983) ¶6781, the Commission found that employment agency referrals giving preference to males violated the Act. (Compare Commission Decision No. 74-64, CCH EEOC Decisions (1983) ¶6419, and Commission Decision No. 78-45, CCH EEOC Decisions (1983) ¶6728, allowing preferences for veterans and for male referrals to the WIN Program, respectively.)

In Commission Decision No. 76-139, CCH EEOC Decisions (1983) ¶6701, the Commission combined the "or otherwise to discriminate" language in §703(b) with the employment service's "inextricable involvement with referral activities and the administration of the employment compensation program" to subject the denial of unemployment compensation to scrutiny under Title VII. (Compare Vick v. Texas Employment Commission, 514 F.2d 734, 9 EPD ¶10,203 (5th Cir. 1975), where a different result was reached.)

In Commission Decision No. 76-129, CCH EEOC Decisions (1983) ¶6691, the Commission found the state employment agency's unemployment compensation and referral activities "inextricably intertwined" so that denial of unemployment compensation can result in a violation of the Act. In this instance, failure to follow up on a referral resulted in denial of unemployment compensation.

In Commission Decision No. 75-021, CCH EEOC Decisions (1983) ¶6473, dicta indicates that an employment agency's activity in causing an ad to be published in the "help wanted-male" column subjects it to Title VII liability under §704(b). In this instance, the charging party lacked standing because she did not apply for the advertised position; therefore, she could not show a real and present interest in the position.

In Commission Decision No. 71-762, CCH EEOC Decisions (1973) ¶6187, the Commission found that the employment agency's use of an unvalidated test for evaluating clientele, which disproportionately excluded Blacks, was discriminatory.

In Commission Decision No. 77-32, CCH EEOC Decisions (1983) ¶6583, the Commission found no discrimination where an employment agency, once it became aware of employer-placed sex limitations on a job opening, made the employer aware of EEO law and referred a female for the job.

(l) Court Cases

In Vick v. Texas Employment Commission, 514 F.2d 734, 9 EPD ¶10,203 (5th Cir. 1975), the court found that the phrase "or otherwise to discriminate" in §703(b) does not include the denial of unemployment compensation benefits since the denial was not influenced by referral activities which are not dependent on the operation of the unemployment compensation program. (See International Union, U.A.W. v. Director and Michigan Employment Security Commission, 9 EPD ¶9879 (E.D. Mich. 1974); and Commission Decision No. 76-139, CCH EEOC Decisions (1983) ¶6701, which reached the opposite conclusions.)

631.5 Exempt or Excused Activities

(a) General -

Not all of an employment agency's classification, referral, or other activities are covered under Title VII, so that they must be conducted on a nondiscriminatory basis. In certain circumstances, although there is apparently discrimination, the Act is not violated. In such cases, the employment agency's Conduct is excused or exempt by direct or by indirect language in the Act. Additionally, activities or practices by an entity that does not meet the §701(c) definition of employment agency are not covered under the employment agency provisions. Such entities included states and municipalities which were not covered prior to the 1972 amendments to Title VII, unless they were involved with the United States Employment Service and/or were recipients of federal assistance. (See Commission Decision No. 76-129, CCH EEOC Decisions (1983) ¶6691, and §631.3(a).)

Other excused or exempt activity includes making referrals to employers that are privileged to discriminate in certain respects (see below). In addition, the EOS should recall that employment agencies are not required to evaluate employers or potential employers or practices or activities violative of Title VII. (See Kaplowitz v. University of Chicago, 387 F. Supp. 42, 8 EPD ¶9762 (N.D. Ill. 1974), and §631.4(d).)

For further discussion of investigative techniques and of these defenses to Title VII violations, including those specifically set out below, the EOS should also refer to §604.10 of Theories of Discrimination.

(b) Specific Activities

(1) Bona Fide Occupational Qualification (BFOQ) - Section 703(e) specifically allows employment agencies to classify or refer any individual for employment in instances where a BFOQ for religion, sex, or national origin is reasonably necessary to the normal operation of a particular employer's business.

This exception is generally raised by an assertion that members of a particular sex, national origin, or religion are unable, because of a characteristic peculiar to their sex, national origin, or religion, to perform a particular job. For example, query whether being a female is a BFOQ for a position modeling women's clothes. Where a sex BFOQ such as this is alleged by the employer, the EOS should refer to the Sex Discrimination Guidelines, 29 C.F.R. §1604.6(b). That provision recognizes that an employment agency which fills an unlawful job order with a sex specification will be jointly liable with the employer placing the order, if it knows that sex is not a BFOQ for the job. However, no liability attaches if it does not have reason to believe the BFOQ claim is without substance, and it makes and maintains written records of such job orders which are available to the Commission. The employment agency is also obligated to keep informed of the applicable law, including Commission decisions. Additionally, §704(b) prohibits discriminatory job advertisements by an employment agency absent a BFOQ. The EOS should also refer to §631.4(f) which deals with acceptance of job orders that express a sex preference.

When dealing with the BFOQ exemption, the EOS should recall that there is no BFOQ for race or color and that the BFOQ exemption is to be narrowly construed. (See §625, Bona Fide Occupational Qualification, where the BFOQ exemption is treated in detail.)

(2) National Security - Section 703(g) exempts or excuses employment agencies from violations of Title VII when engaging in otherwise discriminatory referral activities or practices relating to (1) positions where access to the premises or the duties are "subject to any requirement imposed in the interest of the national security", and (2) individuals who do not meet the national security requirements. Therefore, if an employment agency receives a job order requiring that the job applicant meet certain requirements in the interest of national security before a referral is made, the employment agency may fill the job order as specified without violating the Act. (See §604.10(f) of Theories of Discrimination, which states that a determination of whether the charging party, from the employers perspective, meets or has ceased to meet the requirements is non-CDP.) (See also §622.4 of Citizenship, Residency Requirements, Aliens and Undocumented Workers, where the national security exception is discussed in detail.)

(3) Communist Party Membership -Section 703(f) exempts or excludes from the phrase "unlawful employment practice" any activity by an employment agency taken with respect to a member of the Communist Party or a Communist-front organization. The EOS should note that, in this instance, the discrimination is not on the basis of race, color, sex, religion, or national origin; rather, it is based on Communist Party membership.

(4) Special Programs for Veterans and Unemployed - Section 712 of Title VII provides that "[n]othing contained in this title shall be construed to repeal or modify any Federal, State, territorial, or local law creating special rights or preferences for veterans." Based on this exemption, employment agencies that give a referral preference to veterans in filling job orders specifying a preference for veterans do not violate Title VII, regardless of potential resultant sex-based discrimination since females are more likely to be excluded from job referrals for veterans. (See Commission Decision No. 74-64, CCH EEOC Decisions (1983) ¶6419, where veterans' preference referrals were found not to violate the Act.)

Additionally, an employment agency that gives priority to males in referral to a Work Incentive Program (WIN) does not violate Title VII, regardless of the apparent sex discrimination. Title IV of the Social Security Act which was amended in 1968 to add the WIN program mandates that males be given preference in filling vacant WIN positions. Since this law was enacted subsequent to Title VII and it addresses a specific, narrow problem, it prevails and supersedes Title VII in areas of conflict. (See Commission Decision No. 78-45, CCH EEOC Decisions (1983) ¶ 6728, where referral of males to vacant WIN positions was found not to result in a violation of the Act.)

(5) Indians On or Near Reservation - Section 703(i) exempts or excuses businesses or enterprises that publicly announce a preference for Indians living on or near a reservation from Title VII violations in that activity. Therefore, an employment agency that gives referral preference to "Indians living on or near a reservation" in accordance with a publicly announced policy, can successfully defend its actions based on the above provision. Under Commission Decision No. 74-26, CCH EEOC Decisions (1983) ¶ 16398, the public announcement must include, along with the availability of the position, an indication that preferential treatment will be given to Indians living on or near a reservation.

The EOS should note that this provision also affects advertisements made with respect to §704(b).

(b) Reliance on Commission Interpretation or Opinion -

Section 713(b)(1) exempts or excuses from Title VII liability any person whose activity or practice was in good faith, in conformity with and in reliance on any written Commission interpretation or opinion issued in accordance with the Act. This provision is applicable to employment agencies and can be relied on by employment agencies in responding to charges of discrimination. The EOS should also refer to the Sex Discrimination Guidelines, 29 C.F.R. §1604.6(c), which obligate employment agencies "to keep informed of opinions and decisions of the Commission on sex discrimination."

631.6 Employment Agency As Employer

(a) General -

An employment agency is a special and unique entity within the employment context. By procuring employees or employment opportunities, it can have a large impact on the employment of minorities and women simply by withholding or selectively granting its services. Its employees, as insiders, are able to ensure that the agency makes its services available on a nondiscriminatory basis. In recognition of this unique status, the Commission found that employees of employment agencies are entitled to protection from Title VII discrimination regardless of whether the employment agency qualifies as a §701(b) employer. (See Commission Decision No. 71-1598, CCH EEOC Decisions (1973) ¶ 6271.) Section 701(b) defines an employer as "...a person engaged in an industry affecting commerce who has fifteen or more employees...."

In Commission Decision No. 71-1598, §§701, 703, and 704 were read together and the "or otherwise to discriminate" language of §703(b) was coupled with the general prohibitions against retaliation in §704(a) to reach the above conclusion. The protection was afforded to employees of employment agencies because they are uniquely situated within the employment context and can protect the agency's clientele. Internal discrimination by an employment agency against its employees can chill the protected rights of the clientele. Also, in this respect, §703(b) prohibits employment agencies from otherwise discriminating against any individual.

(b) Discrimination Against Employees -

The employment agency must maintain a nondiscriminatory referral environment (see Commission Decision No. 70-172, CCH EEOC Decisions (1973) ¶6071), and employees are protected against such practices as: being segregated with respect to facilities or clientele; being obligated to conduct single sex interviewing or counseling; or, being obligated to make discriminatory referrals.

Example 1 - R, an employment agency, has an unwritten but nonetheless well known policy of satisfying employers' job wants and needs regardless of what they might be. Job counselors are instructed to contact employers and get confidential and unannounced job expectations to supplement the announced job needs. This has resulted in job counselors refusing to refer females for jobs where employers want males or Blacks for jobs where employers want Whites. CP, a job counselor with R employment agency, knew but refused to consider a confidential employer job expectation. A female was referred for a position that the employer confidentially informed CP was reserved for a male, even though no BFOQ was raised. R, upon learning of the referral, notified CP that she would be terminated in 2 weeks. CP consequently filed a charge alleging that she was being discriminatorily discharged for asserting the Title VII rights of the agency's clientele. R's defense of insubordination for failure to obey instructions fails, and R discriminated unlawfully.

Example 2 - R, an employment agency, has 2 secretaries, 5 job counselors, and an office manager. One of the job counselors is Black, the rest are White. Job counselors receive a salary plus a commission for successful placements. The amount of the commission is based on the salary received by the person placed. Clientele are screened and job counselors are assigned to interview particular clients. CP alleges that professional and highly technical job applicants who can demand higher salaries are discriminatorily screened away from him because of his race, Black. Investigation revealed that clients interviewed by CP are almost always seeking non-technical and semi-skilled jobs. Since R's reason that Black job counselors are less successful in placing technical and professional job applicants lacks any support, the practice is discriminatory.

(c) Commission Decisions

In Commission Decision No. 71-1598, CCH EEOC Decisions (1973) ¶ 6271, the Commission found jurisdiction under Title VII over the activities of an employment agency with respect to its own employees based on an interpretation of the interaction, of §§701, 703, and 704. The Commission noted that employment agency employees are "uniquely situated" to the extent that internal discrimination could have a chilling effect on the Title VII rights of the agency's clientele.

In Commission Decision No. 70-172, CCH EEOC Decisions (1973) ¶ 6071, the Commission found that an employment agency had a discriminatory referral environment because it had only one Black interviewer who was part-time and who did not have a desk or other facilities; this resulted in discrimination against Black job applicants.

In Commission Decision No. 78-46, CCH EEOC Decisions (1983) ¶ 6729, the Commission found an employment agency to be in violation of the Act, as an employer, where it denied unemployment compensation to a pregnant employee when it would not have done so if her disability were not pregnancy related. (Compare Vick v. Texas Employment Commission, 514 F.2d 734, 9 EPD ¶10,203 (5th Cir. 1975), where denial of unemployment compensation benefits to a pregnant client in its function as an employment agency, not an employer, did not violate the Act.)

631.7 Employment Agencies and the ADEA

(a) Introduction

The Age Discrimination in Employment Act of 1967 (ADEA), like Title VII, recognizes the impact employment agencies have on the employment market and, therefore, contains provisions specifically referring to them. Case law and Commission Decisions interpreting and applying Title VII to employment agencies should be used as precedent in interpreting the similar provisions regarding such agencies contained in the ADEA.[1]

Section 4(b) of the ADEA provides that "it shall be unlawful for an employment agency to fail or refuse to refer for employment, or otherwise discriminate against, any individual because of such individual's age or to classify or refer for employment any individual on the basis of such individual's age." Section 4(e) precludes certain advertisement practices indicating any preference, limitation, specification, or discrimination, based on age, absent the applicability of one of the Act's exemptions, e.g., where age is a bona fide occupational qualification (BFOQ). Section 4(d) prevents an employment agency from retaliating against an individual because s/he exercised a right or participated in any manner in a proceeding under the statute. Section 4(i) prohibits an employment agency from establishing or maintaining pension benefit plans that reduce or terminate benefit accruals or account allocations because of age. Section 8 requires an employment agency to post, in a conspicuous place, information deemed appropriate to effectuate the purposes of the Act.

The ADEA, like Title VII, contains certain exemptions that may apply to employment agency practices that would otherwise be discriminatory. Section 4(f)(l) addresses the aforementioned BFOQ exception and the reasonable factor other than age (RFOA) defense. Section 4(f)(1) also exempts employers in a foreign country from compliance with ADEA provisions if compliance would violate the laws of the country in which the workplace is located.[2] Section 4(f)(2) allows an employment agency to take an action otherwise prohibited, except for failure to hire or involuntary retirement on account of age, when it observes the terms of a bona fide seniority system or bona fide employee benefit plan which is not a subterfuge to evade the purposes of the Act. Section 4(f)(3) permits an agency to discharge or discipline an individual for "good cause."

(1) Employment Agency Defined

Section 11(c) of ADEA broadly defines an employment agency to include

any person regularly undertaking with or without compensation to procure employees for an employer and includes an agent of such a person; but shall not include an agency of the United States.

Section 11(a) of the ADEA defines "person" as "one or more individuals, partnerships, associations, labor organizations, corporations, business trusts, legal representatives, or any organized groups of persons."

An employment agency will be covered by the provisions of the ADEA if it regularly procures employees for employers covered by the Act.[3] (Of course, an employment agency may be covered under the Act as an employer with respect to its own employees - see infra, section 631.7(e)). Under the ADEA, section 11(b), an "employer" includes any agent of such person; a state or political subdivision of a state; any agency or instrumentality of a state or political subdivision of a state; and any interstate agency. The term "employer" does not include the United States, or a corporation wholly owned by the government of the United States. Personnel decisions affecting those members of the protected age group employed by the federal government are, however, covered under § 15 of the Act.

(2) Scope of Agency Definition

Under the ADEA, if an employment agency regularly procures employees for at least one employer covered by the ADEA, the employment agency is covered with respect to all of its activities, including those activities involving those employers otherwise not covered by the ADEA. See 29 C.F.R. § 1625.3(a).

In Brennan v. Aldert Root, 16 FEP 1643 (E.D.N.C. 1974), the defendant employment agency made a pre-trial admission that some of its clients came within the ADEA. The court determined that so long as one of an employment agency's clients is a "covered employer," the agency is subjected to coverage by the ADEA with respect to all of its activities. Id. at 1644.

(b) Private Employment Agencies

Private employment agencies are entities that meet the § 11 definition of employment agency set out above. Private in this sense means non-public (i.e., not an entity of federal, state, or local government).

(c)Public Employment Agencies

The definition of employer was revised by the 1974 amendments to the ADEA to include state and local government entities within the scope of the Act. Personnel actions affecting employees of the federal government were also granted coverage by the 1974 amendments, with the addition of § 15 to the ADEA.

(d) Covered Activities

(1) Generally

The same kinds of activities by employment agencies prohibited under §703(b) of Title VII, as were discussed in §631.4 of the Compliance Manual, are also unlawful when based upon age under §4(b) of the ADEA.

Under the ADEA, an individual must be 40 years of age or older to obtain protection. With respect to individuals of differing ages within the protected age bracket, for example, one 45, the other 60, the Act requires that employment-related decisions be made on a basis other than age. See 29 C.F.R. § 1625.2(a).

The principles set out in § 604/804 of the Compliance Manual, Theories of Discrimination, are similarly applicable in determining, when the Act is violated.

(2) Referral

Referral activities are the primary function of employment agencies. Discriminatory failure or refusal to refer occurs where workers 40 years of age and above are not sent to particular jobs because the employment agency believes persons under 40 are preferred by the employers.

Example - Discriminatory Referral Activities -

R, an employment agency, dealt with several potential employers. CP, a 45-year-old job applicant, alleges that, in response to a job advertisement by R for available secretarial positions, she contacted R and asked to be referred. CP alleges that she was not referred, while less qualified individuals, 39 years and younger, were referred. She also alleges that, as a matter of policy, R refers younger job applicants to fill more "glamorous" higher paying positions, while those applicants 40 years of age and older are referred to "mundane" lower paying positions. R acknowledges that CP's allegations are true but defends its actions of the grounds that its clients (employers) would not continue business relations otherwise. The proffered explanation of the employment agency's policies does not justify the discriminatory referrals; therefore, R is in violation of the ADEA. R's clients' solicitation of individuals under the age of 40 also violates the ADEA.

(3) Job Opportunity Advertisements: Publish or Print

Absent a situation such as where age is a BFOQ, an employment agency would violate the ban on age discrimination by sending out to prospective employers listings of available personnel containing specifications of age. Likewise, a violation would be found if an agency chooses to use such terms as "career girl," or "recent graduates" in advertising job opportunities. See Brennan v. Approved Personnel Services, Inc., 529 F.2d 760, 10 EPD ¶ 10,472 (4th Cir. 1975).

The Commission's position is that all terms and phrases contained in job ads which deter the employment of older persons are in violation of the Act unless one of the exceptions applies. 29 C.F.R. § 1625.4(a).

(e) Employment Agency As Employer

If an employment agency meets the criteria to qualify as an "employer" under the ADEA, it can be held responsible for age bias against its employees within the protected age group under §4(a). See footnote 3. If the agency does not qualify as an "employer," for example, it employs less than 20 employees, it still may be held responsible for employment discrimination against its own workers under § 4(b).

Section 1625.3(b) of Title 29 of the Code of Federal Regulations states that the prohibitions of § 4(b) of the ADEA not only apply to the referral activities of a "covered" agency but "also to the agency's own employment practices, regardless of the number of employees the agency may have." This extended coverage is applicable to employment agencies since § 4(b) makes it unlawful for an employment agency to "otherwise discriminate against any individual" in the protected age bracket. It should be remembered, however, that in certain instances an agency's apparent discriminatory activity, whether acting in the role of employer or agency, may be excused or exempted by the Act. See infra, § 63l.7(f)(3).

(f) Exempt or Excused Activities

(1) In General

An employment agency's apparent discriminatory classification, referral or other activity will not trigger a violation of the ADEA where one or more of the exemptions to the Act is shown to apply. Exemptions to the ADEA, as with other remedial statutes, are narrowly construed.

(2) Specific Activities

Section 4(f)(l) of the ADEA provides that an employment agency can take any action otherwise prohibited by the ADEA if age is a BFOQ or if the differentiation is based on reasonable factors other than age (RFOA). An advertiser can indicate an age- based preference, limitation or specification when age is a BFOQ for employment. As with Title VII, the Commission construes this exception very narrowly. See 29 C.F.R. § 1625.6. The RFOA defense often will not apply in the context of job advertising as 29 C.F.R. § 1625.7(c) states that such a defense is not available when an employment practice uses age as a limiting criterion. (See generally Compliance Manual Section 632.2(d)).

In regard to an agency's role as an employer, § 4(f)(2) of the ADEA provides that it is not unlawful for an employment agency to observe the terms of a bona fide seniority system or bona fide benefit plan, which is not a subterfuge to evade the purposes of the Act, so long as the plan does not excuse a failure to hire or compel involuntary retirement because of age. See 29 C.F.R. § 1625.8 and § 1625.9.

Finally, section 4(f)(3) of the ADEA allows an employment agency in the role of employer to "discharge or otherwise discipline an individual for good cause."

631.8 How To Investigate

(a) General

Unlike employers or labor organizations, employment agencies will most likely have the following information which should be secured and analyzed, where appropriate.

(1) A card or folder for each job applicant with whom the agency comes in contact. The card or folder usually contains basic information such as: type of job in which the person is interested, basic qualifications of the individual, a listing of jobs to which the person was referred, and the results of referrals.

(2) Cards or files on job orders or requests submitted by employers with which the agency deals. The job order cards or files usually contain the following: the name and location of the employer; the job or jobs for which applicants are requested; the title, basic duties, and salary range of the jobs or jobs; the basic qualifications the job applicants must possess; a list of job applicants referred by the agency for the job or jobs; and, the results of the referrals.

(3) Records containing a listing of job vacancies to which the agency can refer job applicants. The listings may be categorized by job (clerical, personnel, engineer), by geographic area (city, state), by industry (manufacturing, service, labor), or by employer.

(4) Records of BFOQ requests made by employers, if a defense based on BFOQ is raised. (See Sex Discrimination Guidelines, 29 C.F.R. § 1604.6(b); and § 632, Ads, Recordkeeping, and Notice, to determine when such records are appropriately kept.)

(b) In addition to the above information, the following suggested areas of inquiry should be pursued, where appropriate, with the charging party. If the charging party or potential charging party is complaining about classification, referral, or other discrimination by an employment agency, investigators should attempt to secure the following information, where available, in documentary form.

(1) A detailed statement from the charging party alleging exactly what practice of the employment agency is discriminatory. Be as specific as possible.

(2) A statement of why the charging party chose a particular employment agency, whether by referral, because of the types of jobs the agency handled, or in response to a newspaper or other advertisement. The date of the initial contact and/or discriminatory act or acts should be noted.

(3) Determine the particular job or jobs to which the charging party sought referral and the minimum qualifications required.

(4) Determine the charging party's background, employment history and qualifications for the requested referrals, and whether the employment agency was aware of the qualifications.

(5) Determine what referrals, if any, were made, and their results; also, determine how any other alleged discrimination occurred.

(6) Determine what evidence, including witnesses, the charging party believes is available to support the allegations of discrimination.

(c) The following information should be secured from the respondent in written form:

(1) A statement of the employment agency's policies and practices as they relate to the allegations of discrimination. In referral situations, the statement should include how the employment agency determines which job applicants are referred to which vacancies or to which employers;

(2) copies of the appropriate records or files relied upon by the employment agency to determine whether the charging party was a suitable referral candidate and for a particular job;

(3) copies of job orders for which the charging party was a suitable referral candidate, which indicate minimum qualifications required, referrals made, results of referrals, and the Title VII/ADEA status, background, employment history, and qualifications of the candidates referred; and

(4) where appropriate, copies of job orders placed by employers for jobs to which the charging party asked to be referred. Information on candidates referred should be obtained, including Title VII/ADEA status, background, employment history, and qualifications.

(5) Determine what defenses or justifications the employment agency offers to the allegations of discrimination.

(i) If an employer preference such as that for veterans, or an exemption such as a BFOQ, is alleged as a defense or justification, get copies of the requests or job orders.

(ii) If an employer's affirmative action plan is alleged as a defense or justification, get copies of the request or job orders.

631.9 Cross References

(a) Theories of Discrimination, § 604/804
(b) Affirmative Action, § 607
(c) Terms, Conditions, and Privileges of Employment, § 613
(d) 704(a) Retaliation, § 614
(e) Segregating, Limiting, and Classifying Employees, § 618
(f) Citizenship, Residency Requirements, Aliens, and Undocumented Workers, § 622
(g) Bona Fide Occupational Qualification, § 625/825
(h) Unions, § 630
(i) Ads, Recordkeeping, and Notice, § 632

[1] In considering those provisions of Title VII and the ADEA dealing with deferral, the Supreme Court stated that,

Since the ADEA and Title VII share a common purpose, the elimination of discrimination in the workplace, since the language of § 14(b) [of the ADEA] is almost in haec verba with § 706(c) [of Title VII], and, since the legislative history of §14(b) indicates that its source was §706(c), we may properly conclude that Congress intended that the construction of § 14(b) should follow that of § 706(c).

Oscar Mayer & Co. v. Evans, 441 U.S. 750, 756, 19 EPD ¶ 9216 (1979). Given the above analysis of § 14(b) and §706(c), it is also proper to conclude that Congress intended that the construction of §4(b) [ADEA] should follow that of § 703(b) [Title VII].

[2] Section 4(h)(l) of the ADEA states that

If an employer controls a corporation whose place of incorporation is in a foreign country, any practice by such corporation . . . shall be presumed to be such practice by such employer. (emphasis added).

Section 11(f) defines "employee" as including any individual who is a citizen of the United States employed by an employer in a workplace in a foreign country.

[3] A "covered employer" refers to a person engaged in an industry affecting commerce who has twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year. See § 11(b) of the ADEA.