The new world of Internet job applications affects employer’s liability

New government rules define who qualifies as an online applicant while leaving room for employers’ own criteria

Last year Monster.com had 22.5 million people post resumes on its Web site. Lockheed Martin claims that 50,000 applicants a month post resumes on its Web site. Microsoft boasts that 80,000 individuals place resumes on its site each month. By the year 2003, it was estimated that 50 percent of all applicants applied for their jobs through the Internet.

Are all of these people considered applicants under the law?

That question was presented by Terrence McInnis, partner, Ross, Dixon and Bell, LLP of California, at the Professional Liability Underwriting Society’s (PLUS) Conference recently held in Chicago. “Hot Topics in EPL” (Employment Practice Liability) was discussed by a panel of experts that picked apart laws on disparate impact, religious discrimination, whistle blower retaliation and Internet applications — as well as new rules about applicants applying for jobs via the Internet.

“In recent years employers and insurers have been looking at six figures to defend employment cases but now may see that number grow larger into the millions with new rules in place as more people apply for positions electronically,” McInnis said. “One of the new aspects of the situation is that insurers have always had underwriters and claims people being deposed in such litigations, but now insurance technology (IT) people will be the ones called upon for depositions about electronic documentation of all kinds, storage and servers — and that is a new development.”

What is ESI? Electronically Stored Information, according to government guidelines can include all of the following: e-mail, word processed docs, databases, spreadsheets, calendars, address books, program data, instant messages, video/audio recordings (including voicemail) stored/located on PC, laptop, network server, PDA, CD-Rom, DVD-Rom, MP3 player, flash memory card, digital voicemail, and third party storage system. The list has expanded and all of these documents can and will be used in an employment liability suit, McInnis said.

Electronic applicants
One positive step, according to McInnis it that as of February 2006 new government rules were released that finally laid out exactly who an Internet applicant is. The four criteria necessary to be an applicant are:

• The individual must submit an expression of interest in employment through the Internet or related electronic data technologies;
• The employer must consider the individual for employment in a particular position;
• The individual’s expression of interest must indicate that he or she possesses the basic qualifications for the position; and,
• The individual must at no point in the selection process prior to receiving an offer of employment from the employer, remove himself or herself from further consideration or otherwise indicate that he or she is no longer interested in the position.

But is everyone who applies “via the Internet” considered by law as an applicant?

“To further define who an Internet applicant is the government said basically that employers can lay out certain guidelines in addition to the four criteria given. Those guidelines can help companies narrow down who actually is a bonafide applicant under the law,” McGinnis said.

“The key is consistency,” added Thomas Ham of Aon Financial Services Group in Chicago. “Having consistent, objective guidelines in place about who actually qualifies will keep your company out of trouble.”

Guidelines protect employers
Some guidelines suggested by the panel that further narrow consideration are:

• An employer can establish that only resumes for a specific position will be considered;
• That the company will take a random sampling of a Web site so they will not have to consider all 50,000 resumes;
• That employers can specify numerical limits, saying they will only consider the first 500 applicants.

An employer can also require that basic qualifications for the job must be met, such as having a bachelor’s degree.

“Having criteria that say the applicant must have a degree is fine but saying that the degree must be from a specific college or university would not be an objective criteria and could not be used to eliminate that applicant,” McGinnis added.

The panelists also pointed out that applicants can remove themselves from consideration for the job.

Applicants can also be eliminated legally when they do not respond to queries from the employer or if the employee lists a salary range that is not in the range of what the employer has established, or if the potential employee is not willing to re-locate if the job description calls for a move.

Disparate impact
Ross, Dixon and Bell’s McInnis outlined this example:

Joe, a 25-year-old minority with a GED, mails his resume to Widget Manufacturing. applying for an entry level job. Joe has no access to the Internet. Widget requires its employment application rather than a resume. Widget requires all its applications to be remitted via the Internet. Due to its employment application policies, Widget never considered Joe’s resume.

“Is this company leaving itself open for a lawsuit?” McInnis asked.

“In the real world, if this employee is a good candidate and he put his application on a napkin we would accept it,” said Anita Wilson, senior employment counsel for Sara Lee Corp. in Illinois. “It is really difficult to be consistent because the competition for talent is so intense right now that we will take resumes in a variety of ways, even if certain guidelines have been established. To answer your question specifically about Widget Mfg., I would say they are covered if the candidate did not submit his resume via the Internet.”

McInnis disagreed.

“What the Widget Manufacturing example illustrates is a company could be leaving itself open for a disparate impact suit,” McInnis said. “Statistics tell us that only 29 percent of black applicants have access to the Internet, 23 percent of Hispanics have access and the percentage is even lower for those with disabilities. Countrywide, 58 percent of applicants do have access to the Internet. A case could be made that Widget established guidelines that were unreasonable and therefore open to disparate impact.”

Additional examples discussed by the panel included religious discrimination, retaliation, sexual harassment and whistle blower issues.

In all cases the companies did not clearly define just who an applicant was.

“It took the government six years to finally define what an Internet applicant is but for all of us, insurers, attorneys, human resource personnel and claims people, understanding all the guidelines and being in total compliance will remain a challenge for many years to come,” McInnis said.

Hot Topics in EPL Panel participants were: moderator, Richard Lehr, partner, Lehr Middlebrooks & Vreeland, PC, Alabama; Thomas Hams, director/National EPLI Practice Leader, Aon Financial Services Group; Terrence McInnis, partner, Ross, Dixon & Beil, LLP, California; Robin Symons, partner, Epstein Becker & Green, PC, Florida; and Anita Wilson, senior employment counsel, Sara Lee Corp., Illinois.