Hiring and Firing in New Jersey: A Legal Minefield

By Thomas N. Ryan, Esq.

Lawsuits arising from the workplace have proliferated not only in New Jersey, but throughout the United States. The pitfalls facing employers are many, and the potential damages to them are great. This article offers employers some guidelines on how to avoid the pitfalls - a partial list of do's and don'ts, if you will.

Devoting the necessary time and attention to the hiring process is one way that employers can avoid becoming defendants. Such attention makes not only good legal sense but also good business sense, because while tending to limit claims of employment discrimination, it tends to result in hiring the most qualified candidate and a corresponding reduction in turnover.

The New Jersey Law Against Discrimination (NJLAD) prohibits discrimination on the basis of a variety of criteria. Included are race, color, religion, gender, national origin, ancestry, age, disability, marital status, familial status, sexual orientation, atypical cellular or blood trait, genetic information, and service in the armed forces. Individuals who meet any of the above criteria are considered to be members of a protected class. Claims of employment discrimination are monitored on the federal level by the Equal Employment Opportunity Commission (EEOC) and on the state level by the New Jersey Division on Civil Rights (NJDCR).

In evaluating your hiring and selection procedures, be aware that some procedures that appear neutral and benign may still having an adverse impact upon members of a protected class. Though not intending to discriminate, certain may adversely impact members of a protected class, and are therefore, in the eyes of the law, discriminatory. To steer clear of discrimination in the hiring process, employers must validate the selection procedure by showing the relationship between the criteria used in hiring and job performance.

In few areas of the law is an ounce of prevention worth so much. Because the laws governing employment are constantly evolving, often confusing, and different among states and between state and the federal government, employers should consult a lawyer who specializes in labor and employment law.

RECRUITING, INTERVIEWING AND TESTING - LEGALLY
Screen all newspaper ads, brochures and other solicitation forms for discriminatory wording. Materials must be free of language that could arguably constitute evidence of discrimination. They should also be free from language that implies a fixed duration of employment so that you don't inadvertently obligate yourself to a condition of employment that you never intended.

Interviewers must know how to conduct an interview properly. Never promise permanent employment. Never promise that termination will be only "for cause." Inform candidates in the interview that it is an "employment-at-will" position. Document each interview.

Testing can be a valid means of evaluating job ability and fitness. Such tests, however, are the subject of considerable scrutiny by the EEOC and the NJDCR. To measure simple skills, pre-employment tests should be professionally prepared so as to ensure non- discriminatory results.

IMMIGRATION REFORM AND CONTROL ACT
The NJDCR prohibits inquiries into whether an applicant is now or intends to become a U.S. citizen. The Immigration Reform and Control Act, however, prohibits the employment of "unauthorized aliens" and penalizes employers who hire them. Once employees are hired, they must complete INS Form I-9, and provide a document establishing their identity and employment eligibility.

EMPLOYMENT APPLICATIONS : TO ASK, OR NOT TO ASK?
Employment applications should include only questions that are job-related and relevant to an applicant's qualifications. Applicants should not be encouraged to answer questions that are unrelated to the job for which the applicant is applying. The EEOC suggests that employers consider the following three questions in deciding whether to include a particular inquiry on an employment application or in a job interview:

• Will the question tend to eliminate minorities and women from consideration?
• Is the information necessary to judge the applicant's competence to fill the job?
• Are there alternative, non-discriminatory ways to secure relevant information?

Changes in statutory and case law have severely restricted what business owners or human resources managers can ask prospective workers - seemingly to the point that there are more questions that can't be asked than can. Review your applications and interview questions with a critical eye, and better yet, run them by an attorney proficient in the field.

In general, age is deemed irrelevant in most hiring decisions and, therefore, questions regarding date of birth are considered improper. Such questioning may violate the federal Age Discrimination Employment Act (ADEA) and/or the New Jersey Law Against Discrimination (NJLAD). Questions about when applicants graduated from high school - which may reveal their ages - are viewed as improper for the same reason. If such information is required for health insurance, pension or profit-sharing plans, this information can be obtained after the person is hired.

Avoid questions regarding race, religion, national origin, and ancestry, both on applications and during interviews. Do not ask for a photograph of the applicant. Questions about physical traits and disabilities are also off limits, unless physical condition is a legitimate job-related qualification. Avoid inquiries about height, weight, and health. Employers are prohibited from making inquiries into an applicant's medical history and from requiring medical examinations prior to extending an offer of employment. Employers are permitted, however, to ask applicants about their ability to perform job-related functions and have them describe or demonstrate how, with or without reasonable accommodation, they will be able to perform such tasks. Post-offer medical inquiries and examinations are permitted if they are required of all new employees in the same job classification, regardless of disability.

Sex and marital or family status is also a taboo subject on job applications and interviews, because such questioning gives at least an appearance of sex discrimination. Again, if this information is required for a legitimate reason, it can be obtained after the applicant has been hired.

Even questions about conviction records should generally be avoided, according to the NJDCR, unless they are job-related. The NJDCR recommends never asking about prior arrests. Because state law prohibits employers from discharging, disciplining, or refusing to hire workers whose wages have been subject to garnishment, do not ask applicants whether they have been the subject of garnishment proceedings.

It may seem that employers are barred from asking prospective employees almost everything. Here's one area of inquiry that is legal - the use of illegal drugs. Employers can ask applicants whether they use such drugs, and also whether they will agree to be bound by the company's drug policies and submit to drug testing. You may not, however, discriminate against people for their use - or non-use - of legal tobacco, unless you have a rational, job-related reason to do so. New Jersey has a "Smokers Rights Law" that protects smokers from job discrimination but does not restrict employers from prohibiting smoking on company premises.

CREATING CONDITIONS OF EMPLOYMENT
An employment application can be utilized to confirm conditions of employment. Prospective employees who sign the application acknowledge their consent to these conditions. The following statements are conditions of employment that may be included in an employment application:

• I hereby declare the information provided by me in this application as true and complete, and I understand that falsification of this information is grounds for refusal to hire, or, if hired, termination.
• I authorize you to request, receive and verify all information given in this application.
• I further acknowledge that if I am employed by the employer, my employment will be at-will, and may be terminated with or without cause at any time by me or by the employer.

THE PRE-EMPLOYMENT PHYSICAL - WHEN, WHY AND HOW?
The ADA and the NJLAD prohibit pre-offer medical examinations and medical history questionnaires. The employer may ask applicants questions regarding their ability to perform job-related functions, but nothing beyond that as it relates to their health. An employer is permitted to make an offer of employment contingent on the results of a medical examination or information revealed on a medical history questionnaire - but only if that exam or questionnaire follows a "conditional offer of employment." The use of post-offer medical examinations must meet certain requirements, including:

• Requiring all new employees in the same job category to submit to medical examinations, regardless of disability.
• Maintaining medical information on separate forms and in files separate from the regular personnel file.
• Maintaining the confidentiality of medical records.

When using pre-employment, post-offer physical examinations, employers should be able to demonstrate that:

• There is a relationship between the medical examination and the essential functions of the job in question.
• The company acted in good faith in seeking and using an informed medical opinion about an applicant's health status.
• The examination reveals a physical impairment that would prevent the prospective employee from performing the job even with a reasonable accommodation.
• Refusal to employ a person who cannot pass a physical does not reflect bias against the applicant in particular or against "disabled" individuals in general.

Once employment begins, the ADA bars employers from requiring a medical examination and from making medical inquiries of employees unless such examinations or inquiries are job-related and necessary to conduct business.

DRUG TESTING OF APPLICANTS
In private, non-union employment, there are generally no restrictions on drug testing of applicants. In fact, employers are required to test applicants for, and employees in, certain transportation positions. Legal problems in drug testing can be reduced by establishing a written policy, using qualified labs with chain of custody for collected specimens, and corroborative testing of results using gas chromatography/mask spectrometry. Tests for illegal drugs are not considered medical examinations. Testing of employees for illegal drug use is not prohibited by statute in New Jersey. However, the New Jersey Supreme Court has limited random drug tests to employees who work in safety-sensitive positions.

CREDIT AND BACKGROUND CHECKS
Recent changes in the law impose new obligations on employers when they rely on credit and background checks as a hiring tool. Amendments to the Fair Credit Reporting Act (FCRA) impose notice and disclosure obligations on employers who seek information about an applicant's or employee's credit history, criminal background, medical history, workers' compensation history, or motor vehicle record.

Employers are required to notify prospective and current employees at the outset if they intend to use a credit check. The notification must be in writing and contained in a document that consists only of the notification. Such information should be kept strictly confidential by the employer. Employers that decline to hire based even in part on credit information must provide unsuccessful applicants with notice of both the adverse action and of their right to obtain a free copy of their report from the consumer reporting agency within 60 days. Unsuccessful applicants also have the right to the identity of the consumer reporting agency that provided the credit information and to dispute the accuracy or completeness of the information. For an adverse employment decision to be within the law it must have been made by the prospective employer, not by the consumer reporting agency.

NEGLIGENT HIRING
The number of negligent hiring lawsuits being filed against employers is rapidly increasing and usually arises when a third party is injured by an unfit employee who has been hired by an employer. Ordinarily, the third party claims that the employer failed to conduct a thorough background check on the employee and that, if there had been such an investigation, the employee would have never been hired.

To prevail in New Jersey, the third party in such an action must show that the employer knew or had reason to know of the unfitness, incompetence, or dangerous attributes of the employee; that the employer could reasonably have foreseen that those qualities created risk of harm to other persons; and the employee's unfitness directly caused injury.

Employers should carefully review all information provided by a job applicant. Pay special attention to gaps between jobs and the failure of an applicant to answer certain questions. Obtain a consent and release to gather information from former employers, and even if the former employers have a policy against releasing personnel information, it can be demonstrated that, at the very least, an effort was made to obtain it. Contact personal references provided by the applicant. Verify prior residences given by an applicant to make sure that none has been omitted or changed. Document the information that was obtained and what efforts were made to obtain additional information.

Thomas N. Ryan is a partner at Laddey, Clark & Ryan and maintains a specialty in labor and employment law. For more information on him and his practice, click on the Our Attorneys section of this website