Oracle’s College-Recruiting Bias Case Highlights Risks

Bloomberg Law—Ben Penn

Corporate recruiting and college campuses are such a natural combination, what could possibly go wrong? A number of workers—and the federal government—say some employers use it as a way to exclude minorities and older people.

Oracle Corp. is being sued by the Labor Department’s contractor watchdog, which alleges that the tech giant discriminated against minorities when hiring recent college and university graduates.

Hewlett Packard and PricewaterhouseCoopers face similar claims, related to possible age bias over their recruiting practices, brought by private parties.

Recruiting on college campuses is perfectly legal, if done correctly, according to management and plaintiffs’ attorneys. But as these cases show, the displacement of certain groups is a legal problem, even if it’s only an unintended consequence of the recruiting.

Meanwhile the Seventh Circuit has thrown a wrench into the issue—at least in the Midwest—by holding that only employees, not job applicants, are protected against the unintentional effects of neutral recruitment practices.+

Seemingly Neutral, but Problematic

The complaint against Oracle alleges that the company “strongly preferred hiring Asian recent college graduates,” resulting in a refusal to hire “more than 100 qualified, non-Asian, applicants.”

The lawsuit from the Labor Department’s Office of Federal Contract Compliance Programs alleges that the college recruiting process intentionally discriminated against certain races, but the unintentional impacts could fall on older workers.

The OFCCP ensures government contractors comply with federal anti-discrimination requirements, but doesn’t have the authority to examine age discrimination charges. However, employers that recruit on campuses can face litigation on age bias charges filed with the EEOC, Michael Eastman, senior vice president with the Center for Workplace Compliance, told Bloomberg Law in an email statement. Eastman advises employers on how policy changes can affect their compliance programs.

“Employers should know that the EEOC will pursue charges of discrimination based on employer practices that may deter individuals over 40 from applying for a job,” he said. The EEOC has the authority to investigate charges of discrimination, including claims based on the Age Discrimination in Employment Act., against most private employers with a certain number of employees.

The Jan. 23 Seventh Circuit ruling is specifically focused on the unintended discriminatory effects of seemingly neutral employment policies, known as “disparate impact,” something that could come into play if more college recruitment discrimination cases are taken up. The ruling said that only existing employees, not external candidates, are protected from the disparate impacts of neutral recruitment practices.

That means that while employers still can, and should, recruit on college campuses, they need to do so carefully, Eastman said.

Ed-to-Tech Pipeline

Universities and technology companies regularly collaborate to build the pipeline from higher education to available job openings. The University of California at Berkeley, situated in the San Francisco Bay Area, had a career fair scheduled for this week that is “oversubscribed with 200 employers attending and we anticipate 2000+ students will talk with the employers,” university spokesperson Adam Ratliff told Bloomberg Law in an email.

At events like this, he said, competition for candidates is “intense.”

Recruiting on campus is generally lawful, as long as it’s not the sole recruiting effort for certain jobs, AARP Foundation Litigation senior attorney Daniel Kohrman told Bloomberg Law in an email. The AARP Foundation is a legal advocacy group for people 50 and older.

“There should be another route whereby older, qualified candidates can gain access to such job openings absent some unusual basis for such exclusive recruitment,” he said. “In the first place, there should be no dispute that the federal Age Discrimination in Employment Act prohibits intentional exclusion of older workers from access to job openings for which recent college grads are sought.”

Labor Department Steps In

It’s not surprising that the Labor Department’s Office of Federal Contract Compliance Programs is targeting roles filled by recent college and university graduates, Eastman said.

The more people filling the roles, the more data the OFCCP can access, and the easier it is to find potential statistical disparities, he said.

“There are a lot of people in these positions,” Eastman said. Where the workers are recruited isn’t necessarily key to targeting discrimination in entry-level jobs, but the plentiful nature of such jobs provides a lot of information to be analyzed.

Pandora’s Box

The Seventh Circuit decision limited protections against the unintentional effects of neutral recruitment practices to employees, but Outten & Golden partner Laurence Moy hopes this doesn’t give employers the encouragement to “take more liberties with applicants” and hiring decisions. Outten & Golden is a plaintiff-focused employment law firm.

“Our firm and other firms are involved in cases where even arguably neutral requirements turn out to have an adverse impact or negative impact on hiring particular groups,” he told Bloomberg Law. Neutral criteria can sometimes be used as a proxy to screen out certain people, older workers, and other groups, he said.