“The auditors are here.” These can be some of the scariest words an HR manager can hear. People showing up to make sure you are not discriminating–and keep in mind the discrimination doesn’t have to be on purpose. It can be due to disparate impact.

Two articles on this topic caught my eye. The first is from the New York Times–an article about a restaurant accused of discrimination. It raises these questions:

WHATEVER the outcome, Mr. Boulud’s headaches bring to light a common problem in high-end restaurants around the country. In an industry that relies largely on immigrants, just how difficult is it for workers who don’t speak English as a first language to get ahead? And at what point does hiring someone to achieve a certain look or style in a restaurant turn into racism?

The second article was from a CNN Transcript. A woman, Lisa Bailey, was denied a job at Harvard because she had poor credit. She claims discrimination–because minorities tend to have worse credit scores than whites a policy of making decisions based on credit has a “disparate impact” on minorities. Therefore, she claims, it is a discriminatory policy. She’s suing and apparently has the backing of the EEOC.

For the record, her job involved handling money. Companies should be very careful who they let handle their money. But if your poor credit is due to periods of unemployment or medical bills or something outside your control, is it fair?

Well, life is never fair. But should companies be allowed to make decisions based on how they want their restaurant to “look” or what people’s credit scores are? Whatever you think the answer should be, remember the EEOC has their own opinion and as a business owner, you better be in compliance.

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4 thoughts on “Race and Your Business

  1. Good morning, Evil!

    The Harvard story is one that has peaked a lot of attention in my area. I’m in Massachusetts and I used to work at in higher ed. Putting a bad credit risk in a position where that individual was in charge of processing alumni donations (via check and credit card) is a bad risk, especially in an age of identity fraud. It the individual in question had instead applied for a less glamourous (and lower pay grade) receptionist position, I am certain the poor credit risk would be welcome at Harvard in a non-finance role.

  2. The “disparate impact” issue sounds like a run around the law. Is Harvard at fault because society (the society of the minority, no less) has created these parallel issues? I agree with Mrs.Bart. There’s a reason businesses can discriminate against convicted felons, too. (Not that I’m directly comparing people with low credit to criminals – I’m just saying that some people are not good risks.)

    On another hand entirely, does Ebony get sued if they don’t hire white people?

  3. Mrs Bart is absolutely correct–the job did include handling finances and there are very valid reasons you wouldn’t want someone with money problems in a job that involved handling money.

    What makes it suspect–and why I think the EEOC got involved–is that she was, apparently, doing the job as a temp. It was just when she was going to be made permanent that they ran the credit report.

    I don’t know how true that is or what the exact circumstances were surrounding it. However,if a company is going to claim that clean credit is necessary for the job, it seems like they would have to run a credit check for temps as well.

  4. FHL,

    You bring up excellent points. I though the same thing when some woman was bragging about how her company was 98% female. I wonder where the EEOC is on cases like that?

    I think you can argue that a magazine like Ebony has a distinct audience and that audience can best be reached by African American writers. However,if you can make that argument, it seems you can also make the argument that if your target is group x then other people from group x (or the opposite sec of group x) is the best sales force. Seems to open up a lot of discriminatory possibilities.

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