Test Used to Ensure Fair Housing Also Can Combat Hiring Bias

A decades-old investigative technique the federal government uses to expose evidence of discriminatory home-selling practices nationwide is also an effective tool to uncover patterns of hiring discrimination.

The US Justice and Housing and Urban Development departments both use matched-pair testing—also called auditing—to clamp down on real estate agents who violate fair-housing standards by denying equal opportunities to home buyers based on their race, religion, and other protected characteristics.

Agencies charged with curtailing workplace discrimination could yield similar successes in detecting bias issues at the early stage of the hiring process if they adopt this “underutilized” testing method, according to a new report from the New School’s Institute on Race, Power and Political Economy and the National Employment Law Project that was provided to Bloomberg Law.

Under matched-pair testing, two or more individuals with similar qualifications—but of different races, gender identities, or other protected classes—would pose as applicants for the same job at the same company to test whether they would be treated differently based on their race.

The test’s findings, which may include who gets to the next stage in the hiring process and how differently the testers were treated, would be analyzed to assess whether illegal bias occurred.

Using this tool to target employers and staffing agencies would potentially change their behavior, relieve current workers from having to identify and report discriminatory issues they’ve experienced, and ensure proactive enforcement of antidiscrimination laws, the report said.

Proactive Tool

Hiring discrimination is particularly difficult to detect because those not hired often don’t know why or who was selected instead, said Rebecca Dixon, executive director of NELP and co-author of the report. As a result, employers are unlikely to be held accountable, she told Bloomberg Law.

“The audit testing is a way to proactively look for discrimination and change behavior,” Dixon said. “By increasing the chances that you will get caught for discrimination, you will work harder as an employer to make sure you’re doing it the right way. So it really can shift behavior throughout the labor market.”

“For a problem that is grounded structurally over time in such a persistent and pernicious way, leaving the onus of detection to individuals is not a good approach,” said Darrick Hamilton, a professor of economics and urban policy at the New School and co-author of the report. “Discrimination has been a feature in our economy.”

Matched-pair testing may be more effective than relying on litigation, said Nicole Grunfeld, a partner at Katz Melinger PLLC.

Most employers may not overtly express discrimination during the application process, so job applicants are often unaware when they aren’t hired because of bias, she said. That makes it difficult for plaintiffs to prove bias in failure-to-hire cases unless the employer’s action was “really blatant,” Grunfeld said.

Matched-pairing might be more effective for large employers because they are more likely than smaller companies to show patterns of biased hiring practices, she added.

Tony Torain II, a shareholder at Polsinelli PC who represents businesses, acknowledged matched-pair testing’s effectiveness in eliminating hiring discrimination.

Companies should begin “auditing their own hiring processes before it becomes an issue with the EEOC,” or an applicant says they were turned down for employment because of a certain protected characteristic, he said.

Localized Use

Matched-pair testing already has a legal foothold in New York City, where a 2015 law authorizes the city’s Commission on Human Rights to investigate local employers, labor organizations, and employment agencies for potential discriminatory hiring practices.

The commission tested 82 employers in fiscal year 2019 and filed 36 complaints to address their conduct, the agency said in a report.

The commission didn’t respond to a request for comment about the testing law’s effectiveness.

The testing method also was recently used to detect discriminatory hiring practices at 105 high-end restaurants in Seattle. Workers of color represent about 46% of Seattle’s restaurant workforce, but a July report by labor advocacy group Restaurant Opportunities Centers United and the Seattle Office for Civil Rights found that they’re most likely to be in less visible, lower-wage positions.

The investigation, conducted between August 2017 and November 2018, found evidence of bias in favor of white testers 49% of the time, while evidence of equal treatment was found in 34% of the tests. Evidence of treatment favoring Black and Latino testers existed in 17% of the tests, the report said.

In some cases, people of color were told to seek opportunities at ethnic-themed restaurants or out of town, the report also found.

‘Hampered by Asymmetry’

Job applicants who believe they faced discrimination are unlikely to know the qualifications or racial makeup of the overall hiring pool, or who was ultimately given the job, making it tough to bring a case.

Unless an employer discloses something to the applicant during the hiring stage “that directly relates their membership in a protected class to the decision not to hire them, or an applicant knows a current employee who provides information about why the applicant was not hired, it is difficult for an applicant to have sufficient information to support a discrimination claim,” Dixon and Hamilton said in their report.

“Relying on individuals having to recognize that they have been discriminated against and having the willingness to take on a corporation, for a structural problem like discrimination is not only not fair and insufficient but it is hampered by asymmetry,” Hamilton told Bloomberg Law.

“There’s a distortion of power and information, or asymmetry, that requires public intervention if we want to get this right,” he said.