Business Necessity

Business necessity (U.S.Law) is a defense created by the US courts. It requires showing that there is an overriding business purposes for the discriminatory practice and that the practiced therefore acceptable.

It’s not easy to prove business necessity. The Supreme Court has made it clear that business necessity does not encompass such matters as avoiding an inconvenience, annoyance, or expense to the employer. For example, an employer can’t generally discharge employees whose wages have been garnished merely because garnishment (requiring the employer to divert part of the person’s wages to pay his or her debts) creates an inconvenience. The Second Circuit Court of Appeals held that business necessity means an irresistible demand, and that to be used the practice must not only directly foster safety and efficiency but also be essential to these goals. Further more the business purpose must be sufficiently compelling to override any racial impact.

However, many employers have used the business necessity defense successfully. In Spurlock v United Airlines, a minority candidate sued United Airlines, stating that its requirements that pilot candidates have 500 flight hours and college degrees were unfairly discriminatory. The court agreed that the requirements did have an adverse impact on members of the person’s minority group. But it held that in light of the cost of the training program and the tremendous human and economic risks involved in hiring unqualified candidates the selection standards were a business necessity and were job related.

In general when a job requires a small amount of skill and training, the courts closely scrutinize any pre-employment standards or criteria that discriminate against minorities. The employer in such instances has a heavy burden to demonstrate that the practices are job related. There is a correspondingly lighter burden when the job requires a high degree of skill and when the economic and human risks of hiring an unqualified applicant are great.

Attempts are made by employers showing that their selection tests or other employment practices are valid as an example of the business necessity defense. Here the employer must show that the test or other practice is job related – in other words, that it is a valid predictor of performance on the job. Where the employer can establish such validity the courts have generally supported the use of the test or other employment practice as a business necessity. In this context, validity means the degree to which the test or other employment practice is related to or predicts performance on the job.

Other considerations in Discriminatory Practice defenses:

There are three other points to remember about discrimination charges:

1) First, good intentions are no excuse. As the Supreme Court held in the Griggs case, Good intent or absence of discriminatory intent does not redeem procedures or testing mechanisms that operate as built in headwinds for minority groups and are unrelated to measuring job capability.
2) Second, one cannot hide behind collective bargaining agreements (for instance, by claiming that the discriminatory practice is required by a union agreement). Courts have often held that equal employment opportunity laws take precedence over the rights embodied in a labor contract ,
3) Third, while a strong defense is often the sensible response to a discrimination charge, it is not the only response. When confronted with the fact that one or more of its personnel practices is discriminatory, the employer can react by agreeing to eliminate the illegal practice and (when required) by compensating the people discriminated against.