Goldman Sachs Asks Job Seekers to Come Out: What Are the Risks?

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By Jay-Anne B. Casuga

Race. Sex. Age. Employers regularly ask for such demographic information in job applications. Questions about a job seeker’s sexual orientation and gender identity are less common, if not rare.

Goldman Sachs Group Inc. recently confirmed to Bloomberg BNA that it’s inviting job applicants to voluntarily self-identify as lesbian, gay, bisexual, or transgender as a way to increase diversity in its workforce.

It’s a trend that’s beginning to gain traction among professional organizations, not just in the finance and banking sectors but in consulting and legal fields, Michelle Phillips, a management attorney with Jackson Lewis in White Plains, N.Y., told Bloomberg BNA.

“This is the direction forward-thinking companies seem to be heading,” she said.

But collecting and analyzing the data could have potential risks, Phillips and other attorneys said. On one hand, employers may risk liability if that information is requested by government enforcement agencies during audits or investigations, or private litigants bringing discrimination claims. Further analysis of that data by those parties could lead to systemic discrimination allegations or class actions.

“If a company decides to go in this direction, it must recognize the risk and do what it can to minimize it,” said Chris Chrisbens, a management attorney with Jackson Lewis in Denver.

On the other hand, applicants or employees who provide information about their sexual orientation or gender identity risk shouldering the burden of any negative workplace repercussions should that sensitive information be disclosed, said Shirley Lin, a plaintiff’s attorney with Outten & Golden LLP in New York.

As such, employers should ensure that such information is kept strictly confidential to minimize potential discrimination or harassment, as well as foster inclusive environments that would make applicants and employees feel comfortable to share their sexual orientation or gender identity, the attorneys said.

LGBT Data Collection Not Required by Law

Goldman Sachs introduced sexual orientation and gender identity self-identification to “effectively track and monitor our LGBT population just like other populations in our talent efforts to keep ourselves accountable for being diverse and inclusive,” a company spokeswoman told Bloomberg BNA in a statement.

“Such information is used for tracking purposes on an aggregate, non-identifiable basis,” she said. “It is not used in the resume and interview process.”

Goldman doesn’t currently appear to be a federal contractor, according to Bloomberg Government’s database of government contracts going back to fiscal year 2013. But one of its subsidiaries did have federal contracts in previous years and was subject to compliance audits by the DOL’s Office of Federal Contract Compliance Programs. The company could decide to seek federal contracts in the future.

Many banks are also federal contractors, such as Bank of America Corp. and Citigroup Inc., and the OFCCP has made efforts in recent years to increase its scrutiny of contractors in the financial sector. Nearly all employers are subject to the nondiscrimination provisions of Title VII of the 1964 Civil Rights Act, which is enforced by the Equal Employment Opportunity Commission.

Bank of America and Citigroup don’t collect LGBT information at the application stage, company representatives told Bloomberg BNA. But Bank of America does ask employees at a later date to voluntarily reveal their sexual orientation or gender identity, a spokesman said.

Neither the OFCCP nor the EEOC requires employers within its jurisdiction to request or analyze LGBT applicant or employee data, like it does for other demographics such as sex, race, disability or veteran status.

Voluntarily Collected Data

Even though the agencies don’t require LGBT data collection and analysis by employers, they can still ask to see that information during audits or investigations, the attorneys said.

The OFCCP is the only federal agency that enforces a rule that expressly prohibits workplace discrimination based on sexual orientation and gender identity. The rule makes clear that the agency could ask for any LGBT data voluntarily collected by employers, either as part of a compliance audit or a complaint investigation, according to Lynn Clements, a former OFCCP policy official during the George W. Bush administration.

“The underlying voluntary self-identification data is not protected from disclosure because it is an employment record that once created needs to be maintained and potentially disclosed to the OFCCP if it is relevant to the agency’s review,” said Clements, now the director of regulatory affairs for Berkshire Associates Inc., a consulting firm in Columbia, Md. “The fact that OFCCP may request this information should not deter contractors from voluntarily collecting it.”

Whether Title VII protects LGBT applicants and employees from discrimination is an issue yet to be resolved by the U.S. Supreme Court. But the EEOC could still request voluntarily collected LGBT data if it was investigating an individual sexual orientation or transgender hiring discrimination charge, the attorneys said. Those investigations may or may not lead to agency or private litigation.

If a lawsuit is filed, plaintiffs typically obtain the data during discovery, Lin said.

Shielding Internal Company Analysis

Although the data itself isn’t protected from disclosure, any internal analyses of that data could be shielded if they are performed under the direction of counsel, Clements said. This is known as attorney-client privilege.

Chrisbens cautioned that an open question exists about whether a contractor’s internal analyses are subject to the privilege. That’s the case in the OFCCP context with respect to pay analysis, he said.

A contractor could argue that, unlike pay data analysis, LGBT analysis isn’t required by the OFCCP and that analysis should be privileged, Chrisbens said.

Lin added that other types of privilege raised by companies, such as the self-critical analysis privilege, have been rejected by most courts.

Adverse Impact Liability?

Assuming that an enforcement agency or private litigant can at least obtain the raw LGBT data, what happens next?

“What they do with it is a different question and directly bears on the degree of risk,” Chrisbens said.

The OFCCP, for example, analyzes contractors’ applicant and employee data during audits for statistical indicators of adverse impact discrimination based on race and sex.

Employers can take some “solace” that the agency hasn’t indicated that it will conduct those analyses for sexual orientation or gender identity, Chrisbens said.

But Chrisbens added that if a contractor voluntarily collects and analyzes data, it still might have to act on it or risk an allegation of discrimination.

In some cases involving companies that established voluntary affirmative action programs for other protected groups, the non-implementation of that plan can be used as evidence of discrimination, he said.

The EEOC during a charge investigation or a private litigant also could conduct its own analyses of the raw data.

If the EEOC finds adverse impact in hiring based on LGBT status, the commission could decide to pursue a class action against that employer if conciliation attempts fail, Phillips said.

Conceivably, a private litigant who initially brings an individual LGBT hiring discrimination claim could subsequently seek to amend his or her complaint to bring a class action based on adverse impact findings.

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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