Business Necessity

What Is Business Necessity?

Business Necessity is a legal doctrine in employment practices that permits an employer to use a particular selection criterion that may have a discriminatory impact if it is necessary for the safe and efficient operation of the business, and there is no less discriminatory alternative that serves the same purpose. It's often used in defense of an otherwise discriminatory practice if the employer can demonstrate that the practice is essential to their business and enables effective job performance.

What Is the History of Business Necessity?

The concept of Business Necessity emerged in the United States during the civil rights era of the 1960s. It was shaped by the landmark U.S. Supreme Court case Griggs v. Duke Power Co (1971). In this case, the Court held that Duke Power's policy of requiring a high school diploma or passing an intelligence test as a condition of employment in certain departments, even though it was not significantly related to successful job performance, functioned as discrimination.

The Court declared that under Title VII of the Civil Rights Act of 1964, practices, procedures, or tests which disproportionately affected ethnic minority groups must be shown to be related to job performance and consistent with "Business Necessity." If they are not proven as such, they are considered discriminative.

This concept greatly influenced future employment practices and litigation, and it spurred debate over what exactly constitutes a 'Business Necessity.' This led to the development of Uniform Guidelines on Employee Selection Procedures in 1978, which further defined Business Necessity and Job-Relatedness.

Since then, Business Necessity remains an essential part of employment law, continually adapting to changes in business environments and technologies. Over the years, it has expanded and evolved in response to subsequent court decisions and changes in legislation. Today, it's commonly discussed and applied not just in America but also across international jurisdictions.

What Are Some Examples of Business Necessity?

1. Physical Requirements: For some jobs, such as firefighting, construction, or law enforcement, physical capabilities like strength, agility, and endurance are necessary to perform job tasks effectively and safely. Therefore, fitness tests may be a business necessity for these jobs.

2. Educational Requirements: Certain roles might require specific educational qualifications that are crucial for job performance. For instance, a law firm can require that its lawyers have a law degree.

3. Experience Requirements: Some positions might demand particular experiences. For instance, a company looking for a manager could stipulate previous managerial experience as a requirement.

4. Technical Skills: For certain roles, especially those related to IT and engineering, possessing specific technical skills can be a business necessity.

5. Language Proficiency: If a job involves communication with specific language-speaking clients, proficiency in that language could be a business necessity.

6. Job-Specific Certifications or Licenses: Jobs like pilots, doctors, and certain engineers require specific certifications or licenses by law. This requirement would be considered a business necessity.

It's important to note that these requirements must bear a demonstrable relation to effective job performance and there should not be an alternate, less discriminative method that serves the same purpose for the job.

What Distinguishes Between the Concepts of Business Necessity and Job-Relatedness?

Both Business Necessity and Job-Relatedness are concepts used in employment practices and share similar elements. However, there are some nuanced differences between them:

Business Necessity refers to the employment practice or policy adopted by a business that is essential for its safe and efficient operation. In other words, the business argues that this policy or practice is imperative for its survival and functioning, even if it may appear discriminatory.

Job-Relatedness, on the other hand, refers to a specific qualification, skill, or trait that is directly relevant and necessary to perform a particular job effectively. It does not focus on the entire business operation but singular jobs within the organization.

For instance, a company that institutes a rule requiring all employees to be proficient in English may justify it as a Business Necessity if its operations heavily rely on English communication. However, for that same company, requiring English proficiency for a position like a janitor who doesn't interact with English-speaking individuals may not be justified as Job-Relatedness, as it might not be directly relevant to their individual job duties.

In many situations, the two concepts intersect and sometimes even overlap, often making it challenging to differentiate between them. Nonetheless, understanding the distinction can decrease the risk of potential discrimination lawsuits.

What Are Some Examples of Job-Relatedness?

1. Driving Skills for a Truck Driver: For a job that requires much driving, such as a truck driver or delivery person, having a valid driving license and good driving skills are job-related qualifications.

2. Teaching Degree for a School Teacher: Schools reasonably require their teachers to have education degrees and teaching certifications as these are directly related to their job performance.

3. Cooking Skills for a Chef: For a job in cooking, culinary skills and perhaps a culinary degree or certification are directly related to the job's requirements.

4. Proficiency in Certain Software for an IT Job: An IT job may require proficiency in particular software like Java, Python, or certain platforms which are directly related to job performance.

5. Fluency in a Specific Language for a Translator: For a translator position, fluency in the required languages is directly related to job performance.

6. Knowledge of Engineering Principles for Engineers: An engineer, for instance, would need to demonstrate a strong understanding in areas such as math and physics, as well as certain engineering principles, directly related to the nature of their job.

It's important to note that any job-related requirements or skills must be necessary to perform a certain job successfully and effectively -- they cannot be arbitrary or unrelated to the job's actual requirements.

What's the Difference Between Business Necessity and Bona Fide Occupational Qualification?

Business Necessity and Bona Fide Occupational Qualification (BFOQ) are both legal concepts used in the context of employment law and practices, but they apply to different situations and have distinct criteria.

Business Necessity refers to the employer's defense that a particular hiring practice or policy, though seemingly discriminatory, is necessary for the organization's operation and efficiency. It doesn't aim to exempt the employer from non-discrimination laws but rather justifies the discriminatory practice by showing its necessity for effective job performance. For instance, a requirement that firefighters must meet certain physical fitness standards could be upheld as a business necessity because such fitness is essential for job performance.

On the other hand, a Bona Fide Occupational Qualification (BFOQ) pertains to instances where certain characteristics, generally considered discriminatory to be hiring qualifications (such as religion, sex, age, or national origin), are intrinsically necessary to perform a certain job. In simpler terms, BFOQs are characteristics that employers can legally consider when making decisions about hiring, promoting, and terminating employees - normally, these would violate anti-discrimination laws. An example is an acting role requiring an actor of a specific race or gender for the sake of authenticity.

In essence, while business necessity pertains to practices that are essential for conducting business, BFOQ specifically refers to qualifications that are necessary for performing a certain job.

What Are Some Examples of Bona Fide Occupational Qualification?

1. Actor's Role: A casting director hiring an actor to play a specific role (e.g., an Asian woman) could stipulate that only Asian women can audition for that particular job.

2. Church or Religious Organization: A church may specifically hire clergy from its own religion as this is necessary to fulfill the role's duties.

3. Modeling Industry: A clothing brand launching a women's line may specifically hire female models as they represent the target demographic.

4. Airline Policy on Retirement Age for Pilots: Airlines may institute mandatory retirement ages for pilots due to safety concerns, making age a BFOQ in this instance.

5. Gender-Specific Fitness Trainers: A female-only gym may hire only female fitness trainers to respect and cater to the privacy and comfort of its members.

6. Age requirement for Bartenders and Liquor Sales: In many places, bartenders and liquor salespeople must be above a certain age due to alcohol laws, making age a BFOQ for these roles.

Remember, a BFOQ is an exception to what would typically be considered discriminatory employment practices. Therefore, the burden of proof is on the employer to demonstrate that the qualification is indeed necessary for the operation or success of the business or service.

What Are the Benefits of Business Necessity?

Business Necessity, as a doctrine, can offer several benefits:

1. Efficiency and Performance: By focusing on characteristics and qualifications that are necessary for the job, employers can ensure that their workforce is efficient and capable of performing at required levels.

2. Risk Management: Understanding and applying the concept of Business Necessity can help organizations avoid potential legal issues related to employment practices, thereby managing risk more effectively.

3. Clearer Hiring Practices: By defining what constitutes a Business Necessity, employers can establish clearer guidelines for hiring practices, leading to more consistent decisions and fairness across all potential and current employees.

4. Legal Defence: In instances where a policy or practice might seem to be discriminatory, correctly applying Business Necessity can serve as a legal defense, provided that the policy or practice is indeed essential for the business's operations and no less discriminatory alternative exists.

5. Organizational Development: The practice of incorporating business necessities into company policy can lead to organizational development by ensuring that crucial business needs and functions are being met.

6. Cost Savings: By hiring individuals who are most suitable for the job based on business necessities, organizations could potentially reduce costs associated with training, employee turnover, accidents, and legal issues.

Companies must ensure that any claim of business necessity is legitimate and complies with all employment laws to avoid legal complications.

What Are the Potential Drawbacks or Negative Implications of Applying Business Necessity?

Although the concept of Business Necessity can help organizations efficiently manage their workforce, it can also entail some potential drawbacks or negative implications if not applied judiciously. Here are a few:

1. Potential for Discrimination: If not correctly applied, claims of business necessity could be used to justify discriminatory practices, leading to an unequal and unfair workplace. It is vital to ensure that the practices claimed as business necessities are genuinely necessary and that there is no less discriminatory alternative.

2. Legal Risks: Claims of business necessity that cannot be adequately supported or justified could potentially lead to expensive litigation and damage to the organization's reputation.

3. Limited Diversity: Overly strict or narrow interpretations of business necessity could potentially limit the diversity of the workforce. Diverse workforces are usually more innovative and better at problem-solving, so limiting diversity could impact the organization's overall performance.

4. Employee Morale: If employees feel that policies or practices justified by business necessity are unfair or discriminatory, this could potentially lead to decreased morale, productivity, and employee retention.

5. Barrier to Employment: For certain groups, policies framed as a business necessity might create insurmountable barriers to employment, further promoting inequality in the workforce.

To mitigate these potential risks, organizations must ensure that their understanding and application of business necessity aligns with legal standards and promotes fairness and equality in the workplace.

Which Employers Are Likely to Be Affected by Business Necessity?

Generally, all employers could potentially be affected by the concept of Business Necessity, as it is a fundamental component of employment law and practices. However, it is particularly relevant and often applied in the following contexts:

1. Large Corporations and Businesses: These entities typically have complex operations and broad workforce needs. The concept of Business Necessity helps in defining and justifying certain employment practices and policies.

2. Public Sector Employers: Government departments and agencies often have stringent requirements and regulations for their hiring practices. The concept of Business Necessity can play a crucial role in shaping these practices.

3. Organizations with Physically Demanding Jobs: Companies in industries like construction, emergency services, law enforcement, and firefighting often need to set specific physical criteria to ensure the safe and effective performance of job duties.

4. Companies Operating Internationally: These businesses might have language, cultural, or location-specific requirements that could potentially be justified under Business Necessity.

5. Jobs Requiring Specific Skills: Industries like IT, engineering, healthcare, or law, where specific technical skills, experience, or education levels are necessary, often rely on the concept of Business Necessity to establish job qualifications.

6. Organizations in High-Risk Industries: Companies in fields such as healthcare, aviation, nuclear energy, and other high-risk industries may have stringent job qualifications that can be justified on the grounds of safety and efficient business operation.

It's essential to remember that Business Necessity must never be used as a means to engage in unlawful or unjust discrimination, and companies should always strive to pursue less discriminatory alternatives where possible.