Lawsuits Based on the Hiring Process

Learn when you might have a legal claim arising from an employer's decision not to hire you.

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Can you sue an employer because you weren’t hired – or because of things the employer said or did during the hiring process? In some situations, the answer is “yes.” However, these claims can be tough to win. This article summarizes some common legal claims based on hiring and outlines some steps to take if you believe you were treated unfairly in the hiring process.

Legal Claims Based on Hiring

Most hiring lawsuits boil down to one of these two scenarios: The employer relied on information that was legally off-limits in making its decision, or the employer misled (or outright lied to) the applicant during the hiring process. In some situations, an applicant might even have a legal claim against a former employer who is illegally hindering the job search.

Discrimination and Other Improper Hiring Criteria

There are a number of factors that employers are legally prohibited from considering when they decide whether to hire an applicant. Some of these claims are recognized in every state; others are not.

  • Discrimination. Federal, state, and even local laws prohibit employers from making job decisions based on protected characteristics such as race, sex, disability, religion, and so on. If an employer decides not to hire someone for one of these reasons, the applicant may have a discrimination claim. (For more, see Nolo's articles on workplace discrimination.)
  • Credit history. The current economic climate has left plenty of people with less-than-stellar credit records. Recognizing this, a growing number of states have passed laws prohibiting employers from requesting or considering credit reports in their job decisions, at least for certain applicants and positions. If you weren’t hired because an employer improperly looked at your credit report, you may have a legal claim. (For more, see Nolo's article, Can Prospective Employers Check Your Credit History?)
  • Workers’ compensation claims. Most states prohibit employers from refusing to hire applicants because they have filed for workers’ compensation with previous employers. Although there are limited exceptions, you might have a legal claim against an employer that turns you down just because you have collected workers’ comp in the past.  
  • Criminal records. State laws restrict whether, and to what extent, employers can consider criminal history in deciding whether to hire an applicant. Some states don’t allow employers to consider arrest records, convictions that have been sealed or expunged, or convictions that don’t relate to the position. Some states allow criminal records checks only for certain jobs. A blanket rule of disqualifying any applicant with a criminal record might also be discriminatory, because of the racial disparity in arrests and convictions in the United States. See all of the  individual state laws on employers checking criminal records.

Fraud and Other Claims Based on Employer Statements

If an employer makes intentional misrepresentations to convince an applicant to take a job, and the employee takes action in reliance on those statements (for example, by quitting a secure position to take the new one), the employee may have a fraud claim. These claims often come up if the new job either doesn’t materialize – leaving the applicant out of work and out of luck – or lasts only for a short time.

Example: Bob was recruited for a job in San Francisco. After he was promised a starting salary of $150,000 and a three-year job contract, he quit his job in Arizona, put his house on the market, and put a down payment on a condominium in the city. On his first day of work, Bob was told his salary would start at $90,000 and was handed an at-will employment agreement to sign. Because California recognizes fraud claims, Bob might have a pretty good case against his new employer.

An employee might also have a wrongful termination claim based on statements made during the hiring process. For example, if an employer promised that the applicant would have a six-month probation period to learn the job, during which the employee could not be fired, the employee could have a breach of contract claim if the employer ended the relationship sooner.

Claims Against a Former Employer

In some circumstances, a rejected applicant might have a legal claim against a former employer for preventing the applicant from getting a new job.

  • Retaliation. The laws that outlaw discrimination also prohibit employers from taking action against employees or applicants who have exercised their rights under these laws. These claims are almost always brought by employees who are fired, demoted, or otherwise punished for complaining of discrimination or harassment. However, an applicant who is not hired might have a retaliation claim against a former employer, if the applicant lost the job because of that former employer’s retaliatory actions. For example, if the former employer lied about why the employee was fired, or went into great detail about the employee’s shortcomings despite a policy of not giving references, a retaliation claim might be viable.
  • Blacklisting. A number of states have laws that prohibit employers from taking certain actions to prevent former employees from getting new jobs. Some prohibit employers from actually creating a circulating a “blacklist” (made up, for example, of employees who are union supporters). Others are less literal and prohibit a variety of actions a former employer might take to keep former employees out of the workforce. To violate this type of law, the former employer typically has to make threats or false statements. 
  • Defamation. If a former employer intentionally makes a false statement that damages your reputation and/or prevents you from getting a job, you may have a defamation claim. However, if the former employer’s statement is true – no matter how bad – or made in good faith, your case won’t get too far. For more information on defamation claims, see Defamation Lawsuits: Do You Have a Case Against a Former Employer?

Next Steps

Despite all these potential legal theories, there aren’t many hiring lawsuits filed – and even fewer are won. There are a few reasons for this, but it mostly boils down to proof. It’s hard to know – and harder to prove – why an employer turned down a particular applicant. Often, an applicant is left with strong suspicions but little hard evidence, particularly if the applicant doesn’t have any personal contacts within the company.  

As a result, applicants who believe they were passed over unfairly have a particularly tough road ahead – and can really benefit from legal advice. A lawyer can help you figure out whether it’s worth pursuing a legal claim for failure to hire. And, if you pursue an administrative charge or a lawsuit, you’ll be able to use the discovery process to gather evidence that might support your claims.

If you are considering a lawsuit, you should talk to a lawyer right away. There are time limits for filing an administrative charge (which you must do before you can bring a lawsuit for discrimination or retaliation) or a lawsuit.

To assist the lawyer in assessing your chances, bring every document you have relating to the hiring decision. If you responded to an online post, print out a copy. If you have an offer letter, rejection letter, copy of your application and resume, or any other paperwork, bring that along as well. And make notes of any conversations you had, such as your initial contact with the employer, your interview, or a call to tell you that you didn’t get the job.

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