I'm applying for jobs as a bartender. At one bar, the manager told me that they only hire people who live in the same neighborhood. They toss any applications that come from outside the bar's zip code. Is this legal?
Your question reminds us of the theme song from the TV show "Cheers": Sometimes you want to go where everybody knows your name -- and your nine-digit postal code. (Although it's not clear how often the Cheers neighbors got their mail, as Cliff the postman was always riding a stool at the end of the bar. But we digress.)
Whether this is a legal hiring criterion depends on the facts. Generally speaking, employers are free to impose any hiring requirements they like, as long as they aren't discriminatory. For example, a bar might require all employees to be able to sing karaoke passably well, to serve patrons quickly, and to be knowledgeable on modern mixology.
However, if an employer's hiring requirements discriminate against certain groups -- by design or by accident -- then they are not legal. For instance, let's say a bar required all employees to pass a lengthy test on local sports teams. If the intent behind this requirement was to disqualify as many women as possible, that would be intentional discrimination, and it would be illegal. But even if the intent was simply to make sure employees in a sports bar chain could intelligently converse with customers, the requirement might be illegal if it had the effect of screening out disproportionate numbers of female applicants. If this were the case, the bar could keep its sports test only if it could show that passing the test was job-related and consistent with business necessity. This is a tough standard to meet, particularly if alternatives exist that are less discriminatory. For example, the sports bar could send otherwise qualified applicants who didn't pass the test to a one-day crash course on local teams, or it could designate a number of positions that didn't require sports knowledge (bussers, dishwashers, cooks, and so on).
The same rules apply to your situation. If the bar you applied to adopted its "same neighborhood" requirement as a way to discriminate, that's illegal. For example, if neighborhoods are racially segregated (as is too often the case in urban areas), and the bar decided on this requirement as a way to avoid considering applicants of different races, that is discriminatory. Similarly, if you applied to work at a gay bar in an area that is largely gay, such a hiring requirement could violate state law prohibiting sexual orientation discrimination, if the owner's intent were to screen out applicants who aren't gay.
Even if the owner's intent is simply to make sure that patrons and employees have their knowledge of the neighborhood in common, the "same neighborhood" requirement could be discriminatory if it had the effect of screening out disproportionately large numbers of a protected group. Again, if neighborhoods are racially or ethnically segregated, this requirement might favor certain groups at the expense of others, for example.
As you can see, whether the requirement is discriminatory depends on lots of facts: the owner's intent, the make-up of the neighborhood (and surrounding neighborhoods), the demographics of the bar's employees, the characteristics of applicants who have been excluded from consideration due to the requirement, and so on. But if you really want the job and you live outside the hiring zone, it can't hurt to let the bar owner or manager know that its practice might be legally questionable -- and follow up quickly with all of the reasons why you'd be a fantastic employee.