Wells Fargo Learns That Hiring Matters Too

Frank Kollman
Frank Kollman

The U.S. Department of Labor has entered into a conciliation agreement with Wells Fargo & Co. to settle allegations that it discriminated in hiring on the basis of sex and race.  The Office of Contract Compliance Programs (OFCCP) found that  Wells Fargo (a federal contractor) had discriminated against 2,066 female applicants for positions as online customer service representatives in Glen Allen, Virginia, and Salt Lake City, Utah, and 282 African American applicants for phone banker positions in Phoenix, Arizona.  In addition to paying $603,612 in back wages, the financial services company agreed to make 17 job offers in Glen Allen, Virginia, 20 job offers in Salt Lake City, Utah, and 29 job offers in Phoenix, Arizona, to original applicants as positions become available.  Wells Fargo also agreed to review and revise its hiring procedures and improve its training of hiring managers.

This should be a lesson to all employers.  Employers spend more time worrying about termination decisions than hiring ones. That is not a particularly good strategy.  For one thing, a good hiring decision will decrease the chances later of having to fire the result of a poor hiring decision.  But that — as Wells Fargo found out — is not the only reason why hiring decisions should be made with more deliberation and precision.

If an employee is fired for unlawful reasons, he or she can sue for reinstatement, back pay, and attorney’s fees. If an employee is not hired for unlawful reasons, he or she has essentially the same remedies. Why wouldn’t an employer pay more attention to hiring issues?  Yet, I can ask almost any one of my clients to tell me the details of a termination that took place years ago, and the client can do that easily. Ask the same client, however, to tell me the names of the five people it interviewed for a job 4 weeks ago, and I would be met with blank stares. Imagine, however, the look on their faces if one of those five filed a charge of discrimination 4 months later, and they were asked for specific reasons why this candidate was passed over for the successful one.

Each hiring decision should generate at the very least a hiring file to document that decision. The first piece of paper to go in that file should be the job description, or something very much like it. It is very difficult to explain why someone was not hired if you can’t explain what qualifications and abilities you wanted. If there is no job description, create one, keeping in mind that qualifications should be related to the job. Housekeeping employees do not need advanced degrees.

The “hiring” file should also contain all the ads, postings, and solicitations you made to seek qualified applicants. It may be important to show when recruiting started and ended, especially if someone applies late in the process. In fact, if you do hire someone, don’t continue to run the ad just because you paid for a multi-day ad. At the very least, send the newspaper or magazine a note to pull the ad, if possible, because you no longer need applicants. The reason for this is that one of the elements of a discrimination case can be that the company continued to seek applicants after the qualified, but rejected, applicant sought the job.

The next set of items in the hiring file should concern the actual processing of applications and resumes to determine who should be interviewed.  If the number of applications is overwhelming, the file should include a notation explaining how many of the applications were reviewed (for example, the first 25), and how that group of applications was narrowed to the most qualified.  That way, if there were 2000 applications, but only 25 were considered, the applicant in the 1975 that were not reviewed could not claim that he was rejected because of a protected characteristic, such as race, sex, etc.

Once the applications are narrowed, the interviewing process should take place.  The interviews, conducted by trained supervisors who know what is proper to ask and what is not, should result in notes designed to identify strengths and weaknesses.  If a person was rejected because he wore running shoes that were not tied and smelled like a wet dog, that should be noted in the interview notes.  Any other pertinent answers to questions, observations, and facts should be noted.

Following the interviews, there should be a document in the file showing how the selection was narrowed to the successful candidate.  The successful candidate should be the one that you could convince 12 strangers was the best person for the job.  If you cannot do that, you may need to rethink the selection.

Those records should be kept for at least three years, although you are not necessarily obligated to keep them that long.  After three years, it should be safe to discard old interview files and documents.

Finally, a word on interviews.  While there is nothing wrong about asking an applicant to “tell me about yourself,” most questions should be limited to job qualifications, skills, and ability.  Questions concerning physical ability to do the job should not be made until a job offer is ready to be made to avoid problems with disability discrimination.  Have your core questions read ahead of time, and have them reviewed by your human resources person to insure that they are not improper.


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