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Federal Government: Fire Good Employees, Hire Bad Ones

The Obama administration is pressuring employers outside the financial sector to hire felons, even as its regulations force employers in the financial sector to fire "thousands of employees," including exemplary employees who once committed misdemeanors decades ago. As Walter Olson notes:

Thanks to new federal banking and mortgage guidelines with $1-million-a-day penalties for noncompliance, banks are scrambling to fire any employee who has previously been convicted of a crime involving dishonesty. Among those tossed out: a bank employee with seven years’ service who used a slug in a washing machine in 1963, and a 58-year-old customer service representative with a shoplifting conviction forty years ago. A lawyer says thousands of employees have been fired under the new rules.

The Des Moines Register notes, "Big banks have been firing low-level employees like Eggers since the issuance of new federal banking employment guidelines in May 2011 and new mortgage employment guidelines in February." (Richard Eggers is the 68-year-old Wells Fargo employee fired for using a slug in 1963, nearly half a century ago.) Additional coverage of this can be found in USA Today and the ABA Journal.

While pressuring banks to fire good employees, the Obama administration is pressuring other employers to hire bad employees. The federal Equal Employment Opportunity Commission, dominated by anti-business Obama appointees, recently sued Pepsi for doing criminal background checks on job applicants, forcing it to pay $3.1 million to settle the lawsuit. It has previously sued other employers who take serious criminal records into account, or use criminal background checks, even though employers who hire criminals end up getting sued when those employees commit crimes. The EEOC’s demands place employers in a no-win position where they can be sued no matter what they do.

Employers’ ability to hire and fire based on merit is being undermined by the EEOC, which has ordered employers to discard useful employment tests and accommodate incompetent employees. For example, a hotel chain was recently compelled to pay $132,500 for dismissing an autistic desk clerk who did not do his job properly, in order for it avoid a lawsuit by the EEOC that would have cost it much more than that to defend. The EEOC has sued companies that quite reasonably refuse to employ truck drivers with a history of heavy drinking, even though companies that hire them will be sued under state personal-injury laws when they have an accident. The EEOC is also threatening employers who require high-school diplomas with lawsuits under the ADA. The EEOC forced a cafe owner to pay $20,000 for not selecting a hearing- and speech-impaired applicant for a cashier’s position, even though such impairments obviously affected the applicant’s qualifications for the job.

The Obama administration has interfered with employers’ merit-based hiring, thus discouraging job creation, by imposing a wide array of costly, harmful new labor and employment rules on American manufacturers.

The administration has also harmed the economy through Obamacare, which has caused layoffs in the medical device industry, and wiped out jobs in other industries. The Dodd-Frank financial law passed in 2010 is also expected to shift thousands of jobs from America to foreign countries. The administration has managed to alienate even some Democratic businessmen, like Steve Wynn, who called President Obama “the greatest wet blanket to . . . job creation in my lifetime."