In a recent claim filed against one of our clients, an aggrieved employee alleged that a manager who was a former military officer had a preference for hiring and promoting people with military experience. The employee in this case was a woman who claimed that this preference had a disparate impact against female employees and applicants due to the fact that most people with military experience are men. Employers frequently tout their desire to assist service members transitioning from the military. Do these initiatives create legal risks for employers?

The answers to these questions are unclear. In 2007, the EEOC issued policy guidance on this issue. When the veterans preference is imposed by a legal requirement such as affirmative action plan mandates, a provision of Title VII exempts these practices from discrimination claims. However, when the veterans preference is voluntary, this exception does not apply. In those situations, the EEOC says that veterans preferences can have a disparate impact against women.

In order to defend the hiring preference, employers could demonstrate the lack of any statistical hiring disparity based on gender. If the practice does result in a disparate impact, the employer must show that the veterans preference “serves, in a significant way, the legitimate employment goals of the employer.” This business justification could relate to specific skills or training obtained in the military that are necessary to performance of the job.

Absent such evidence, employers with voluntary veterans hiring preferences run the risk of gender discrimination claims. This does not mean that companies cannot recruit from the military, of course. But the actual hiring decisions cannot grant preferences to veterans absent the ability to assert a strong legal defense to any claims of hiring bias.