If an employers asks in your application you what your ethnicity is, religion or age they face a barrel of troubles. These questions and questions like them are grounds for discrimination lawsuits and are not appropriate to ask, and especially to act upon. No employer has the right to make a hiring decision based on the answers to questions like these.
But these questions and questions like them often do come into play when making hiring decisions. There are laws and protections designed to keep the playing field fair when it comes to job competition, but let's face it, recruiters can't help themselves. Which is why some 40% of employers turn to social networking websites like Facebook and Myspace to aid their "decision-making."
Most important, of those hiring agents that do look at the sites a huge 80% use what they find there to make hiring decisions!
Currently, there is no specific prohibition, law, or protection that says employers can't use social networking to make hiring decisions, but that doesn't mean there aren't dangers to using them.
State and federal discrimination laws do discourage using "too much information." Once you find information out, it is hard to backtrack and erase it from memory. If you discovered a serious and chronic health problem plagued your latest applicant and then denied them the job, they have grounds to questions the reason for the denial. If you can't offer one, expect a discrimination lawsuit on your hands.
Searching an applicants background without authorization is illegal, but if you're searching their Myspace profile, do they need to be made aware? There are currently no laws on the books, but people are taking notice and it's sure to become a hot topic sooner rather than later. FCRA laws do not affect it, but expect to see some action to protect applicants in the near future.
Many states prohibit discrimination against applicants behavior when off-duty.
Some Facebook or Myspace profiles are just for fun and don't really represent the person who owns them. Making judgements based on profiles on which not everything might be true, or information might be skewed is an unfair hiring practice, especially considering applicants are not typically aware they are being looked at.
When making a decision it is important to understand your applicant, but be aware of the dangers of judging their character off their profile on Facebook. The laws are not clear enough to assume you'll be safe doing so.