On September 8, 2015, BMW Manufacturing Co., LLC and the U.S. Equal Employment Opportunity Commission (EEOC) entered into a consent decree ending the EEOC’s disparate impact lawsuit over BMW’s use of criminal background checks in employment. The consent decree requires BMW to pay $1.6 million and provide job opportunities to claimant and other applicants who were turned away under BMW’s prior background check policy.

According to the lawsuit, when BMW switched its logistics contractor at its Spartanburg, South Carolina location in 2008, it required the new contractor to perform criminal background checks on all existing logistics workers (who were required to reapply to keep their jobs), using BMW’s criminal background screening guidelines. The EEOC claimed that because BMW’s criminal background screening guidelines barred employment to individuals with certain criminal convictions, regardless of when they had been convicted or the severity of the conviction, a large number of African-American workers were excluded from jobs. As a result, the EEOC asserted, many longtime employees were not eligible to be rehired under the new policy. According to the EEOC’s complaint, some of the disqualifying offenses were without time limitation. For example, the complaint cited the company’s use of a 1990 conviction for simple assault (an offense punishable by a $137 fine) that a logistics employee, who had been working for BMW for 14 years, had committed 18 years before the background check was conducted.

EEOC consent decrees are a valuable tool for employers in learning more about the EEOC’s interpretations of its own guidance, as well as the direction in which EEOC enforcement efforts might be heading. In addition to the damages and job opportunities, the consent decree requires BMW to take the following steps:

  • change the company criminal background check policy (for direct hires and contractor employees);
  • provide written notice to applicants identifying the specific criminal history relied upon in making an employment decision;
    • This requirement goes well beyond either (a) the EEOC’s 2012 Enforcement Guidance or (b) the federal Fair Credit Reporting Act (FCRA) requirements—although, there are some jurisdictions that require some specificity in identifying which criminal offense led to the employment decision.
  • hold open a position for 21 days after sending the written notice outlined above;
    • This requirement exceeds the five business-day period used by many employers between a pre-adverse action letter and an adverse action letter.
  • refrain from using non-pending arrest records as a reason to take adverse action;
  • request additional information about an applicant’s criminal history before taking adverse action, including information regarding:
    • the record’s accuracy,
    • circumstances of events included on the record,
    • employment history,
    • rehabilitative efforts,
    • personal references, and
    • any other information that the applicant believes bears on his or her suitability for employment;
  • designate a company official to review all potentially adverse decisions prior to a final decision being made;
    • This requirement reflects a growing trend; prior cases had suggested that an employer should double-check any initial disqualification classifications by using an outside consumer reporting agency or background-check company.
  • create a database of individuals against whom adverse action has been taken; 
  • maintain certain records related to criminal history checks; and
  • train staff on these requirements for at least two hours. 

As noted above, many of these decree requirements appear to exceed the requirements of Title VII of the Civil Rights Act of 1964, the FCRA, and state and local “ban the box” statutes and ordinances (e.g., holding a position open for 21 days). While it is not yet settled whether employers will be required to adopt all of these measures, they indicate what the EEOC may expect employers to do in the future.

This consent decree also underscores the importance of having a good background policy/process, including a targeted screening-out process and individualized assessment as outlined in the 2012 EEOC Guidance on Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.