I have been invited by the American Conference Institute to participate in a panel presentation at their 8th Annual Forum on Defending and Managing Employment Discrimination Litigation. The panel will be addressing “Avoiding Discrimination in Company Recruitment and Hiring Practices: The Latest on Ban the Box, Employee Background Checks, Online Job Applications and Pitfalls to Avoid When Using Social Media Tools in Your Hiring Process”. Anyone who registers on or before April 29 can receive a substantial discount ($300) off the regular fee by contacting me directly so I can provide you with the early speaker discount information. Also, for any of my readers in the Chicago area, I will be there from July 28 through July 31 for the conference, and I would like to meet as many of you as possible during this time frame. Please contact me directly and let's try to set up a time to meet.
Over the past several years, many states and cities have adopted Ban the Box laws and there continue to be dangers for employers in running credit checks because of the FCRA. A number of studies have revealed that there may be unintended consequences as a result of the Ban the Box statutes, the use of background checks and the use of the FCRA in the hiring process.
Late last year, President Obama signed an Executive Order banning the box for federal contractors. In Alabama, Birmingham adopted such a law in February, 2016. The Alabama Senate Judiciary Committee passed a state version of a Ban the Box law, and it should be considered by the entire Senate shortly. If it passes the Senate, the House will consider adopting such a law for the entire state.
In September, 2015, BMW agreed to pay $1.6 million as the result of a lawsuit filed by the EEOC alleging that the use of background checks had a disproportionate impact on African-Americans. Also in September, 2015, Whole Foods agreed to pay $803,000 to settle a class action lawsuit that alleged Whole Foods failed to properly disclose to applicants that they would conduct background checks. In 2013, two units of Verisk Analytics, a background check company, agreed to pay $18 million to settle three class action lawsuits alleging violations of the FCRA. The list of lawsuits and settlements can go on and on.
Several studies have revealed the consequences of the use of the various bans imposed on employers by the Ban the Box statutes and the FCRA, as well as the EEOC's position on the use of background checks. A recent Washington Post story stated that “a new study from Robert Clifford, an economist at the Boston Fed, and Daniel Shoag, an assistant professor at Harvard's Kennedy School, finds that when employers are prohibited from looking into people's financial history, something perverse happens: African-Americans become more likely to be unemployed relative to others.” Laura Bogardus with Clemson University, published a study entitled “Impact of ‘Ban the Box' on Hiring Processes”, examining the Ban the Box law in Minnesota. This study concluded, in part, that there was “no significant change in overall hiring fairness or hiring cost.”
Practice pointer. The hiring process can lead to various claims by individuals who are not hired, including claims under Title VII, the FCRA, Ban the Box statutes and the ADA. Employers should keep current with the numerous laws, regulations and cases that govern the hiring process to minimize their liability when hiring employees. They are constantly changing, and I expect more cities and states to enact Ban the Box legislation in the future, the EEOC to continue its push against the alleged disparate impact when hiring based on criminal records, and more FCRA lawsuits to be filed focusing on the hiring process. To learn more about these and other issues, I hope you can join me at the American Conference Institute seminar in July.