In April 2012, the Equal Employment Opportunity Commission (EEOC) issued its updated enforcement guidance concerning how, in its view, Title VII of the Civil Rights Act of 1964 (Title VII)  restricts an employer's discretion to consider criminal records relative to employment decisions.  Even before April 2012, and since that time, the EEOC has filed lawsuits against a handful of employers challenging employer screening policies that the EEOC maintains disproportionately affect protected class members (known as "disparate impact" discrimination claims). 

While many employers have struggled with how and even whether to follow the EEOC's guidance, the Hawaii Supreme Court's decision in Shimone v. Hawaii Health Systems (Jan. 16, 2015) underscores that employers must continue to be mindful of fair employment laws in states, like Hawaii, that extend various protections to ex-offenders.

The Hawaii Supreme Court Considers the State's Ex-Offender Anti-Discrimination Law

In 2007, the plaintiff applied for a position as a radiological technician at a medical center.  Radiological technicians are responsible for medical imaging and the preparation and maintenance of medical imaging equipment.  The medical center concluded that the plaintiff's felony drug conviction for possession with intent to distribute crystal methamphetamine disqualified him from the position.  The plaintiff sued and claimed the medical center violated Hawaii's ex-offender anti-discrimination law, which states that an employer can only deny employment to an individual with a conviction if the "conviction record bears a rational relationship to the duties and responsibilities of the position." 

In its motion for summary judgment, the medical center asked the court to dismiss the case by arguing the felony drug conviction was related to the position at issue because the plaintiff would have access to (1) drugs, syringes, needles and patient charts and (2) vulnerable patient groups "who are at risk of having 'their medication taken from them and/or [being] sold an illegal drug.'"  The circuit court granted the medical center's motion, and the Intermediate Court of Appeals affirmed.

The Hawaii Supreme Court reversed and found that triable issues of fact existed as to whether the medical center's stated reasons satisfied the "rational relationship" standard in the Hawaii statute.  According to the court, "neither syringes nor needles are controlled items" and both were "readily and cheaply available to the public."  Moreover, the drugs the technician might have accessed were not regulated by the federal Controlled Substances Act.  Although the court noted the potential for a relationship between a drug conviction and controlled substances, the court found triable issues as to whether and what type of access radiological technicians even had to such drugs.  Finally, the court found no evidence of any connection between a drug conviction and access to patient charts.

The court also rejected the medical center's argument that a technician with a drug conviction could steal medication from vulnerable adults.  On this point, the court found lacking undisputed evidence that these patients even "have physical control over controlled substances that might be diverted."  With respect to the medical center's argument that a technician with a drug conviction might attempt to sell drugs to patients, the court stated that if it agreed with this position, "then all individuals with prior drug convictions could be disqualified from any job that dealt with the public at large."

What the Decision Means for Employers

Hawaii is not the only state that requires a measure of "job-relatedness" when employers consider criminal history for employment purposes.  For many years, the State of New York has barred employers from rejecting applicants with criminal records unless the employer can prove a "direct relationship" between the criminal record and the position sought.  More recently, several cities and counties that have enacted so-called "ban-the-box" ordinances have included a requirement that covered employers conduct a job-related analysis similar to the "individualized review" the EEOC recommends in its guidance.  For instance, ban-the-box ordinances in San Francisco, California and Seattle, Washington require an individualized review and even set out the factors the employer must consider before rejecting an applicant based on a criminal record. 

The Hawaii Supreme Court did not find that the medical center discriminated against the plaintiff when it refused to hire him because of the drug conviction.  Rather, the court simply concluded that a jury should decide whether the medical center had proven job-relatedness.  That said, the lesson to be learned from the decision is that employers in jurisdictions requiring proof of job-relatedness will need to actually have evidence to support their use of a job applicant's criminal history.  That an employer believes a criminal record to be job-related does not make it so.  As a result, employers that consider criminal history as part of their pre-hire screening program should consider conducting a privileged review of their conviction-based screening policies to, among other things, assess compliance with the various state, county and city laws that protect job applicants with criminal records and also to assess potential disparate impact risks under Title VII.  Of course, employers also should continue to be mindful of, and comply with, the various laws that impact the use of criminal records in addition to Title VII and the state fair employment laws, including "ban-the-box" laws and federal and state fair credit report laws, such as the Fair Credit Reporting Act.