Employers’ use of criminal history, credit, and other background checks in the hiring process is under vigorous attack from EEOC lawsuits and legislative initiatives.
Some legislative efforts may result in an outright ban on the use of many or most background checks for employment-related purposes. For example, the New Jersey legislature is eyeing the so-called Opportunity to Compete Act, which bar employers with 15 or more employees from conducting criminal background checks on applicants prior to a conditional job offer and from asking candidates about criminal histories on job applications. Similar legislation has been proposed in New York State and New York City. Democratic leaders in the U.S. Senate are pursuing legislation that would altogether prohibit employers from using credit checks in the hiring process.
The U.S. Equal Employment Opportunity Commission has been increasingly active in filing lawsuits against employers that use background checks. Following April 2012 updated EEOC guidance on the use of arrest and conviction histories in employment decision-making, the EEOC has pursued high-profile suits against employers like Dallas-based corporate event planner Freeman, Dollar General Corp., automaker BMW Manufacturing Co., and clothing company Saavedra alleging that their use of criminal background checks in the hiring process had a disparate impact on blacks.
The law on employers’ use of background checks is rapidly evolving. Employers must not assume that the continued use of such checks is lawful and should consult counsel for the latest developments.