In April 2012, the Equal Employment Opportunity Commission (“EEOC”) issued updated “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”1 The guidance concerns how, in the EEOC’s view, Title VII restricts an employer’s discretion to consider criminal records for hiring decisions. What followed was a flurry of new EEOC charges and broad-based investigations relating to employment criminal records checks. Despite some setbacks in the courts,2 the EEOC is continuing enforcement activities. The EEOC’s Strategic Enforcement Plan for Fiscal Years 2017-2021 refers to “Eliminating Systemic Barriers in Recruitment and Hiring” (e.g., use of “screening tools” and “background screens”) and notes this as one of the agency’s “National Priorities” for the next several years.
The EEOC’s longstanding lawsuit against Dollar General is an ongoing example of its commitment to these actions.3 Earlier this month, an Illinois federal judge largely denied Dollar General’s attempt to force the EEOC to provide additional evidence in support of its claim that the employer’s background check policy disparately excluded African-American workers from employment. This ruling significantly limited the discovery burdens placed on the EEOC for the case and may only strengthen the EEOC’s stated resolve to pursue future similar actions against employers.
The Dollar General Lawsuit
In 2013, the EEOC filed suit against Dollar General, alleging that the company’s use of criminal background checks disparately impacted African-American applicants in violation of Title VII. The individuals who filed the charges prompting the EEOC’s lawsuit are African Americans, one of whom alleged that Dollar General denied her employment because of a six-year-old conviction for possession of a controlled substance. The other individual alleged she was terminated because of a felony conviction that actually belonged to someone else. The lawsuit alleged that there was a “gross disparity in the rates at which Black and non-Black conditional employees were discharged,” in violation of Title VII.
As the district court held, to succeed on its disparate impact claim, the EEOC must first offer “statistical evidence of a kind and degree sufficient to show that the [background check policy] has caused the exclusion of applicants for jobs . . . because of their membership in a protected group.” At that point, the burden would then shift to Dollar General to demonstrate that the policy is “job related for the position in question and consistent with business necessity.” If Dollar General makes this showing, the burden would shift back to the EEOC to “show that an equally valid and less discriminatory practice was available that Dollar General refused to use.”
The Discovery Dispute
Dollar General served discovery aimed at its burden to prove the policy was job-related for each position and consistent with business necessity. In particular, and in aid of this defense, Dollar General requested the EEOC to identify the specific job positions where African-American applicants experienced alleged disparate impact due to the criminal background check policy, and the portion of the policy that allegedly was responsible for the disparate impact. Dollar General also requested the EEOC to identify any alleged less-discriminatory policies and practices it believed Dollar General should implement and explain how those polices are consistent with the company’s business needs—which is the EEOC’s burden to prove should Dollar General meet its defense burden.
When the EEOC balked, Dollar General moved to compel. With the narrow exception of requiring the EEOC to specifically identify the “universe of documents” it intends to use at trial, the district court denied the employer’s motion. The court explained that Dollar General had long maintained that the EEOC was required to demonstrate disparate impact on a position-by-position basis—this based on Dollar General’s wide range of varying positions, from store manager to corporate officer. However, the court accepted the EEOC’s position that it need not perform any position-by-position analysis of disparate impact because the EEOC alleged that Dollar General applied the same background check policy to all job applicants across all positions. The court found that the EEOC’s “global approach to analyzing the background check policy” was sufficient and noted that Dollar General was free to engage its own expert to perform a position-by-position analysis. Ultimately, the court held that the burden of demonstrating business necessity for each position fell squarely on Dollar General, and the EEOC has no obligation to assist with this showing.
The court also rejected Dollar General’s request that the EEOC be ordered to further specify “the less discriminatory alternative practices (‘LDAs’) it should use in lieu of the criminal background check policy.” The EEOC did not dispute that it carried the burden on this issue, but claimed that it had already provided Dollar General with less-discriminatory options, including limiting the time frame for convictions, limiting the type of convictions considered, and conducting individualized assessments for each applicant. Dollar General responded that these were “merely generic suggestions that fail to provide any meaningful guidance regarding LDAs it could actually implement in the case.” However, the court refused to order the EEOC to respond further—finding the agency had “provided sufficient factual information regarding LDAs” at this “juncture” of the case. The court left open the possibility that the EEOC may have further identify LDAs via its expert once Dollar General’s expert explains why the policy is job-related and consistent with business necessity.
The Dollar General discovery order is most significant for how it reflects the EEOC’s resolve to continue to litigate broad background-check-related cases notwithstanding its very public failings in other such cases. And it has settled rather than lost other similar matters.4 Employers thus should continue to exercise caution and care in drafting their criminal record screening policies. Employers also should consider arranging for a privileged review of their credit and criminal check screening processes, policies and procedures to fortify compliance with Title VII and related requirements, particularly the Fair Credit Reporting Act (a regular source of class action litigation).5 Employers also should continue to be mindful of their obligations under the proliferating state and local ban the box laws.6