Seyfarth Synopsis: The California Legislature has just created yet another protected class of individuals entitled to sue employers under the Fair Employment and Housing Act. The new class of potential plaintiffs are applicants denied employment because of their conviction history, where the employer is unable to justify relying on that conviction history to deny employment.

We’ve reported on two January 2017 developments for California employers that use criminal records in employment decisions: (1) Los Angeles enacted a city-wide “ban-the-box” ordinance, and (2) the Fair Employment & Housing Council approved new regulations that borrow heavily from the EEOC’s April 2012 “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”

The trend continues. Over the weekend, on October 14, 2017, Governor Jerry Brown signed Assembly Bill 1008, which amends FEHA to add new Government Code section 12952. This section will restrict an employer’s ability to make hiring decisions based on an applicant’s conviction records, including a “ban-the-box” provision and a prohibition against considering conviction history until the applicant has received a conditional offer of employment. (It is only scant comfort to reflect that the final version of AB 1008 was not as stringent as the originally proposed bill, which would have placed even greater restrictions on consideration of criminal history.) With a fast-approaching effective date of January 1, 2018, California employers should review their policies and procedures now to ensure compliance.

Coverage

Section 12952, like other parts of FEHA, applies to employers with five or more employees. Section 12592 exempts from its coverage only a small handful of positions:

  • positions for which government agencies are required by law to check conviction history,
  • positions with criminal justice agencies,
  • Farm Labor Contractors as defined in the Labor Code, and
  • positions as to which the law (e.g., SEC regulations) requires employers to check criminal history for employment purposes or restricts employment based on criminal history.

Inquiries About Conviction History

Section 12952 makes it unlawful for California employers to

  • include on a job application any question about conviction history, unless the application is presented after a conditional offer of employment,
  • inquire into or consider an applicant’s conviction history before extending a conditional offer of employment, and
  • consider, distribute, or disseminate information about criminal history that California already prohibits employers from considering, such as (a) an arrest not resulting in a conviction (except in the limited situations described in Labor Code section 432.7), (b) referral to or participation in a pretrial or post trial diversion program, and (c) convictions that have been sealed, dismissed, expunged, or statistically eradicated pursuant to law.

Section 12952 expressly states that it does not prevent employers from conducting conviction history checks that are not covered by the new law.

Section 12952 borrows its definition of “conviction” from Labor Code section 432.7(a)(1), (3): “a plea, verdict, or finding of guilt regardless of whether sentence is imposed by the court.” The term “conviction history” is somewhat broader, and can include certain arrests.

Individualized Assessment

If an employer intends to deny hire because of a prior conviction, Section 12952 would require the employer to assess whether the individual applicant’s conviction history has a “direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.” This individualized assessment must consider the nature and gravity of the criminal offense, the time that has passed since the offense and the completion of the sentence, and the nature of the job sought.

The employer, may, but need not, document the required individualized assessment.

Adverse Action Based on Conviction History

If the individualized assessment leads to a preliminary determination that the applicant’s conviction history is disqualifying, then the employer must provide a written notice. Section 12952 requires more than what the federal Fair Credit Reporting Act (FCRA) requires. Specifically, the written notice required by Section 12952 must:

  • identify the conviction at issue,
  • include a copy of any conviction history report (which means the notice is required regardless of the source of the conviction history),
  • explain the applicant’s right to respond to the notice before the employer’s decision becomes final,
  • state the deadline for that response, and
  • tell the applicant that the response may include evidence challenging the accuracy of the conviction history and evidence of rehabilitation or mitigating circumstances.

The applicant has five business days to respond to a preliminary notice. The employer, in then making its final employment decision, may, but need not, explain the reasoning for its final decision. (Note that the Los Angeles ordinance, by contrast, requires employers to document the individualized assessment and to give the applicant a copy of it before making a final decision.)

If the applicant timely notifies the employer that the applicant disputes the accuracy of the conviction history and is taking specific steps to obtain evidence, then the applicant has an additional five business days to respond. The employer must consider any information the applicant submits before the employer can make a final decision.

If an employer then makes a final decision to deny employment based solely or in part on conviction history, a second written notification must be provided to the applicant, which must include:

  • the final denial or disqualification,
  • any existing procedure the employer has to challenge the decision or request reconsideration, and
  • the right to file a complaint with the Department of Fair Employment and Housing.

Again, the employer may, but need not, explain its final decision. (Under the Los Angeles ordinance, new requirements arise when the applicant provides any additional information upon receipt of the employer’s first notice and its initial completed assessment: the employer receiving that additional information must then complete a re-assessment and provide the applicant with a copy of it while notifying the applicant of the final decision.)

Remedies

Because Section 12952 is part of the FEHA, an aggrieved individual may sue for the full range of FEHA damages available, including compensatory damages, attorney’s fees, and costs.

Next Steps

Most immediately, California employers should determine whether they need to revise job applications, interview guidelines, and policies and procedures for criminal background checks. Many employers will need to revise their pre-adverse and adverse action letters to comply with the many laws regulating criminal background checks, and to revamp the timing of events in their hiring process.

Employers throughout the United States, and particularly multi-state employers, should continue to monitor developments in this and related areas of the law, including laws restricting the use of credit history information and the fair credit reporting laws.