The EEOC has been searching for a test case on the use of criminal background checks, and they found not just one, but two.  On Tuesday, June 11, 2013, the EEOC filed suit against Dollar General and BMW claiming that criminal background checks were improperly used in the hiring process resulting in alleged discrimination against black applicants. 

In March, I blogged about compliance in hiring, including the use of criminal background checks.  As you recall, the EEOC issued guidance last year, which does not bar the use of criminal background checks, but does urge employers to consider, on a case-by-case basis, the nature of the crime, its relationship to the potential job, and how much time has passed since the conviction before excluding an applicant. 

According to David Lopez, the EEOC’s general counsel, the cases filed against Dollar General and BMW are “very serious systemic race discrimination cases.”  The EEOC’s cases are based on statistical disparities in the hiring rates of blacks versus non-blacks after each of the companies ran criminal background checks.  Let's look at each of the specific lawsuits and the two companies' criminal background check policies. 

In its suit against Dollar General, the EEOC says Dollar General uses a formula, including the crime and how old it is, to decide whether to reject an applicant.  The EEOC alleges that the policy is illegal because it does not allow for consideration of the age of the offender, a nexus between the crime and the specific job duties, employee safety, other matters necessary for the operation of the business, or the events that may have transpired since the offense.  The matrix simply requires that if an applicant was convicted of any of a specific list of crimes within a specific period of time, the offer of employment is rescinded.  According to the EEOC, this is criminal background check matrix is not sufficiently job-related and does not consider individual circumstances. 

One example cited by the EEOC in the lawsuit against Dollar General included an Illinois woman who disclosed on her job application a 6-year-old felony conviction for drug possession.  The woman was given a job offer, began working, and then after a criminal background check revealed this same felony and a misdemeanor drug paraphernalia possession conviction, was terminated. 

At BMW, the EEOC alleges that when BMW transferred logistics work from an old contractor to a new contractor, BMW required all 645 of the previous contractor employees to submit to a new criminal background check.  In doing so, 88 of the old contractor’s employees were not hired by the new contractor, and 80% of the 88 “terminations” were of black employees.  The new contractor did not hire the 88 employees because they had criminal convictions in violation of BMW’s policy.  The lawsuit claims that BMW’s criminal conviction policy prohibits the hiring of individuals with convictions of a violent nature and has no statute of limitation for any of the crimes.  Some of the terminated employees had worked for various contractors at the BMW plant for as long as 14 years. 

These test cases are viewed as the EEOC’s attempt to have a court endorse its guidelines, giving them the effect of law.  We will watch the progression of these two inaugural criminal background check cases.  Meanwhile, we encourage employers to review their policies on the use of criminal background checks in the hiring process.