Earlier this year, the Equal Employment Opportunity Commission approved a revised “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964” (“Guidance”). The Commission emphasizes in the Guidance that before disqualifying an individual with a criminal record from employment, employers should engage in an individualized assessment involving a dialogue with that individual. While the Guidance states that employers would not violate Title VII if they disqualify an applicant based on separate, federal restrictions on the employment of persons with criminal records, the EEOC warns that an employer may not defend a decision to disqualify an individual solely on state restrictions on the hiring of persons with criminal records.  

Previous EEOC Policy and Guidelines

The new Guidance replaces existing EEOC guidance on criminal background checks, which has been in existence since 1987 (“1987 Guidance”). The 1987 Guidance detailed statistics showing African-Americans and Hispanics are convicted at a rate disproportionately greater than their representation in the population, implying that excluding individuals from employment on the basis of their conviction records had a disparate impact on these groups. Under Title VII, an employer may justify a practice that results in a disparate impact on protected groups by demonstrating a “business necessity” for the practice.  

New Guidance: Targeted Screens May Satisfy Business Necessity

Large retailers often adopt an internal policy regarding the types of convictions that will disqualify an individual from employment. The Guidance contemplates that an employer may satisfy the “business necessity” requirements with an internal policy that is “narrowly tailored.” It explains “narrowly tailored” as a “demonstrably tight nexus to the position in question.” The Guidance further explains, “Title VII thus does not necessarily require individualized assessment in all circumstances.” It states that a “targeted screen” would pass muster if it considers at least the nature of the crime, the time elapsed and the nature of the job (these are the three Green factors, based on a Supreme Court decision by that name).  

Targeted Screens Accompanied by Individualized Assessment

The Guidance clearly prefers a targeted screen accompanied by notice to the individual under scrutiny and an individualized assessment of the individual, the crime and the position in question. An individualized assessment would allow the applicant or employee to explain the circumstances of the conviction and why the conviction should not exclude him or her from employment.  

The Guidance states that if the individual does not respond to the employer’s inquiries, the employer may make its decision without the information.  

Persons Subject to Federal, State Prohibitions or Restrictions

The Guidance notes federal laws and regulations prohibit the employment of persons with records of certain crimes in particular positions, e.g., child care workers in federal agencies, bank employees and port workers. It finds that Title VII does not preempt these restrictions. However, perhaps of greatest concern for employer, the Commission refuses to allow employers to establish business necessity based on compliance with state or local laws prohibiting the employment of persons with certain criminal convictions. According to the Guidance, an employer that takes adverse action against an applicant or employee, as required by state law or local regulations, nonetheless must demonstrate that its policy is job-related and consistent with business necessity based on the Green factors.

“Ban the Box” by Fiat

As a so-called best practice, the Guidance encourages employers not to ask applicants about their criminal records (this is often called “banning the box” for the question on employment application forms). According to the EEOC, not asking about criminal records early in the application process is important because an employer is more likely to assess objectively the relevance of an applicant’s criminal records when it already knows about the applicant’s qualifications and experience.  

At least one EEOC regional office has begun targeting employers who do not heed this “best practice.”

Operating in the New Legal Environment

The Guidance shows the Commission accepts criminal background checks as a common employment practice. Nevertheless, retailers should review the Guidance and, with human resources, loss prevention officials and in-house or outside counsel, evaluate and revise their policies and practices, if necessary, in accordance with the “Best Practices” provided in the Guidance to minimize becoming a target of the EEOC.  

This is especially important for employers that have multiple hiring locations and utilize background checks frequently. The EEOC has taken the position that it can expand any individual charge into a systemic discrimination investigation of the employer. Indeed, the EEOC has begun using its systemic discrimination authority to target companies with multiple locations and employees. “Big numbers are bad numbers” and large numbers of applicants are likely to produce statistically significant adverse impact trends. When that occurs, employers will be required to utilize individualized assessment, targeted screens or conduct a validation study under the Guidance.