On September 30, 2009, the Equal Employment Opportunity Commission (“EEOC”) filed a federal court lawsuit against a Dallas corporate events company for discrimination based on sex, race and national origin, EEOC v. Freeman, D. Md. 09-CV-02573. The EEOC alleges that the company’s use of credit history checks and criminal background checks results in discrimination against black, Hispanic and male job applicants. The Title VII lawsuit shows that the EEOC intends to enforce its previously-issued guidance on the use of background checks on applicants and employees. The EEOC guidelines stated that a company must have a business necessity to deny an applicant employment based on a criminal record. Specifically, it must consider, “the nature and gravity of the offense or offenses for which the applicant was convicted; the time that has passed since the conviction and/or completion of the sentence; and the nature of the job held or sought.” (EEOC Policy Statement on the Issue of Conviction Records under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. (1982). (2/4/87)). In a March 2008 letter, the EEOC reiterated its concern about the use of criminal records stating, “Conviction records may be considered in the employment decision as evidence of conduct that makes an individual unsuitable for a particular position. However, where there is a disproportionate impact based on race or national origin, the employer must demonstrate that it considers the relationship of the crime to the position sought.” In November 2008, the EEOC held a public meeting to discuss how the use of criminal background checks in hiring practices may result in discrimination against racial and ethnic minorities. The recent public meeting, opinions and lawsuit reflect the EEOC’s renewed interest in prosecuting claims based on employers’ allegedly improper use of background checks.

How can employers ensure they are complying with the EEOC’s guidelines about the use of applicants’ and employees’ credit histories and criminal backgrounds? Companies should look at their hiring guidelines first. Prudent employers generally weigh the relevance of the criminal or credit information with the type of position the applicant seeks. For example, an aggravated battery conviction is relevant when hiring a preschool teacher, but may not be relevant when hiring a telemarketer who would work from home. Companies also should remember that not all offenses are the same. Therefore, employers should not have an across-the-board ban on all applicants who have any criminal histories. Instead, companies should consider the type and degree of the offense in question. While the Fair Credit Reporting Act (“FCRA”) imposes limits on the age of information used, the EEOC provides no specific guidelines on this issue. Nonetheless, companies should consider the amount of time that has passed since a criminal conviction occurred. A misdemeanor assault conviction from 20 years ago may not be relevant when interviewing a 45-year-old candidate for a sales representative job. Further, the FCRA requires specific forms to be used before obtaining information from a third-party about the background of applicants and employees. Companies should review their forms and ensure they are complying with both the FCRA and the EEOC’s guidelines.