INTRODUCTION

On April 25, 2012, the EEOC adopted new guidance concerning an employer’s use of criminal background checks to screen applicants and current employees. One recent survey revealed that 92% of employers use criminal background checks to screen some applicants and employees. This Guidance replaced a 1987 EEOC Policy Statement on the use of conviction records and a 1990 Policy Guidance on the use of arrest records. Based on this Guidance (unrealistic in parts), employers should revisit their criminal background check policies and practices to determine if they arguably are complying with it.

WHY ALL THE FUSS?

The EEOC enforces Title VII which prohibits employment discrimination based on race, color, religion, sex, or national origin. The EEOC also enforces the ADA, Section 501 of the Rehabilitation Act, the ADEA, GINA, and the Equal Pay Act. This Guidance primarily focuses on race and national origin discrimination. All employers covered by Title VII are subject to the EEOC’s analysis.

The EEOC notes there has been a significant increase in the number of Americans who have spent time in prison during their lifetime:

  • 1 in 17 Caucasian men
  • 1 in 6 Hispanic men
  • 1 in 3 African American men

Consequently, the EEOC determined that criminal conviction record exclusions have a disparate impact on African Americans and Hispanics. Because technology has made it easier for employers to obtain criminal history information, more employers are utilizing criminal background checks to screen applicants and, to a lesser extent, current employees.

Why screen? Employers report a myriad of reasons, including:

  • combat theft and fraud;
  • workplace violence concerns;
  • negligent hiring claims; and
  • local/state/federal law requirements.

All logical and common sense reasons for preventing a potential problem employee from entering your workplace.

HOW TO PROVE EMPLOYMENT DISCRIMINATION

Having a criminal record is not listed as protected group in Title VII. Therefore, whether the employer’s reliance on a criminal record to deny employment violates Title VII depends on whether that decision impacts one of Title VII’s protected groups. There are two analytic theories used to determine employment discrimination.

A. Disparate Treatment

  • Treating an individual differently becauseof his race, national origin, etc.
  • The Widget Company rejects an African American applicant based on his theft conviction but hires a similarly-situated Caucasian applicant with a comparable record for that job.
  • Disparate treatment evidence can include:
    • biased and derogatory statements from decision-makers or protected group-related stereotypes about criminality
    • inconsistent hiring practices (requested criminal history information more often from certain racial or ethnic backgrounds; permitting Caucasian applicants to explain their criminal conviction history; ignoring certain convictions for Caucasian)

B. Disparate Impact

  • Employer’s neutral policy/practice has the effect of disproportionately screening out a Title VII-protected group.
  • The EEOC states that national data supports a finding that criminal conviction exclusions inherently have a disparate impact based on race and national origin.
  • The EEOC will assess relevant evidence when making a disparate impact determination, including:
    • applicant flow data maintained under the Uniform Guidelines On Employee Selection Procedures;
    • workforce data;
    • criminal history background check data;
    • demographic availability statistics;
    • incarceration/conviction data; and/or
    • relevant labor market statistics.
  • The EEOC knows this type of data is more readily available in this “point/click” technological environment.
  • The EEOC also will assess the probative value of an employer’s applicant data. More than just reviewing statistics. Since otherwise qualified people may be discouraged from applying because of an employer’s alleged discriminatory policy/practice, the EEOC will consider the employer’s reputation for excluding individuals with criminal records. In so doing, the EEOC may consider the following sources: ex-offender employment programs, individual testimony, employer statements, recruitment practices, and publicly posted notices.
  • An employer’s evidence of a racially balanced workforce will not be enough to disprove disparate impact. The key issue is whether the policy/practice deprives a disproportionate number of Title VII-protected individuals of employment opportunities.

JOB-RELATED FOR THE POSITION IN QUESTION AND CONSISTENT WITH BUSINESS NECESSITY

If the EEOC or a plaintiff demonstrates the employer’s facially neutral policy/practice has a statistically significant disparate impact on a protected group, then the employer must demonstrate the policy/practice is job-related and consistent with business necessity -- and is applied on a consistent basis.

What does that ubiquitous phrase mean? The employer must show the policy/practice is one that “bear[s] a demonstrable relationship to successful performance of the jobs for which it was used” and “measures the person for the job and not the person in the abstract.” It is a highly fact intensive inquiry.

EEOC: TWO WAYS TO CONSISTENTLY MEET THE “JOB-RELATED AND CONSISTENT WITH BUSINESS NECESSITY”DEFENSE -- VALIDATION AND TARGETED EXCLUSION/ INDIVIDUALIZED ASSESSMENT

A. Validation.

  • Validate the criminal conduct screen for the position in question per the Uniform Guidelines on Employee Selection Procedures standards -- if data about criminal conduct as related to subsequent work performance is available and such validation is possible.
  • Three ways to validate:
    • criterion-related validity studies
    • content validity studies
    • construct validity studies
  • Unrealistic
    • places burden on the employer to prove, via statistics, a credible link between the specific criminal conduct and the risks inherent in the particular job at issue.
    • EEOC admits such social science studies are “rare” as of the time the Guidance was drafted.
    • expensive

B. Targeted Exclusion/Individualized Assessment

Under this method, an employer policy/practice initially excludes individuals from certain positions for specifiedcriminal conduct within a defined time period – as guided by the three factors referenced below. Those targeted exclusions, by definition, are tailored to the rationale for their adoption.

Under the EEOC’s guidance, such an exclusion must be narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question. Once that preliminary decision has been made, the EEOC recommends (not requires) that employers then engage in an individualized assessment -- discussed below.

The EEOC, citing a 1975 federal court case, identified three factors that are relevant in assessing whether a criminal conviction exclusion is job-related for the position in question and consistent with business necessity:

  • The nature and gravity of the offense or conduct (i.e., whether a specific crime may be relevant to concerns about risks in a particular position -- theft/bank teller);
  • The passage of time since the offense/conduct and/or completion of the sentence (i.e., has enough time passed to minimize the risk that she/he will repeat the crime); and
    • Informally, EEOC attorneys have cited to national studies that indicate that the rate of recidivism (or criminal violation) by former convicts returns to the same rate as the national population after 7 years without a criminal conviction.
  • The nature of the job sought or held (i.e., the nature of the job duties; identification of the job’s essential functions; the circumstances under which the job is performed -- level of supervision, oversight, contact with others; and the workplace environment -- outdoors, warehouse, office setting, private home).

Once the initial “targeted exclusion”decision is reached -- using those three factors, the EEOC recommends the employer engage in an individualized assessment. The EEOC contends doing so “can help employers avoid Title VII liability by allowing them to consider more complete information on individual applicants or employees. . . .” There are three steps to this process:

  • informthe individual he may be excluded because of past criminal conduct;
  • providehim an opportunity to demonstrate the exclusion does not properly apply to him; and
  • considerwhether his additional information shows the policy (as applied to him) is not job-related and consistent with business necessity.

The individual, in turn, may provide information showing he was not correctly identified in the criminal record, or the record is otherwise inaccurate.

Other relevant individualized evidence includes, for example:

  • the facts and circumstances surrounding the offense/conduct;
  • the number of offenses for which he was convicted;
  • older age at time of conviction or release from prison;
  • evidence he performed the same type of work, post conviction, with the same or different employer, with no known incidents of criminal conduct;
  • length and consistency of employment history before and after the offense/conduct;
  • rehabilitation efforts (e.g., education/training);
  • employment/character references and other information regarding fitness for the position;
  • whether he is bonded.

If the individual fails to respond to the employer’s attempt to gather additional background information, the employer may make its employment decision without the information. Note the Fair Credit Reporting Act already requires employers to provide: a pre-adverse action letter -- with a copy of the consumer report and an adverse action letter.

Bottom line. A policy that permanently excludes all applicants with criminal conviction records will not pass EEOC scrutiny. Rather, linking the criminal conduct to the essential functions of the position in question may assist the employer in meeting the “job-related” and “consistent with business necessity” test.

PROBLEMS WITH THE INDIVIDUALIZED ASSESSMENT

  • What does an employer do when a criminal conviction is one of several factors relied upon in rejecting a candidate -- instead of being the sole reason?
  • Many employers receive a myriad of applications on a daily or weekly basis. Does the EEOC really expect them to personally reach out to each and every screened out applicant to conduct an “Oprah Winfrey” interview or send a letter/email to them . . . and then analyze the responses? This costs time and money.
  • Litigation risk. Inconsistent treatment allegations. Once an employer engages in individualized assessments, it is sure to spawn a disparate treatment claim.

AND YOU STILL CAN LOSE ….

Even if an employer successfully demonstrates its policy/practice is job-related for the position in question and consistent with business necessity, it still can lose. A Title VII plaintiff still may prevail by showing there is a less discriminatory “alternative employment practice” that serves the employer’s legitimate goals as effectively as the challenged practice -- but the employer refused to adopt it.

COMPLIANCE WITH FEDERAL LAWS/REGULATIONS IS A DEFENSE TO A DISCRIMINATION CHARGE

  • Certain federal laws exclude people with particular convictions in the public and private sector (e.g., security screener, federal law enforcement officers, childcare workers in federal agencies/facilities, bank employees, and port workers).
  • The EEOC states that Title VII does not preempt those federally imposed restrictions and/or federally-mandated licenses and registrations.
  • The EEOC suggests employers, in some situations, should seek a waiver.

COMPLIANCE WITH SIMILAR STATE LAWS/REGULATIONS IS NOT A VALID DEFENSE TO A DISCRIMINATION CHARGE

  • The EEOC states if an employer’s exclusionary policy/practice is not job-related and consistent with business necessity, the fact the criminal record exclusion was mandated by state law will not shield the employer from Title VII liability. Really?
  • Many state laws regulate occupations that involve responsibility for the elderly and children (e.g., nurse/elder caregivers, daycare providers, caregivers in residential facilities, school teachers, and certain non-teaching school employees.)
  • In Kentucky, for example, you cannot be employed in children services if convicted of certain sexual or violent crimes. You also cannot be employed at a nursing facility providing direct services to senior citizens if convicted of sex crimes or felony related theft, abuse or sale of illegal drugs, or abuse, neglect or exploitation of an adult.
  • There will be litigation over this ridiculous pronouncement.

NOW WHAT?

  1. Take a deep breath. The EEOC has issued“Guidance,” in part, that is not realistic in scope or practice. It places an undue burden on employers. That being said, this Guidance does not remove an employer’s ability to make rational, unbiased, hiring decisions based on an applicant’s background history.
  2. Do not base decision on “arrest” records. Nothing changed on that front.
  3. The EEOC recommends (not “requires”) that employers not ask about convictions on job applications. Some states already forbid it (Hawaii, Connecticut, Minnesota). The EEOC wants employers to ask that question later in the hiring process. If you continue to ask that question on the application (in states that have not barred it) then add the phrase “A conviction will not necessarily disqualify an applicant from employment.” If practicable, ask that question during the last stages of the interview process or at the “conditional offer” stage.
  4. Treat all applicants with similar criminal histories equally. Unfortunately, that is easier said than done. Shades of grey abound.
  5. Most likely, you will not have the patience or the financial resources to “validate”your criminal background check policy – even if that effort is possible.
  6. The EEOC’s message is loud and clear. Where it can prove disparate impact, a policy that excludes all applicants or employees with any criminal conviction history will be deemed to violate Title VII. Therefore, rather than a blanket exclusion, consider utilizing the three factors referenced above:
    1. nature and gravity of the offense/conduct;
    2. the passage of time since the offense/conduct; and
    3. the nature of the job sought or held.
    4. Link up the criminal conviction to the position in question. Document your rationale.
  7. Consider implementing an individualized assessment process to weed out certain candidates with criminal records. Again be very careful. An employer can fall into a “disparate treatment” claim if it treats applicants with similar mitigating factors differently. Those decisions (ideally) should be made by the same person(s). If practicable, consider following a narrowly tailored written policy to enhance consistency.
  8. Consider a form letter notifying applicants their criminal record may disqualify them from employment. Ask them to provide any additional information within a reasonable timeframe (e.g., one week.) If they do not respond, make your decision.
  9. If you exclude individuals with certain conviction records, be prepared to defend your decision with sound reasoning (i.e., research, statistics, other relevant information). Link it up. Document your rationale.
  10. Train all employees involved in the hiring process. All decisions to “screen out” an applicant should be reviewed by Human Resources before the decision is finalized.
  11. Keep criminal conviction information confidential.
  12. Continue to comply with the Fair Credit Reporting Act if you utilize a third party to conduct your criminal background checks.