After a nearly six-year legal battle, the Fifth Circuit has struck down the U.S. Equal Employment Opportunity Commission’s 2012 Enforcement Guidance on the consideration of criminal history in employment decisions. On August 6, a three-judge panel held that the Guidance was a substantive rule the EEOC had no authority to issue and that the EEOC can no longer enforce the Guidance or treat it as binding in any respect.

Originally published in 2012, the Guidance announced that an “employer’s use of an individual’s criminal history in making employment decisions may, in some instances, violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964.” The Obama-era EEOC cautioned that:

  • The fact of an arrest should not be considered in employment decisions, but that employers may consider the conduct underlying an arrest as related to the specific job position.
  • An employer’s neutral policy excluding applicants based on criminal history may disproportionately impact people based on race or national origin.
  • Employers may lawfully consider criminal history if it is “job related and consistent with business necessity” by conducting an individualized assessment, taking into account three factors: the nature of the crime, the time elapsed, and the nature of the job.

The Guidance was challenged by the State of Texas, which bars individuals with certain felony convictions from holding some state jobs. The state sued the EEOC and the Attorney General in 2013. The U.S. District Court for the Northern District of Texas originally threw the case out, finding that Texas lacked standing because the guidance had not been enforced against it. The case was revived by the Fifth Circuit, and the district court later ruled in the state’s favor that the EEOC should have submitted the Guidance for public comment.

Both Texas and the EEOC appealed portions of the district court’s ruling. In its decision, the Fifth Circuit panel affirmed a modified version of the injunction granted by the district court. The district court’s injunction enjoined enforcement of the Guidance against Texas until the EEOC complied with the Administrative Procedure Act’s notice and comment requirements. The panel agreed that the Guidance constituted a substantive rule but further concluded, however, that the EEOC had no authority to issue substantive rules implementing Title VII. Thus, even if the EEOC followed the notice and comment requirements, it still could not issue the Guidance. Consequently, the panel modified the injunction issued by the district court “to clarify that EEOC and the Attorney General may not treat the Guidance as binding in any respect.”

Employers, especially those in Texas, Louisiana, and Mississippi, now have additional authority to cite in defending their background check procedures against EEOC scrutiny.