The Pennsylvania Human Relations Commission (“PHRC”) has proposed “Policy Guidance” stating that it intends to treat an employer's rejection of an African-American or Hispanic applicant because of his or her criminal record as presumptive evidence that the employer is discriminating against the applicant in violation of the Pennsylvania Human Relations Act (“PHRA”).

The proposed Policy Guidance potentially presents significant new hurdles for Pennsylvania employers as they attempt to strike the correct balance between instituting security-minded and non-discriminatory hiring practices. This is particularly critical in fields that are highly regulated by federal, state and administrative bodies. Employers in regulated industries are already bound by a myriad of statutory, regulatory and court authority that includes prohibitions against employing individuals convicted of specific offenses in certain occupations.

The PHRC is seeking public comments regarding the proposed Policy Guidance by January 26, 2010, so that it can consider them before deciding whether to adopt the final Policy Guidance on February 22, 2010. A copy of the proposed Policy Guidance can be found on the PHRC’s website, and includes instructions for submitting comments. Please read on for further information regarding the potential issues the proposed Policy Guidance raises for Pennsylvania employers, and suggestions of points to include if you choose to submit comments to the PHRC.

The Policy Guidance Fails to Address the True Disparity Revealed By the Statistical Data

The Pennsylvania Human Relations Commission’s (“PHRC”) proposed Policy Guidance regarding the implications of using an African-American or Hispanic applicant’s prior criminal history in hiring decisions is based on the PHRC’s analysis of statistics showing a nationwide disproportionate conviction rate of African-American and Hispanic populations, as well as the larger disparity evidenced by Pennsylvania-specific data. This data has led the PHRC to propose that an employer that an employer’s use of criminal convictions in deciding who not to hire should be presumed to have engaged in “disparate impact” discrimination against African-American and Hispanic applicants. The Policy Guidance provides in part:

[W]hen investigating complaints of alleged unlawful disparate impact discrimination presented by Black and Hispanic complainants that are otherwise jurisdictional, the PHRC will presume that the complainant has established the disparate impact element of a prima facie case of unlawful discrimination under Section 5 of the Pennsylvania Human Relations Act (PHRA).

The data used by the PHRC, however, speaks not to discriminatory practices in hiring, but rather to the PHRC’s view that the criminal justice system of both the nation and Pennsylvania has a discriminatory disparate impact on African-Americans and Hispanics. Employers must rely on valid public records, such as criminal convictions, to ensure that their employees, clients and third parties are not endangered because of negligent hiring for positions of trust. The PHRC’s guidance, however, puts the onus on employers, who have no involvement with applicants’ criminal convictions, to try to eradicate discrimination apparently caused by the criminal justice system.

The clear target of anti-discrimination measures designed to address disparity in the criminal justice system should be those empowered and mandated to monitor that system, namely, law enforcement and prosecutorial offices. The proposed Policy Guidance puts employers in the untenable position of second-guessing valid convictions of persons who were afforded the right to trial by jury, and found guilty of crimes beyond a reasonable doubt. The PHRC’s attempt to redress discrimination in that process by imposing higher burdens on employers will create an unworkable scenario by attempting to close the barn door after the horses have already escaped from a completely different barn.

The 'Business Necessity' Defense

The PHRC’s guidance appears to closely track the central principles set forth by the Equal Employment Opportunity Commission (“EEOC”) in its 1987 “Policy Statement on the Use of Statistics in Charges Involving the Exclusion of Individuals with Conviction Records from Employment” (available on the EEOC’s website). However, the PHRC’s guidance is substantially more detailed, and in that respect more limited, in describing what an employer needs to show to rebut the presumption that its use of criminal convictions has an unlawful disparate impact. Because the courts have generally interpreted and applied PHRA and Title VII in a similar way, to the extent that the proposed Policy Guidance imposes higher burdens on employers under the PHRA than is required by Title VII, it could lead to incongruous results for employers in Pennsylvania under the two laws.

Though the PHRC’s guidance allows employers to rebut the presumption of disparate impact hiring by demonstrating business necessity, Appendix A to the guidance, which lists specific laws that the PHRC will recognize as valid hiring limitations in certain occupations, suggests that employers will otherwise need to convince PHRC investigators that they are properly adhering to valid legal authority. A quick glance at Appendix A by anyone familiar with laws and regulations governing industries such as health care, law enforcement, banking and telecommunications reveals that it is far from exhaustive. Indeed, for Appendix A to remain effective, the PHRC would need to constantly monitor changes in federal and state statutes, regulations, and court cases affecting employers in a wide variety of the industries.

The Statistical Defense

The clear tone of the 30-plus-page Policy Guidance is that employers facing disparate impact claims by African-American and Hispanic applicants or employees based on the use of prior criminal history will have a much more difficult time getting such claims dismissed. Besides the business necessity defense, the PHRC allows the employer to present specific regional statistical evidence that may show that the general presumption of disparate impact convictions does not hold true in a particular complainant’s case. However, the guidance expressly disallows any defense that the employer’s own workforce demographics rebut that presumption. Indeed, the only statistics that serve as a defense under the PHRC’s proposed guidance are those of the geographic region in which the employer operates, not the statistics actually under the control of the employer.

Pennsylvania’s Legislature Has Already Spoken Regarding Unauthorized Use of an Applicant’s Prior Criminal History

The Policy Guidance discusses at length the public policy of Pennsylvania against stigmatizing ex-offenders, on the grounds that doing so contradicts the justice system’s chief goal of rehabilitation. However, the Pennsylvania legislature has already legislated in this area, with the Pennsylvania Criminal History Record Information Act, codified at 18 Pa. C.S. § 9101, et. seq., which sets forth limits on employers’ use of criminal history records in hiring. Though the PHRC guidance acknowledges this statute, it also minimizes its impact, because no administrative agency is charged with enforcing this law, as the PHRC is charged with enforcing the PHRA.

The PHRC discounts the advantage that private litigants have to bring immediate suit against employers under this law, rather than being forced to exhaust the administrative process required before bringing suit under the PHRA. As most employers know, a significant number of PHRA cases are dismissed because the plaintiff failed to bring an administrative charge, a prerequisite for filing suit. But a plaintiff can sue an employer under the Criminal History Record Information Act without ever being forced to clear an administrative hurdle as a prerequisite to recover compensatory and punitive damages as well as attorneys’ fees.

By seeking to expand the prohibitions of the Criminal History Record Information Act with its newly expanded interpretation of the PHRA, the PHRC is exceeding its legislative mandate. The proposed Policy Guidance would create a clear conflict with existing legislation that specifically addresses this area of employment law.

Predictive Outcomes

Though the PHRC is accepting public comment regarding this proposed guidance, some form of this guidance is virtually certain to be adopted by the Commission. To the extent the PHRC tracks the guidance issued more than 20 years ago by the EEOC, there should be no issues for employers whose hiring practices were already compliant with the disparate impact analysis regarding criminal history under Title VII. However, a comparison of the PHRC’s proposed 30-plus-page guidance, with the three-page statement issued by the EEOC in 1987, implies that employers will face a much rougher road ahead in defending against these claims before the PHRC.