As an employer, you want to feel confident that your employees will conduct themselves in a lawful and ethical manner – perhaps you use criminal background checks to help ensure that your organization will not be liable for an employee’s criminal activity. Criminal background checks and screenings may seem like an efficient method to protect your business from liability for negligent hiring, and depending on the nature of your business, a criminal background check may be required by law.

Employers, however, must now be wary of improperly using criminal background information to exclude candidates and employees. Following a $31 million settlement with a global beverage company for its strict policy excluding anyone with a criminal record from employment, the EEOC recently issued new, comprehensive guidelines solidifying its long-held position that improper use of criminal background information in making employment decisions could constitute unlawful race discrimination under Title VII. As a result, employers may feel stuck choosing between potential liability under Title VII for screening employees and applicants in good faith, or risking liability for negligent hiring if they neglect to perform criminal background checks or to monitor employees with criminal backgrounds.

Employers’ fear of liability for negligent hiring in many instances is well founded. For example, in J. v. Victory Tabernacle Baptist Church, the Supreme Court of Virginia held the defendant church liable for negligent hiring when a church employee, who recently had been convicted and was on probation for aggravated sexual assault on a young girl, repeatedly assaulted another young girl on church premises. The Court found that the church had neglected to conduct a proper background check and “knew or should have known” of its employee’s conviction and probation. While cases like this one may motivate employers to use a “better safe than sorry” approach to screening applicants with criminal records, employers with sweeping exclusionary hiring policies are particularly susceptible to Title VII discrimination suits. In a landmark case, Green v. Missouri Pacific Railroad, the Eight Circuit held that the employer’s strict policy excluding any applicant whose record contained more than a minor traffic offense violated Title VII. While the employee in that case used statistical methods to show the policy’s disparate impact in its geographic region, the EEOC’s new guidelines now allow complainants to rely on national statistics to prove disparate impact.

So how do you avoid being stuck between a rock and a hard place under the new guidelines? Below is some information about the law regarding criminal background checks and employment decisions, the EEOC’s position, and tips for developing a lawful criminal background check policy.

Overview – The New Guidelines. According the EEOC, more individuals are coming into contact with the criminal justice system than ever before, resulting in an increase in criminal records among the working-age population. This trend has raised public policy considerations that support hiring former convicted criminals in order to remove social roadblocks and reduce recidivism – considerations that may have a greater effect on some populations than others. The EEOC has released statistics confirming that nationwide arrest and incarceration rates are two to three times higher for African American and Hispanic men than White men. Therefore, while those with a criminal record are not a protected class under Title VII, the EEOC has clarified that based on these national statistics, a disparate impact is created – such that employers may be liable for race or national origin discrimination – if employers improperly use criminal background information as the basis for employment decisions.

Disparate Impact vs. Disparate Treatment. Under a disparate treatment theory of discrimination, employers may not treat similarly situated employees with comparable criminal records differently based on race. The EEOC has also determined, however, that its arrest and incarceration statistics support claims of race discrimination under a disparate impact theory – meaning that an employer could be liable for any exclusionary criminal background check policy unless it can demonstrate that such exclusions are job-related and consistent with business necessity, even if the policy is neutral on its face. In other words, if an employer uses criminal background checks, it must (a) look at the particular criminal information on an individual’s record, and (b) determine that such activity will render the individual unfit for the particular job in question.

Credible Sources. With criminal background information readily available from a number of private and public sources, the EEOC cautions employers that the information they receive – particularly from private consumer reporting agencies, or CRAs – may be inaccurate, out-of-date, or incomplete. Employers should not rely solely on the information received through a criminal background check, particularly if the criminal record shows arrests rather than convictions.

Arrests vs. Convictions. The EEOC cautions that arrests can never be used in making employment decisions because arrests in themselves do not prove that criminal conduct occurred. Those who are arrested are innocent until proven guilty, and the disposition of an arrest (whether the charges were dropped, etc.) may not be included in the criminal background information an employer receives.

The underlying conduct leading to an arrest, however, may lawfully be used to exclude an individual from employment. For example, an applicant who was arrested for conspiring to commit credit card fraud with several other individuals but accepted a plea bargain for a lesser charge may be still be excluded from a job that requires handling credit card information.

Convictions may be used to verify that criminal activity occurred, but must be used narrowly. An employer must demonstrate that its exclusionary policy “operates to effectively link specific criminal conduct, and its dangers, with the risks inherent in the duties of a particular position.”

Establishing Job Relatedness and Business Necessity. According to the EEOC, employers may assert the “job relatedness and business necessity” defense in using criminal records to screen applicants in one of two ways. Employers may validate their screening process for the specific position identified using one of the approved statistical approaches in the Uniform Guidelines on Employee Selection Procedures. Few studies exist, however, linking criminal convictions and future workplace behavior.

Therefore, employers may consider three factors set forth in Green, to establish a connection between criminal conduct and job responsibilities. Those factors are:

  • The nature and gravity of the offense or conduct;
  • The time that has passed since the offense, conduct and/or completion of the sentence; and
  • The nature of the job held or sought.

Individual Assessments. While the Green factors provide a framework for establishing a lawful criminal conduct screening policy, the EEOC stresses that policies that do not include individual assessments are more likely to violate Title VII. Individualized assessments can give applicants or employees an opportunity provide additional information about their criminal records and an opportunity to explain circumstances. Accordingly, employers should establish a screening process tailored to the specific positions in question and utilize individualized assessments to ensure their criminal background check policies comply with Title VII.

Steps for Developing a Non-Discriminatory Policy. Employers should take the following steps in developing a criminal background check policy:

  1.  Identify and review the job description(s) to which the screening policy will apply.
  2. Identify the specific offenses that might demonstrate an individual is unfit for a particular job, using all available evidence. Keep records of all research used in developing the policy. 
  3. Develop a written policy explaining the justifications for each exclusion based on the Green factors and establish a set period of time following an offense for which the employer will no longer exclude an applicant or employee based on that conduct.
  4. Develop specific, written procedures for individualized assessment when applicants or employees are screened out by a criminal background check that will afford the individual the opportunity to provide additional information. When asking an applicant or employee about a criminal record, limit the scope of questioning to the specific conduct you have identified as exclusionary for the job in question.
  5. Keep all information regarding an individual’s criminal record confidential.
  6. Train hiring professionals, decision makers and supervisors on your policies and procedures to ensure compliance.

To access the full EEOC guidelines, visit the EEOC website at http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm