IV. POTENTIAL SOLUTION TO A NATIONAL PROBLEM
Amid skyrocketing unemployment, the issue of the validity of pre-employment criminal background checks for the purpose of making adverse employment decisions has received considerable attention, both at the federal and state levels. Myriad reforms to address this historic reentry challenge have been proposed, including classifying individuals with criminal records as a protected class under Title VII, having the EEOC offer additional guidance, expanding ban the box policies, reforming FBI rap sheets used by employers screening applicants, prohibiting blanket felony bans on hiring, leveraging development funds to create employment opportunities for people with criminal records, expanding bid incentive programs to promote local hiring priorities, and creating financial incentives for private employers to create jobs for people with criminal records. Additionally, less discriminatory alternatives have been suggested to replace problematic employment practices.
But the focus here is on amending FCRA. Some employers conduct their own criminal background checks, but statistics show that a majority of organizations completely or partially outsource background checks, and this number is projected to increase within the next three years. These statistics may be attributable to the fact that, although employers may rely on popular Internet search engines to perform their own criminal background checks, a consumer report is comprehensive and arguably requires a smaller investment of resources. Because the companies providing criminal background check services to employers are covered under FCRA, amending FCRA to prohibit the use of pre-employment criminal background checks would seemingly address this national problem.
Amending FCRA has been tried previously, albeit in a different context. On July 9, 2009, Representative Steve Cohen of Tennessee introduced the Equal Employment for All Act in the U.S. House of Representatives, which was referred to the House Committee on Financial Services on the same day. The bill never passed the committee stage and has since been cleared from the books. The purpose of the bill, which was endorsed by fifty-six Members of Congress and a number of consumer and civil rights groups, was [t]o amend [FCRA] to prohibit the use of consumer credit checks against prospective and current employees for the purposes of making adverse employment in order to give some of our most vulnerable, credit-challenged citizens--students, recent college graduates, low-income families, senior citizens and minorities--the opportunity to begin rebuilding their credit In its proposed form, the bill read, in part:
(b) Use of Certain Consumer Report Prohibited for Employment Purposes or Adverse Action--
(1) GENERAL PROHIBITION--Except as provided in paragraph (3), a person, including a prospective employer or current employer, may not use a consumer report or investigative consumer report, or cause a consumer report or investigative consumer report to be procured, with respect to any consumer where any information contained in the report bears on the consumer's creditworthiness, credit standing, or credit capacity--
(A) for employment purposes; or
(B) for making an adverse action ...
(3) EXCEPTIONS--Notwithstanding the prohibitions set forth in this subsection, and consistent with the other sections of this Act, an employer may use a consumer report with respect to a consumer in the following situations:
(A) When the consumer applies for, or currently holds, employment that requires national security or FDIC clearance.
(B) When the consumer applies for, or currently holds, employment with a State or local government agency which otherwise requires use of a consumer report.
(C) When the consumer applies for, or currently holds, a supervisory, managerial, professional, or executive position at a financial institution.
(D) When otherwise required by law.
The bill, however, only sought to prohibit the use of consumer reports bearing on a consumer's creditworthiness, credit standing, or credit capacity for employment purposes.
Similar to pre-employment credit checks, criminal backgrounds checks have not been shown to predict successful job performance and have a disparate impact on racial minorities. Therefore, Congress should reintroduce the Equal Employment for All Act, appropriately named, and extend the bill to include a general prohibition of the use of criminal background checks for employment purposes. As with the formerly proposed Equal Employment for All Act, exceptions to the general prohibition may have to be created.
Alternatively, absent congressional action, the onus should fall on the relevant administrative agencies to act. First, the EEOC should update its guidance on criminal background checks. The existing EEOC guidance on arrest and conviction records is over twenty years old and in dire need of revision, particularly given the increasing reliance on criminal background checks by employers and the public availability of criminal record information through online databanks. In updating its guidance, the EEOC should consider the latest statistics on the disproportionate impact these checks have on racial minorities, as well as the current literature regarding past criminal behavior having decreasing value over time and criminal history not being shown to predict counterproductive work behaviors. Second, given the technical complexity of criminal background records, the Federal Trade Commission should draft regulations requiring consumer-reporting agencies to provide information to employers on how to properly interpret criminal history reports.
