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Jon D. Bible

Jon D. Bible, To Check or Not to Check: New Eeoc Enforcement Guidance on the Use of Criminal History Information in Making Hiring Decisions, 2013-MAR Business Law Today 1


Although employers used to conduct criminal background checks of applicants only for certain positions, e.g., security guard or day care worker, the practice is more prevalent now. The Equal Employment Opportunity Commission (EEOC) recently cited a survey that revealed that 93 percent of employers conduct checks at least in some instances. Some employers don't want anyone with a criminal record working for them at all, regardless of the circumstances. Others are concerned about a problematic employee committing theft or fraud or harming a third party, which could result in a negligent hiring claim. This claim might assert that there were facts that should have alerted the employer to the need to conduct a check, which, if it raised red flags, would have led the employer not to hire the applicant. That résumé fraud -- lying about one's background, including whether one has a criminal record -- is so rampant today, and that the Internet has made it easier to conduct criminal history checks, are additional reasons why more employers are doing so. Although some employers disqualify only for some offenses and/or not for those that occurred fairly recently, some ban the hiring of anyone with a criminal conviction, or even arrest, record.

At the same time, an employer covered by Title VII of the 1964 Civil Rights Act (has at least 15 employees) risks being sued for disparate treatment or disparate impact discrimination based on its criminal history policy. Under the former theory, liability can be imposed for treating people differently based on a protected trait (race, color, religion, national origin, or sex), e.g., hiring a white person but not a Hispanic with comparable criminal histories. The disparate impact theory prohibits policies that have a disproportionate impact on a protected group and are not justified as being job related for the position and consistent with business necessity. Because African-Americans and Hispanics are arrested and convicted more often than whites, a policy of excluding applicants with a criminal history could run afoul of this theory.

Roughly 20 years ago, the EEOC enacted guidelines on how employers could comply with Title VII in using criminal history information in making a hiring decision. In April of 2012, the EEOC published new Enforcement Guidance (the Guidance) -- the focal point of this article -- that goes beyond anything it had previously said. After several false starts, and by a 4-1 vote of the commissioners, the EEOC acted in recognition of the fact that its prior policy statements, which appeared when the Internet was in its infancy, needed to be updated. That the EEOC had just months before announced a $3.13 million settlement with Pepsi Beverages involving charges of discrimination in its background check policy also, no doubt, made it believe employers would welcome fresh, more detailed advice. The Guidance focuses on race and national origin discrimination, the Title VII protected classes that the EEOC has decided are most often implicated in the use of criminal history in employment decisions.

No sooner had the Guidance appeared than interest groups began protesting it. The main complaint is that it puts employers in a Catch-22. If employers adhere to its strictures and do not use criminal history information in at least some instances, they risk losses from employee theft and fraud and in a negligent hiring claim. As well, some states mandate criminal background checks for certain positions. But if they ignore the Guidance, they risk being challenged for disparate treatment or impact by the EEOC and, down the road, a hefty damage award or settlement. Oddly enough, the Guidance does not even mention the negligent hiring conundrum.

The EEOC maintains that its Guidance does not reflect any change in its fundamental positions on criminal record exclusions. The differences are that it discusses disparate treatment and impact more fully, gives examples of both forms of discrimination, and better explains how the EEOC analyzes the “job related and consistent with business necessity” standard for criminal record exclusions. In one of its most controversial statements, the Guidance provides that federal laws that restrict employing people with certain records afford a defense to a Title VII claim but that state and local laws are preempted if they permit any act which would be unlawful under Title VII. Thus, if an employer adopts an exclusionary policy to comply with state or local law, it is not shielded from liability if the policy does not meet the job-related standard; stated differently, an employer could violate Title VII, as construed by the EEOC, if it rejects someone based on a criminal history background check required by state or local law.

The Guidance also notes that the Uniform Guidelines on Employee Selection Procedures provides that employers should maintain information on the adverse impact of their employment selection procedures, and that if an employer fails to do so, the EEOC may draw an inference of adverse impact of the selection process.

Excluding its 167 often lengthy footnotes, the Guidance is over 20 pages long. The first few pages provide background: the disparity in the arrest, conviction, and incarceration rates of African-Americans and Hispanics versus whites; sources from which criminal history data can be obtained, e.g., court, law enforcement, and correction agency records, registries and watch lists, state criminal record repositories, and the Interstate Identification Index of the Federal Bureau of Investigation; and a discussion of the disparate treatment and impact theories and how to avoid liability under both. In the latter discussion, the Guidance notes that evidence of a racially balanced workforce is not sufficient to disprove disparate impact. After this overview, the Guidance gets into specifics involving arrest and convictions.