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The AR Group

Background Checks and EEOC Litigation

This is the second blawg in a series that we began in an effort to summarily highlight the EEOC?s stated objectives as outlined in the Strategic Enforcement Guidelines issued in January of 2013.? ?As noted previously, one of the primary issues the EEOC identified as needing attention was ?Eliminating Barriers in Recruiting and Hiring.? ?One way the EEOC has manifested its efforts to address this concern is with increased EEOC litigation against employer use of criminal background/credit checks as a screening tool for hiring.

Employer Use of Background Checks & The EEOC?s Enforcement Initiatives

Employers have long used criminal background checks as a hedge against employee theft, and in more recent years as a response to the increase in workplace violence.? In some instances, failure to do a criminal background check on an employee could expose an employer to tort liability.? Though there are currently no federal laws prohibiting employer consideration of criminal convictions in making employment decisions, the EEOC takes the position that utilizing criminal background checks in making employment decisions may violate Title VII.? Accordingly, within the last year, the EEOC has filed lawsuits against national retailer Dollar General, and car maker BMW Manufacturing Co., LLC, alleging criminal background check policies used by these employers systematically discriminated against African-American job applicants or existing employees.? The EEOC continues to bring similar lawsuits against other employers nationwide.

The stated rationale for EEOC?s stance is that reliance on criminal records as a factor in hiring decisions disproportionately affects African-Americans and Hispanics, who statistically have higher rates of arrest and criminal conviction.? This is referred to as disparate impact discrimination.? The EEOC?s revised guidelines makes clear that the use of criminal histories could support a claim of disparate treatment discrimination, including when decisions are made based on stereotypes about classes of individuals.? Importantly, The EEOC takes the same position on the use of credit histories of job applicants.

The good news is that the EEOC?s theory of disparate impact discrimination has not been well received by the courts. For example, in the Maryland case of EEOC v. Freeman, the district court granted summary judgment in favor of the defendant, dismissing the EEOC?s claim that the company?s background check policies violated Title VII.? More recently, the United States Court of Appeals for the Sixth Circuit issued a strong rebuke to the EEOC for suing an educational services company for implementing a credit check program after discovering that employees had stolen student?s financial aid payments.? See Equal Employment Opportunity Commission v. Kaplan Higher Education Corporation.

What Is An Employer to Do?

While employers are prevailing in these cases brought by the EEOC, more often than not it can be a pyrrhic victory, where the employer is forced to bear the cost and time of defending itself against the resources of the federal agency.? So what is an employer to do? ?We recommend the following:

  • Limit criminal background checks to seeking information only on crimes identified as job related and consistent with business necessity. ?Document the reasons you considered certain convictions to be job related and consistent with business necessity for each position. This will strengthen your case if the EEOC decides to investigate your Company?s policy.
  • Eliminate blanket policies or practices that exclude people from employment based on any criminal record, except to the extent required for employment by a federal contractor.
  • Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct.
  • Identify essential job requirements and the actual circumstances under which the jobs are performed.
  • Determine the specific offenses that may demonstrate unfitness for performing jobs.
  • Identify the criminal offenses based on all available evidence.
  • Determine duration of exclusions for criminal conduct based on available evidence.
  • Record the justification for the policy and procedures.
  • Note and keep a record of any consultations and research considered in crafting the policy and procedures.
  • Include an individualized assessment.? Prior to making a decision to not hire based on a criminal history, interview applicant about the circumstances to determine if there are mitigating factors or mistakes in the information. Allow applicant to provide the facts or circumstances surrounding the offense or conduct; the number of offenses for which the individual was convicted; evidence that the individual performed the same type of work, post-conviction, with the same or a different employer, with no known incidents of criminal conduct;?the length and consistency of employment history before and after the offense or conduct;?rehabilitation efforts, e.g., education/training; and employment or character references and any other information regarding fitness for the particular position.
  • If federal laws prohibit hiring for particular positions based on a criminal history, do not have a policy that is more restrictive for those positions. For example, if federal law prohibits hiring an individual with a conviction in the last ten years, do not have a policy based on convictions in the last fifteen years.
  • Train managers, hiring officials, and decision makers on how to implement the policy and procedures consistent with Title VII.
  • Keep information about applicants? and employees? criminal records confidential. Only use it for the purpose for which it was intended.

In our next Blawg, we will address how the EEOC is using its enforcement powers to limit the scope of Release Agreements employers often use to separate employees, claiming employers? policies and practices discourage or prohibit individuals from exercising their legal rights.