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EEOC Files Suit over Employer Use of Criminal Background Checks

In an opening salvo following its recently revised enforcement guidelines, the Equal Employment Opportunity Commission (“EEOC”) has filed suit against two major employers, a national retail chain and an international automobile manufacturer. It alleges the companies used criminal background checks to disproportionately exclude African-Americans from their workforces.

On June 11, 2013, the EEOC filed suit against Dollar General, claiming the discount retailer systematically discriminated against African-American job applicants by using a process that screened out applicants that had previously been convicted of criminal offenses.  On that same day, the EEOC filed suit against BMW Manufacturing Co., LLC, alleging that the company’s Spartanburg, South Carolina facility had similar policies that resulted in the termination of African-American employees. 

Back in April 2012, Phelps Dunbar first reported the EEOC’s revision of its enforcement guidelines as to what extent employers may rely on an individual’s criminal history in making hiring or other employment selection decisions without violating Title VII of the Civil Rights Act of 1964 (“Title VII”).  The suits against Dollar General and BMW should come as no surprise.  In January 2013, the EEOC released its Strategic Enforcement Plan for 2013-2016, in which it announced its intent to refocus its litigation priorities on “systemic discrimination” by employers, as opposed to discrimination claims brought by individual employees. In its Strategic Enforcement Plan, the EEOC included the improper use of criminal background checks as an example of the systemic discrimination it intended to target.

The stated rationale for EEOC’s position is that employers’ 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. EEOC also makes clear that use of criminal histories could support a claim of disparate treatment discrimination, including when decisions are made based on stereotypes about classes of individuals.

For an employer to avoid Title VII disparate impact liability for excluding an individual with a criminal record, the EEOC requires that employers show that any reliance on a criminal history is job related and consistent with business necessity.  In doing so, an employer must show that it considered three factors: (1) the nature and gravity of the offense, (2) the amount of time since the conviction, and (3) the relevance of the offense to the type of job being sought.  The EEOC’s guidelines place the burden on employers to develop screening guidelines to individually assess each applicant/employee to determine whether a criminal history may be used as a factor in any employment decision.

While the new guidelines do not forbid criminal background checks by employers, blanket employment exclusions are proscribed and "[a] policy or practice that excludes everyone with a criminal record from employment will not be job related and consistent with business necessity and therefore will violate Title VII, unless it is required by federal law." The guidelines also sharply differentiate between an employer’s reliance on a record of arrests as opposed to a record of convictions.  EEOC’s guidance states that reliance on an arrest as a basis for exclusion (as opposed to actual conduct underlying the arrest) will not satisfy Title VII’s requirement that the policy be job related and consistent with business necessity.

Dollar General has denied the allegations in the EEOC’s lawsuit, stating that the company’s screening policies are lawful and non-discriminatory and are intended to ensure the safety of its customers and  employees and to protect the company’s assets. BMW likewise denied the allegations, highlighted the company’s culture of non-discrimination and its highly diverse workforce, and promised a vigorous defense against the claims in the suit.

The EEOC’s targeting of Dollar General and BMW should serve as a wake-up call to employers to review their existing policies.  The following steps would place an employer’s criminal background policy in accord with the EEOC's guidelines.

●          Your application should not ask questions about criminal history. Rather, don't inquire into   criminal history until a conditional decision to hire has been made. (As noted above, there is currently no legal prohibition against inquiring into criminal history on a job application)

●          Limit criminal background checks to seeking information only on crimes that you have identified as job related and consistent with business necessity.

●          Eliminate blanket policies or practices that exclude people from employment based on any criminal record, except to the extent required for employment with the federal government.

●          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 such jobs.

▪           Identify the criminal offenses based on all available evidence.

▪           Determine the duration of exclusions for criminal conduct based on all 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.

●          In determining the crimes that will likely result in refusal of employment, analyze a) the nature and gravity of the offense or conduct, including the harm caused, the specific elements of the crime, and whether it was a felony or misdemeanor; b) the time that has passed since the offense or conduct and/or completion of the sentence; and c) the nature of the job held or sought. When considering these factors, you should review the job description and essential functions of each position.

●          Do not use records of arrests that did not result in conviction unless you independently verify that the underlying circumstances suggest guilt or unfitness and are closely tied to the job in question.

●          Include an individualized assessment.  Prior to making a decision to not hire based on a criminal history, interview the applicant about the circumstances to determine if there are mitigating factors or mistakes in the information. Allow the applicant to provide information on the following:

▪           The facts or circumstances surrounding the offense or conduct.

▪           The number of offenses for which the individual was convicted.

▪           Older age at the time of release from prison.

▪           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.

▪           Employment or character references and any other information regarding fitness for the particular position.

●          When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question 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 can be time-consuming and tedious (especially if your Company has a large number of different positions), but will strengthen your case if the Commission decides to investigate your Company's policy.

●          When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity.

●          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.

The EEOC’s "Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964" is available at http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm. The EEOC also has issued a Question-and-Answer document to provide employers with additional compliance information. That document is available at http://www.eeoc.gov/laws/guidance/qa_arrest_conviction.cfm.

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