Ask The Experts: Can Employers Screen Job Applicants Based on Criminal Records?

EEOC HiringAn employer’s use of a job applicant’s criminal history in making employment decisions may, in some instances, violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964.

The U.S. Equal Employment Opportunity Commission (EEOC) has issued new guidance, urging employers to review their hiring policies to make sure they are not engaging in racial discrimination when they screen applicants based on any previous criminal history.

“National data supports a finding that criminal record exclusions have a disparate impact based on race and national origin,” the EEOC guidance says. “The national data provides a basis for the Commission to investigate Title VII disparate impact charges challenging criminal record exclusions.”

Radical Departure?

Is this a radical departure in hiring guidelines? Not at all, says Gail Heriot, professor of law at the University of San Diego – one of several experts we consulted on the issue.

“The EEOC has long taken the position that employers who reject job applicants on account of a prior criminal conviction may sometimes be in violation of Title VII,” Heriot said. “That position has been based on the controversial disparate impact theory of liability under which an employer may be held in violation of the law if its hiring qualifications have a disproportionate impact on women and minorities and it cannot demonstrate a business necessity for those hiring qualifications. Actual intent to discriminate is irrelevant.”

The EEOC’s recent guidance has been accompanied by increased enforcement activity against employers who hire employees for sensitive positions, such as security guard, and use prior criminal history as a screening tool. Brenda Smith, a law professor at American University, says the EEOC is simply using its authority to foster legal compliance and avoid unintended consequences as new socioeconomic trends emerge.

“Given the over two million individuals currently under correctional supervision, limiting employment opportunities because of past criminal convictions has a tremendous impact on the labor force, especially for individuals of color and low-income individuals who disproportionately face contact with the criminal justice system,” Smith said.  “So, I think EEOC’s clarification is a point of clarification given the many consequences of the practice both in terms of the impact of race and ethnicity and the impact on employment.”

Legal Challenge

As the EEOC becomes more aggressive on this point, a legal challenge should not be unexpected if a business finds itself facing federal sanctions because it declined to hire someone with a criminal record.

“To some extent, that challenge will depend on the plaintiff’s particular argument, the job at issue, and what kind of discrimination is at issue,” said Marcia L. McCormick, a professor at the St. Louis University School of Law.

How can employers avoid EEOC litigation in response to their hiring criteria? Marina Angel, a law professor at Temple University, suggests employers only consider offenses for a limited time, if the conviction is for an offense specifically related to the job in question. Charles Shanor, a law professor at Emory University, says the easy answer is for employers to simply follow the EEOC guidance.

“The harder questions are whether following the guidance will serve employer business needs well and  whether lack of EEOC claims will be offset by claims by others that they were discriminated against because others less qualified than them were hired, Shanor said. “As women and disabled job applicants will typically have much lower rates of criminal convictions, they may be likely plaintiffs in such cases.”

Meet Our Experts

  • Gail Heriot – Professor in the University of San Diego School of Law
  • Joseph W. Little – Emeritus Professor in the University of Florida’s Levin College of Law
  • Brenda Smith – Professor in American University’s Washington College of Law
  • Gilbert Paul Carrasco – Professor in the Willamette University College of Law
  • Orly Lobel – Professor in the University of San Diego School of Law
  • Marcia L. McCormick – Co-Director of the William C. Wefel Center for Employment Law at the St. Louis University School of Law
  • Charles A. Shanor – Professor in the Emory University School of Law
  • Marina Angel – Professor in Temple University’s Beasley School of Law

 

Gail HeriotGail Heriot - USD Law

Do you see this as a significant departure in enforcement?

The EEOC has long taken the position that employers who reject job applicants on account of a prior criminal conviction may sometimes be in violation of Title VII.  That position has been based on the controversial disparate impact theory of liability under which a employer may be held in violation of the law if (1) its hiring qualifications have a disproportionate impact on women and minorities and (2) it cannot demonstrate a business necessity for those hiring qualifications. Actual intent to discriminate is irrelevant. Last year, the EEOC announced a new guidance signaling a more aggressive stance on this issue. The guidance was accompanied by stepped-up enforcement activity against employers who hire employees for sensitive positions, such as security guard.  The message is clear:  If these employers are getting into hot water with the EEOC for considering the criminal backgrounds of their job applicants, then the EEOC’s standards for proving “business necessity” must be extraordinarily high.

Is this ruling likely to be challenged in court, and if so, on what grounds?

The guidance is policy, not a “ruling.”. The EEOC does not have rule-making authority in this area. One way such a policy can come before a court is for the EEOC to bring a lawsuit against an employer.  Indeed, the EEOC did exactly that with EEOC v. Freeman. Last month a federal judge issued a scathing opinion holding in favor of the defendant in that case. I’ll send it to you.

How should businesses adjust their employment policies to be sure they are in compliance with the law?

The only surefire way for an employer to be in compliance with the law is never to hire. The EEOC’s guidance is carefully crafted to discourage criminal background checks without actually forbidding them outright. It achieves its purpose by creating uncertainty about liability. Even in cases in which state law requires the use of these checks, the EEOC warns employers that they may run afoul of federal law if they comply. Employers are thus caught between the proverbial rock and a hard place.

 


Joseph LittleJoseph W Little – UF Law

Do you see this as a significant departure in enforcement?

I do not have the data to determine whether the EEOC’s enforcement practices have changed, but that the application of an employment rule based on prior convictions could violate Title VII is well established. The key questions are disparate impact – a factual question and job relatedness – a mixed factual/legal question, I suppose.

Is this ruling likely to be challenged in court, and if so, on what grounds? 

Every ruling is subject to challenge in court.

How should businesses adjust their employment policies to be sure they are in compliance with the law?

Businesses should determine whether the anti-conviction polices are job related and whether the rule would disproportionately impact minority persons in the pool of employees and applicants that seek employment in the company. If the job pool were to be racially/ethnically/gender homogeneous no violation would be likely even if the policy were not job related. To find such a population would also seem unlikely.

 


Brenda SmithBrenda Smith - AU Law

Do you see this as a significant departure in enforcement?

I don’t see this as a significant departure in enforcement, but really as the EEOC doing what is has the authority to do — issue guidance on emerging issues or issues where there is a lack of clarity. Given, the over 2 million individuals currently under correctional supervision, limiting employment opportunities because of past criminal convictions has a tremendous impact on the labor force, especially for individuals of color and low-income individuals who disproportionately face contact with the criminal justice system. So, I think EEOC’s clarification is a point of clarification given the many consequences of the the practice both in terms of the impact of race and ethnicity and the impact on employment. It is also quite consistent with the Attorney General Holder’s recent discussions about what the government is doing to address the issue of returning citizens. There are also many initiatives throughout the government attempting to address the impact of imprisonment. This is just another one.

Is this ruling likely to be challenged in court, and if so, on what grounds?

Likely challenges could come from an individual or class of individuals who learn they were not hired for a position soley for a criminal conviction that was not related to performing the essential functions of the job.

How should businesses adjust their employment policies to be sure they are in compliance with the law?

In terms of employer compliance I would suggest the following: looking at policies and procedures relating to the hiring process to determine if this is a factor; review applications to determine if questions  out past criminal history are routinely used to exclude otherwise eligible candidates [some jurisdictions have passed "ban the box"  legislation which removes those questions from applications; employers can inquire once the person is past the initial screening process]; training; and analyzing jobs to see if past criminal convictions are really a bar to holding a particular position.

 


Gilbert Paul CarrascoGilbert Paul Carrasco - Willamette Law

Do you see this as a significant departure in enforcement?

The Equal Employment Opportunity Commission has long implemented a policy of enforcement based on challenges to facially neutral policies (i.e., those that do not reference race or ethnicity) that have a discriminatory impact on people of color. Such enforcement has varied between aggressive to non-existent, depending on the particular predilections of the Administration currently in power and on the political persuasion of those who serve on the Commission. “[T]he dispositive issue is whether a challenged practice serves, in a significant way, the legitimate employment goals of the employer.” Brooks, Carrasco, & Selmi, The Law of Discrimination: Cases and Perspectives, at 562 (Lexis/Nexis 2011).

Is this ruling likely to be challenged in court, and if so, on what grounds?

I see two possibilities for challenge. The first could relate to any particular application of such a disqualifying employment policy based on whether the requirement is manifestly related to job performance.  For example, the Supreme Court upheld a policy prohibiting the employment of narcotics users in methadone maintenance programs, even in jobs that were not safety-sensitive, based on “legitimate employment goals of safety and efficiency.”   If an employer in Colorado, for example, disqualified all convicted felons regardless of the crime or time of its commission, how could that possibly be fairly applied to a person who had been convicted years ago for the felony of marijuana possession with the intent to distribute for a job waiting tables in a State that no longer even criminalizes simple possession of marijuana? An employer would be hard pressed to challenge enforcement of Title VII against it if the policy operates to disqualify applicants for such a job, particularly if people of color had disproportionately been arrested and convicted for such a crime.  On the other hand, if a person were recently convicted of embezzlement and was denied employment in a bank as a teller based on that, an analysis similar to that employed in Beazer would likely prevail.

The second possibility is more global and theoretical in nature. Some Members of the Supreme Court have raised the issue in recent cases as to whether an “effects test” may be constitutionally applied in a Title VII case based on the argument that such a construction is inconsistent with the Equal Protection Clause of the Fourteenth Amendment, which requires proof of intent to discriminate.  A facially neutral policy that is rendered illegal under Title VII because it has a discriminatory impact, so the argument goes, cannot be applied (at least against a governmental entity, such as a police department) because it imposes liability without the necessity of proving racial animus.

How should businesses adjust their employment policies to be sure they are in compliance with the law?

Employers are well-advised to consider whether any employment disqualification they implement based on prior felony convictions is narrowly tailored as to the relatively recent occurrence of the conviction, the type of crime that triggers the qualification (e.g., crimes of moral turpitude that are disqualifying for positions requiring high degrees of trust and honesty), and, most importantly, whether the employment criterion is job-related and consistent with business necessity.

 


Orly LobelOrly Lobel - USD Law

Do you see this as a significant departure in enforcement?

The new three year plan of the EEOC, 2013-2016 is to target class based discrimination. Class in itself is not a protected category under federal employment discrimination laws. But it can become a prohibited proxy for protected groups as it correlates with protected identity categories race, gender, disability, religion. The EEOC hopes to address new frontiers of disparate impact discrimination. The essence of disparate impact law suits is that a facially neutral practice – i.e., practice that does not explicitly distinguish on basis of membership in a protected identity group – has discriminatory impact on protected group members. So the courts looking at these claims are not interested in the employer’s motivation but rather whether as a factual statistical matter the employer’s use of a certain hiring criteria is unlawful if it disproportionately adversely impacts certain groups, such as women or African Americans. The early cases of disparate impact were mostly about aptitude tests and educational requirements that disproportionately excluded minorities. More recently, disparate impact discrimination also looks at other  screening tools, including criminal background checks, credit ratings and date-of-birth inquiries.

And yet, background checks are pervasive in the market and there is an agreement in the case law that they are frequently serving a reasonable business purpose of maintaining an honest and reliable workforce. These days it, as it has become harder for employer to receive references from previous employers (often former employers fear potential liabilities for defamation) and as the job market has become so broad and mobile, a large majority of employers use such screenings. According to the Society for Human Resource Management, almost 90% of all firms employ background checks.

In 2009, the EEOC filed a race discrimination lawsuit against the Freeman Corporation on the basis of employing both criminal and credit ratings checks. The case was decided August 2013, when the U.S. District Court Judge Roger W. Titus of Maryland dismissed the suit holding that the screening methods were reasonable and suitably tailored to the purpose of ensuring an honest workforce. The decision stated, “By bringing actions of this nature, the EEOC has placed many employers in the “Hobson’s choice” of ignoring criminal history and credit background, thus exposing themselves to potential liability for criminal and fraudulent acts committed by employees, on the one hand, or incurring the wrath of the EEOC for having utilized information deemed fundamental by most employers.” So the courts are not receptive to a broad version of disparate impact. They would be however receptive to more specific fact patterns that cannot show that the screenings were reasonably tailored for the recruitment process.

Last year, the EEOC issued a new guidance. Employers can benefit from the best practices issued in the EEOC’s background checks Guidance. First, the Guidance discusses the differences between arrest and conviction records. Arrests do not establish criminal conduct and therefore exclusion based on an arrest, in itself, is probably not job related and consistent with business necessity. And still, an employer may make an employment decision based on the conduct underlying an arrest if the conduct makes the individual unfit for the position. Also very important, a violation may occur when an employer treats criminal history information differently for different applicants or employees, for example using a criminal background as a reason not to hire a minority applicant but ignoring the criminal record of a white applicant. More broadly, the EEOC recommends that the screening policy will be tailored to consider the nature of the crime, the time elapsed, and the nature of the job and that the employer considers whether the screening is in fact necessary for the position.

 


Marcia McCormickMarcia L. McCormick - SLU Law

Do you see this as a significant departure in enforcement?

Not at all. Title VII is enforced by the the EEOC, a federal agency, that can bring lawsuits against employers and that issues guidance about what employment practices may violate the laws it enforces. It has always cautioned employers that practices like this one might violate Title VII unless the screening is related to the particular job the applicant has applied for–in other words unless the job requires that the person who holds it not have a felony conviction. Moreover, the vast majority of enforcement comes from individuals who file lawsuits against employers. And individuals have been bringing discrimination claims challenging this kind of screening for a very long time.

Is this ruling likely to be challenged in court, and if so, on what grounds?

The EEOC’s press release or statement of what it believes the law requires isn’t a ruling. It is just advice, and so in that sense, there is no mechanism for advice to be challenged in court. That said, in a case brought by the EEOC or an individual applicant that alleges that this kind of screening discriminated against applicants based on race, sex, national origin, color, or religion, the employer will certainly challenge the argument that the screening discriminated.

To some extent, that challenge will depend on the plaintiff’s particular argument, the job at issue, and what kind of discrimination is at issue. I’ll give a hypothetical example, though. Imagine an African American applies to be a cashier at a retail store. The employer discovers that the applicant has a 20-year old conviction for felony assault. The employer rejects that applicant. In the city where the store is located, imagine that African Americans are much more likely to have felony convictions than are European Americans. This rule operates to screen out more African Americans than European Americans–it has a disparate impact on the minority group. An employer can have rules like this that disproportionately screen out members of minority races, but only if the rules are job related and consistent with a business necessity–that the rule states a minimum qualification for this particular job. The retail store here would have to show that not being a former felon is a minimum qualification to be a cashier. That might be difficult if the rule is about all felonies and not limited in time. Cashiers handle money, use cash registers, and handle merchandise. A past violent incident doesn’t seem to relate to a person’s ability to handle money, use a cash register, or handle merchandise. If the rule focused instead on felonies that involved theft or fraud, it will be more easily seen as a minimum job requirement for a job that handles money. Although even then, there may be reasonable arguments that a cashier is closely supervised enough that an employer can guard against theft as easily or better without relying on this rule.

If this is the hypothetical case, the employer can challenge the initial claim that the rule impacts members of the minority race disproportionately. It can also show that the rule it has is a minimum qualification for the job at issue. Employers might also try to argue that not having a felony conviction is a minimum qualification for every job, or that for felony convictions, employers shouldn’t have to probe that the rule is related to the qualifications to do the job. No court has accepted that argument, however, and Congress and the Supreme Court are the ones that say we have to look at the tasks the job requires and focus on minimum qualifications.

How should businesses adjust their employment policies to be sure they are in compliance with the law?

Employers should look at their employment rules and determine whether those rules really describe what qualifications a person needs to do each job. It’s not enough that employers want a better class of employee if the rules they pick keep out women or members of minority races, nationalities, colors, or religions. Not all of these general rules will do that, but we know there are some disparities in our communities. Employers will know what rules are likely to keep out members of traditionally disadvantaged groups. It just makes good business sense, too. Why leave potential talent on the table?

 


Charles ShanorCharles A Shanor – Emory Law

Do you see this as a significant departure in enforcement?

EEOC’s earlier guidance was very general, focused more on arrests than convictions, and was not the subject of much litigation, by the agency or by private plaintiffs. The new guidance is very precise, has been trumpeted in the media by EEOC.

Is this ruling likely to be challenged in court, and if so, on what grounds?

It will certainly be challenged in court. Indeed, there is already some skepticism at the district court level.

 

How should businesses adjust their employment policies to be sure they are in compliance with the law?

EEOC provides guidance regarding type of job, recency of conviction, and type of crime, etc. Employers can avoid likely litigation by EEOC by following the guidance. The harder questions are (a) whether following the guidance will serve employer business needs well and (b) whether lack of EEOC claims will be offset by claims by others that they were discriminated against because others less qualified than them (shown for example by criminal records and interrupted work histories from incarceration) were hired. As women and disabled job applicants will typically have much lower rates of criminal convictions, they may be likely plaintiffs in such cases.

 


Marina AngelMarina.Angel - Temple Law

Do you see this as a significant departure in enforcement?

No. Given the massively disproportionate convictions of African-Americans for felonies, the across the board exclusion of those with such records has a massive disparate impact on African Americans. A felony is any crime that carries the possibility of a year or more of imprisonment.  Many very minor offences potentially carry a penalty of a year or more.

Many states already have statutes or regulations prohibiting all use of arrest records and limited use of conviction records. Convictions should be “job-related”, thief for a person applying for a cashier job, and time limited, three years. If someone has not engaged in thefts for three years, that person should be considered rehabilitated.

Is this ruling likely to be challenged in court, and if so, on what grounds?

Maybe. BMW will get a lot of bad publicity from a formal hearing to determine if it discriminated against African Americans. There are wealthy African Americans who buy BMWs for the status symbol effect; they and allies of all colors, including Latin Americans, will buy some other model of luxury car.

How should businesses adjust their employment policies to be sure they are in compliance with the law?

Consider only offenses for a limited time, if the conviction is for an offense specifically related to the job in question.

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