EEOC Guidance On Use of Criminal History in Employment Decisions

When Is a Proscription on Convictions an Impermissible Predilection?  EEOC Issues New Guidance on the Use of Criminal History in Employment

Earlier this week, the United States Equal Employment Opportunity Commission (“EEOC”) issued updated Enforcement Guidance (“Guidance”) regarding the circumstances under which employers permissibly may, under Title VII of the Civil Rights Act of 1964 (“Title VII”), rely on arrest and conviction records in employment decisionmaking. See EEOC, Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964 (April 25, 2012), http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm. The Guidance, while clarifying the agency’s position on this issue, also portends additional burdens for employers who need or want to consider applicants’ and employees’ criminal records.

The EEOC issued its Guidance in the midst of its ongoing Eradicating Racism and Colorism from Employment (“E-RACE”) initiative and on the heels of prominent enforcement actions involving allegations of race discrimination relating to the use of criminal history information. The most recent of those actions was venued in Minnesota and resulted in a $3.13 million settlement between the EEOC and Pepsi Beverages. See EEOC, Pepsi to Pay $3.13 Million and Made Major Policy Changes to Resolve EEOC Finding of Nationwide Hiring Discrimination Against African Americans (Jan. 11, 2012), http://www.eeoc.gov/eeoc/newsroom/release/1-11-12a.cfm. The Guidance is the EEOC’s first on this issue in more than 20 years.

Use of Criminal History Information in Employment Carries Pros and Cons

According to one recent survey, more than nine out of ten employers require at least certain applicants to submit to a criminal background check. See Soc’y of Human Res. Mgmt., Background Checking: Conducting Criminal Background Checks (Jan. 22, 2010), http://www.shrm.org/research/surveyfindings/articles/pages/backgroundcheckcriminalchecks.aspx.

This practice may be advisable for a number of reasons, including promotion of workplace safety; prevention of meritorious negligent hiring claims; and compliance with requirements imposed by federal, state, or local law. However, the use of criminal history information in employment can be frought with legal risks, chief among them potential liability for discrimination under Title VII, the federal statute that prohibits workplace discrimination on the basis of race (as well as color, national origin, sex, and religion).

Disparate Impact Concerns Dominate EEOC’s Guidance

The EEOC’s Guidance focuses principally on circumstances under which an employer’s consideration of criminal history information will have a prohibited disparate impact on applicants and employees on the basis of race. African American and Hispanic men, the EEOC observes, are arrested and convicted at rates disproportionate to their prevalence in the U.S. population. For this reason, an employer’s facially neutral practice of disqualifying for employment all or certain applicants who have a criminal record, or a certain type of criminal record, may have the effect of discriminating against African American and Hispanic individuals.

EEOC Frowns on Reliance on Arrest Information

As a preliminary matter, the EEOC’s Guidance strongly cautions against the use of arrest records in employment decisions under almost all circumstances. According to the EEOC, the fact that an applicant has been arrested in the past is insufficient evidence to support a conclusion that he in fact engaged in the conduct for which he was arrested. However, according to the EEOC, an employer may make an employment decision based on the conduct that led to the arrest “if the conduct makes the individual unfit for the position in question.” For example, a pharmaceutical company theoretically could deny employment in a sales representative position to an applicant whose criminal background check revealed that she had been arrested for dealing in prescription drugs.

Unfortunately, the EEOC’s Guidance does not indicate what steps, if any, the employer must take to determine whether the individual in question actually engaged in the conduct underlying his or her arrest. Particularly in the case of new job applicants, employers generally will have very limited ability to assess the validity of the arrest and the applicant’s culpability for the alleged conduct. For this reason, and given the EEOC’s obvious skepticism of the use of arrest records in hiring and employment, most employers would be wise to forgo this practice altogether.

Reliance on Conviction Records Can Be Permissible if Circumscribed

Employers have much greater leeway under the EEOC’s Guidance to consider conviction records in hiring and employment decisions. According to the EEOC, “a record of a conviction will usually serve as sufficient evidence that a person engaged in particular conduct, given the procedural safeguards associated with trials and guilty pleas.” The EEOC’s Guidance recommends that employers not, however, ask about criminal conviction history on job applications; instead, that inquiry should be reserved for a later stage of the hiring process. (It is worth noting that some states—but not Minnesota, in the case of private employers—separately prohibit inquiries regarding criminal history early on in the selection process).

If an employer’s selection criterion relating to conviction history has a statistically significant disparate impact on individuals of a certain race, the criterion will be deemed to violate Title VII unless it is “job related and consistent with business necessity.” In its recent Guidance, the EEOC opines that an employer may be able to justify a criminal-history-based selection criterion that has a disparate impact in one of two ways:

• First, the employer may validate the criterion in accordance with the Uniform Guidelines on Employee Selection Procedures, guidelines jointly promulgated in 1978 by the EEOC, the Civil Service Commission, the Department of Labor, and the Department of Justice. See 29 C.F.R. § 1607.1, et seq.
• Second, the employer may develop a “targeted screen” based on three factors articulated in a 1975 Eighth Circuit decision, Green v. Missouri Pacific Railroad, 523 F.2d 1290 (8th Cir. 1975): (1) the nature of the crime, (2) the time elapsed since the crime, and (3) the nature of the position sought. In most cases, according to the EEOC, the employer also should engage in an “individualized assessment” with respect to any individual disqualified by the targeted screen.

Unfortunately, both options have the potential to entail substantial burden and expense for employers. The process of having a selection criterion validated pursuant to the Uniform Guidelines on Employee Selection Procedures can be cumbersome and time-consuming, and it can have the inertial effect of locking employers into validated procedures that may not accommodate changing business needs.

Use of the Green factors in employment decisionmaking is unlikely to be problematic in and of itself and, in fact, many employers already do consider factors such as these, whether purposefully or simply as a matter of common sense. Potentially more troublesome is the EEOC’s suggestion that employers undertake an “individualized assessment” for any candidate whom the Green factors exclude. According to the EEOC, such an assessment could include, but need not necessarily include all of, the following evidence:

• 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 conviction, or 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 such as education and training;
• Employment or character references and any other information regarding fitness for the particular position; and
• Whether the individual is bonded under a federal, state, or local bonding program.

Obviously, compilation and review of all of these data points is likely to be time-consuming, if not impossible, in the run of cases. The EEOC does note in its Guidance that “an employer may be able to justify a targeted criminal records screen solely under the Green factors” and that “Title VII thus does not necessarily require individualized assessment in all circumstances.” Given this Guidance, employers who elect not to engage in individualized assessments of candidates who are excluded by a selection criterion relating to conviction history, or who engage in only limited individualized assessments, should ensure that the selection criterion is narrowly tailored to the specific requirements of the position at issue.

Compliance with State or Local Law Is Not an Absolute Defense

As we noted above, federal, state, or local law may require the use of criminal history screening or make a clean criminal record a minimum requirement for certain positions, typically those that implicate safety or public health interests. Minnesota law, for one, includes many provisions of this nature. See Minn. House Research Dep’t, Criminal Background Check Statues: An Overview (Jan. 2010), http://www.house.leg.state.mn.us/hrd/pubs/bkgdchck.pdf.

The EEOC’s Guidance clarifies that, while adherence to a federal requirement of this nature will not violate Title VII, adherence to a similar state or local law may lead to Title VII liability due to the supremacy of federal law over state or local law. Employers who find themselves stuck between the rock of a state or local law prohibiting employment of individuals with certain criminal records and the hard place of potential disparate-impact liability should be sure to document thoroughly the reasons for their hiring and employment decisions based on criminal history and, if necessary, raise the conflict with appropriate state or local authorities.

EEOC and Dorsey Offer Suggested Best Practices

The EEOC’s Guidance sets forth a list of best practices for employers regarding the use of criminal arrest and conviction information:

• Eliminate policies or practices that exclude people from employment based on any criminal record;
• Train managers, hiring officials, and decisionmakers about Title VII and its prohibition on employment discrimination;
• 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;
• 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 consultations and research considered in crafting the policy and procedures;
• Train managers, hiring officials, and decisionmakers on how to implement the policy and procedures consistent with Title VII;
• 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; and
• Keep information about applicants’ and employees’ criminal records confidential. Only use it for the purpose for which it was intended.

We offer the following additional best practices to supplement the EEOC’s list:
• Consider, on a position-by-position basis, whether the benefits of criminal history screening are likely to outweigh the legal risks;
• Work with any third-party providers of criminal background reports to ensure that criminal history information not relevant to the position at issue is not communicated to decisionmakers in the first instance;
• Conduct individualized assessments of excluded candidates to the fullest extent possible under the circumstances;
• Document thoroughly the reasons for not selecting certain candidates based on screening factors or individualized assessments;
• Track applicant flow and selection data to assess on an ongoing basis whether a criminal history screen is having a disparate impact; and
• Remember that, while the issue of criminal history screening may come up most often in the hiring context, the EEOC’s Guidance is equally applicable to current employees.

Finally, it is worth noting that the EEOC’s Guidance does not carry the force of law and, therefore, will not automatically control in civil litigation under Title VII or similar state or local laws that prohibit employment discrimination. That said, the EEOC’s opinion on these matters is likely to be highly influential in the courts, and it will be the final word with respect to charges of discrimination filed under Title VII. While only time will tell the degree of influence the EEOC’s Guidance will have in the courts and at the state level, the prudent employer will take it to heart at this time.

The EEOC’s Q&A document regarding the Guidance is available here:

ttp://www.eeoc.gov/laws/guidance/qa_arrest_conviction.cfm

The EEOC’s press release relating to the Guidance is available here:

http://www.eeoc.gov/eeoc/newsroom/release/4-25-12.cfm.

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