Criminal Background Checks and EEOC Enforcement

lemonRecent surveys demonstrate that nearly 92% of employers use criminal background checks for employment decisions. Public employers often have prescribed statutory background check requirements. Because a criminal background check (CBC) conducted by private companies are most often used by employers, employers need to be aware of their responsibility to obtain prior authorization from the prospective employee, and their need to insure that even with the private vendor doing the check that the employer is not violating Title VII. Further, the guidelines adopted by the EEOC layout safe harbor behaviors that a prudent employer should adopt.

Warning About Criminal Background Checks (CBC)

A cautious and prudent approach to the use of CBC’s is important to avoid litigation by minorities applicants and scrutiny by the EEOC. The EEOC has an interest in how employers use CBCs to hire new employees. The problem from the EEOC’s perspective is that there is a hugely disproportionate representation of minorities in the criminal justice system. From 2008 to 2010 statistics on arrests by racial status demonstrated that 1:17 whites were incarcerated; 1:6 Hispanics were incarcerated; and, 1:3 African Americans were incarcerated. The EEOC points to this as an indication of racism; however, it does not legitimately investigate whether if it is actually an issue of poverty in America. Given the prima facie nature of this raw data and it’s cart blanche acceptance by the EEOC, employers must be aware that any CBC program they adopt that disqualifies a minority candidate may subject the employer to scrutiny by the EEOC. For that reason, employers must take a proactive defensive stature dealing with CBC policies.

The EEOC looks at CBC policies with regard to their “Disparate Impact” or “Disparate Treatment” of applicants or employees who are seeking transfer or promotion when already employed. It is important to understand how the EEOC views these two disparate acts.

Disparate Treatment

An employer engages in disparate treatment if it treats one person differently from another based on the person’s race, national origin, or another protected basis. When a protected class employee and a non-protected class employee have a same or similar background and set of qualifications, but the non-protected class employee is selected, there is a prima facie case for disparate treatment. Disparate treatment occurs whether the decision is based directly on the protected status or because of stereotypical view of the protected class. To make this case the EEOC examines whether the employer has made biased statements, inconsistencies in hiring process and the total number of minorities in key positions. The EEOC will consider matched pair testing of minority and non-minority candidates to determine if the test disqualifies protected class members more often. Statistical analysis will be applied in these situations to determine if the employer has significantly excluded protected class employees.

Disparate Impact

Disparate impact means that an adopted policy excludes protected classes more often from positions than it does non-protected classes. An employer’s claim that they have a balanced workforce is not a defense to this claim by the EEOC. When examining a policy adopted by an employer regarding CBC’s the EEOC looks at five elements according to their guidelines:

• What offenses, or classes of offense are reported to the employer on which they make their decision (all felonies, all drug offenses);

• Did any of the offenses reported to the employer include convictions that were sealed or expunged, arrests, charges or other criminal offenses;

• How far back in time does the criminal record check go (e.g., the last five, ten, or twenty years);

• What type of position is the employer screening for (e.g., does the employee handle sensitive information, work with the helpless such as children or seniors, the handicapped or infirmed); and

• What written policies and procedures does the employer have which are used to guide or train employment decisions and specifically what type of criminal convictions are the Human Resources Department or employer using to disqualify candidates.

The EEOC will use these criteria to determine if the employer discriminates in their employment decisions.

Determining Disparate Impact

The type of offense used by the employer to make hiring decisions is important as well because of the disparate rates at which minorities are arrested for such offenses, such as drug offenses, differ greatly from non minorities. A study by the U.S. Justice Department in 2001 demonstrated that 1 out of 17 whites were arrested for drug crimes, while 1 out of 6 Hispanic men were arrested. The arrest record for African American males was 1 out of 3. Therefore, a CBC that focuses on drug offenses is likely to exclude Hispanics and African American candidates. Armed with this information the EEOC will also look at regional criminal data, employer data collected regarding their hires over time, and the community opinion regarding the employer’s conduct. Again, the employer needs to keep in mind that having a balanced workforce is not sufficient evidence to survive an EEOC examination. The EEOC’s issue is whether the employer’s policy deprives minorities disproportionately from employment. Further, the EEOC will look to determine if the process used by the employer may discourage minority candidates from even applying at all. It is clear that the EEOC is employing a minority candidate weighted examination procedure that will be difficult for an employer to defeat this initial examination.

Avoiding the Microscope

The first thing an employer who wants to use criminal background checks as a tool for identifying qualified candidates must be proactive in their policy development and procedures. The employer should promulgate a solid policy and collect relevant evidence of their compliance with non-discriminatory practices. Some simple things that an employer can do is:

• Collect regional data about criminal convictions per racial classification;

• Collect company data on hiring practices, procedures, and statistics;

• Collect applicant flow information maintained pursuant to the Uniform Guidelines on Employee Selection Procedures;

• Collect employee evidence of a workforce proportionate to the racial makeup of the community the company occupies (understand this itself is insufficient to prove proper policy and procedure to the EEOC);

• Collect evidence to show that the application process does not discriminate either in selection or in developing an available applicant pool;

• Collect evidence of the Company’s reputation in the community for non-discriminatory hiring and encouraging Title VII qualified applicants.

Truly, the best defense is a good offense. Employer’s need to maintain a healthy defensive posture against discrimination claims. The EEOC does not take an “innocent until proven guilty” approach, they make it easy for an applicant or employee to raise an initial claim, which immediately forces the company to defend itself.

Developing Effective Policies and Procedures

First and foremost if you use a third party CBC company, make sure that you have the applicant’s written permission to obtain the report. Further, you need to know what information the Credit Reporting Agency (CRA) collects and from where. Because the bar is so low for a protected class employee to raise a complaint with the EEOC, it is essential that the employer carefully consider the information that will be collected. To accomplish this the employer should evaluate each position for which a CBC will be done and evaluate what specific criminal conduct would disqualify the applicant from a position, or which would prompt an individual analysis of the applicant’s application.

To conduct the analysis of positions where the employer intends to use a CBC, they should consider the following:

• What crime is used to exclude the applicant, what is the relationship between the crime (including the elements of the crime) and the job duties, does it demonstrate a business necessity;

• The policy and procedure bear a demonstrable relationship to successful performance of the position duties;

• The employer must “measure the person for the job and not the person in the abstract” which means that the employer examines the gravity of the offense, the amount of time passed since the crime, as well as the job to be held. Basically, does the candidate represent an unacceptable risk; and

• Insure that the company policy is narrowly tailored. Policies that “disqualifying for employment any applicant with a conviction for any crime other than a minor traffic offense.”

These basic principles are incorporated in a decision handed down by the court in Green v MO. PAC. RR 549 F.2D 1158, 1160 (8TH CIR. 1977) as:

1. The nature and gravity of the offense or conduct;
2. The time that has passed since the offense or conduct and/or completion of the sentence; and,
3. The nature of the job held or sought.

A reasonable approach for an employer to protect themselves from EEOC claims is to provide a two step process that first assesses the qualifications for candidates and, once a pool of qualified applicants is selected, second, conduct the criminal background check. If the CBC, identifies qualified applicants with criminal convictions that may disqualify them from employment for the position identified, a subsequent step is an individual review of the applicant’s criminal convictions. A prudent employer will provide the candidate with a copy of the CBC report and request additional information that may still qualify the candidate for the position. The additional information may include such things as an error in the CBC, such as the conviction having been sealed or expunged; wrong person; and discharge or dismissal of the alleged conviction. If the applicant provides information contrary to the CBC, the employer may decide to waive the policy. If the applicant chooses not to respond to the request, then the employer is justified in disqualifying the candidate. This individualized review is an essential element to quashing any effective EEOC action against the employer.

Statutory Disqualification

Courts have held that statutory provisions that restrict the employment of persons with specific convictions meet the requirements of Green. Many states have laws that list convictions for crimes which automatically disqualify a candidate from employment. For example, restrictions on teachers with convictions for prostitution, sex trafficking, sex with a corpse, kidnapping, domestic abuse, and a host of other crimes. There are similar lists of disqualifying convictions for professional licenses like bank owners, insurance sales, medical professions, etc. In disqualifying a candidate based on these statutes the employer is assuming that the state in its deliberative process has considered the Green factors in creating the list of disqualifying crimes. Compliance with state law, even though state law can be preempted by Title VII, is a defense to claims of discrimination.

Can Employers Use Arrest or Charging Information

Under certain conditions an employer can use arrest information though I cannot recommend it as a safe practice. The fact of an arrest does not establish that criminal conduct has occurred. An arrest is not proof of a criminal act nor is a charge by a grand jury or district attorney proof of a criminal act. If the employer wants to use arrests or charges to disqualify the applicant then the employer must investigate the charges or arrest information and can show a clear and strong nexus between the applicant’s conduct and a legitimate business necessity. Basically the employer bears the burden of proof to show the conduct of the arrested or charged applicant is specifically related to a job duty. Further, the employer bears the burden of showing that the candidate is disqualified by a business necessity.

A problem with arrest or charging records is that in nearly one-half of the cases the records fail to record the disposition, contain inaccuracies, the reported arrests or charges may have been expunged or dismissed without that information having been recorded. An employer may deny hiring based on behavior underlying the arrest if there is a clear connection between the job related duties and the applicant’s behavior. The employer must prove that there is a business necessity for denying the applicant a position.

It is a significant burden on the employer to prove a valid use of arrest and charging records. If an employer is not prepared to do the work to investigate the facts, they should not expose themselves to the risk of litigation by relying on arrest and charges when the records are so poorly maintained by government agencies.

Using an Individualized Assessment

If an otherwise qualified applicant is discovered to have a criminal conviction that would by policy or procedure disqualify the applicant, the employer is well advised to conduct an individualized assessment. The prudent employer seeks to determine if there is any additional information that should be considered before the otherwise qualified applicant is disqualified. The EEOC sites as examples other evidence of mitigation or rehabilitation:

• The facts or circumstance 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;

• The length and consistency of employment history before and after the offense or conduct;

• Rehabilitation efforts including 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.

Including an individualized assessment of the otherwise qualified candidate is a strong defense against claims of disparate treatment or disparate impact.

Summary: How to Successfully Use Criminal Background Checks

Validate what the CRA collects when they do a CBC and how reliable the information is. Document your inquiry and the information that you are provided by the CRA which forms the basis for your selection of the CRA as your CBC provider.

Review your position descriptions for the jobs your employees do and analyze each of the positions to determine what, if any, specific criminal conduct would specifically disqualify an applicant for a position. Consider what rehabilitation or restitution could serve to waive the company’s position on a disqualification, such as the gravity of the crime, the time since the crime was committed, and the applicant’s history since then. Document the discussions and decisions leading to the written policy and procedures.

Screen applicants for qualifications for the position and identify a pool of candidates for the position. Then conduct criminal background checks and if an otherwise qualified candidate has a negative criminal conviction, arrest, or charge, provide the qualified candidate a copy of the CBC and request an explanation. If the applicant provides a response, carefully consider the information to determine if the policy should be waived based on the evidence and circumstances. If the applicant doesn’t submit a response, the applicant can be disqualified.

An individual assessment for an otherwise qualified applicant is not required by the EEOC, but it is cheap insurance protection from litigation and, in my opinion, worth the added step.
Blanket disqualifications based on any conviction, arrest or charge are not permitted and an open invitation to be sued or investigated by the EEOC. A prudent employer adopts the least discriminatory practice in the selection of employees.

Being proactive in the use of criminal background check policies and procedures will not insure that you will not be sued or investigated by the EEOC. But following the recommendations herein will increase the likelihood of your successful defense of your policies and procedures.


Posted in Making Lemonade, Problem Employee Solutions.