Does your compliance team need an on-staff criminologist?
It may sound strange, but that expertise might be warranted as companies struggle more than ever with the thorny issue of conducting criminal background checks and the chaos of contradictory regulations, laws, and legal challenges.
Employers must navigate a patchwork of state and federal rules that, in some cases are at odds with each other. For example, some states require criminal background checks for employees in certain industries, such as those who work at nursing homes, while new federal guidelines warn that companies with blanket policies requiring criminal background checks could run afoul of discrimination rules.
Earlier this year, the Equal Employment Opportunity Commission (EEOC) released new guidance related to criminal records, putting them through the prism of Title VII of the Civil Rights Act. Excluding applicants based on past criminal conduct may “disproportionately impact” those protected under Title VII, and violate the law, it says.
The EEOC reasons that a disproportionate number of African Americans and Hispanics have prior convictions, therefore, an employer's policy to screen job candidates for criminal records gives those ethnic groups fewer job opportunities, effectively discriminating against them.
In order to use a criminal conviction screen under the guidelines, an employer should base its decision upon a targeted screen that considers at least the nature of the crime, the time elapsed, and the nature of the job. The employer's policy should also provide an individualized assessment for those identified by the screen, determine if the policy “is job related and consistent with business necessity,” and assess the threat of recidivism. Failure to offer an individualized assessment is more likely to lead to a violation of Title VII, according to EEOC.
It gets worse for companies. Even if background checks are used only in cases where a specific candidate is screened for a specific job, a perception that those checks are pervasive and a broad-based requirement may be enough to warrant action by the EEOC. “The guidance is as clear as mud,” says Barry Hartstein, co-chair of the Hiring and Background Checks Practice Group for law firm Littler Mendelson. “How is an employer supposed to comply? Do they have to go out and hire a recidivism expert? Even then, the EEOC may still challenge them.”
Rod Fliegel, who also co-chairs the Littler Mendelson practice group on the topic, says large businesses are particularly vulnerable and “a regular target for systemic investigations by the EEOC,” he says. The challenge is balancing its demands with protecting customers, assets, and employees.
“It raises criminal convictions to the status of a legislatively protected class and I just don't think that is within the EEOC's jurisdiction,” says Terence Connor, co-head of the labor and employment practice for law firm Hunton & Williams.
Connor says businesses are put in the untenable position of making subjective decisions objectively. “An employer would have to prove that an absence of convictions of burglary is essential to the selling of hardware,” he says. “If that's going to be the standard advanced in courts, it is impossible to validate.”
Adding to the confusion is an ever-expanding variety of state laws that either prohibit background checks or demand them. Although EEOC says its guidance will not apply when superseded by federal law, it offers no such exemption for state requirements.
“If a state law says you can't hire someone to work in a nursing home who has been convicted of abuse, the EEOC says that alone isn't going to be enough.”
—Patricia Weisberg,
Partner,
Walter & Haverfield
Many states currently require criminal background checks for the professionals they license, including those overseen by dental, pharmacy, and chiropractic boards to name just a few. Those selling insurance and mortgages frequently fall under those requirements too, as do those who want to work for a lottery commission or drive a school bus. Until recently, even barbers in Ohio with a criminal record couldn't get a license to snip hair.
“The EEOC guidance does not create any kind of a safe harbor for employers who are required to follow a state law. There is no carve out,” says Angela Bosworth, vice president of compliance and general counsel for EmployeeScreenIQ, a Cleveland-based employment screening firm.
Bosworth explains that even though the EEOC offered guidance, not law, it can nevertheless leverage the understanding that Title VII preempts state law when applicable. “While I don't think they are necessarily seeking out enforcement in areas where there are state requirements, no employer really wants to be targeted,” she says.
“If a state law says you can't hire someone to work in a nursing home who has been convicted of abuse, the EEOC says that alone isn't going to be enough,” says Patricia Weisberg, a partner at the Cleveland law firm Walter & Haverfield who specializes in employment and labor law. “It's crazy. If you hire that person you are going to be in violation with the state law; if you don't hire that person you might have the EEOC coming after you. Why should an employer have to go through this more individualized assessment? If the law says you can't hire this person that should be enough.”
EEOC Q&A
The following is a selection from “questions and answers” issued by the U.S. Equal Employment Opportunity Commission on April 25, 2012, regarding enforcement guidance on the consideration of arrest and conviction records in employment decisions.
How is Title VII relevant to the use of criminal history information?
There are two ways in which an employer's use of criminal history information may violate Title VII. First, Title VII prohibits employers from treating job applicants with the same criminal records differently because of their race, color, religion, sex, or national origin (“disparate treatment discrimination”).
Second, even where employers apply criminal record exclusions uniformly, the exclusions may still operate to disproportionately and unjustifiably exclude people of a particular race or national origin (“disparate impact discrimination”). If the employer does not show that such an exclusion is “job related and consistent with business necessity” for the position in question, the exclusion is unlawful under Title VII.
Does Title VII prohibit employers from obtaining criminal background reports about job applicants or employees?
No. Title VII does not regulate the acquisition of criminal history information. However, another federal law, the Fair Credit Reporting Act, does establish several procedures for employers to follow when they obtain criminal history information from third-party consumer reporting agencies. In addition, some state laws provide protections to individuals related to criminal history inquiries by employers.
Is the Commission changing its fundamental positions on Title VII and criminal record exclusions with this Enforcement Guidance?
No. The Commission will continue its longstanding policy approach in this area:
The fact of an arrest does not establish that criminal conduct has occurred. Arrest records are not probative of criminal conduct, as stated in the Commission's 1990 policy statement on Arrest Records. However, an employer may act based on evidence of conduct that disqualifies an individual for a particular position.
Convictions are considered reliable evidence that the underlying criminal conduct occurred, as noted in the Commission's 1987 policy statement on Conviction Records.
National data supports a finding that criminal record exclusions have a disparate impact based on race and national origin. The national data provides a basis for the Commission to investigate Title VII disparate impact charges challenging criminal record exclusions.
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.
Source: EEOC.
While numerous states have enacted laws to limit the use of background checks, others, like Florida, have instead sanctioned them as a defense against “negligent hiring.”
EEOC investigations can lead to costly settlements. For example, in January, Pepsi Beverages (the former Pepsi Bottling Group), agreed to pay $3.13 million and provide job offers to resolve a charge it discriminated against African Americans in Minneapolis through its background check policy.
Dollar General has battled for months with the EEOC over a criminal background check policy it has defended as “both lawful and necessary to a safe environment for its employees and customers and the protection of its assets and shareholders' investments.” In a September SEC filing, the company disclosed that it fully expects there will be litigation.
Better Policies
To comply with the guidance, Weisberg says a written policy needs to remove blanket background checks and replace them with policies that enable more of a case-by-case approach, where the individual circumstances are considered. She also says companies should do away with boxes on job applications that ask applicants to self-report prior convictions. And interviewers should not ask any questions related to a criminal past, at least not until the pool of candidates is narrowed to finalists. “If you don't have the information, it can't impact your decision on whether this person is qualified,” Weisberg says.
Additionally, anyone connected to the hiring process—including franchisees, remote offices, and low-level managers—should undergo a Title VII training process, says Weisberg.
According to Hartstein, employers need to ensure compliance with the Fair Credit Reporting Act, which regulates information gathered through a third party. Employers must obtain consent from an employee or applicant and allow them a chance to dispute inaccurate or incomplete information.
Connor sees value in a multi-disciplinary approach that goes beyond just the human resources department to include legal and compliance expertise. “We are at a time where the law department has to get involved in evaluating the hiring process and take a look at how justifiable it is,” he says, adding that even the extra, unusual step of consulting with a criminologist may be advisable to fully assess risk.
“One of the first steps is to get the right folks within the business with different backgrounds together to go over how to take the blueprint you are going to come up with and actually implement it,” Fliegel says. “There are a lot of stakeholders in the process, ranging from human resources to even information technology. At the end of the day, a lot of this stuff is really brass tacks. It actually has to work and not just be something for lawyers, criminologists, and EEOC commissioners to kick around at some abstract level.”
No comments yet