Take a Look at Your Screening Practices for Background Checks!

December 17, 2019by accurateinvest

Criminal history information can be a crucial tool in the employment decision process. During the past few years, state and local governments have been limiting employers’ use of criminal history information in the employment process through regulation, litigation, and legislation. In 2012, the Equal Employment Opportunity Commission issued guidance in an effort to limit employers’ options with respect to their use of this tool.

The EEOC has brought several high-profile lawsuits against national employers over their use of criminal history information, with some cases resulting in employer victories. Most recently, on November 18, 2019, the EEOC announced in a press release that a nationwide retailer settled a race discrimination lawsuit brought by the EEOC, which challenged the employer’s use of criminal history for employment purposes. Specifically, the EEOC had alleged that the employer’s use of criminal history resulted in a disparate impact against minority workers, especially African Americans who had been excluded from jobs at higher rates than non-minority applicants. The EEOC gave as an example an applicant denied a position for having a six-year-conviction for possession of a controlled substance, which fell within the employer’s 10-year exclusionary rule for this type of conviction.

The three-year consent decree requires that the employer not only pay $6 million (to be distributed to aggrieved individuals) but also, if the employer elects to continue considering criminal history pre-employment, hire a criminologist to develop a new criminal background check based on certain factors including: (a) the time since conviction; (b) the number of offenses; (c) the nature and gravity of the offense(s); and (d) the risk of recidivism. Once the consultant provides a recommendation, the employer is not allowed to use any other pre-employment criminal background check. Until the criminologist provides a recommendation, the employer must continue to conduct individualized assessments.

The settlement also enjoined the employer from discouraging people with criminal histories from applying, engaging in retaliation, and otherwise discriminating on the basis of race in implementing a criminal history check. The employer also is now required to advise conditional hires of its background screening processes and state that having a criminal history is not an automatic bar to employment. In addition, the settlement requires the employer to update its process when a rejected applicant requests that the company reconsider its decision. As part of this process, the employer is required to clearly communicate to disqualified applicants that they may provide additional information to the employer to support reconsideration of the adverse decision. Finally, the employer must provide reports to the EEOC regarding its implementation of any new criminal history checks and its reconsideration process.

The employer remained steadfast in its position that its screening policies were lawful, and the settlement should not be viewed as any admission by the retailer of any wrongdoing.

Employer Considerations

Employers in all jurisdictions should consider an attorney review of their pre-employment and hiring practices by experienced counsel. Setting aside the EEOC’s guidance, many states and localities have their own laws concerning “job relatedness” requirements for an employer’s use of criminal history information, including California, New York, Pennsylvania, and Wisconsin, among many others. Further, subject to narrow exceptions, some states, counties and cities do not even permit employers to inquire about criminal history information on the initial written application form or before a conditional offer, including ordering a criminal background check report from a consumer reporting agency. Against this backdrop, and based on an individual employer’s operations, a company might consider the following best practice recommendations, including:

  • Eliminating policies or practices that exclude people from employment based on a bright-line rule, for example, any criminal record or any felony.
  • Training managers, hiring officials, and decision-makers about the numerous laws that impact use of criminal history information.
  • When asking questions about criminal history information, limiting inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity.
  • Keeping information about applicants’ and employees’ criminal history information confidential and only using it for the purpose for which it was intended.

In addition, employers continue to be targeted in Fair Credit Reporting Act (FCRA) class action lawsuits over the process they use to obtain and make decisions based on background check information obtained from a consumer report agency. As a result, employers are well advised to consider evaluating their use of criminal history information and any other background check information to ensure compliance with the FCRA, similar state fair credit reporting statutes and substantive employment laws.


Seyfarth Shaw LLP, December 2019

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