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The New EEOC Guidance On The Use Of Arrest And Conviction
Records In Making Employment Decisions
Presented by:
Garen Dodge | DCMickey Silberman | DenverSusan Corcoran | White PlainsPaul Patten | Chicago
May 15, 2012
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About the Firm
Represents management exclusively in every aspect of employment, benefits, labor and immigration law and related litigation
Over 700 attorneys in 49 locations nationwide
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About the Firm
Ranked in the First Tier nationally in the category of Labor and Employment Litigation, as well as in both Employment Law and Labor Law on behalf of Management in the U.S. News - Best Lawyers® “Best Law Firms”
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54 Jackson Lewis attorneys were named Leaders in Their Field by Chambers USA for 2011; 60 Jackson Lewis attorneys were named Best Lawyers in America® in the 2012 edition
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Transportation7
Jackson Lewis represents a wide range of companies in various industries, including:
About the Speakers: Garen Dodge (DC Location)
GAREN E. DODGE is a Partner in the Washington, D.C. Region office of Jackson Lewis LLP. He is co-Leader of the firm’s Government Relations practice, and coordinator of the firm’s Government Contracts industry group.
Mr. Dodge represents clients before Congress and key federal agencies such as the EEOC. In that context, he advised EEOC Commissioners and their staffs on the agency’s criminal background guidance. He submitted comments and provided analysis that helped improve that guidance. After issuance of the guidance, Mr. Dodge provided analysis to the media, including the Daily Labor Report, and has spoken to multiple industry groups to facilitate compliance.
Phone: (703) 483-8323Email: [email protected]
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About the Speakers: Susan Corcoran (White Plains Office)
SUSAN M. CORCORAN is a Partner in the White Plains, New York office of Jackson Lewis LLP. She serves as a Firm resource on fair credit reporting act and background check issues, having assisted many employers and consumer reporting agencies in their compliance efforts. Ms. Corcoran has also been involved in providing litigation support and employment defense of background check decisions, particularly given New York has long provided individuals who have been convicted of crimes protections under its Corrections Law.
Phone: (914) 514-6104 Email: [email protected]
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About the Speakers: Paul Patten (Chicago Office)
PAUL PATTEN is a Partner in Jackson Lewis’s Chicago Office. Mr. Patten frequently represents clients facing Equal Employment Opportunity Commission pattern or practice investigations and subsequent litigation by the EEOC. Earlier in his career, Mr. Patten was a Trial Attorney for the EEOC.
Phone: (312) 803-2570Email: [email protected]
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About the Speakers: Mickey Silberman (Denver Office)
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MICKEY SILBERMAN is the Chair of the Affirmative Action-OFCCP practice group and is the Managing Partner of the firm’s Denver, Colorado office. Mickey specializes in systemic discrimination, affirmative action, EEO compliance, and diversity.
Mickey spends much of his time counseling companies on complex, "real world" issues relating to systemic discrimination, diversity, EEO, and affirmative action compliance. He has helped many national employers develop compliance programs relating to recruitment, applicant tracking, pre-employment testing, background checks, compensation systems, performance assessment, succession planning, etc. He also conducts mock audits to help companies assess their compliance with EEO and affirmative action obligations.
Phone: (303) 225-2400Email: [email protected]
The Guidance
On April 25, 2012 the EEOC approved, by a 4-1 vote, an Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964
The Guidance was effective immediately
There was no public comment on proposed content
The Guidance is 52 pages (although pages 27-52 are endnotes) and give examples of proper and improper employer practices
We will reference the examples throughout today’s Program
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The Guidance
The Guidance replaced
a 1987 EEOC Policy Statement regarding Conviction Records;
and
a 1990 Policy Guidance on the Consideration of Arrest Records
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The Guidance: Strong Dissent
Dissenting Commissioner Barker
“In summary - I object to the utter lack of transparency in the development of this guidance. I object to the inexcusable way the public has been intentionally shut out of this process. I object to the unnecessary haste at which this document has been pushed through, and I object to the burden it places on business owners.”
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The Guidance
On the other hand, the Legal Action Center press release states:
“LAC and HIRE wholeheartedly support the new guidance, including provisions that:
Put employers on notice that categorical exclusions for people with certain convictions may violate [federal law] because of the disparate impact on minorities….
Offer examples of common policies and practices that violate Title VII….”
ACLU, NELP and others very pleased15
The Guidance: a Glimpse Behind the Scenes
The Jackson Lewis Government Relations team worked publicly and privately
Met with individual Commissioners and staff
Organized a full-day “hearing” at US Chamber
Submitted comments and legal analysis
Capitol Hill
OMB (OIRA)
The final Guidance is an improved document
EEOC is not finished: credit checks and other “barriers” to employment
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Disparate Impact Analyses under the Law
Employer’s neutral policy may disproportionately impact individuals protected under Title VII (disparate impact)
Disparate impact burden-shifting framework:o Plaintiff(s) or EEOC demonstrates the employer’s facially neutral
policy has a statistically significant disparate impact on a protected group
o Burden shifts to employer to demonstrate the policy is job-related and consistent with business necessity (and consistently applied)
o Even if the employer proves business necessity, the plaintiff(s) or EEOC may prevail by showing the employer refused to adopt an alternative practice that would satisfy the employer's legitimate interests without having a disparate impact on a protected class
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Making a Prima Facie Case through Statistical EvidenceEEOC will seek to make a prima facie disparate impact case through statistical analyses of the employer’s applicant, workforce, and/or third-party background history
Therefore, expect the EEOC to request applicant and background check data in its investigationso “The Commission will assess relevant evidence when making a
determination of disparate impact, including applicant flow information maintained pursuant to the Uniform Guidelines on Employee Selection Procedures, workforce data, criminal history background check data….”
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EEOC Knows Applicant and Background Check Data is Readily Available
Technology has changed everything -- and EEOC knows it
It is easier than ever before to gather detailed applicant and background check datao Applicant flow data maintained in ATS
o Background check data maintained by third-party providers
Applicant and background check data spanning several years and/or covering multiple locations can be run in a single report. This makes it more difficult for employers to argue it is too burdensome to produce the data
EEOC knows “big numbers are bad numbers” – large data sets are more likely to tip over into statistical significance
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EEOC RFIs Seek Applicant and Background Check DataOftentimes, the Agency will first request more general information about applicant or background check data, including the following:o Fields of information available
o Dates of information available
o Who maintains the data and how it is stored, etc.
WHICH LEADS TO… RFIs for detailed applicant and/or background check databases, which are often:o Nationwide in scope
o Span over several years (3-5 years is typical)
o Requested of third-party vendors20
Sample Disparate Impact Analyses
ANALYSIS
RATE FOR GROUP ON
LEFT
RATE FOR GROUP ON
RIGHT80%
RULESTANDARD DEVIATION OSR EXP ACT DIF
Minority v. Non-Minority19000/20000
.9529000/30000
.970.98 9.317
48000/50000
.9619200 19000 200
Female v. Male23500/25000
.9424500/25000
.980.96 22.822
48000/50000
.9624000 23500 500
40+ v. Under 409500/10000
.9538500/40000
.960.99 5.705
48000/50000
.969600 9500 100
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Once the EEOC or plaintiff(s) makes a prima facie case through statistical evidence, the burden shifts to the employer to demonstrate that the selection procedure was job-related and consistent with business necessity.
These Cases are Costly:Sample Damages Analysis
From the prior exampleo Job: Customer Service Representatives
o Review Period: 3/9/09 - 4/24/12 (3+ years)
o Wage Rate: $440 Week ($11/Hour)
o Shortfall: 100 (40+ Analysis)
Potential Damages: $10 million
Systemic background check cases can result in millions of dollars of potential liability
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The New Guidance: Who Should be Concerned
Employers should be concerned by the new guidance if they use criminal background checks and:o Use them on a regular basis (“big numbers are bad numbers”)
o Solicit and maintain race, gender, age, disability or veteran data on applicants – this applies to government contractors and subcontractors in particular
o Applicant and/or background check data is maintained by the company or through a vendor
o Have a “one size fits all” criminal background check policy
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The Guidance
Requires review of practices but in this speaker’s opinion does not restrict employers’ rights to continue to make reasonable employment decisions based on criminal background information
This concept is reinforced for multi-state employers for whom an individualized analysis has long been required under state and local laws – such as NYS and NYC
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Summary
Arrests itself – as opposed to underlying conduct – should not be considered in making employment decisions – no significant change – the Guidance respects an employer’s right to make credibility determination
Convictions – should be subject to individualized analysis and dialogue
- as noted above, individualized analysis already required under some state laws
- such individualized analysis also was suggested – to a lesser extent – in the prior guidance
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Defending AI Claims – Old Guidance
Under Title VII, an employer may justify a practice that results in a disparate impact by demonstrating a business necessity for that practice. An employer can demonstrate business necessity under the 1987 Policy by showing it considered three factors in making its decision:
1. The nature and gravity of the criminal offense(s);2. The time that has passed since the conviction and/or completion of the sentence; and3. The nature of the job held or sought. (“Green factors”)
In essence, utilization of the factors was a proxy for business necessity and the basis for arguing to EEOC there is no need for a disparate impact analysis.
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Defending AI Claims – New Guidance
Narrowly Targeted Screens May Satisfy Business Necessity - The Guidance contemplates that an employer may satisfy its Title VII obligations by using an internal policy if it is “narrowly tailored.” The Guidance explains “narrowly tailored” as a “demonstrably tight nexus to the position in question. Title VII thus does not necessarily require individualized assessment in all circumstances.” The Guidance refers to “targeted screens” that are based on the Green factors, i.e., the nature of the crime, the time elapsed and the nature of the job.
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Defending AI Claims – New Guidance
“Depending on the facts and circumstances, an employer may be able to justify a targeted criminal records screen solely under the Green factors. Such a screen would need to be narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question. Title VII thus does not require individualized assessment in all circumstances. However, the use of individualized assessments can help employers avoid Title VII liability by allowing them to consider more complete information on individual applicants or employees, as part of a policy that is job related and consistent with business necessity.”
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Defending AI Claims – New Guidance
The guidance does not require pre-validation of disqualification criteria
Of course, SUCH A PER SE STANDARD SHOULD BE THE EXCEPTION, NOT THE RULE and as noted the Guidance suggests that individualized analysis accompany such a targeted screen
The Guidance does not provide an example of a narrowly targeted screen that would pass muster. However, Commissioner Lipnic previously provided the example of an applicant for a day care center who had been convicted of child molesting
Recency also likely would be an issue in determining whether a targeted screen, alone, would suffice
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Defending AI Claims – New Guidance
Validation Of Criminal Conduct Exclusion – but is there data or analysis about criminal conduct as related to subsequent work performance or behaviors?
The EEOC appears doubtful that data exists to allow an employer to conduct such a validation study
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Defending AI Claims – New Guidance
Targeted Screens Accompanied by Individualized Assessment – THE BEST PRACTICE - the Guidance clearly prefers that a targeted screen be accompanied by notice to the individual under scrutiny and an individualized assessment of the individual and the crime and the position in question. The Guidance lists nine possible topics of consideration in an individualized assessment, all of which generally require a dialogue:
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Defending AI Claims – New Guidance
Criminal record is inaccurate
The facts and circumstances surrounding the offense;
The number of offenses for which the individual was convicted;
Age at 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, without incidents of criminal conduct;
The length and consistency of employment history before and after the offense;
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Defending AI Claims – New Guidance
Rehabilitation;
Employment or character references and other information regarding the individual’s fitness for the particular position; and
Whether the individual is bonded.
If the individual does not respond to the employer’s inquiries, the employer may make its decision without the information.
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Other Issues
Federal disqualifier prevails and employers not even required to seek waivers. Examples include:
o Child care workers in federal agencies
o Bank employees
o Port workers
State or local disqualifiers do not
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Other Issues
Suggested implementation of “ban the box” – but likely does not work for every organization.
- And we continue to encourage the use of broad questions to maximize ability to argue individual omitted or misrepresented information regarding criminal history
- We differ from EEOC on this issue because we believe judicious use of information is a better alternative than avoiding information to ensure “bad” decisions are not made
Suggestion of claims for those discouraged from applying due to employer’s reputation in community
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EEOC Scrutiny
The EEOC has taken the position that it can expand any individual charge into a systemic investigation if the charge does not challenge a criminal background practice or even allege hiring discrimination
The charge is more likely to be expanded when the EEOC has information that the employer conducts background checks
Courts have generally approved of such expansion, particularly if the EEOC stays within Title VII and proper notice of the expansion is provided by the EEOC
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Stay off EEOC Radar
The EEOC will be looking for evidence that an employer conducts criminal background checks in unrelated charges
Avoid erroneously providing criminal background practice and policy information in exhibits to EEOC in unrelated charges
If the charge does not address criminal background issues, avoid unnecessarily disclosing the fact that the charging party took and passed a criminal background check, which might be contained in a personnel file
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EEOC Pattern or Practice Investigations
EEOC offices that are straightforward will provide official notice
Notice will be followed by a broad request for information
The EEOC seeks “big numbers”
The EEOC perceives inconsistencies, e.g., one particular decision maker or HR representative who mistakenly did not follow the EEOC’s policy or the employer’s stated policy, as evidence of a broader problem
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Defending Pattern or Practice Investigations
Be completely honest with the EEOC (know the facts before making representations)
Keep the scope of the response narrow (initially provide data for workforce subgroups (geographic, time, job position))
Utilize statistical expertise to determine the scope of the response
Demonstrate compliance with EEOC policies (this is dependent on having policies in place and implemented)
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Be in a Position to Demonstrate Compliance
Targeted Screens: use different standards for different positions
Avoid policies that indicate automatic exclusions, instead, “Acme Corp. believes the following crimes are job related--applicants with these offenses will be subject to individualized assessment”
Train HR and decision makers to avoid local decision makers’ instinct to rely on hard and fast rules—such communications jeopardize demonstrating compliance
Self-audit to root out inconsistencies, e.g. on-line kick out40
Demonstrating Compliance
Document thought process if developing general disqualifications, business purposes, past experience, etc.
Consider making criminal inquiry at interview stage—preferred by EEOC and avoids EEOC concern that criminal backgrounds were considered at application stage
Disqualifiers mandated by state law: arguably the business necessity defense applies; make sure the crime precisely meets the definition of the state exclusion; to be safe, perform individualized inquiry
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Resolving EEOC Matters
If settling, use of legal counsel is vitally important
Various Title VII defenses and developing court precedent can assist to limit the time and geographic scope of victim class
Absolutely crucial to utilize counsel familiar with “statistical cases” so that data can be presented appropriately and relief limited in amount and to proper victim class
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Other Considerations
Also there is the potential for class action suits driven by plaintiffs’ bar
Be careful that individualized assessments do not create disparate treatment issues, i.e., hiring Caucasians who “explain away” a criminal record and not hiring minorities who provide similar explanations
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Will Courts Follow Guidance?
Not 100% clear but even if courts don’t, significant potential issues with EEOC before judiciary becomes involved
Courts sometimes bow to EEOC guidance – Justice Scalia generally defers to EEOC
If guidelines rejected, pure Disparate Impact business necessity analysis applies – difficult standard to meet and arguably validation is required
Also potential challenges to Guidance based on manner in which EEOC passed it and potential Congress would limit EEOC’s funding to enforce Guidance
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Action Items/Best Practices
Periodically conduct a self-audit of the disparate impact of your background check policieso Analyze your data to identify which criminal offenses are causing
disparate impact
o Consider alternative policies or background criteria that lessen less impact
Analyze the data to ensure it is consistently used to disqualify applicants (if not consistently applied, this can be evidence of disparate treatment)
Conduct these analyses under the attorney-client privilege
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Action Items/Best Practices
Review and refine current policies
Limit per se disqualifiers (especially those that apply to all criminal records) and engage in appropriate analysis for any remaining per se disqualifiers
Analyze specific jobs and specific crimes if a general matrix is utilized
Consider recency
Maintain a file explaining the basis for policy refinements
Train personnel with hiring responsibilities
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Action Items/Best Practices
Be careful of automatic pre-adverse action letters
If ratings are used, utilize caveats
Engage in individualized analysis and dialogue whenever possible
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Questions?
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Workplace law. In four time zones and 49 major locations coast to coast.
AND OF COURSE…
THE MATERIAL CONTAINED IN THIS PRESENTATION WAS PREPARED BY THE LAW FIRM OF JACKSON LEWIS LLP FOR THE
ATTENDEES’ OWN REFERENCE IN CONNECTION WITH THIS SEMINAR. SINCE THE MATERIAL AND RELATED DISCUSSIONS ARE INFORMATIONAL AND EDUCATIONAL IN NATURE AND REPRESENT
THE SPEAKER’S OWN VIEWS, ATTENDEES SHOULD CONSULT WITH COUNSEL BEFORE TAKING ANY ACTIONS AND SHOULD NOT
CONSIDER THESE MATERIALS OR RELATED DISCUSSIONS TO BE LEGAL OR OTHER ADVICE. PROFESSIONAL ADVICE SHOULD BE
OBTAINED BEFORE ATTEMPTING TO ADDRESS ANY LEGAL SITUATION OR PROBLEM.
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