Do Employers Have To Hire Criminals?

This article was extracted from the 2014 Employment Law eBook. To view the entire eBook, please click here.

Do Employers Have To Hire Criminals?Consider the following scenario: You’re an employer in an industry that is regulated by a state law which requires you to deny employment to job applicants with certain types of convictions on their criminal record, i.e. schools, daycares, nursing homes, banks, etc…. For certain convictions, this state law does not allow you to consider any mitigating factors that may be applicable, such as the time that has lapsed since the offense, the applicant’s previous job history, the applicant’s age at the time of the offense, etc….

So, pursuant to state law, you revoke a job offer for an applicant that has one of these specified con-victions on their record, however, the applicant is a member of a protected class i.e., African American or Hispanic. The rejected applicant files a discrimina-tion charge with the Equal Employment Opportunity Commission (“EEOC”) alleging racial discrimination in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”). Specially, the job applicant argues that your background check policy has a disparate impact on minorities, and is neither job related nor support-ed by a business necessity.

Do you know what the EEOC’s position on this scenario would be? If not, you should keep reading.

In April 2012, the EEOC issued new Enforcement Guidance on the Consideration of Arrest and Convic-tion Records in Employment Decisions under Title VII (“Enforcement Guidance”), with a focus on race and national origin discrimination claims.

Since April 2012, the EEOC has increased its activities in this area and recent lawsuits and court decisions are available to give employers a better understand-ing of the EEOC’s position and how it may play out in federal courts. In addition, on July 24, 2013, the attorneys general of several states wrote a joint let-ter to the EEOC asking the EEOC to reconsider its position as stated in the Enforcement Guidance

concerns about two recent lawsuits the EEOC has filed against employers, Dollar General and BMW Manu-facturing Co. challenging their background check policies. The EEOC submitted a written response to this letter on August 29, 2013, reaffirming its position as stated in the Enforcement Guidance, which all employers should read.

Why is the EEOC Focusing on Criminal Background Checks in Employment?

The EEOC is shifting its focus towards arrests and conviction records in employment decisions because: (1) the number of working adults with convictions has increased; (2) the federal government has undertaken a new initiative to reintegrate ex-offenders back into the community and reduce recidivism rates; (3) statis-tical data shows that African American and Hispanic males are arrested and convicted at a much higher rate than the general population and in comparison to Caucasian males; and (4) employers have greater access to arrest and conviction records than they had in past years.i

SUMMARY OF THE EEOC’S ENFORCEMENT GUIDANCEAs the EEOC’s Enforcement Guidance explains, Title VII only prohibits discrimination based on a person’s race, color, religion, sex or national origin; and hav-ing a criminal record does not automatically place an employee and/or job applicant into a protected class

particularly the individualized assessment

component, and its position on an employer’s compliance with

state law as a defense to Title VII claims. The letter also expressed

http://www.rendigs.com/wp-content/uploads/2014/01/2014-Rendigs-Employment-Law-eBook.pdf

http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm




under Title VII. An employer’s Title VII liability for use of criminal records in employment decisions hinges on one of two types of discrimination claims: (1) “disparate treatment” and/or (2) “disparate impact.”

Disparate treatment claims - arise when the employer treats the criminal history of a minority employee or job applicant differently than the crimi-nal history of another similarly situated employee or job applicant that is not a member of a protected class. Example: an employer extends a conditional job offer to two job applicants to work as a cashier at the same location. Both job applicants’ criminal histories reveal theft convictions within the same general time frame, but the employer revokes the job offer for the African American applicant but continues the employment of the Caucasian appli-cant. In this example, the employer would be liable under Title VII for a disparate treatment claim.

Employers can avoid disparate treatment claims by creating a uniform background check policy and training their managers concerning the implementa-tion of that policy to ensure consistency in treatment for similarly situated employees with similar criminal records.

Disparate impact claims – arise when the employ-er’s race neutral background check policy has the effect of disproportionately eliminating employees in a protected class (i.e., African American and Hispanic males), and the employer’s policy is not job related and consistent with a business necessity.

How Does the EEOC Determine Whether an Employer’s Policy has a Disparate Impact on Minorities?

In order to determine whether an employer’s background check policy has a disparate impact on members of a protected class, the EEOC will look at statistical evidence. The Enforcement Guidance gives employers some insight into the types of sta-tistical data the EEOC will look at when making this determination:

1. national data concerning incarceration rates from the U.S. Department of Justice;2. regional or local data showing the arrest and conviction rates for minorities and non-minorities in a particular employer’s geographic area;3. the employer’s own applicant data and statistics;4. applicant flow information maintained by the employer pursuant to the Uniform Guidelines on Employee Selection Procedures (29 CFR part 1607);5. workforce data;6. criminal history background check data;7. demographic availability statistics;8. incarceration conviction data; and9. relevant labor market statistics.ii

In addition to the statistical data referenced above, the EEOC will also consider the employer’s reputa-tion in the community for excluding individuals with criminal records, employer statements, individual testimony, evidence from ex-offender programs, evidence of the employer’s recruitment practices and publically posted notices.iii

How will the EEOC Determine that an Employer’s Criminal Background Check Policy or Practice is Job Related and Consistent with a Business Necessity?

According to the EEOC, an employer’s policy is job related and consistent with a business necessity if:

1) The employer’s policy of refusing to hire job appli-cants with a specific type of conviction is supported by statistical data or analysis about criminal conduct and how it relates to subsequent work performance or behavior (validation studies); or

2) The employer’s policy has a targeted screening component that considers the three factors identi-fied by the Eighth Circuit Court of Appeals in Green v. Missouri Pacific Railroad, 549 F.2d 1158 (8th Cir. 1977), and also provides the opportunity for the employer to conduct an individualized assessment for the people identified by the screen to determine if the policy, as applied, is job related and consistent with a business necessity.iv



Statistical data about criminal conduct and how it relates to subsequent work performance is hard to find, so employers typically will not be able to show their policy is job related and supported by business necessity through validation studies of this nature. In addition, most employers do not review statistical data when creating their background check policies, although they should. Accordingly, most employ-ers will have to prove that their policy is job related and supported by a business necessity through the targeted screening and individualized assessment process.

Targeted Screening

The three factors identified by the Eighth Circuit Court in Green are: (a) the nature and gravity of the crime; (b) the time that has elapsed since the crime and the completion of the sentence; and (c), the nature of the job held or sought by the applicant/employee.

The employer’s background check policy should be drafted in such a way that it only screens out job applicants for elimination after considering the Green factors listed above. A policy can successfully do this if the policy does the following:

A. Considers the type of crime committed by the applicant and the harm caused by the crime (i.e., violent crimes cause physical injuries and/or death, theft crimes cause property loss, etc….);

B. Takes into account the severity of the offense (i.e., a misdemeanor vs. a felony);

C. Limits how far back the employer will look for criminal records (i.e., 7, 10 or 15 years, etc….) and sets a time limit based on available statistical data about the decreased risk of recidivism over time; and

D. Identifies the essential functions for each par-ticular job, and sets exclusion criteria that bear a “demonstrable” relationship to the successful performance of each job. Example: setting a policy that excludes job applicants with theft convictions within the last seven years, if the individual will work in a position in which they will have access to money, a customer’s financial information, process credit cards, etc…. But the policy does not exclude employment for job applicants with theft convictions who will work in positions in which they are closely supervised and have no access to money, a custom-er’s financial information and/or credit cards, etc….

Individualized Assessment Process

The EEOC recommends that once an employee is identified through the targeted screening process as having a conviction that would exclude them from employment, the employer should then perform an individualized assessment of the particular employee, through the following process:

(1) Notify the applicant that he/she may be excluded from employment because of his/her past criminal record;

The employer’s background check policy should be drafted in such a way that it only screens out job applicants for

elimination after considering the Green factors.



(2) Provide the applicant with the opportunity to demonstrate why the exclusion does not apply to him/her; and

(3) The employer considers whether the individual’s additional information shows that the policy, as applied, is not job related and consistent with business necessity.

Some of the ways an applicant may be able to demonstrate that the exclusion doesn’t apply to them is by: showing that they have engaged in successful employment for a significant period of time since the conviction without any further criminal conduct; their education and participa-

tion in rehabilitation programs; providing character references; and providing information showing their age at the time they committed the crime, etc….

But, the EEOC does not require an individualized assessment of all applicants screened out, if the employer can show that its targeted screening policy is always job related and supported by business necessity.

Arrest vs. Conviction Records

Arrests records - The EEOC’s position is that the mere fact that a person was arrested does not estab-lish that any criminal conduct occurred. Therefore, an arrest, by itself, is not job related and consistent with business necessity and is not legitimate grounds for exclusion from employment. But, the EEOC recognizes exceptions to this general principal and the Enforcement Guidance provides employers with an example.

Conviction records - The EEOC’s position on convic-tions is different than arrests. The EEOC’s position on a conviction is that convictions will usually serve as sufficient evidence that a person engaged in particular conduct, given the procedural safeguards associated with trials and guilty pleas.

Conflicting Federal and State Laws

Federal laws - the Enforcement Guidance recognizes that some employers are bound by federal laws that prohibit employers from hiring persons convicted of certain types of crimes, and the EEOC acknowledges that compliance with federal laws concerning back-ground checks is a valid defense to a discrimination claim under Title VII. The EEOC is also working with

the federal agencies responsible for creating these federal regulations to ensure that they are consistent with the EEOC’s Enforcement Guidance.

State laws - the EEOC’s position on compliance with state law as a valid defense to a discrimination claim is a little different, however. Title VII specifically states that if a state law conflicts with Title VII’s require-ments, Title VII preempts state law and the employer must comply with Title VII. With that said, the EEOC’s general position is that an employer’s compliance with a state law concerning the use of conviction records in employment decisions will be a valid defense if the state’s law is job related and consistent with a business necessity. Most state laws concerning background checks are job related and supported by a business necessity, and typically involve protection of occupations that involve responsibility for “vulnerable citizens” i.e., children and the elderly. So, most state laws do not conflict with Title VII at all.

... the EEOC’s general position is that an employer’s compliance with a state law concerning the use of conviction records in employment decisions will be a valid defense if the state’s law is job related and

consistent with a business necessity.



successfully defend a disparate impact claim under Title VII concerning their background check policy. In this case, a minority applicant filed a disparate impact claim against the employer concerning its policy of preventing anyone who has ever been convicted of a violent crime from being a paratransit driver, which is a job involving transportation of disabled employees. The Third Circuit granted summary judgment to the employer because the employer presented recidivism evidence through expert testimony in support of its policy; and the policy was limited to the paratransit driver position, which was a position that gave em-ployees unsupervised access to vulnerable adults with physical disabilities.

In EEOC v. Freemanvii, the EEOC filed a lawsuit against Freeman, a nationwide employer, alleging that its background check policy has a disparate impact on African American male employees, by using poor credit history and criminal history as a basis to deny employment. In this case, the U.S. District Court for the District of Maryland granted summary judgment to the employer and held that (1) the EEOC failed to meet its burden of proving disparate impact through expert, testimony and statistical evidence. Specifi-cally, the EEOC failed to show that African American male applicants were denied employment at signifi-cantly higher rates than other races due to their back-ground checks; and, (2) the EEOC failed to isolate and identify which aspect of the employer’s background check policy allegedly caused the disparate impact. This case provides an excellent analysis of what the Court’s have determined the EEOC must do in order to successfully challenge an employer’s background check policy under a disparate impact claim under Title VII.

EEOC v. Peoplemark, Inc.viii is a Sixth Circuit case which provides a good example of how an employer can successfully defend a Title VII disparate impact claim using its own statistical data. In this case, the EEOC filed a class action lawsuit against Peoplemark on behalf of 286 potential class members alleging that Peoplemark had a company-wide policy of denying employment to any applicant convicted of a felony. The EEOC was under this false impression based on statements made by Peoplemark’s in-house counsel during the EEOC’s investigation, which later turned out to be incorrect.

According to the Enforcement Guidance, the EEOC will only deem a state law as being inconsistent with Title VII, if the state law is not narrowly tailored in that it prohibits employers from hiring an applicant with a conviction without considering the nature of the conviction and how it relates to the type of job the applicant will be doing. Most state laws consider the nature of the conviction and the specific job the applicant will be doing, so conflicts with state law are rarely a problem.

CASE LAW AND EEOC’S RECENT LAWSUITS

El v. Southeastern Transportation Authorityvi, which is a case referenced in the Enforcement Guidance, provides an example of how an employer can



if the reason for the disqualification is job-related and consistent with business necessity. Specifically, the policy also automatically excludes applicants without considering the age of the offender at the time of the crime, the nexus between the crime and the specif-ic job duties of the applicant, and the time that has transpired since the crime, etc…. Some of the felony convictions that result in automatic disqualification from employment include flagrant non-support,illegal dumping, and possession of drug paraphernalia. Some of the misdemeanor convictions that result in auto-matic disqualification include reckless driving, failure to file income tax returns, and improper supervision of a child.

The second lawsuit to watch in 2014 is EEOC v. BMW Manufacturing Co.x On June, 11, 2013, the EEOC filed a class action on behalf of 69 African American employees who worked for UTi, a logistics company that provides logistical services for BMW at a BMW owned warehouse in Spartanburg, South Carolina. The lawsuit alleges that BMW hired a new contractor to provide logistics services at its Spartanburg facility, but BMW desired to have UTi employees work for the new contractor. BMW directed the new contractor to conduct criminal background checks on all UTi em-ployees applying to work for this new contractor at BMW’s facility. The background checks revealed that 88 current UTi employees had convictions that would exclude them from employment pursuant to BMW’s background check policy. Accordingly, the new con-tractor denied employment to these UTi employee’s pursuant to BMW’s policy. BMW’s policy automatically denies employment to any person convicted of murder, assault and battery, rape, child abuse, domestic violence, manufacturing of drugs, distribution of drugs and weapons violations regardless of how long ago the crime was commit-ted. The policy also denies employment to any person convicted of theft, dishonesty or crimes of moral tur-pitude.

The EEOC determined this policy had a disparate impact on African Americans based on statistical data which showed that 55% of all the UTi employees assigned to work at this BMW facility were African American.

In defense of the suit, Peoplemark produced over 176,000 documents and provided the EEOC with access to its database which proved that People-mark did not have a company wide policy of denying employment to applicants with felony convictions and that Peoplemark currently employed some employees that had felonies on their criminal record. The EEOC eventually dismissed its lawsuit against Peopklemark, but the Court awarded Peoplemark attorney’s fees from the date the EEOC should have realized that Peoplemark did not have the companywide policy.

Pending EEOC Cases to Watch in 2014

In 2013, the EEOC filed two lawsuits which employ-ers should watch closely in the upcoming year. These cases give employers insight about the type of back-ground check policies that the EEOC considers to be a violation of Title VII, and should be monitored to see if the Courts ultimately agree with the EEOC’s position.

The first case is EEOC v. Dolgencorp, LLC d/b/a Dollar Generalix. On June 11, 2013, the EEOC filed a nation-wide class action against Dollar General alleging that Dollar General’s background check policy has a disparate impact on African American applicants. According to the Complaint, the EEOC determined that Dollar General’s background check policy has a disparate impact on African American applicants based on statistics provided by Dollar General. These statis-tics showed that 75% of the job offers made from 2004 to 2007 were made to non-Black job appli-cants, and 25% were made to African Americans. The data also showed that 7% of the job offers made to non-black applicants were revoked based on their criminal records, while 10% of the job offers made to African American applicants were revoked based on their crim-inal records. The EEOC considered this 3% difference to be a “gross disparity” in the rates at which African Americans were being excluded from employment.

As stated in the Complaint, the EEOC challenged Dollar General’s background check policy as not being job related and supported by a business necessity because it automatically excludes applicants convict-ed of specific crimes from working for Dollar General without doing an individual assessment to determine



applicants regardless of race, and other protected characteristics.

6) Make sure the policy is narrowly tailored so that applicants with certain convictions are only excluded if their conviction is related to their particular job; and place a time limit on how far back in time you will look at criminal records when making hiring decisions i.e., 7 or 10 years, etc….

7) Track and keep statistical records on the implemen-tation of your background check policy and the job applicants retained and excluded under your policy (which is required by federal law). This will allow you to see if your background check policy is having a dis-parate impact on minority applicants and gives you the opportunity to revise the policy if you discover that it is not job related and supported by business necessity. Keeping this information also allows you to success-fully defend against disparate impact claims with your own data, if the EEOC challenges your policy, like the employer in Peoplemark.

i Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964, U.S. EQUAL EMP’T OPPORTUNITY COMM’N (April 25, 2012), page 3.ii Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964, U.S. EQUAL EMP’T OPPORTUNITY COMM’N (April 25, 2012) pages 9-10.iii Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964, U.S. EQUAL EMP’T OPPORTUNITY COMM’N (April 25, 2012), page 10.iv Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964, U.S. EQUAL EMP’T OPPORTUNITY COMM’N (April 25, 2012) page 2.v Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964, U.S. EQUAL EMP’T OPPORTUNITY COMM’N (April 25, 2012) page 12.vi El v. Southeastern Transportation Authority, 479 F.3d 232 (3rd Cir. 2007) vii EEOC v. Freeman, 2013 WL 4464553 (D. Md. Aug. 9, 2013).viii EEOC v. Peoplemark, Inc., 732 F.3d 584 (6th Cir. 2013).ix EEOC v. Dolgencorp, LLC d/b/a Dollar General, Case No. 1:13-cv-04307, U.S. District Court, N.D. Illinois, Eastern Division.x EEOC v. BMW Manufacturing Co., LLC, Case No. 7:13-cv-01583-HMH-JDA,U.S. District Court, Southern District of South Carolina.

BMW denied employment to 88 UTi employees based on their criminal record, and of these, 80% were Af-rican American and 20% were non-black employees. The EEOC considered this to be a “gross disparity.”

The EEOC challenged the policy as not being job related and/or supported by a business necessity because the policy denied employment without any individualized assessment of the nature and gravity of the crime, the age of the convictions or the nature of the employee’s position. The policy also did not consider the fact that many of the employees had been working for UTi at this BMW facility for several years without incident. Specifically, one African American female employee who had worked at this BMW facility for nearly 14 years without incident, but was denied continued employment due to a 1990 conviction for simple assault in which she was punished with only a $137 fine.

Employer Best Practices to Prevent or Defend Against these Claims

1) Review any available statistical data and/or validity studies concerning recidivism rates for certain crimes, crimes in relation to certain types of jobs, etc… when developing a background check policy and document the research and data used to create your background check policy.

2) Revise and update your background check policy taking into consideration the EEOC’s Enforcement Guidance and eliminate provisions in the policy which automatically exclude employees with certain convic-tions without considering the factors in Green and without doing an individualized assessment.

3) Have all of your human resource managers, hiring managers and decision makers review the EEOC’s Enforcement Guidance and train them accordingly.

4) Document the individualized assessment process you used when excluding a job applicant from em-ployment, so you can successfully defend your policy decision in the event of a lawsuit.

5) Make sure that your background check policy is applied consistently to all similarly situated job

________________________________Donyetta D. Bailey, Esq.

[email protected]


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Do Employers Have To Hire Criminals?