Background Check Policies Exposing Employers to Legal Liability


The Equal Employment Opportunity Commission (EEOC) continues to challenge employers' seemingly legitimate reliance on background checks as part of the hiring process. Recent developments indicate that the heat is intensifying both on employers and the EEOC.

On August 9, 2013, a Maryland federal court dealt the EEOC a significant loss in a class action case brought by the EEOC, challenging an employer's use of criminal background and credit history in making hiring decisions. Undaunted, however, the EEOC continues to pursue two newly filed, high-profile cases against BMW and Dollar General, challenging their use of background checks in the hiring process. In all three cases, the EEOC takes the position that the employer's process for conducting background screens has a disparate impact against minorities and therefore constitutes unlawful race discrimination.

Through its words and its actions, the EEOC has indicated that scrutinizing background check procedures will be one of its highest enforcement priorities in 2013. The EEOC does not allege that merely conducting background checks is unlawful, but takes the position that, in most cases, automatically excluding applicants with certain types of convictions is improper. Rather, the EEOC advocates an individualized inquiry that takes into account such factors as the amount of time that has passed since a conviction, the nature of the job applied for and the nature of the conviction.

Several states and localities also have recently passed "ban the box" legislation. These laws place additional restrictions on when in the application process employers may ask applicants about criminal convictions.

In light of the EEOC's aggressive position on this issue and the emergence of state and local "ban the box" rules, employers are strongly encouraged to take a fresh look at their existing policies and procedures for conducting background checks. Employers that proactively revise their procedures can make significant strides toward avoiding the excessive costs inherent in defending a discrimination lawsuit, especially a potential class action, as well as avoiding liability under state and local "ban the box" laws.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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