Seyfarth Synopsis: On December 17, 2019, Congress passed "The Fair Chance To Compete for Jobs Act of 2019" (the “Act”) as part of the National Defense Authorization Act. The Act provides that as of December 20, 2021, federal agencies (including offices within the executive, legislative, and judicial branches) and federal civilian and defense contractors may not request disclosure of criminal history record information regarding an applicant for a position related to work under the government contract before the contractor extends a conditional offer to the applicant. The President signed the law, which had bipartisan support, on December 20, 2019.

The Act expressly covers all executive agencies (including cabinet agencies and the U.S. Postal Service, but not including the armed forces), the legislative branch, and the judicial branch of the federal government (other than judges, justices, and magistrates). It also applies to civilian agency and defense contracts entered into with private employers.

Notably, “conditional offer” is defined to mean an offer of employment that is “conditioned upon the results of a criminal history inquiry.” This is important because it may arguably mean that at the time of a conditional offer, all other pre-hire contingencies, if any, must have cleared, including consideration of non-criminal history components in a background check or employment or personal reference checks.

There are exceptions. Specifically, the Act does not apply to:

• Positions where a background check is required by law, but only if the law requires consideration of the criminal record before an offer is made. In other words, if the law mandating the criminal history background check is silent as to the timing of the inquiry, the employer must still wait until after a conditional offer of employment.
• Positions involving access to classified information or having sensitive law enforcement or national security duties.

The General Services Administration and the Department of Defense have 16 months to issue implementing regulations with respect to federal contractors.  Additional exemptions to the law may be adopted for civilian and defense agency contractors, giving due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions. The regulations must be consistent with, and in no way supersede, restrict, or limit application of, Title VII of the Civil Rights Act of 1964, as amended, or other federal civil rights laws, and hiring activities conducted pursuant to the regulations must be carried out in accordance with these same laws.  We will be monitoring these regulations and updating this alert once they are issued.

If a civilian or defense agency contractor fails to comply, the penalties vary for first and subsequent violations. For a first violation, the executive agency will notify the contractor; give the contractor 30 days to appeal the determination; and issue a written warning to the contractor that includes a description of the violation and the additional remedies that may apply for subsequent violations. Subsequent violations will result in a similar notice process, but additional actions can be taken depending on the severity and the history of non-compliance, including, among other things, suspending contract payments until the contractor is in compliance.

Employer Considerations

State and local ban-the-box laws have swept the nation for both private and public sector employers. Given the lack of uniformity among these laws, we continue to recommend that employers defer any inquiry into criminal history until issuance of a conditional offer of employment. Now, ban-the-box has reached civilian agency and defense contractors on a federal level and, thus, any employer with a government contract should consider the impact the Act has on their hiring practices and make any necessary adjustments to their policies and procedures.