Individualized Assessments for Criminal Background Checks

by Snell & Wilmer
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What if the Equal Employment Opportunity Commission (EEOC) forced your company to defend a Title VII lawsuit based on a company-wide policy to not hire felons? Peoplemark, Inc. is dealing with this exact scenario in the Sixth Circuit case EEOC v. Peoplemark, Inc., as are other businesses throughout the nation. Complicating matters further, on April 25, 2012, the EEOC issued revised guidelines relating to the use of an individual’s criminal record in hiring decisions. See “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 Employment Opportunity Commission” (2012) (hereinafter “Guidelines”). In May 2012, Snell & Wilmer published a Workplace Word article explaining the impact of the Guidelines on conducting criminal background checks as regulated under the Fair Credit Reporting Act. In addition to issues associated with conducting criminal background checks, the Guidelines dictate how an employer can use the information in hiring decisions once a criminal background check has been completed.

An employer may be found liable for violating Title VII when the plaintiff demonstrates that the employer’s policy for refusing to hire based on criminal background checks has the effect of screening out a Title VII-protected group and the employer fails to demonstrate that the policy is job related and consistent with business necessity. See 42 U.S.C. § 2000e-2(k)(1)(A)(i). The EEOC emphasizes that criminal records may be inaccurate and a disproportionate number of Title VII-protected groups have criminal records. Therefore, the Guidelines strongly recommend an individualized assessment for every prospective employee before an employer refuses to hire an individual based on a criminal background check, regardless of whether the applicant was convicted or not.

In terms of arrests, the EEOC emphasizes that arrests do not necessarily equate to criminal conduct. However, the conduct associated with the arrest may trigger an exclusionary policy. Therefore, the employer must give the applicant an opportunity to explain the events and circumstances leading up to the arrest. Regarding convictions, the EEOC acknowledges that convictions are usually sufficient evidence of guilt. But the EEOC also requires individualized assessments in the case of convictions because “there may be evidence of an error in the record, an outdated record, or another reason for not relying on the evidence of a conviction.” See Guidelines, § V.B.3. Therefore, individualized assessments are necessary for both arrests and convictions.[1]

The purpose of the individualized assessments is to demonstrate that the policy of not hiring an applicant with a particular conviction or arrest is related to the job in question and consistent with business necessity. To accomplish this, the EEOC recommends that an employer develop a consistent and targeted screen utilizing the factors identified in the 1975 Eighth Circuit decision, Green v. Missouri Pacific Railroad, 523 F.2d 1290 (8th Cir. 1975). Those factors are:

  • The nature and gravity of the offense or conduct;
  • The time that has passed since the offense, conduct and/or completion of the sentence; and
  • The nature of the job held or sought.

Once the targeted screen is developed, the employer should schedule an assessment of the individual including: (1) notice to the applicant that he is being screened because of criminal conduct, (2) an opportunity for the applicant to explain the circumstances of the criminal conduct, and (3) a thoughtful analysis by the employer explaining the reasons why the applicant is still excluded from employment based on the information provided. If the applicant refuses to submit to the individualized assessment or does not respond after being given notice, the employer may make its employment decision without the individual’s explanation. The EEOC admits that a narrow screen based on the Green factors may be enough in some cases, but still recommends an individualized assessment to avoid Title VII liability. The EEOC also acknowledges that compliance with federal laws and regulations is a defense to Title VII liability but compliance with state laws and regulations may not be. See Cal. Fed. Sav. & Loan Ass’n v. Guerra, 479 U.S. 272, 282-84 (1987) (holding Title VII preempts state law inconsistent with it).

Regarding the first Green factor, the nature and gravity of the offense or conduct, the EEOC recommends that an employer look to the harm caused by the criminal activity, the legal elements of the crime and whether the crime is a misdemeanor or a felony. The second Green factor is not as clear cut. The EEOC suggests that an employer look to recidivism studies to determine if the criminal conduct is still relevant to the position in question. Although not expressly mentioned in the Guidelines, employers may also look to employment history. If the applicant has been unable to successfully hold down a job after the criminal conduct in question, further investigation may show that the applicant continues to relapse into criminal behavior. Finally, to relate it all back to the third Green factor, the nature of the job held or sought, the EEOC looks to the job’s duties, the job’s essential functions, the circumstances under which the job is performed (e.g., supervision, oversight, and interaction with co-workers or vulnerable individuals) and the environment in which the job’s duties are performed (e.g., outside, in a warehouse or in a private home).

Even after the individualized assessment, a Title VII plaintiff may still prevail if there is an equally effective policy that is less discriminatory and serves the employer’s legitimate goals. Therefore, the exclusionary policy developed must be narrow to minimize potential discrimination. As a best practice, the EEOC recommends that employers limit their requests for information to criminal conduct that would be related to the position and is consistent with business necessity.

Based on the Guidelines, it is no longer advisable to refuse to hire individuals solely based on their criminal record discovered during a background check. Therefore, employers should consider the following:

  • Developing a narrow exclusionary policy for criminal conduct based on each position and business necessity;
  • Revising job applications to only request information on criminal conduct related to the narrow exclusionary policy discussed above; and
  • Conducting an individualized assessment of each applicant before excluding the applicant for criminal conduct.

Ultimately, the Guidelines will govern how the EEOC processes complaints from individuals refused employment because of criminal conduct and, therefore, attention must be paid to them. Counsel may be helpful to employers in determining whether their exclusionary policies for criminal conduct comply with the Guidelines set forth by the EEOC.

[1] The EEOC acknowledges that an employer can validate the criminal conduct screening process pursuant to the Uniform Guidelines on Employee Selection Procedures (UGESP), codified at 29 C.F.R. Part 1607. However, the EEOC emphasizes that social science studies relating to criminal conduct and subsequent work performance in a particular position must be available to utilize UGESP and such studies are rare.

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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