In order to avoid potential litigation, employers who rely on criminal background checks to screen out undesirable applicants should make sure they are tailored to the requirements of the job being filled, the chairwoman of the U.S. Equal Employment Opportunity Commission noted in a letter clarifying its policy.

The EEOC made it a priority this year to eliminate barriers in recruitment and hiring. But the agency has come under increased scrutiny for filing lawsuits against employers it believes use criminal background checks to discriminate against minority job applicants, who have higher rates of incarceration.

Critics contend that the careful and appropriate use of criminal history information is an essential part of the employee hiring process.  One survey found that 92 percent of responding employers stated that they subjected all or some of their job candidates to criminal background checks.

“An employer may have any number of business-driven reasons for not wanting to hire individuals who have been convicted of rape, assault, child abuse, weapons violations, or murder,” West Virginia Attorney General Patrick Morrisey wrote in a July letter to the EEOC on behalf of nine state attorneys general. “Forcing employers to undertake more individualized assessments will add significant costs. . . . In addition, more individualized assessments are liable to increase the number of discrimination suits by rejected applicants.”

In an effort to clarify the agency’s stance, EEOC Chairwoman Jacqueline Berrien wrote  late last month that “it is not illegal for employers to conduct or use the results of criminal background checks.” Instead, she noted in a letter to the attorneys general, the EEOC recommends that employers use a two-step process to  ensure that the criminal background check does not discriminate against certain types of applicants.

Two-Step Process to Screen Employees

First, an employer should use a “targeted” screening process to exclude only specific criminal conduct that an employer believes is inconsistent with the duties of a particular position. To develop its “targeted” screening process, an employer should identify essential job requirements and the actual circumstances under which the job is performed, and then determine the specific offenses that may demonstrate unfitness for performing those specific jobs. Next, an employer should consider the nature of the crime, the length of time that has elapsed since the crime was committed, and the nature of the job-related duties of the position as part of the screening process. Once this is complete, an employer should create policies and procedures based on its assessment and be sure to record how it reached those conclusions.  

Second, the employer should provide conduct an individual assessment of those applicants who have been flagged by the “targeted” screening process. An individual assessment allows an employer to make sure it is not mistakenly excluding qualified applicants or employees based on incorrect, incomplete or irrelevant information. It also gives the applicant a chance to correct errors in their records.

Berrien noted that “the individualized assessment is a safeguard that can help an employer to avoid liability when it cannot demonstrate that using only its targeted would always be job related and consistent with business necessity.” 

EEOC Litigation

In order to demonstrate that a background check unlawfully discriminates against an applicant under Title VII of the Civil Rights Act of 1964, the EEOC must demonstrate that the background check results in either “disparate treatment” or “disparate impact.”

Disparate treatment is intentional discrimination. This occurs when an employer uses the results of a criminal background check differently based on an applicant’s or employee’s race, national origin, or gender. For example, an employer evidence rejected an African American applicant based on his criminal record but hired a white applicant with a comparable criminal record.

The current controversy, however, centers on the EEOC’s attempt to show that an employer’s criminal background check policy results in a disparate impact on certain minorities. Disparate impact arises if an employer uniformly administers a criminal background check that disproportionately excludes people of a particular race, national origin or gender and that background check is not related to a particular job being filled and not consistent with business necessity.

A U.S. District Court judge in Maryland recently held that in order to be successful the EEOC must specifically identify what part of the background check process had a disparate impact on certain classes of employees. It must do this by relying on reliable and accurate statistical analysis by a qualified expert.

That has been a problem for the EEOC in two recent cases against Kaplan Higher Learning Education Corp., a nationwide tutoring service, and Freeman, a nationwide marketing company. Both lawsuits were dismissed after the court in both  cases identified seriously flawed statistical analysis on the part of experts hired by the EEOC.

Despite several setbacks, the EEOC continues to pursue companies that rely on criminal background and credit history checks in making hiring decisions, including Dollar General Corp. and car manufacturer BMW. Employers should be aware that there are risks associated with conducting such checks and take note of the recent clarification by Berrien. However, employers should also know that courts so far have not been persuaded by the EEOC’s position.