The Dust Hasn’t Settled Yet: Employers Must Continue to Be Thoughtful About Criminal Record Screening Policies

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Last month, the new chair of the EEOC, Charlotte A. Burrows, was the keynote speaker at a conference regarding new research on criminal recidivism.1  The EEOC has been mostly quiet on the topic of criminal background checks and Title VII since the U.S. Court of Appeals for the Fifth Circuit upheld an order enjoining the EEOC from enforcing its Enforcement Guidance against the State of Texas.2  Chair Burrows’ comments reveal the EEOC remains keenly interested in this subject.  But this is just one of the reasons why employers, particularly those operating in multiple jurisdictions with a high concentration of entry-level jobs, must continue to be thoughtful about criminal record screening policies.  The other reasons include the risk of disparate impact class actions by the plaintiff’s bar, regulatory actions by local fair employment agencies, and increased claims activity by individual plaintiffs, particularly in California and New York. And these concerns fall against the backdrop of widespread class actions under the federal Fair Credit Reporting Act (FCRA).3

Comments by Chair Burrows

Initially, Chair Burrows framed the issue of criminal background checks by employers as one that ties to broader issues nationwide regarding racial justice and systemic discrimination.  Chair Burrows made the point that criminal background checks impact the employment opportunities of those individuals with criminal records and those in, but soon to be released from, prison (i.e., who will be seeking employment in the near term).  Chair Burrows’ tone was fairly moderate overall.  In fact, Chair Burrows said at least twice that the EEOC’s Enforcement Guidance does not outright prohibit criminal background checks, although she did not once mention the Fifth Circuit’s opinion. 

Importantly, though, Chair Burrows also repeatedly emphasized that criminal background check policies must be “evidence-based.”  She did not offer any comments about the meaning of the term “evidence-based,” but presumably was referring to the standard adopted by the Third Circuit in El v. Southeastern Pennsylvania Transportation Authority (SEPTA) in 2007.4  In El, the court held that for employers to prove criminal record screening policies are justified by “business necessity,” they must prove the policies “accurately” distinguish between applicants that do and do not pose an unacceptable level of risk.5

Chair Burrows closed by emphasizing that criminal justice reform is going on at various levels of government, is directed at “structural barriers,” and is integral to what she described as the nation’s promise of “equal justice to all,” including those who have paid their debts to society.  The chair did not mention any ongoing investigations or impending lawsuits.6

Heightened Claims Risk

Whereas the EEOC has not been pursuing criminal background check cases aggressively of late, the class action plaintiff’s bar has taken up the mantle.7 Plaintiffs’ attorneys have had some high-profile success negotiating both cash payouts and programmatic relief (i.e., mandatory structural changes to the employer’s criminal record screening policy).8  Additionally, activity at the local level, particularly in California and New York (especially New York City), and both by local agencies and individual plaintiffs, has increased significantly.9  Meanwhile, so-called “ban the box” laws continue to proliferate or reinvent themselves across the United States, for example, in Illinois,10 Pennsylvania,11 Hawaii,12 and Massachusetts.13   

In addition to such litigation and new background check laws, employers must contend with persistent disagreement among federal courts about the scope of the FCRA (e.g., about the “injury-in-fact” required for standing under Art. III of the U.S. Constitution).14  The U.S. Supreme Court recently passed on an opportunity to rein in such technical, “no-harm” class actions.15

Risk Mitigation

There are several practical steps employers can take to help mitigate risk. For example, employers should consider designating an in-house subject matter expert to help oversee efforts to fortify compliance with the various laws.  Because sensitive judgment calls may be needed, having someone with an understanding of the business, on the one hand, and compliance, on the other, is indispensable.

Employers should consider arranging for a privileged review of their background check policies, forms and notices. If this review has been planned but is languishing on the “to-do” list, it is a good time to give it priority.

And, employer should assess the adequacy of training, and as needed, arrange for updated training sessions.

 

Footnotes

1 Rod Fliegel was the only defense attorney on the panel that discussed the new research from the perspective of employers.  The new research by Prof. Shawn Bushway and his colleagues is not yet available to the public.

2 See Rod M. Fliegel and Molly Shah, Fifth Circuit Deals a Blow to EEOC’s Criminal Record Guidance, Littler ASAP (Aug. 6, 2019). For a comprehensive discussion of the EEOC’s Enforcement Guidance, see Rod Fliegel, Barry Hartstein, and Jennifer Mora, EEOC Issues Updated Criminal Record Guidance that Highlights Important Strategic and Practical Considerations for Employers, Littler Insight (Apr. 30, 2012) and Barry Hartstein et al.Criminal Background Checks: Evolution of the EEOC's Updated Guidance and Implications for the Employer Community, Littler Report (May 17, 2012).

3 See Rod Fliegel, Alison Hightower, and Allen Lohse, High Alert for California Employers and Employers Nationwide for the Second Wave of FCRA Class Actions, Littler Insight (Oct. 19, 2017).

4 479 F.3d 232 (3d Cir. 2007).

5 In El, the plaintiff proved that SEPTA’s policy had a disparate impact on protected class members.  Still, SEPTA defeated the plaintiff’s claims based largely on uncontroverted testimony from a leading criminologist, Alfred Blumstein, regarding the heightened risk of violence posed by ex-offenders that committed violent crimes.

6 The EEOC suffered high-profile loses in several disparate impact cases.  Seee.g., Barry A. Hartstein et al., Update on Criminal Background Checks: Impact of EEOC v. Freeman and Ongoing Challenges in a Continuously Changing Legal Environment, Littler Insight (Feb. 23, 2015).  However, the EEOC has had some success negotiating settlements that included cash payouts and “programmatic relief.”  Seee.g., Rod Fliegel and Molly Shah, Dollar General Reaches Settlement with the EEOC in Years-Long Background Check Bias Suit, Littler Insight (Nov. 1, 2019).

7 In 2016, one law firm reached a $15M settlement with the Census Bureau.  The settlement also required programmatic relief.

8 See Rod M. Fliegel, Criminal Record Screening Policies Continue to Raise Important Compliance Issues, Littler ASAP (Apr. 6, 2018).

9 Regarding California, see Rod M. Fliegel, California DFEH Ramps Up Enforcement of FEHA’s Protections Against Criminal Record Discrimination, Littler Insight (Mar. 8, 2021).  Regarding New York, see Stephen A. Fuchs, New York City Expands Scope of its Ban-the-Box Law, Littler Insight (Dec. 16, 2020).

10 See Kwabena A. Appenteng and Andrew Gray, Illinois Imposes New Criminal History Check Requirements on Employers, Littler ASAP (Mar. 26, 2021).

11 See Rod M. Fliegel, William J. Simmons and Wendy Buckingham, Philadelphia Enacts Amendments to and Expands Coverage of its Background Screening Ordinances, Littler ASAP (Jan. 26, 2021).

12 See Rod M. Fliegel, Hawaii Amends its Ban the Box Law to Fortify Protections for Ex-Offenders, Littler ASAP (Sep. 16, 2020).

13 See Rod M. Fliegel and Allen P. Lohse, Impending Necessary Ban-the-Box Updates for Criminal Record Inquiries in Massachusetts and San Francisco, Littler ASAP (Apr. 24, 2018).

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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