Criminal Background Checks and Hiring Practices

By Richard D. Alaniz

 
A criminal background check for job applicants has become standard operating procedure for many companies. However, companies that routinely conduct criminal background checks should take a hard look at their current policies and procedures. In April, the U.S. Equal Employment Opportunity Commission (EEOC) issued new guidance about the use of arrest and conviction records in hiring. While the guidance does not ban the use of criminal background checks, the EEOC reiterated that using criminal history as a hiring criterion could lead to discrimination charges under Title VII of the Civil Rights Acts of 1964. 
 
The updated guidance comes several months after Pepsi agreed to pay $3.13 million and to provide job offers and training to settle claims that it used criminal background checks to discriminate against African American job applicants. According to the EEOC, more than 300 African Americans were adversely affected when Pepsi's criminal background check policy disproportionately excluded black applicants from permanent jobs.
 
According to the EEOC, the latest guidance "builds on long-standing court decisions and existing guidance documents that the [EEOC] issued over twenty years ago. The new guidance clarifies and updates the EEOC's long-standing policy concerning the use of arrest and conviction records in employment, which will assist job seekers, employees, employers, and many other agency stakeholders," stated EEOC Chair Jacqueline A. Berrien when the guidance was released. Employers need to become familiar with the new guidance so they can remain compliant with EEOC regulations and insulate their organizations from potential lawsuits.
 
"Significant Increase" in Criminal Records
In its explanation of the new guidance, which commissioners approved in a 4-1 vote, the EEOC pointed to the "significant increase" in the number of Americans who have criminal records compared to twenty years ago. Statistics show that the percentage of the adult population in the United States that serves time in prison or jail is rapidly increasing. The EEOC also pointed out that many databases used for criminal background checks are incomplete or inaccurate, and African American and Hispanic men are two to three times more likely to be arrested and jailed than the general population.
 

Steps to Take Now

The EEOC advises employers to:

  • Eliminate policies and practices that automatically exclude applicants from jobs based on any criminal record.
  • Refrain from asking about conviction records on job applications.
  • Train managers and other hiring decision makers on Title VII prohibitions on employment discrimination. 
  • "Develop a narrowly tailored written policy and procedure" around screening for criminal conduct put those policies and procedures in writing. 
  • Identify what specific crimes could make an applicant unfit to perform the job based on all available evidence. 
  • Consider what length of time since an applicant's past criminal conduct is relevant, looking at each case individually.
  • Limit their questions to those that are job related and consistent with business necessity. 
  • Keep all information about criminal records confidential, not using it for any purpose except for making hiring decisions.
 
The Updated Guidance
Under Title VII, organizations may be liable for discrimination when their employment practices lead to disparate treatment or disparate impact. The guidance addresses how the use of criminal background checks could lead to either type of discrimination. 
 
Disparate treatment. In disparate treatment cases, employers may be liable for Title VII violations if they treat applicants or employees differently because of race, national origin, or other protected status. For example, the EEOC might cite a hypothetical employer who hires a Caucasian job applicant with a criminal record but refuses to hire an equally qualified African American with a similar record.
 
The EEOC provides a hypothetical case study of two recent graduates from the same college; John, who is Caucasian, and Robert, who is African American. They share similar educational backgrounds, skills, and work experiences. In high school, they both pled guilty to possessing and distributing marijuana, but neither had any legal issues thereafter. After graduating from college, they both apply to Office Jobs, Inc. After short intake interviews, Office Jobs asks their consent to conduct background checks, which turn up their drug convictions. The representative decides not to offer Robert another interview, telling a coworker that the company cannot afford to refer "these drug dealer types" to their clients. However, the same representative refers John for an interview, pointing to John's age at the time of the conviction and his clean record since then.
 
The EEOC highlights several ways it may determine that an employer's policies cause disparate treatment liability. These include:
  • Biased statements
  • Inconsistencies in the hiring process
  • "Similarly situated comparators"
  • Employment testing
  • Statistical evidence
 
Disparate impact. Employers may also create "disparate impact" liability when seemingly nondiscriminatory policies or practices disproportionally screen out a protected group or if employers fail to demonstrate that policies or practices leading to disparate impact are job related and consistent with business necessity. 
 
When employers review their policies on criminal background checks for disparate impact, the EEOC suggests that they first identify the policy or practice that could cause disparate impact. Then, employers need to consider how those policies and practices could disproportionately impact protected groups. 
 
For example, employers need to consider that African Americans and Hispanics are arrested in far greater numbers as a proportion of the population. In 2010, 28 percent of all arrests were of African Americans, even though approximately 14 percent of the general population was African American. Thus, a policy of not hiring anyone with an arrest record could adversely affect African American applicants more than Caucasian applicants. 
 
Checks must be job related and consistent with business necessity. Under Title VII, employers can successfully defend themselves against disparate impact discrimination claims if they can prove that their policies and practices are job related and consistent with business necessity.
 
The EEOC guidance points to two circumstances where employers that use criminal background checks can defend those checks as job related and consistent with business necessity. One is when employers validate the criminal conduct exclusion for the job pursuant to the EEOC's Uniform Guidance on Employee Selection Procedures. However, employers need to be able to find sufficient data explaining how the conduct that led to the arrest or conviction relates to subsequent work performance or behavior. 
 
Employers can also consider a "targeted screen" or individual assessment of each situation. When using this type of screen, employers must consider the nature of the crime, the time that has elapsed since the crime, and the nature of the job. Then, employers must consider whether excluding that particular individual for a particular job based on his or her criminal background would be job related and consistent with business necessity.
 
Arrests vs. Convictions
Employers should also be wary of treating arrests with equal importance as convictions. According to the EEOC, a person's mere arrest is not related to their job or business necessity. However, employers can consider the type of behavior that led to the arrest and may decide that the behavior disqualifies a job candidate. Also, arrest records are often incomplete, and employers should not rely on those alone when making a hiring decision. On the other hand, a conviction record is usually adequate proof that a person committed a crime, according to the EEOC.
 
Employers who have relied on criminal background checks as an effective way to screen potential workers should consult with their attorneys and HR experts as soon as possible. They may need to fundamentally reconsider how they conduct screenings, employee interviews, and management training in order to stay in compliance with Title VII and avoid charges of discrimination under the new guidance. 
 
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About the author:
Richard D. Alaniz is senior partner at Alaniz and Schraeder, a national labor and employment firm based in Houston. He has been at the forefront of labor and employment law for over thirty years, including stints with the U.S. Department of Labor and the National Labor Relations Board. Rick is a prolific writer on labor and employment law and conducts frequent seminars to client companies and trade associations across the country. Questions about this article can be addressed to Rick at (281) 833-2200 or ralaniz@alaniz-schraeder.com.

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