Background Screening Policy Considerations to Avoid Discrimination Claims

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The EEOC, Congress, and many state legislatures are closely scrutinizing how employers use background checks, especially criminal histories and credit reports. This presentation will walk employers …

The EEOC, Congress, and many state legislatures are closely scrutinizing how employers use background checks, especially criminal histories and credit reports. This presentation will walk employers through the process of preparing a background screening policy that helps ensure a safe and productive workforce while staying out of regulators’ cross hairs.

On April 25th, 2012, the Equal Employment Opportunity Commission issued new “enforcement guidance on the consideration of arrest and conviction records in employment decisions under Title VII of the Civil Rights Act of 1964.”

This was the first guidance on this topic issued by the EEOC in more than 20 years and reflects the EEOC’s recent scrutiny of employers’ use of criminal records in making employment decisions.

In addition to Title VII, other federal and state laws regulate employer’s use of criminal records, credit reports, and other information.

This presentation will walk employers through the process of preparing a background screening policy that helps ensure a safe and productive workforce while staying out of regulators’ and plaintiffs’ attorneys’ crosshairs.

In this presentation, we’ll cover:

The legal and safety reasons employers conduct thorough background checks.
Employers’ responsibilities under the Fair Credit Reporting Act.
Considerations in developing a background check and due diligence policy.
Title VII of The Civil Rights Act of 1964 and its application to background checks.
State-specific laws governing background checks.
You can download the presentation and the notes and a sample relevance matrix.

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Twitter: @mrcoffey @badhiredays

Website: http://www.imperativeinfo.com/

Contact: http://www.imperativeinfo.com/contact/

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  • OK, maybe HR credibility isn’t the same as “street cred,” but, hey, I am a well-rated presenter at HRSouthwest and SHRM chapters around the country.I’m a 20-year HR veteran and a Senior Professional in Human Resources. I’m also 2013 President for the Fort Worth Human Resource Management Association. Additionally, I sit on the board of the Texas Association of Business.I’ve delivered dozens of presentations to SHRM chapters and conferences around the country and dozens of webinars on a variety of topics. Hit up my website if you need a speaker for an upcoming event. http://imperativeinfo.com/speaker-availability/All that said, I’m not a lawyer and I’m especially not YOUR lawyer. Wiser people than I decline to express their opinion for fear of some knucklehead misapplying what they said and getting them sued. Just realize that you didn’t pay me for this presentation and you might only be getting what you paid for. Be prudent. Use this information to start a discussion in your organization and with your own legal counsel. If they disagree with me, go get another lawyer.There is a healthy dose of the Gospel According to Coffey (in other words, opinion) in this webinar and handout. I hope it is helpful to you!
  • As we review the issues surrounding employers’ use of criminal records, it is important to keep in mind why we care about applicants’ backgrounds. Employers run background checks to protect the public, their employees, their assets, and their reputations. Many also run background checks to ensure legal and regulatory compliance. After all of these issues, employers worry about litigation costs. Ultimately, employers have a much higher risk of lawsuits stemming from employees’ negligent or malevolent behavior than they might face from applicants who believe that they weren’t treated fairly during the employment process. However, both risks can be mitigated through reasonable policies and procedures and good management training.
  • BadHireDays.com has many cases studies about individuals with criminal histories who later brought injury to their employer or others – and how employers can avoid making the same mistakes.
  • President Johnson signed Title VII in 1964 and President Bush signed amendments to it in 1991. Also, be aware that other laws such as the ADA, ADEA, and GINA protect other groups of workers against employment discrimination.
  • The EEOC was formed by the Civil Rights Act of 1964 and is charged with enforcing the Act. They are a law enforcement agency – not a rule-making body. The only power they have is to use federal funds to finance investigations and bring civil suits against employers. They still have to prove their cases in court like any other plaintiff. Courts have sometimes used the EEOC’s guidance documents in their interpretation of Title VII but they have also criticized both the agency and their guidance documents.
  • All but two states also have agencies that are able to bring suits to enforce Title VII. Individuals who believe that have been wronged can also file suit, after they have first filed a charge with the EEOC.
  • In 1971, the Supreme Court ruled in the Griggs case that Duke Power illegally discriminated against black applicants and employees by requiring that all supervisors have a high school diploma and pass an IQ test. Because the black population was less likely than the white population to have a diploma at that time in North Carolina and scored lower on IQ tests, the court decided that the policy had a “disparate impact” on the black population. Duke Power was unable to establish a business necessity for these requirements (which they applied apparently equally to both black and white supervisor candidates) because they did have some supervisors who did not meet the requirements and they seemed to perform as well as other supervisors who did meet the requirements.What is interesting in the Griggs case is that the court recognized that Duke Power was not trying to intentionally discriminate against black applicants – in fact, they had a program in place to help black applicants achieve their high school diplomas.In his decision, Chief Justice Burger wrote “good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as ‘built-in headwinds’ for minority groups and are unrelated to measuring job capability.”More reading: http://en.wikipedia.org/wiki/Griggs_v._Duke_Power_Co.
  • In a case involving a criminal record exclusion, the Eighth Circuit in its 1975 Green v. Missouri Pacific Railroad decision, held that it was discriminatory under Title VII for an employer to “follow the policy of disqualifying for employment any applicant with a conviction for any crime other than a minor traffic offense.” The Eighth Circuit identified three factors (the “Green factors”) that were relevant to assessing whether an exclusion is job related for the position in question and consistent with business necessity: The nature and gravity of the offense or conduct;The time that has passed since the offense or conduct and/or completion of the sentence; andThe nature of the job held or sought. The EEOC’s previous guidance documents included the Green factors.
  • Don’t do this.Let me repeat: Don’t. Do. This.Or anything similar, for that matter. Don’t create “no convictions” rules or even “no felony convictions” rules.“Brightline rules” are overly broad policies that do not consider the specifics of the job or reasonable alternatives to the policy that might result in less of an adverse impact on a protected class. They will get you sued for disparate impact.The EEOC’s new guidance document points to several studies showing that black men are likely to be arrested and convicted of criminal offenses than the white population. Therefore, policies that are not tailored to business necessity will likely result in a disparate impact on black job seekers.
  • Don’t do this.Let me repeat: Don’t. Do. This.Or anything similar, for that matter. Don’t create “no convictions” rules or even “no felony convictions” rules.Brightline rules are overly broad policies that do not consider the specifics of the job or reasonable alternatives to the policy that might result in less of an adverse impact on a protected class. They will get you sued for disparate impact.The EEOC’s new guidance document points to several studies showing that black men are likely to be arrested and convicted of criminal offenses than the white population. Therefore, policies that are not tailored to business necessity will likely result in a disparate impact on black job seekers.
  • In January 2012, Pepsico Beverages entered into a conciliation agreement with the EEOC for $3.13 million based on allegations that Pepsi allegedly discriminated against African-American applicants based on use of their criminal histories in the hiring process.Pepsi also agreed to change their policies but didn’t admit to any wrongdoing. $3.13 million dollars isn’t anything to sneeze at but it is probably less than Pepsi would have spent responding to a multi-year EEOC investigation and a federal lawsuit. The publicity would have also been bad for Pepsi if the EEOC, the National Employment Law Project, and other community-based advocacy groups began banging the discrimination drum in many of the communities in which Pepsi sells its product.The EEOC has a history of drawing out investigations and civil cases to run up the expenses of the defendants in order to pressure them to settle their cases and quickly paying the EEOC off may have been Pepsico’s best business choice.
  • In 2009, the EEOC filed a discrimination lawsuit against Freeman Companies for rejecting “job applicants based on their credit history and if they have had one or more various types of criminal charges or convictions.” Freeman is a corporate event and convention planning company.According to the EEOC:Freeman’s use of “criminal checks” for job applicants has an adverse effect on male applicants because they are more likely to fail the criminal background checks than female applicants. (This is a novel approach! Because men are much more likely to be criminal offenders than women, if the EEOC prevails on this claim, it will basically be creating a protected class for male criminal offenders.)Freeman’s use of “criminal checks” for job applicants has an adverse effect on African American applicants because they are more likely to fail the criminal background checks than white applicants.Freeman’s use of “credit checks” for job applicants has an adverse effect on African American applicants because they are more likely to fail the credit check than white applicants.Included in the EEOC’s group of represented applicants are a number who were disqualified from employment by Freeman not due to the nature of their criminal histories but because they failed to accurately answer Freeman’s criminal history inquiry on the employment application.According to case filings, Freeman has a fairly robust criminal records policy that tied specific offenses to particular roles.Freeman’s Motion for Summary Judgment (requesting that the court dismiss the EEOC’s case) pointed to a number of errors in the EEOC’s statistical claims.In the August 9, 2013 opinion granting Freeman’s Motion for Summary Judgment (almost a full four years after the lawsuit was filed), Judge Roger W. Titus criticized the EEOC’s statistical expert, citing "a plethora of errors and analytical fallacies" that made the conclusions "completely unreliable." The statistician "cherry-picked" data and examined the wrong time period when reviewing Freeman's records, the judge said.The judge also wrote: “Careful and appropriate use of criminal history information is an important, and in many cases essential, part of the employment process of employers throughout the United States. As Freeman points out, even the EEOC conducts criminal background investigations as a condition of employment for all employees, and conducts creditbackground checks on approximately 90 percent of its positions.”Also, he wrote: “…the EEOC has made no effort to break down what is clearly a multi-faceted, multi-step policy. Though it is theorectically possible that one or more of Defendant’s background check considerations causes a disparate impact on certain classes, the EEOC has failed to demonstrate which such factor is the alleged culprit. Accordingly, the EEOChas failed to establish this element of its case, and summary judgment must be entered for Defendant.”8:09-cv-02573-RWT EEOC v. Freeman
  • In 2009, the EEOC filed a discrimination lawsuit against Freeman Companies for rejecting “job applicants based on their credit history and if they have had one or more various types of criminal charges or convictions.” Freeman is a corporate event and convention planning company.According to the EEOC:Freeman’s use of “criminal checks” for job applicants has an adverse effect on male applicants because they are more likely to fail the criminal background checks than female applicants. (This is a novel approach! Because men are much more likely to be criminal offenders than women, if the EEOC prevails on this claim, it will basically be creating a protected class for male criminal offenders.)Freeman’s use of “criminal checks” for job applicants has an adverse effect on African American applicants because they are more likely to fail the criminal background checks than white applicants.Freeman’s use of “credit checks” for job applicants has an adverse effect on African American applicants because they are more likely to fail the credit check than white applicants.Included in the EEOC’s group of represented applicants are a number who were disqualified from employment by Freeman not due to the nature of their criminal histories but because they failed to accurately answer Freeman’s criminal history inquiry on the employment application.According to case filings, Freeman has a fairly robust criminal records policy that tied specific offenses to particular roles.Freeman’s Motion for Summary Judgment (requesting that the court dismiss the EEOC’s case) pointed to a number of errors in the EEOC’s statistical claims.In the August 9, 2013 opinion granting Freeman’s Motion for Summary Judgment (almost a full four years after the lawsuit was filed), Judge Roger W. Titus criticized the EEOC’s statistical expert, citing "a plethora of errors and analytical fallacies" that made the conclusions "completely unreliable." The statistician "cherry-picked" data and examined the wrong time period when reviewing Freeman's records, the judge said.The judge also wrote: “Careful and appropriate use of criminal history information is an important, and in many cases essential, part of the employment process of employers throughout the United States. As Freeman points out, even the EEOC conducts criminal background investigations as a condition of employment for all employees, and conducts creditbackground checks on approximately 90 percent of its positions.”Also, he wrote: “…the EEOC has made no effort to break down what is clearly a multi-faceted, multi-step policy. Though it is theorectically possible that one or more of Defendant’s background check considerations causes a disparate impact on certain classes, the EEOC has failed to demonstrate which such factor is the alleged culprit. Accordingly, the EEOChas failed to establish this element of its case, and summary judgment must be entered for Defendant.”8:09-cv-02573-RWT EEOC v. Freeman
  • The EEOC filed a federal suit against Kaplan Higher Education Corporation, claiming that Kaplan “has rejected job applicants based on their credit history. This practice has an unlawful discriminatory impact because of race and is neither job-related nor justified by business necessity.”In January 2013, this case was dismissed by the federal judge after Kaplan demonstrated that the EEOC used credit in hiring its own employees using rationale similar to Kaplan’s: “overdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations”.Because Kaplan also was not required to collect applicant demographic data, the EEOC was also unable to demonstrate that Kaplan’s process created discriminatory outcomes. This is best summarized by David Foley at his Labor and Employment Law Blog at http://laborrelated.blogspot.com/2013/01/jujitsu-in-eeoc-v-kaplan.html:Kaplan's second and critical act of Jujitsu came when it challenged the EEOC's prima facie case.  The EEOC's prima facie case was based on evidence that the applicants that Kaplan rejected on the basis of credit reports were disproportionately minorities.  To establish this prima facie case, the EEOC needed one critical piece of data: the race/ethnicity of the applicants.  Getting this information was an obstacle for the EEOC because Kaplan did not record the race of its applicants (the EEOC attempted to no avail to argue that the EEOC's model guidelines for employers call for gathering and retaining such information). In order to find out the respective races of the applicants, the EEOC used their names and presumably their social security numbers to look up information about them from their local departments of motor vehicles.  However, only 14 of the 38 states from which the applicants hailed had records of race associated with drivers licenses.  For those states that did not have racial self-identification on the drivers license, the EEOC ordered the drivers license photographs of the applicants...With the pictures in hand, the EEOC had a panel of five "expert" "race raters" look at the pictures and determine the race of the applicants...You might be wondering, "What kind of credential does an expert race rater have?" The judge also wondered and was not at all impressed with their varied credentials of the raters who held advanced degrees in either economics, human development, psychology, or cultural anthropology, and had no established background in visually identifying an individual's race.  Further discrediting the "race rater" panel was its inability for 80% of its raters to reach a consensus as to the race of 11.7% of the applicants. The lack of expertise and inability to reliably judge race was bad enough for the EEOC, but Kaplan's second Jujitsu move came in when they showed that the EEOC's own guidelines (the ones they tried to employ against Kaplan) deem visual identification as an undesirable way of identifying race and ethnicity. Thus Judge Gaughan noted that the "EEOC itself frowns on the very practice it seeks to rely on in this case" and ultimately dismissed the complaint on summary judgement for lack of a prima facie case.
  • Peoplemark is a staffing company in the Northeast. EEOC conducted a 3-year investigation into claims filed by Sherri Scott, a two-time felon with convictions for housebreaking and larceny who Peoplemark chose not to hire because of her criminal record. The EEOC filed suit in May 2008, claiming that PeopleMark had a “blanket policy” of not hiring former offenders. PeopleMark was forced to provide 18,000 pages of documents with the detailed personnel information of the group the EEOC sought to represent (protected classes with criminal histories). Almost a year after filing the suit, the EEOC finally identified the 286 individuals who composed the class in the suit. PeopleMark realized that they had actually hired 22% of the people in the class and pointed this out to the EEOC. The EEOC continued to litigate the case anyway. After failing to designate a statistical expert to support their allegations in accordance with the court’s scheduling order, the EEOC finally dismissed the case. (In other words, the EEOC could not find a statistician who could testify that PeopleMark’s polices had an adverse impact on protected class applicants.) PeopleMark made a motion for recovery of their attorney and expert witness fees. The EEOC’s failure to pursue the statistical component of its case led the Court to find that an award of $751,942 in “attorneys’ fees is appropriate because of the unnecessary burden imposed on defendant.”
  • On June 11, 2013, the EEOC filed suit Title VII separate disparate impact claims against BMW Manufacturing and Dollar General.In the BMW case, the EEOC claims that BMW’s requirements that their logistics provider (basically, a contract staffing firm) follow BMW’s criminal history guidelines makes BMW a joint employer. The EEOC complaint claims that BMW’s previous logistics provider applied their own criminal history guidelines, rather than BMW’s and when BMW changed providers, they required the new provider to use BMW’s guidelines, which eliminated 69 of the previous logistics providers’ employees from continuing to work at the BMW facility. Some of these employees had been working at BMW’s facility for over a decade (for the previous logistics provider). According to the EEOC’s filing, the BMW policy prohibited employment of individuals convicted of:“’Murder, Assault & Battery, Rape, Child Abuse, Spousal Abuse (Domestic Violence), Manufacturing of Drugs, Distribution of Drugs, [and] Weapons Violations.” As further reflected in the written policy documents, “any convictions of a violent nature are conditions for employment rejection,” and “there is no statute of limitations for any of the crimes.”Remember that the Green v. Missouri Pacific case said that employers must consider the nature and gravity of the offense or conduct; the time that has passed since the offense or conduct and/or completion of the sentence; and the nature of the job held or sought. Depending on the specific facts related to the individuals’ excluded for employment, BMW may have a hard time defending this blanket rule that has consideration of how long ago the offense occurred. If the EEOC is able to support the argument that the policy resulted in a statistically disparate impact, then BMW may have to demonstrate the business necessity of their policy. The fact that many of the excluded employees had worked in the BMW facility for the previous logistics contractor, possibly without any safety or performance concerns, may undermine BMW’s business necessity argument.Of course, it is important to remember that the EEOC’s complaint only reflects their view of the case and they are not going to include any information that might weaken their case!
  • On June 11, 2013, the EEOC filed suit Title VII separate disparate impact claims against BMW Manufacturing and Dollar General.The EEOC’s claim against Dollar General argues that their use of criminal history information resulted in “ongoing, nationwide race discrimination against Black Applicants in violation of Title VII.”According to the EEOC, Dollar General’s background screening provider provides a “pass” or “fail” rating to Dollar General, apparently without providing them the details of the offenses found. This pass or fail rating is based upon an adjudication matrix provided by Dollar General. The EEOC claims in the complaint:Defendant’s [Dollar General’s] utilization of its criminal convictions policy has not been demonstrated to be and is not job-related and consistent with business necessity. Moreover, the policy as applied does not provide for an individualized assessment for those applicants who receive a “fail” result to determine if the reason for the disqualification is job-related and consistent with business necessity. For example, Defendant’s policy does not allow for consideration of the age of the offender; any actual nexus between the crime and the specific job duties; employee safety, or other matters necessary to the operation of the defendant’s business; or to the time or events that have transpired since the offense. If the applicant was convicted of any of the identified offenses in the specified time frames, the employment offer is not made or the conditional offer of employment is rescinded.The complaint also includes examples of the felony convictions that mandate a “fail” rating:Felony flagrant non-support (failure to pay child or spousal support) – disqualified for 10 yearsFelony possession of drug paraphernalia – disqualified for 10 yearsFelony illegal dumping – disqualified for 3 yearsMisdemeanor improper supervision of a child – disqualified for three yearsMisdemeanor reckless driving – allowed one charge in 5 yearsMisdemeanor failure to file an income tax return – allowed 1 charge in 5 years.The complaint does not include Dollar General’s full list of offenses that would lead to a “fail” rating for the applicant. It appears from the EEOC’s complaint that the policy is strictly pass/fail, with no room for management consideration of individual circumstances in grey areas. This may be a problem for Dollar General as this case proceeds.According to the complaint, 7% of non-black employees were eliminated from consideration based on their criminal history while 10% of black applicants were eliminated. The EEOC purports to represent all black applicants who were eliminated based upon their criminal history. There are several problems with the EEOC’s complaint. First, though they list the example offenses above that result in exclusion (presumably because they believe they are unreasonable), they don’t indicate how many applicants have been excluded based upon these offenses. From Imperative’s own experience, theft and violent offenses are more likely to be found than most of the examples above. It is likely that the court would find that many of Dollar General’s exclusions make sense.Even if some of the disqualifying offenses and time periods are found to be unreasonable, it is very likely that many of the disqualified individuals had offenses that were job-relevant within time periods and meet the business necessity standard. Removing those individuals from the pool of applicants may significantly shrink the 3% difference between excluded black and excluded non-black applicants, making it hard for the EEOC to prove their case statistically.Both of these will be cases to watch.
  • The OFCCP has also expressed concerns about disparate impact in federal contractors’ employment practices. In January, 2013, the OFCCP issued Directive 306, “Complying with Nondiscrimination Provisions: Criminal Record Restrictions and Discrimination Based on Race and National Origin.” adopting the EEOC’s guidance document on the use of criminal records in employment decisions. http://www.dol.gov/ofccp/regs/compliance/directives/dir306.htm
  • Hawaii, Kansas, Ohio, Missouri, New York, Pennsylvania, and Wisconsin have job-relatedness requirements along the lines of the Green factors. There may be many more at different state and municipal levels.
  • At least ten states (Illinois, Oregon, Washington, Connecticut, Hawaii, Colorado, California, Maryland, Nevada, and Vermont) restrict the use of credit reports in making employment decisions. Some of these restrictions simply require that the review be “job related” while others prohibit or delay until late in the hiring process the use of credit reports.The use of credit reports as a predictor of theft or dishonesty has not been validated. In fact, the few studies on the topic suggest that there is no correlation between poor credit and dishonesty or poor job performance. Imperative recommends that credit reports be limited to roles where an individual will be making financial decisions on behalf of the employer or clients, using the credit report as a means of measuring how they manage their own business as a predictor of how they will manage the employer’s business.
  • “The Box” is the criminal history inquiry on the employment application. Proponents want to ban the box under the belief that former offenders will suffer less discrimination if employers first meet them in an interview. The underlying assumption is that employers automatically disqualify applicants with criminal histories without regard for the relevance of the offense to the position.This is a bad idea that is also being promoted by the EEOC. We talk more about it later.
  • Now, on to the new guidance…On July 24, 2013, the attorneys general for nine states sent a letter to the Chair of the EEOC challenging the new guidance.http://www.shrm.org/legalissues/federalresources/pages/attorneys-general-criminal-background-check.aspxOn August 29, 2013, the EEOC’s chair issued a response to the AGs’ letter.http://www.eeoc.gov/eeoc/newsroom/wysk/criminal_background_checks.cfmOn November 4, 2013, Texas filed a federal lawsuit against the EEOC seeking an injunction to prevent the EEOC from implementing its guidance document.https://www.oag.state.tx.us/oagnews/release.php?print=1&id=4570
  • Title VII was last revised with regard to these issues in 1991, codifying the legislative history from Griggs v. Duke Power forward.
  • Most of Imperative’s clients run the background check pre-offer. Many run smaller background checks on employees on an annual or bi-annual basis. We recommend that you run driving histories annually on drivers and others who operate in a safety-sensitive environment.
  • Remember that many people who can’t get past employers’ background checks often work for temporary agencies or set up their own contracting or consulting businesses! HR and Procurement need to work together!Stephen Robertson’s story is available at Bad Hire Days: http://www.badhiredays.com/2011/08/29/two-employers-two-victims-two-convictions-for-computer-guru
  • If so, email or call me!

Transcript

  • 1. Background Checks Under Fire: Policy Considerations to Avoid Discrimination Claims MIKE COFFEY, SPHR PRESIDENT I M P E R AT I V E I N F O R M AT I O N GROUP
  • 2. Mike Coffey, SPHR Not a lawyer! Just a smart guy with some street cred. Get good legal advice! • President Imperative Information Group
  • 3. WHY EMPLOYERS RUN BACKGROUND CHECKS
  • 4. WHY EMPLOYERS RUN BACKGROUND CHECKS
  • 5. TITLE VII OF THE CIVIL RIGHTS ACT OF 1964
  • 6. PROTECTED CLASSES UNDER TITLE VII     Race Color Sex National origin  Religion
  • 7. EEOC  Federal law enforcement agency  Not rulemaking agency  2,500+ employees
  • 8. EEOC  5 commissioners  Currently 3 Democrats and 2 Republicans  Commissioner Jenny Yang approved by Senate April 2013 Ms. Yang represents employees nationwide in complex, civil rights class actions and wage and hour collective actions. - Cohen Milstein bio
  • 9. OTHER TITLE VII ENFORCEMENT  State fair employment practices agencies can also enforce Title VII  Individuals can also file individual lawsuits Courthouse
  • 10. DISPARATE TREATMENT  Disparate Treatment - intentional discrimination against someone in a protected class where there is not a bona fide occupational qualification.
  • 11. DISPARATE IMPACT  Disparate impact - seemingly neutral policies without business necessity that have adverse impacts on protected classes (“disparate impact” - see Griggs v. Duke Power Company)  “Business necessity” –  manifest relationship to employment role  with no viable alternatives to qualify
  • 12. DISPARATE IMPACT “…good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as „built-in headwinds‟ for minority groups and are unrelated to measuring job capability.” Supreme Court Chief Justice Warren Burger Griggs v. Duke Power
  • 13. TITLE VII OF THE CIVIL RIGHTS ACT OF 1964 When reviewing criminal records, an employer must consider the Green factors (Green v. Missouri Pacific Railroad):  Nature of the offense,  The time elapsed,  The nature of the job, In non-conviction cases (arrests, dismissals, etc.), employers should also consider the reasonable likelihood that the person engaged in the underlying conduct. See the previous EEOC Guidance: EEOC Policy Statement on the Issue of Conviction Records under Title VII of the Civil Rights Act of 1964 (1987) and Policy Guidance on the Consideration of Arrest Records in Employment Decisions under Title VII of the Civil Rights Act of 1964 (1990)
  • 14. TITLE VII OF THE CIVIL RIGHTS ACT OF 1964 Criminal Records Brightline Rule: Have you ever been arrested?  No  Yes (please deposit your application in the trashcan on your way out)
  • 15. TITLE VII OF THE CIVIL RIGHTS ACT OF 1964 Criminal Records Brightline Rule: “Clean background check required” “No felonies allowed” “No convictions for theft or dishonesty.”
  • 16. EEOC ACTIVITY 02/22/2012 Strategic Plan for FY 2012-2016  Combat employment discrimination through strategic law enforcement.  Prevent employment discrimination through education and outreach  Deliver excellent and consistent service through a skilled and diverse workforce and effective systems.
  • 17. PEPSICO CONCILIATION AGREEMENT
  • 18. EEOC V. FREEMAN COMPANIES “Careful and appropriate use of criminal history information is an important, and in many cases essential, part of the employment process of employers throughout the United States. As Freeman points out, even the EEOC conducts criminal background investigations as a condition of employment for all employees, and conducts credit background checks on approximately 90 percent of its positions.” -- U.S. District Judge Roger W. Titus August 9, 2013
  • 19. EEOC V. FREEMAN COMPANIES The EEOC‟s case contained "a plethora of errors and analytical fallacies" that made the conclusions "completely unreliable." The EEOC‟s expert "cherry-picked" data and examined the wrong time period when reviewing Freeman's records. -- U.S. District Judge Roger W. Titus August 9, 2013
  • 20. EEOC V. KAPLAN HIGHER EDUCATION CORP. In January 2013, this case was dismissed by the federal judge after Kaplan demonstrated that the EEOC used credit in hiring its own employees using rationale similar to Kaplan‟s: “overdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations.”
  • 21. EEOC V. PEOPLEMARK
  • 22. JUNE 2013 CASE FILINGS
  • 23. JUNE 2013 CASE FILINGS
  • 24. HOW MANY DISPARATE IMPACT CASES RELATED TO CRIMINAL HISTORY HAVE PLAINTIFFS WON SINCE 1975?
  • 25. OFCCP
  • 26. STATE EEO LAWS Many states have their own equal employment opportunity or human rights laws.  Washington state and Hawaii will not allow employers to consider any criminal records older than ten years.  At least 7 states have “job-relatedness” requirements for the consideration of criminal records
  • 27. STATE CREDIT REPORT LAWS
  • 28. “Ban the Box”  Massachusetts, Minnesota, Hawaii, & Rhode Island: Public and private employers may not inquire about criminal records on the initial written application.  Connecticut & New Mexico: Public employers may not inquire about criminal records on the initial written application.  More than 2 dozen cities have passed similar ordinances including Philadelphia, Baltimore, Memphis, San Francisco, and Seattle.
  • 29. NEW EEOC ENFORCEMENT GUIDANCE
  • 30. NEW EEOC ENFORCEMENT GUIDANCE
  • 31. NEW EEOC ENFORCEMENT GUIDANCE
  • 32. CRIMINAL OFFENDERS NOT A PROTECTED CLASS
  • 33. Green factors + Individualized Assessment
  • 34. Nature & Gravity
  • 35. Time Passed
  • 36. Nature of the Job
  • 37. Individualized Assessment
  • 38. Individualized Assessment
  • 39. Individualized Assessment
  • 40. Individualized Assessment
  • 41. Individualized Assessment
  • 42. Individualized Assessment
  • 43. Individualized Assessment
  • 44. Individualized Assessment
  • 45. Individualized Assessment
  • 46. How to respond to the EEOC’s individualized assessment guidance?
  • 47. Add individualized assessment on the employment application? Following your application‟s state-specific criminal history question, Coffey suggests that you consider adding: If you believe that the information above does not adequately reflect the circumstances surrounding the case(s) listed above or if there is additional information not included elsewhere on this application that you believe the Company should be aware in evaluating your fitness for this position, please provide that information below:
  • 48. Add individualized assessment to the FCRA pre-adverse action notice? Insert: If you believe that there is additional information that may help us better evaluate your fitness for this position in light of the information in the attached consumer report, please contact us immediately.
  • 49. Individualized Assessment Factors
  • 50. Is individualized assessment always necessary?
  • 51. Relation to Other Federal Laws
  • 52. Relation to State Laws
  • 53. Ban the Box (backdoor version)
  • 54. POLICY CONSIDERATIONS Smart employers will have polices in place before background results are requested. Always consult with your background screening partner and legal counsel before creating new policies in this area.
  • 55. POLICY CONSIDERATIONS: CRIMINAL RECORDS How might past behavior predict on-the-job behavior? =
  • 56. ADJUDICATION RELEVANCE MATRIX Position-specific (or job class-specific?) criminal offense guidelines (in line with state laws): Yes: Eligible for hire (Y) Corporate Review: Management review of offense, time that has passed, and applicant‟s whole picture (C) or (R) No: Not eligible for hire (N) SHOULD BE LIMITED IN APPLICATION
  • 57. Adjudication Relevance Matrix OFFENSE Alcohol Consumption/Possession Alcohol Sale to Minor Arson Assault/Battery/Domestic Violence (FELONY) Assault/Battery/Domestic Violence (MISD) Auto Theft Burglary/Breaking and Entering/Burglar's Tools Child Abuse/Molestation Child Neglect/Child Endangerment (FELONY) Child Neglect/Child Endangerment (MISD) Child Support Computer Crimes Contributing to Delinquency Minor Credit Card Abuse/Fraud/Skimming Criminal Contempt Criminal Mischief/Damage to Property/Vandalism Disorderly Conduct Drug Possession/Drug Abuse/Poss. of Drug Paraphernalia (MISD) Drug Sale/Distribution/Manufacturing/Felony Possession Embezzlement Evading Arrest/Failure to Identify as Fugitive/Fugitive Failure to File Tax Return False Report 0 - 3 YEARS (0 - 36 MONTHS) 3 - 7 YEARS (37 - 84 MONTHS) 7 YEARS + (85 + MONTHS) Y Y Y C C Y N N N N N C C C Y N N C N N C N N N N N N N C Y Y Y Y C C C C C C N N N C Y Y N Y Y C Y Y N C Y N N C N N N C C Y C Y Y C Y Y
  • 58. POLICY CONSIDERATIONS: CRIMINAL INQUIRY Please list all misdemeanor and felony criminal matters, other than minor traffic safety violations for which no arrest was made, in which you were convicted, served probation, participated in deferred adjudication or other program to avoid a conviction, or made restitution or participated in pre-trial diversion or other program to avoid prosecution. Disclosure of interaction with the criminal justice system will not necessarily eliminate you from consideration for employment. Remember that some states’ laws limit the inquiries that may be made!
  • 59. Policy Considerations: Criminal Inquiry Following your application‟s state-specific criminal history question, Coffey suggests that you consider adding: If you believe that the information above does not adequately reflect the circumstances surrounding the case(s) listed above or if there is additional information not included elsewhere on this application that you believe the Company should be aware in evaluating your fitness for this position, please provide that information below:
  • 60. Adjudication Relevance Matrix OFFENSE Alcohol Consumption/Possession Alcohol Sale to Minor Arson Assault/Battery/Domestic Violence (FELONY) Assault/Battery/Domestic Violence (MISD) Auto Theft Burglary/Breaking and Entering/Burglar's Tools Child Abuse/Molestation Child Neglect/Child Endangerment (FELONY) Child Neglect/Child Endangerment (MISD) Child Support Computer Crimes Contributing to Delinquency Minor Credit Card Abuse/Fraud/Skimming Criminal Contempt Criminal Mischief/Damage to Property/Vandalism Disorderly Conduct Drug Possession/Drug Abuse/Poss. of Drug Paraphernalia (MISD) Drug Sale/Distribution/Manufacturing/Felony Possession Embezzlement Evading Arrest/Failure to Identify as Fugitive/Fugitive Failure to File Tax Return False Report 0 - 3 YEARS (0 - 36 MONTHS) 3 - 7 YEARS (37 - 84 MONTHS) 7 YEARS + (85 + MONTHS) Y Y Y C C Y N N N N N C C C Y N N C N N C N N N N N N N C Y Y Y Y C C C C C C N N N C Y Y N Y Y C Y Y N C Y N N C N N N C C Y C Y Y C Y Y
  • 61. POLICY CONSIDERATIONS: CREDIT The use of credit is being scrutinized closely:  What job-related insight into the applicant‟s ability to perform the job duties do you hope to obtain from the credit report?  What will be your objective criteria for evaluating applicants‟ credit reports (employment-related reports don‟t show a credit score)?  Are you willing to be the EEOC‟s next test case?
  • 62. POLICY CONSIDERATIONS: APPLICATION What is your policy about incomplete or inaccurate responses to questions on the employment application? Are applicants who fail to answer or lie on the application eligible for hire? If not, are they eligible for future consideration? (How would that person be different from a former employee who you terminated for dishonesty?)
  • 63. POLICY CONSIDERATIONS: CRIMINAL INQUIRY When will you inquire of applicant? • Application? • Interview? • Post offer? What state-specific limitations apply to the inquiry? • Your state • State the position is in • Candidate‟s state
  • 64. Policy Considerations: When to Run Background Checks?  Pre-offer  Return from extended leave  Upon contingent offer  Annually  Prior to promotion/job change  During investigations/ progressive discipline  “Rumor mill” allegations
  • 65. POLICY CONSIDERATIONS: CRIMINAL RECORDS What are the position-specific business risks:  Asset/information theft  Risks from unsafe/negligent conduct  Vulnerable coworkers, customers, others  Company reputation/branding risks
  • 66. POLICY CONSIDERATIONS: CRIMINAL RECORDS What about pending cases? Warrants for arrest?  For applicants?  For current employees?  Do they have a duty to report all arrests? Tickets?
  • 67. POLICY CONSIDERATIONS: CRIMINAL RECORDS What kinds of criminal record sources are relevant:  County criminal records  State criminal record repositories  Multi-jurisdictional databases  Federal criminal records  International records
  • 68. POLICY CONSIDERATIONS: CRIMINAL RECORDS What jurisdictions will be searched:  County of residence  Those disclosed by the applicant (address history, previous employment locations, education locations, etc.)  Those identified in identity research  How far back? (7 years, 10 years, more?)
  • 69. POLICY CONSIDERATIONS: CRIMINAL RECORDS What names will be searched:  Current/former names disclosed by applicant.  Those identified in identity research.  What about “nicknames” (“Bob” for “Robert”)  How far back on previous names? (7 years, 10 years, all?)
  • 70. POLICY CONSIDERATIONS: ADVERSE ACTION Document:  FCRA pre-adverse action communication on “management review” or “not eligible” scores before putting a final decision into place. Also, document post-adverse action communications.  Subsequent communications with applicant.  Receipt and consideration of any “individualized assessment” information from the applicant.  Reason for any variations to guidelines.
  • 71. Policy Considerations: Contingent & Contract Workforce How do you ensure the same “standard of care” when dealing with contingent and contract workers? Stephen Robertson
  • 72. Upcoming webinars: What Employers Need to Know About Background Checks Wednesday, November 20, 2013 DOT Driver Qualifications and Background Checks Tuesday, December 10, 2013 www.imperativeinfo.com Also: www.mikecoffeysphr.com www.badhiredays.com