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New EEOC Guidelines Regarding Criminal Background Checks

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New EEOC Guidelines Regarding Criminal Background Checks

  1. 1. Employment & Labor Law Breakfast Briefing NEW EEOC GUIDELINES REGARDING CRIMINAL BACKGROUND CHECKS Christina Jepson Salt Lake City
  2. 2. Introduction  The Obama administration has used the administrative agency system aggressively in the area of employment law  The EEOC has identified criminal background checks as an area of priority 2
  3. 3. Background Checks--Norm  Background checks have exploded with use of internet databases and search companies at low cost  SHRM survey found 73% of employers conduct criminal background check on all applicants and another 19% for certain jobs 3
  4. 4. Background Checks--Important  Two-thirds of resumes contain material misrepresentations  Poor hiring decisions can have a big impact on your company—theft, fraud, workplace, violence, negligent hiring lawsuits  70% of negligent hiring lawsuits are decided against companies 4
  5. 5. Background Checks--Important  Criminal background checks often required for certain jobs by: –Federal statutes and regulations –Federal contracts –State and local laws –Licensing 5
  6. 6. Background Checks--Concerns  EEOC states national data shows criminal record exclusions have disparate impact on race/national origin – At current rates, 6.6% of persons born in 2001 will serve time – 1 in 17 white men – 1 in 6 Hispanic men (17%) – 1 in 3 African American men (32%) – Hispanics and African Americans more likely to be arrested and convicted for drug offenses despite similar rate of drug use as Whites 6
  7. 7. New Guidance  Breaking news – 4/25/2012  EEOC just issued Enforcement Guidance on use of Arrest and Conviction Records in employment decisions under Title VII  Concerns with disparate treatment and disparate impact – uniform policies may still have a disparate impact  Does not have force of statute or even regulation – but it holds weight 7
  8. 8. Title VII Discrimination  Being a person with a criminal record is not a protected class  Use of criminal convictions/arrest records may violate Title VII – Direct discrimination—inconsistent treatment (stereotyping) – Disparate impact on race and national origin 8
  9. 9. Direct Discrimination  Example from EEOC – Jon (white) and Robert (African American) have similar education, skills, & work history. – Both pled guilty to comparable drug charges in high school and have had no problems since – Employer hires Jon noting his ―youthful mistake‖ but does not hire Robert because company doesn‘t hire ―drug dealer types‖ 9
  10. 10. Direct Discrimination  Evidence of discrimination –Biased statements—stereotyping –Inconsistencies in treatment of crimes –Similarly situated comparators –Employment testing (similar results) –Statistical evidence 10
  11. 11. Disparate Impact  EEOC discusses significant increase in criminal convictions and how this has had a negative impact on African American and Hispanic men in employment  EEOC states that even ―consistent‖ or ―neutral‖ treatment of convictions can have disparate impact on these groups 11
  12. 12. Disparate Impact  Disparate impact when – Neutral criminal record screening policy has affect of disproportionately screening out a protected group, and – Employer fails to demonstrate that policy or practice is job related and consistent with business necessity 12
  13. 13. Problems with Records  EEOC Guidance claims that a ―significant number of state and federal criminal record databases include incomplete criminal records‖  ―Criminal records may be inaccurate‖ – Expunged records, misspellings, clerical errors, intentionally inaccurate information 13
  14. 14. Problems with Records  Many employers ―buy‖ criminal record data from companies who provide these services – Subject to Fair Credit Reporting Act – Vary widely in how they collect information and how often they update information – Inaccurate information 14
  15. 15. Crimes/Arrests May Be Relevant  Criminal convictions may be relevant if – Job related – specific and tailored (tight nexus) – Direct threat to public safety or property – Business necessity – individualized assessment  Fact of an arrest does not establish criminal conduct – May consider conduct underlying arrest if conduct makes individual unfit for position 15
  16. 16. Arrests  EEOC example regarding why arrests typically not relevant – African American couple driving to church. Officer stops and interrogates them. Husband becomes annoyed and says he is being harassed for ―driving black.‖ Arrested for disorderly conduct. Prosecutor decides not to file charges because no crime. Arrest remains in database. Husband applies for job 15 years later and is not hired due to policy excluding anyone with arrest record. 16
  17. 17. Arrests  EEOC example regarding when arrest warrants inquiry – Andrew (Latino man) works at elementary school. Several girls accuse him of touching them. He is charged, but criminal proceedings will take some time. School places Andrew on unpaid leave and conducts an investigation. The investigation includes interviews of the girls and an interview of Andrew which allows him a chance to explain. The school finds the girls credible and Andrew not credible. The school terminates Andrew consistent with its policies to protect children. 17
  18. 18. Business Necessity Defense  In a lawsuit, plaintiff would have to show disparate impact—applies to hiring, retention, promotion, etc.  If policy has a disparate impact, an employer will have to explain how the policy is ―job related and consistent with business necessity‖  Business necessity defense 18
  19. 19. Three Defenses  Guidance only identifies three circumstances in which an employer‘s policy will ―consistently meet‖ the business necessity defense 19
  20. 20. Three Defenses  Three circumstances – Employer validates the policy under the Uniform Guidelines on Employee Selection Procedures (used in federal programs) – The policy includes a ―targeted screen‖ or – The policy complies with federal laws and regulations 20
  21. 21. Validate Policy  First defense--validate the policy – Employer ―validates‖ the criminal exclusion with data and analysis about how the criminal conduct is related to subsequent work performance (pursuant to Uniform Guidelines on Employee Selection Procedures) – If data about criminal conduct as related to subsequent work performance is available and such validation is possible 21
  22. 22. Targeted Screen  Second defense--targeted screen – Identify essential job requirements and actual circumstances of performance – Identify specific offenses that may demonstrate unfitness for that job – Identify duration for exclusion for that job based upon all evidence – Provide an opportunity for an individual assessment for people excluded by screen 22
  23. 23. Targeted Screen  Crime – Nature • Theft=property loss • Violent crimes=risk of interaction with vulnerable persons – Legal elements of the crime—theft by deception? Threat? Intimidation? – Felony v. misdemeanor 23
  24. 24. Targeted Screen  Time – Permanent exclusions from all employment based on any offense will never fly – ―Time when a former criminal is no longer more likely to recidivate than the average person‖—experts in lawsuits – Studies about risk of recidivism over time – Discussion at page 15 24
  25. 25. Targeted Screen  Job – Essential functions – Circumstances of performance – Level of supervision – Level of oversight – Interaction with co-workers or vulnerable individuals – Environment (private home, public) 25
  26. 26. Individual Assessments  Is the EEOC requiring an individualized assessment? – ―Although Title VII does not require individualized assessment in all circumstances, the use of a screen that does not include individualized assessment is more likely to violate Title VII.‖ Page 4 – An employer may be able to justify a targeted screen (with no individualized assessment) if the screen is ―narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question.‖ – However, still recommended 26
  27. 27. Individualized Assessments  Individualized assessment – Notice to individual that he has been screened out because of criminal conviction – Opportunity to demonstrate he should not be excluded due to particular circumstances – Consideration as to whether additional information warrants an exception because it shows not job related and consistent with business necessity 27
  28. 28. Individualized Assessments  Individualized assessment may reveal – Relevant circumstances – Expunged or downgraded – Database wrong – Person successfully worked in same job since conviction – Rehabilitated or character references – Number of offenses – Whether bonded 28
  29. 29. Targeted Screen--Examples  Equipment Rental Company uses internet for job applications for all positions. Includes question ―have you ever been convicted of a crime?‖ and must be answered. If yes, process terminates.  No record of reasons for policy. No information to show that all convictions for all offenses presents unacceptable risk for all jobs.  Violates Title VII if it has a disparate impact. 29
  30. 30. Targeted Screen--Examples     Leo (African American) worked successfully as account exec for 3 years. New owners adopt a policy of no tolerance for convictions and no individualized assessments. Pride themselves on ―best of best.‖ Leo pled guilty to misdemeanor assault 20 years earlier as teenager. No issues since. Terminate him without considering his record at the job. If disparate impact, violated Title VII. 30
  31. 31. Targeted Screen--Examples  County rents meeting rooms to various groups. It has a targeted rule prohibiting any employee with a conviction (within four years of release) for theft crimes from working in a position with access to personal financial information.  Rule was based on data from County Corrections Department, national crime data, and recent recidivism research for theft crimes.  County allows individualized assessments. 31
  32. 32. Targeted Screen--Examples  Hispanic man applies for admin assistant which involves accepting credit card payments and unsupervised access to personal belongings.  Pled guilty 18 months earlier to credit card fraud. He provides reference from restaurant where he works now and asks for ―second chance.‖  County considers info but it does not dispel its concerns because of recency and direct connection. 32
  33. 33. Targeted Screen--Examples  EEOC finds disparate impact, but finds screen was carefully tailored to assess unacceptable risk for this position, for limited time, and was not overbroad. Also, policy allowed individualized assessment which County considered. 33
  34. 34. Targeted Screen--Examples  Jamie (African American) works successfully for five years for shredding company which picks up discarded files and sensitive materials from offices and shreds them.  Company is sold and new company requires employees to reapply with criminal background check. 34
  35. 35. Targeted Screen--Examples  New company excludes employees for anyone convicted of crime related to theft or fraud in past 5 years. Policy does not allow individualized assessment. Policy is to protect sensitive documents.  Jamie has excellent reviews for trustworthiness and honesty. But Jamie pled guilty to misdemeanor insurance fraud five years ago for exaggerating costs of repairs from winter storm. 35
  36. 36. Targeted Screen--Examples  Jamie is terminated. Jamie asks management to reconsider his honest performance in the same job, but new company refuses.  EEOC finds disparate impact and reasonable cause to believe Title VII violation. 36
  37. 37. Alternative Employment Practice  Just when you think you are right . . .  If employer demonstrates business necessity defense, employee may prevail by demonstrating there is a less discriminatory ―alternative employment practice‖—Page 20  No examples provided 37
  38. 38. Best Practices  Targeted screen ―best practices‖ – Eliminate blanket policies – Train decision makers (maybe centralize) – Develop a narrowly tailored screening policy – Record the policy‘s justification – Keep records of consultations and research considered in preparing the policy – Keep records of decision (maybe applicants) – Limit inquiries to relevant criminal conduct – Keep info confidential—only use as intended 38
  39. 39. Federal Laws  Third defense – Compliance with federal laws and regulations (if you stay strictly within parameters) is a defense to a charge of discrimination under Title VII – Airports, law enforcement, banks, licenses, transportation, financial, import/export, security clearances  Pages 4, 20-21 39
  40. 40. State Laws  However, Guidance specifically states that Title VII preempts inconsistent state/local laws regarding background checks  ―State and local laws or regulations are preempted by Title VII if they ‗purport to require or permit the doing of any act which would be an unlawful employment practice under Title VII.‖ 42 USC 2000e-7 40
  41. 41. Rock and Hard Place  Tension with desire to avoid lawsuits— negligent hiring lawsuits – You get sued because you did not do a criminal background check or – You get sued because you hired someone anyway  Some state laws require background checks—may be inconsistent 41
  42. 42. Defense Issues  Employer may present regional or local data showing that protected classes are not arrested or convicted at a higher rate in that particular geographic area—Page 10  Employer may use its own applicant data to demonstrate no disparate impact including applicant flow data, workforce data, background check data, demographic stats, conviction data, and labor market stats—Page 10 42
  43. 43. Defense Issues  However, employer‘s evidence of a racially balanced workforce is not enough (alone) to disprove disparate impact—Page 10  Employer‘s data may be discredited if employer has a reputation for excluding applicants with criminal records – That why EEOC discourages asking about criminal background on application—may deter applicants 43
  44. 44. Applications  ―Commission recommends that employers not ask about convictions on job applications and that, if and when they make such inquiries, the inquiries be limited to convictions for which exclusion would be job related for the position in question and consistent with business necessity.‖  Some states require employers to wait until after the selection process to ask about convictions  More likely to objectively assess applicant and conviction 44
  45. 45. Applications  Best to follow EEOC‘s recommendation  If you decide to ask, include a disclaimer that a conviction will not necessarily preclude the applicant from employment 45
  46. 46. Real World  Increased enforcement  This year Pepsi Beverages Co. paid $3.1 million to settle EEOC charges for using criminal check to screen out applicants (race charge) 46
  47. 47. Real World  El v. Southeastern Pennsylvania Transportation Authority (3rd Cir. 2007)  Employer had a policy of excluding everyone ever convicted of a violent crime from job of paratransit driver  55-year old African American trainee was terminated when employer learned of 2nd degree murder conviction 40 years earlier 47
  48. 48. Real World  Gang fight when he was 15 years old and only violent crime  Although the court upheld the decision to terminate him, it expressed ―reservations‖ about a policy excluding all violent crimes no matter how long ago ―in the abstract‖ (meaning without individual assessment)  Stated outcome might be different if plaintiff had hired an expert on recidivism 48
  49. 49. Reaction to Guidance  Some push back  House of Representatives passed an appropriation bill on May 10th that would prohibit the use of EEOC funds for enforcing the Guidance—not law yet  Business community has complained that Guidance goes too far in restricting employers 49
  50. 50. Thank You  Christina Jepson direct: (801) 536-6820 cell: (801) 209-7805 email: 50