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1. LORMAN SEMINAR – EMPLOYMENT LAW UPDATE IN UTAH
EEOC GUIDANCE REGARDING
CRIMINAL BACKGROUND CHECKS
Christina M. Jepson
November 9, 2012
Provo, UT
parsonsbehle.com
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. 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. 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. 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. 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. 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. 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. 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. Direct Discrimination
Evidence of discrimination
–Biased statements – stereotyping
–Inconsistencies in treatment of
crimes
–Similarly situated comparators
–Employment testing (similar results)
–Statistical evidence
10
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. 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. 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. 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. 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. 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. 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. 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. Three Defenses
Guidance only identifies three
circumstances in which an employer‟s
policy will “consistently meet” the business
necessity defense
19
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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Thank You
Christina M. Jepson
direct: (801) 536-6820
email: cjepson@parsonsbehle.com
50