• A Supplemental Update Regarding the EEOC’s Enforcement Guidance Regarding Criminal History Information
  • August 14, 2012 | Author: David J. Freedman
  • Law Firm: Barley Snyder - Lancaster Office
  • As reported previously, the United States Equal Employment Opportunity Commission (EEOC) recently issued an enforcement guidance regarding the use of criminal history information in employment decisions. Although not necessarily indicative of how a court would rule, an EEOC enforcement guidance is based on legal precedent and suggests how the EEOC intends to exercise its enforcement powers under Title VII, the federal law that bans discrimination based on race and national origin, among other protected classifications.

    The EEOC’s most recent enforcement guidance makes clear that Title VII does not bar employers from using criminal history information in hiring decisions. Nevertheless, reckless use of such information during the hiring process can expose an employer to significant liability. This includes claims of intentional discrimination, otherwise known as “disparate treatment,” which occurs when an employer treats applicants who have similar criminal history differently. For example, an employer would be liable if it rejected an African-American applicant based on criminal history, but hired a White applicant with a similar record. Using criminal history in hiring decisions can also expose employers to allegations of unintentional discrimination, what the EEOC calls “disparate impact.” Under the “disparate impact” theory, an employer can be held liable if it has a facially-neutral policy that results in a statistically significant negative impact on members of a protected classification.

    While disparate impact claims have been around for decades, employers have traditionally faced few claims. Plaintiffs avoided alleging disparate impact because getting those cases through the proverbial courthouse doors required that the plaintiff provide expensive statistical analysis demonstrating that an employer’s specific practice had a significant negative impact on a racial minority group. As a result, employers faced relatively few disparate impact claims, but such claims, when successful, resulted in huge--sometimes crippling--class action liability judgments and attorneys’ fee awards.

    The EEOC’s recent guidance regarding criminal history information suggests that it will be taking a dramatically different approach to disparate impact claims. Now the EEOC will presume that an employer’s use of criminal history information during the application process has a disparate impact, at least with respect to African-American and Hispanic male candidates. The EEOC has taken this position because incarceration rates are especially high for African-American and Hispanic men. While roughly 6% of White men are expected to be incarcerated in their lifetime, one in six Hispanic men and one in three African American men are expected to serve prison time.

    According to the EEOC, this data gives it reason to investigate any use of criminal history information that eliminates African-American and/or Hispanic applicants from consideration. The employer will have an opportunity to provide evidence that the policy does not cause a disparate impact, such as local data demonstrating that African Americans and Hispanics are not convicted at disproportionately higher rates in the employer’s geographic area. Evidence of a racially balanced workforce, however, is insufficient.

    If an employer cannot disprove the EEOC’s disparate impact presumption--which could prove expensive and difficult--then an employer must demonstrate that disqualifying applicants based on criminal history is related to the job and consistent with business necessity. This requires that the employer effectively link specific criminal conduct and its dangers with the risks inherent in particular position’s functions. Three factors are relevant to determining if an exclusion is job related and consistent with business necessity: (1) the nature and gravity of the offense; (2) the time that has passed since the conviction or the applicant’s release from punishment; and (3) the nature of the job in question.

    Also, an important distinction is made between arrest and conviction records. An arrest does not establish the presence of criminal conduct, and therefore, an exclusion based on a mere arrest is not job related and consistent with business necessity. Although a conviction is a sufficient basis to conclude that a person engaged in criminal conduct, the EEOC does not want employers using criminal convictions as a means of winnowing down an applicant pool. Accordingly, the EEOC discourages employers from asking about convictions on job applications. Instead, the EEOC prefers that employers make a conditional hiring decision, then request criminal history only from the potential hire and limit that inquiry only to a pre-identified list of convictions for which exclusion would be job related and consistent with business necessity.

    One way for an employer to meet the business necessity requirement is to develop a targeted screening program which considers the three factors and also provides for an individualized assessment of applicants with disqualifying criminal convictions. This individualized assessment should provide notice to the individual that he was eliminated because of a criminal conviction and allowing him to demonstrate that he should not be excluded due to his particular circumstances. Relevant factors include the facts and circumstances surrounding the conviction, the number of offenses, length and consistency of the applicant’s employment history, evidence of rehabilitation, and employment or character references. An employer must then consider if this additional information justifies an exception to its policy.

    The following are best practices the EEOC is encouraging employers to take:

    • Eliminate policies that exclude candidates based on mere arrests;
    • Train managers and officials about Title VII and its prohibitions on discrimination
    • Develop narrowly-tailored written policies regarding how criminal history information is to be used in hiring decisions;
    • Identify essential job requirements and the actual circumstances under which the jobs are performed;
    • Determine the specific offenses that demonstrate unfitness for performing a job;
    • Determine the duration of exclusions for criminal convictions;
    • Conduct an individualized assessment of the applicant’s record and circumstances;
    • Record the justification for the policy, including consultations and research considered in crafting the policy;
    • Limit inquiries to convictions for which exclusion would be job related and consistent with business necessity; and
    • Keep information about applicants’ and employees’ criminal records confidential and only use it for the purpose for which it was intended.

    Adopting these approaches does not immunize an employer from disparate impact liability. Even if an employer successfully proves that its policy is job related and consistent with business necessity, an employer may still be liable under Title VII if an applicant can point to a less discriminatory approach that would serve the same purpose as effectively as the challenged practice. A demonstration of business necessity, however, puts the burden back on the excluded applicant.

    Keep in mind, though, that even if an employer is successful in defending against a Title VII claim, there are other federal and state laws-- like the Fair Credit Reporting Act and the Pennsylvania Criminal History Information Act--that impose other burdens on employers who utilize criminal information in hiring decisions.