LS Screening’s Response to the EEOC’S Recent Ruling on the Use of Criminal Records in the Employment Process
LS Screening’s Response to the EEOC’S Recent Ruling on the Use of Criminal Records in the Employment Process
On April 26, 2012, the EEOC released its “Enforcement Guidance: Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964” (Guidance). The title alone is enough to instill terror in the hearts of employers everywhere. The document was years in the making and the subject of great speculation among those of us in the pre-employment screening industry. Despite the highly dramatic headlines in the media, the final version served only to more specifically define how criminal records may be used in the employment process.
Background
The EEOC has always played a secondary role in governing how criminal records may be used in background checks. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, does most of the heavy lifting related to regulation and enforcement. The FCRA defines the background check as a “consumer report” and regulates it as such. The only real interest (and impact) of the EEOC is the interpretation of “disparate treatment” and “disparate impact” as prohibited by Title VII of the Civil Rights Act of 1964 (Title VII). Title VII prohibits discrimination in hiring/employment on the basis of race, color, sex, religion or national origin.
Using the presumption of innocence as the foundation, the EEOC said, in 1990, the use of non-conviction records aka “arrest records” as a reason to exclude applicants from employment is inherently unfair to minorities. This is validated in a 1987 Department of Justice report that affirms minorities are arrested disproportionately more than majorities (a link to the original EEOC document is below). Therefore, using those records, knowing about them or even receiving them creates a disparate or “inherently different” impact on minorities and is discriminatory.
Ironically, the FCRA addresses arrest records only within the context of the seven year limitation. (§605(a)(2) “Civil suits, civil judgments, and records of arrest that from date of entry antedate the report by more than seven years…”) Convictions, however, are excluded from any time limit restriction and may be reported forever (§605(a)(5)). As you can imagine, this split between the EEOC and FCRA has been the subject of debate within the pre-employment screening world almost as long as background checks have been used in hiring.
Disparate Treatment and Disparate Impact
These two terms are at the heart of the EEOC’s interpretation of what is discriminatory under Title VII. As a disclaimer, we are not attorneys so please consider the definitions below accordingly:
Disparate Treatment occurs when two people apply for the same job but are not treated equally by the hiring process. Example: One applicant is Green and the other is Blue. Both have the same attributes, including similar criminal records, yet one applicant is given preferential consideration over the other because of an opinion or stereotype that is inherently discriminatory. Within the context of criminal records, assuming two applicants with equal criminal records are less than equally qualified based on their race, gender, national origin, etc., is “disparate treatment”.
Disparate Impact occurs when the policies or practices of a company affect protected classes adversely. Again, within the context of criminal records, since it has been established that minorities are arrested disproportionately more than majorities and since an arrest does not constitute guilt, excluding minorities from unemployment based on arrest records creates a disparate impact on minorities and is discriminatory.
What Does this Guidance Really Do?
What it doesn’t do is ban the use of criminal records, or even arrest records, in your hiring process. What it does do is state, very clearly, what it considers to be discriminatory and, therefore, illegal behavior. If you, as an employer, use criminal records, arrests or convictions, in a manner that the EEOC believes is discriminatory against a protected class and, if asked to rule on the fairness of your hiring process, the EEOC will rule in favor of the person(s) being discriminated against. A ruling by the EEOC in favor of a Plaintiff opens the door to civil litigation and changes the burden of proof to the employer which makes it difficult to overcome in court. Historically, the jury awards have been very harsh (read: expensive).
Who is Affected By This Ruling?
Practically speaking, this is a concern for larger companies. Generally, a claim of disparate treatment requires an employee group the size of which can only exist within a large company. The most recent example was a $3.1 million ruling against Pepsi. Those of us with 15 or less employees can’t be sued under EEOC rules anyway.
However, anyone with employees should think long and hard before ignoring what this Guidance is saying. Habits created during the early days of an organization, the good, bad and ugly, are tough to change. And in today’s world, where everything ends up on the Internet eventually, what happens today can become a problem in 8-10 years when your company is larger and perhaps subject to EEOC rules.
What Do I Need To Do?
So, do you need to change your hiring process? Again, we are not attorneys so you should consult with legal council. That said, read the questions below:
1. Do you exclude everyone with a criminal conviction from employment?
2. Do you receive criminal records on your background checks that did not result in a conviction i.e. innocent, not guilty, dismissed, nolle prosse or deferred sentences where the probation has been completed?
3. Do you exclude candidates on the basis of their race, color, religion, sex or national origin?
4. Do you have a policy to support “no” answers to 1-3?
If you answered “yes” to 1,2 or 3 and/or “no” to 4, you should review your hiring process.
Those Were Trick Questions. What Do I Really Need To Do?
Fair enough.
The EEOC Guidance actually offers some “Best Practices” to improve your compliance. They can be found on pages 22-23 of the Guidance. Before you do that, we have a few recommendations to make based on our review of the document. These can also be found in a new checklist we created “FCRA/EEOC Hiring Dos and Don’ts”:
Examine each job class in your company and assess what the risks are to your employees and company. It doesn’t have to be complex or detailed. Here’s an example:
Job Class Review
Clerical: Administrative only; no client/customer contact; does not operate a vehicle while on company business/errrands or have access to money or proprietary information such as personnel information or company records.
The risks are violence/harassment towards employees and theft of company property. [Note: These risks would apply to every employee.]
Background Check components should include a criminal background check for convictions related to violence, theft or drugs within the past seven years. [Again, standard.]
Include in your process a review of any criminal record that includes the following factors:
1. The nature and gravity of the offense or conduct
2. The time that has passed since the offense, conduct and/or completion of the sentence
3. The nature of the job held or sought
This may sound like a lot of work but, practically speaking, it isn’t. With a few exceptions, generally every employee poses the same risk of theft and/or violence. The key, as with all things HR, is consistency.
For example, if the job is clerical and the offense is misdemeanor theft less than $500, the offense is over five years old and the applicant has no prior or subsequent records, is it really relevant? What about misdemeanor possession of marijuana six years ago? Does it affect the applicant’s ability to do the job?
If however, there are offenses prior or since, it wouldn’t be unreasonable to presume a “pattern of behavior” that puts your company at risk by hiring this person. And, if those offenses are felonies instead of misdemeanors, the “gravity” of the offense changes dramatically and your decision should change accordingly.
In each case where you have someone with a criminal record, a review, which the Guidance calls an “assessment”, is recommended. This means you should ask the applicant for his/her side of the story. We also recommend reviewing the actual criminal case files to compare the official version with theirs. Your background check provider can help you with this. Whatever decision you make, it is important to have documentation as to how and why you did what you did – and then be consistent with similar situations in the future.
One More Thing to Think About
The Guidance specifically calls out the practice of asking about an applicant’s criminal record on the application i.e. “Have you ever been convicted of a crime…” We’ve always referred to it as “The Question”. The EEOC (strongly) suggests that you either:
• Re-word the question to be more specific about those offenses that you consider job relevant and may cause a disqualification. Example: “Have you ever been convicted of any crimes related to violence, sex or drugs?”
• Remove the question from the application and ask it later in your hiring process. The thinking here is that by waiting until later, any record disclosed would have less adverse impact on any protected class of applicants because it doesn’t exclude them outright at the beginning of the process.
Our view: There isn’t a correct answer here. Changing your application is not easy but, if possible, creating a more specific question to address job relevant convictions might be the better option.
Summary
Our goal here was to distill 43 pages of a government document into a succint description of how it practically affects you, your hiring process and your company. For the umpteenth time, we are not attorneys but we do understand the hiring process and how our participation affects it. You should take the time to read the actual Guidance and its supporting documentation i.e. FAQs, etc., yourself and seek legal counsel. That said, we found it to be very informative, easy to understand and, our disagreements with some parts notwithstanding, generally validating of our beliefs about pre-employment screening.
In our opinion, it has never been a “best practice” to make employment decisions with a “zero tolerance” mindset. The EEOC’s Guidance now provides both new and more specific information about what they will consider to be discrimination as well as a roadmap for avoiding their wrath. That’s a good thing.
What we like most about the Guidance is that it confirms many of our core beliefs specifically that, for the past eight years, we’ve been playing by the rules. We don’t knowingly report arrest records. We discourage the use of databases as primary search sources and we do our best to educate our Clients about and comply with the Fair Credit Reporting Act.
The conversation surrounding this new Guidance is just beginning. We intend to be involved and to keep you informed. We also encourage you to weigh in with your questions, opinions and feedback. Speaking of that, you can read John’s take on the EEOC ruling here.
Useful Links
Enforcement Guidelines on Employer Arrest and Conviction Records
EEOC Enforcement Guidelines Q&A
Title VII of the Civil Rights Act of 1964
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