Can the EEOC require employers to hire convicted criminals? Last April, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued a policy guideline that calls into question the extent to which employers can incorporate a check of criminal records into a hiring decision without risking legal liability.^[1] 

On April 25, 2012, the EEOC issued its “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964” (“Updated Guidance”), declaring that criminal record exclusions have a disparate impact based on race and national origin. The Updated Guidance is a warning to private sector employers that they could face litigation unless they significantly restrict the use of arrest and conviction records in hiring, promotion, and other employment decisions. The Updated Guidance came on the heels of a $3.1 million settlement with an employer after the EEOC found that the employer eliminated from consideration more than 300 African-American job applicants due to their criminal records.

Of course, ex-offenders are not a protected class under Title VII and the EEOC does not have any express statutory authority to prohibit discrimination against ex-offenders on the basis of their criminal record. However, the EEOC’s theory is that excluding individuals from hiring consideration based solely on the presence of a criminal record has a disparate impact on African-Americans and Hispanics, as they are more likely to have criminal records than other demographic populations. Thus, evidence of a blanket exclusion may then be used by the EEOC to justify an investigation into the employer’s practices.

If an investigation is commenced, the employer will be required to demonstrate to the EEOC that it performed a targeted screening of applicants, followed by an “individualized assessment” of those applicants who were flagged for their criminal records. The employer must be able to prove that it had a “business necessity” not to hire the ex-offender or that the ex-offender’s offense disqualified him or her for a specific job.  The EEOC states that a targeted screening should evaluate the following factors: (i) the nature and gravity of the offense or conduct; (ii) the time that has passed since the offense or conduct; and (iii) the nature of the job held or sought. In other words, employers should establish a policy that defines and limits the use of conviction records based on the type of job involved. The EEOC then recommends the employer provide written notice to the applicants who have been flagged based on their criminal history (in case there is an error in the record or mistaken identity). The employer should also provide each flagged applicant an opportunity to explain the circumstances of the crime and conviction, after which the employer should conduct an assessment of the facts as they apply to the particular job and the exposure to danger or risk, the age at time of conviction, the number of offenses, post-conviction conduct, employment or character references, and other factors suggested in the Updated Guidance.

Earlier this year, the EEOC admitted to the U.S. Commission on Civil Rights that the EEOC’s guideline was essentially based on a hunch, yet it has no intention to revise the guideline. At the hearing, the EEOC representative stated that the EEOC does not have any studies regarding the job performances of ex-offenders compared to non-offenders, nor does it have any statistical evidence to support or disprove the EEOC’s theory that the use of criminal background checks unlawfully disadvantages ex-offenders that would otherwise perform just as well as non-offenders. Employers were hoping the hearing would provide clarification to many of the glaring issues presented by the guidance, but no clarification was provided.

Another troubling issue is that the Guidance lacks any allowance for employers who must comply with both state law as well as the EEOC’s guidance when state laws require criminal background checks. To date, the EEOC has simply stated that an employer’s compliance with state law is not a defense to an EEOC charge under the guidance. In fact, an employer’s compliance with a state law that requires background checks in a certain industry may invite EEOC investigation of the employer to determine whether the employer is conducting the EEOC’s required “individualized assessment for each candidate,” so employers should use particular caution in this area.

Employers who perform background checks are strongly cautioned to perform an audit of their hiring policies and procedures to determine compliance with the EEOC’s guidance, as well as with state laws.