Employers Should Review Their Criminal History Use During Pre-Screening Of Applicants


by Abbey Moland

Moland, Abigail
amoland@mcgrathnorth.com
(402) 341-3070

The current state of the economy has left many companies and businesses inundated with an overwhelming number of job applicants. In an effort to narrow the applicant pool, many employers have turned to the use of background checks, such as criminal history and credit reports, to screen potential candidates. It has long been the U.S. Equal Opportunity Commission’s (“EEOC”) position that an employer who uses a “blanket” policy of not hiring any applicant who has a history of arrest or convictions violates Title VII of the Civil Rights Act because such a policy disproportionately excludes members of certain racial and ethnic groups, unless the employer can demonstrate a business need for use of this criteria.

Recently, however, as part of  its E-RACE (Eradicating Racism and Colorism from Employment) Initiative, the EEOC has stepped up its efforts to challenge pre-employment screening processes, that “significantly disadvantage applicants and employees on the basis of race and color.”

One of the EEOC’s specific goals for E-RACE is to develop investigative and litigation strategies for addressing “21st Century manifestations of discrimination,” which the EEOC has identified as including credit and background checks, arrest and conviction records, and other facially-neutral factors.

As part of the enforcement of the initiative and in an effort to achieve the outlined goals, the EEOC has begun filing nationwide Title VII pattern and practice lawsuits against employers and challenging their hiring and screening procedures. For example, in EEOC v. Freeman, (filed Sept. 30, 2009), the EEOC filed a complaint alleging that the defendant’s use of credit history and criminal justice history information had a significant disparate impact on African-American applicants, while the company’s use of criminal history information had an adverse impact on Hispanic and male applicants. Likewise, in EEOC v. Peoplemark (filed Sept. 29, 2008), the EEOC’s complaint on behalf of African-American applicants alleged that Peoplemark’s policy denying employment to any person with a criminal record had a disparate impact on African-American applicants.

The Third Circuit’s decision in El v. SEPTA (2007), offers some direction to employers for avoiding liability in hiring decisions, while still maintaining business objectives. El held that an employer’s assumption that ex-offenders possess a higher propensity for workplace crime is not sufficient evidence to shield the employer from liability. Rather, the employer must demonstrate not only that the pre-employment inquiry is “job-related,” but also that the policy is predictive of successful job performance. Thus, where a criminal conviction is used to disqualify an applicant, the employer must demonstrate that it has considered the risk posed by the ex-offender in conjunction with the specific job sought by the applicant in order to show disqualification was justified by business necessity.

The EEOC’s recently-issued revised guidelines provide additional guidance for employers utilizing background checks in hiring. The EEOC advises employers to undertake three steps to determine whether its hiring policy can be justified by a business necessity. First, the employer should consider the nature and gravity of the offense. Second, the employer must consider the length of time that has passed since the conviction. Third, the employer must consider the nature of the job held or sought.

In light of the EEOC’s renewed interest in challenging facially-neutral screening processes and the revised EEOC guidance, employers must take this opportunity to review their background check policies in order to avoid liability. As a starting point, it may be advisable for employers to conduct routine self-audits of applicant pools to ensure that use of its background checks is not having a disparate impact on particular applicant groups.

At the very least, employers should replace policies that impose an absolute ban on hiring applicants with criminal convictions with a more nuanced approach. In other words, employers should institute policies which consider various factors in determining whether to hire an applicant with a criminal conviction, including the nature of the offense, the nature of the job for which the applicant has applied, and the length of time that has passed since the conviction.

Under the EEOC guidelines, an employer’s selection criteria is only valid where the employer can prove it serves a genuine business need. The decision in El makes it clear that an employer’s disqualification of an applicant based on a criminal offense must be justified by something more than an assumption and speculation that the conviction is related to the position sought. Simply put, employers should review their use of background checks in pre-screening applicants and formulate job-related justifications for the practices and criteria used.

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