June 6, 2012 – On April 25, 2012, the U.S. Equal Opportunity Commission (EEOC) issued new enforcement guidance regarding use of criminal background checks and arrest/conviction disclosures. The revised guidance offers in-depth analysis of the disparate impact of arrest and conviction records on racial and ethnic minorities. The enforcement guidance also provides employers with clear, albeit somewhat burdensome, rules on the use of criminal background checks and self-disclosure. Additionally, the enforcement guidance explains how employers can establish a defense to claims of disparate impact by showing that criminal background checks were job related and consistent with business necessity.

Because Title VII of the Civil Rights Act (Title VII) does not provide protection on the basis of arrest or conviction records, the EEOC does not have explicit authority to investigate arrest and conviction record discrimination claims. However, the EEOC will investigate an employer’s race-neutral policy to consider if the arrest and conviction records may have a disproportionately negative effect – or “disparate impact” – on certain minority groups that are protected by Title VII.

It should be noted that the Wisconsin Fair Employment Act (WFEA) explicitly prohibits discrimination based on arrest and conviction records. Under the WFEA, an employer is prohibited from making any decision based on arrest records. However, an employer can base an employment decision on a conviction record if the “circumstances of the conviction and the circumstances of the job are substantially related.” The approach to conviction record discrimination under the WFEA remains unaffected by the EEOC’s revised enforcement guidance.

The EEOC Changes the Criminal Background Check Landscape

The EEOC’s enforcement guidance contains several recommendations to employers that include: 

• Develop a “targeted screen” that takes into account the nature and gravity of the offense, the duration of any sentence issued, and the nature of the job held or sought;

• Conduct an “individualized assessment” of any applicant initially screened out due to his or her conviction record or give him or her the opportunity to explain the particular circumstances of the arrest or conviction;

• Avoid asking about convictions on employment applications;

• Refrain from asking about arrests or basing an employment decision on any arrest record; and

• Demonstrate that a refusal to hire an applicant was based on a federal or state legal requirement or business necessity if it is challenged. 

The EEOC expressed concern that the criminal record databases on which employers may rely include “incomplete criminal records.” While an arrest may be reported, the record may not include whether the arrest was expunged.

Building a Defense

The EEOC states that there are circumstances under which an employer may consistently meet the “job-related and consistent with business necessity defense.” First, the employer must validate that the criminal conduct exclusion for the position meets the EEOC’s Guidance on Employee Selection Procedures, which can be found at 29 C.F.R. 1607. Second, the employer should develop a “targeted screen” considering the nature of the crime, the time elapsed, and the nature of the job. Third, the employer should provide for an “individualized assessment” of the applicant.

The term “individualized assessment” is a complicated way of saying that an employer should have a discussion with the applicant about his or her criminal record. When conducting an “individualized assessment,” an employer should explain to any rejected candidate what arose in the criminal background check that caused him or her to be disqualified from consideration. Then the employer should give the candidate the opportunity to explain. 

 There are many state laws that obviate the need or opportunity for such an “individualized assessment.” Even though the EEOC’s guidance attempts to preempt state or local law that “conflicts” with their position, the EEOC has failed to provide any such immunity to an employer for failure to follow state or local law in deference to the EEOC’s guidance.

Job Applications

The EEOC recommends that employers should not ask about convictions on job applications. If and when employers make such inquiries, the inquiries “[should] be limited to convictions that are job-related for the position in question and consistent with business necessity.”

The EEOC has made several missteps when advising employers not to ask about conviction records on job applications. First, the EEOC attempts to preempt state law if the restriction on an employee with a criminal record is not “job-related and consistent with business necessity.” Moreover, the EEOC fails to indicate when employers can ask such questions. Instead, the revised enforcement guidance suggests that inquiries into convictions should take place only after the employer is “knowledgeable about the applicant’s qualifications and experience.” Even then, the inquiry should be limited to “conditions for which exclusion would be job-related for the position and consistent with business necessity.”

Recommendations

In order to comply with the EEOC’s enforcement guidance, it is recommended that an employer:

• Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct;

• Identify central job requirements and the actual circumstances under which the jobs are performed;

• Determine the specific offenses that may demonstrate unfitness for performing such jobs;

• Determine whether you will disregard certain criminal conduct after a certain amount of time has elapsed;

• Perform an “individualized assessment”;

• Train managers, hiring officials, and decision makers on how to implement the policy and procedures consistent with Title VII; and

• Limit inquiries to records to which exclusion would be job related for the position in question and consistent with business necessity

With respect to job applications, Wisconsin employers are already prohibited from making decisions based on arrest or conviction records. Most Wisconsin employers probably already are in compliance with the EEOC’s concerns. Thus, employers should not be compelled to remove arrest or conviction inquiries from their applications, despite the EEOC’s disfavor for these types of application questions.

Employers should ensure that the application clearly states that divulging any arrest or conviction record will not automatically lead to disqualification of an application. The application should state that arrest or conviction record information will not be considered unless substantially related to the position for which the individual has applied. Employers also should consider adding language stating that applicants will be given the opportunity to discuss and explain any criminal record, provided that the record has been disclosed by the applicant. If an applicant fails to disclose a criminal record, and the criminal record is revealed subsequent to an authorized criminal background check, an employer is entitled to disregard the application for untruthfulness. However, the employer should consider whether the applicant actually was convicted and whether the conviction was related to the position.

About the Author

Geoffrey S. Trotier, Minnesota 2003, is a shareholder at Davis & Kuelthau, S.C., Milwaukee. He assists private corporations, municipalities, and school districts in many diverse labor and employment issues.