The Use of Criminal Background Checks in Hiring: A Catch-22 for Employers? - Articles

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Posted by: Christy Gibson on Oct 7, 2013

By Jessica Lingo*

Conducting criminal background checks on prospective employees is a common practice for employers when hiring. It is in an employer’s best interest to provide a safe work environment for its employees, and such a practice can limit exposure to negligent hiring or retention claims. In 2012, 69% of employers reported conducting criminal background checks on all job applicants.[i] Recently, however, the EEOC has raised concerns with this practice, claiming that the use of conviction records to screen job applicants can result in discrimination.

While an individual’s criminal status is not protected under Title VII, the EEOC fears the use of conviction records can amount to disparate impact claims of discrimination, as certain minorities are convicted of crimes at a higher rate than whites. The EEOC suggests that blanket “no-hiring policies” for individuals with a criminal record disproportionately impact these minorities, and has subsequently filed lawsuits to that effect.

As recently as June 2013, the EEOC filed complaints against two prominent companies, Dollar General[ii] and BMW North America,[iii] asserting each employer’s use of criminal background checks in hiring decisions resulted in discrimination against African-Americans. The government claimed that both companies turned away applicants with criminal convictions, without examining whether such convictions were job-related, and without giving the applicants an opportunity to explain their circumstances.  These policies, the EEOC argues, “operate to exclude disproportionate percentages of blacks.”[iv]

As a result of this more aggressive application of the disparate impact analysis, many employers feel left with a Catch-22: Be exposed to negligent hiring and vicarious liability claims or risk an EEOC investigation and potential litigation. To help alleviate some employer concern, however, the EEOC issued enforcement guidance on the use of criminal background checks in hiring decisions in April 2012.[v] The guidelines stress that employers may continue to use criminal background checks so long as each applicant is given an “individualized inquiry.”  Convictions must be evaluated based on the nature of the crime, the crime’s relation to the potential job, and the time passed since the conviction. Arrests may not be considered, and employers must give applicants the chance to explain the circumstances of their criminal past.

Yet even with the EEOC’s guidance, many employers feel entitled to exclude applicants with convictions for any serious violent crime, even if the conviction is not strictly job-related. In fact, in the BMW complaint, the EEOC claimed that the company violated the “equal employment opportunities” of African-American applicants because the employer excludes all applicants convicted of “Murder, Assault & Battery, Rape, Child Abuse, Spousal Abuse (Domestic Violence) . . . [and] Weapons Violations.”[vi] Many employers feel that an attempt to limit screening of even these crimes is unacceptable. Fortunately for them, courts have largely opposed the EEOC’s position on the use of criminal background checks.

Most recently, in E.E.O.C. v. Freeman,[vii] the EEOC alleged the employer’s use of criminal background checks had a disparate impact on African-American, Hispanic and male job applicants.  The court, however, disagreed, and Freeman won on summary judgment. The Court acknowledged the “Hobson’s choice” in which employers are placed as a result of the EEOC’s stance on background checks. Furthermore, the Court expressed doubt that such a practice truly has a disparate impact on minorities. Ultimately, the Court noted the lawsuit itself was “a theory in search of facts to support it.”[viii]

Similarly, while not addressing the employer’s use of criminal background checks, the EEOC recently alleged the use of applicants’ employment credit reports constituted a discriminatory hiring practice. In E.E.O.C. v. Kaplan, the Northern District of Ohio ruled in favor of Kaplan on summary judgment, as the EEOC failed, again, to offer sufficient evidence that Kaplan’s practices had a disparate impact on African-American applicants.[ix]

Thus far, the EEOC has failed to show statistical evidence of disparate impact in any of the cases that have been decided.  As a result, these cases cast doubt on the EEOC’s assertions that employer use of background checks disparately impacts minorities. Freeman, in particular, undermines the EEOC’s contention that the use of criminal background checks has a disparate impact on certain minorities. Nonetheless, employers should be aware of the EEOC enforcement guidance, particularly while cases like BMW and Dollar General are still pending. Until more courts oppose the EEOC, employers should avoid blanket no-hiring policies as much as possible, yet need not eliminate all use of criminal background checks in hiring.

* Jessica Lingo is an associate at Frost Brown Todd in Nashville and focuses her practice on labor & employment and business litigation matters. She is a native of Nashville, and graduated from Northwestern University School of Law in May 2012. Ms. Lingo may be reached at jlingo@fbtlaw.com or (615) 251-5562.

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[i] Society for Human Resource Management, Background Checking—The Use of Criminal Background Checks in Hiring Decisions (July, 19, 2012), http://www.shrm.org/Research/SurveyFindings/Articles/Pages/CriminalBackgroundCheck.aspx.

[ii]  E.E.O.C. v. Dolgencorp LLC d/b/a Dollar General, Case No. 1:13-cv-04307 (N.D. Ill. June 11, 2013).

[iii] E.E.O.C. v. BMW Manufacturing Co., LLC, Case No. 7:13-cv-01583 (D.S.C. June 11, 2013).

[iv] Id.

[v] E.E.O.C. Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII and the Civil Rights Act of 1964, available at: www.eeoc.gov/laws/guidance/arrest_conviction.cfm.

[vi] E.E.O.C. v. BMW Manufacturing Co., LLC, Case No. 7:13-cv-01583 (D.S.C. June 11, 2013).

[vii]  EEOC v. Freeman, Case No. 8:09-cv-02573 (D. MD Aug. 9, 2013).

[viii] Id.

[ix] E.E.O.C. v. Kaplan Higher Educ. Corp., Case No. 1:10-cv-02882 (N.D. Ohio Jan. 28, 2013).