On April 25, 2012, the Equal Employment Opportunity Commission (EEOC) issued, after a vote of 4-1, an updated Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII (the “Guidance”).  The Guidance, which takes effect immediately, is a summary of the EEOC’s long-held position that employers’ reliance on arrest and conviction records may have a disparate impact on individuals because of their race or national origin, with significant changes in certain areas that are important to most employers. Republican-appointee Commissioner Constance S. Barker dissented, while Republican-appointee Commissioner Victoria A. Lipnic voted with the majority, after reportedly securing some employer-friendly concessions in the Guidance. There was a push to get the Guidance approved before Democrat-appointee Commissioner Stuart J. Ishimaru steps down later this month.

According to the EEOC Guidance, Title VII violations may occur in two employment background check situations:

  • When employers treat criminal history differently for different applicants/employees, based on their race or national origin (disparate treatment) or
  • When an employer’s neutral background check policy or practice disproportionately impacts protected individuals (disparate impact), unless the policy is job-related and consistent with business necessity.

Not surprisingly, the majority of the Guidance discusses the second “disparate impact” type of Title VII race or national origin discrimination, although not before the Commission reminds employers that it may find disparate treatment when employers make distinctions between two applicants/employees of different races based on the employer’s judgment as to the relative severity of past criminal convictions.

The Guidance explains that, for a disparate impact claim, the EEOC first must identify the policy or practice causing the disparate impact and then confirm that there is a disparate impact. The commentary associated with the second “confirmation” step suggests employers may expect more EEOC requests for voluminous applicant and hiring data, in evaluating disparate impact.

Once the EEOC has established disparate impact, the employer has the burden of proving the affirmative defense that its policy or practice is job-related and consistent with business necessity. In the Guidance, the Commission repeats its long-held position that an arrest, by itself, is never job-related and consistent with business necessity because an arrest does not establish that criminal conduct has occurred, individuals are presumed innocent until proven guilty, and many arrests do not result in convictions.

Although the EEOC identifies two circumstances allowing employers to establish the “job-related and consistent with business necessity” defense, only one is likely to be useful for most private-sector employers—a targeted screening process that takes into account the following factors:

  • The nature and gravity of the offense or conduct;
  • The time that has passed since the offense, conduct, and/or completion of the sentence; and
  • The nature of the job held or sought.

For any individuals “screened out” by this targeted screening process, the EEOC explains, the employer’s policy should then provide “an opportunity for an individualized assessment.” While the EEOC stops just short of actually requiring employers to conduct individualized assessments as part of their targeted screening process, the Guidance repeatedly stresses that a screening process that does not include individualized assessments is more likely to violate Title VII. The between-the-lines message is that individualized assessments are now expected. The Guidance provides several factors for consideration during the individualized assessment, including some directly-relevant ones like a showing that the individual was incorrectly identified in the background check and less-relevant ones like “employment or character references.”

The second way an employer can satisfy the “job-related and consistent with business necessity” defense is complicated and costly—for each position, the employer must validate the criminal conduct exclusion, by using the Uniform Guidelines on Employee Selection Procedures, including its statistical models, to validate that criminal conduct data relates to subsequent work performance.  Even the Guidance seems to acknowledge that issues about the availability of criminal conduct data and the application of validation studies may be tough hurdles for employers to clear.

In what is sure to be a controversial one-sentence “best practice,” the EEOC recommends that employers not ask about convictions on job applications.

According to Stephen Woods, a shareholder in Ogletree Deakins’ Greenville, South Carolina office and chair of the firm’s Background Check Advice Practice Group, “The old phrase ‘the devil is in the details’ has never been more apt than with this new EEOC Guidance. Although the EEOC opines that this guidance is a natural evolution of its prior guidance, there are some huge changes, including the section on individualized assessment of applicants and employees. Employers would be wise to reexamine their background check policies and practices, in light of the new Guidance. Only time and, unfortunately, lawsuits are likely to determine whether courts think all or only some of the EEOC’s new Guidance is correct.”

Many in the business community have complained that the Guidance was rushed through with no public rulemaking or the associated process for public comment—a refrain recently echoed by the Senate Appropriations Subcommittee responsible for EEOC funding and Commissioner Barker in her dissent. Additionally, while courts are required to defer to EEOC guidance like this to some extent, EEOC guidance is not controlling on courts’ interpretation of Title VII and is not entitled to the high level of deference given to federal regulations. Instead, courts and litigants may refer to the EEOC’s interpretation for guidance, based on the guidance’s thoroughness, the validity of its reasoning, and its consistency with earlier EEOC pronouncements.



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