On February 7, 2013, “The Opportunity to Compete Act” (S2586) was introduced in the New Jersey Senate, seeking to dramatically curtail the ability of New Jersey employers to obtain or use a job applicant’s criminal history during the hiring process. The proposed bill would require employers to engage in a multi-step process before rejecting an applicant based on a criminal record. Unfortunately, the process proposed in the Act lacks clarity as currently drafted.

Under the Act, most employers would be prohibited from inquiring about an applicant’s criminal history during the application process, either directly or via a background check, until after a conditional job offer is made. Once a conditional job offer is made, an employer would be permitted to inquire about the applicant’s criminal history only after providing a detailed notification form, obtaining written consent from the applicant, and then providing the applicant with a standardized Notice of Rights form. Employers would then be permitted to consider only those specific types of convictions or pending charges expressly identified within the Act, and would be precluded from considering non-pending arrests, or erased, expunged, pardoned, or juvenile convictions.

For employers seeking to rescind an offer in connection with a background check, the Act would require the employer to take several affirmative steps before rejecting the application. Those steps include meeting with the applicant before rescinding the application, completing a standardized “Applicant Criminal Record Consideration Form,” and providing the applicant with various written notices along the way. The Applicant Criminal Record Consideration Form specifically requires employers to explain the rationale behind the decision to rescind the offer of employment.

Further, the Act seemingly intends to protect employers that comply with the Act from certain limited negligent hiring claims, but as currently drafted, the Act instead holds compliant employers automatically liable for such claims. Should the bill advance, we assume this language will be revised.

Notably, there is no right to a private cause of action under the Act as currently drafted, and employers would only be liable for civil penalties ranging on a sliding scale from $500 to $7,500, depending upon the number of workers employed by the company and the number of violations.

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