New York City Issues Fair Chance Act Notice Form for Criminal Background Checks

NOTE: On November 5, 2015, the Commission released an updated version of the Fair Chance Notice form, which resolves many of the issues identified in the below analysis. For a detailed analysis, see our November 13, 2015 article, “Everything You Need to Know About New York’s New FCA Guidance.”   

As we previously reported in July and June, New York City recently passed the Fair Chance Act (FCA), which becomes effective on Tuesday, October 27, 2015, and is applicable to criminal background checks.   

Among other requirements, the FCA prohibits employers from inquiring about or making statements concerning criminal history, prior to a conditional offer of employment, including the following:

1. asking an applicant* questions about his or her criminal record;
2. searching public records on an applicant’s* criminal record;
3. having an applicant* complete background check disclosure and authorization forms; or
4. conducting a background check on an applicant*. 

*Recently, the New York City Commission on Human Rights opined that the FCA applies to current employees (presumably when they are “applying” for a new position at the employer), though the FCA language does not appear to cover current employees. The Commission also has indicated that employers violate the FCA simply by making statements about criminal history or background checks, prior to a conditional offer of employment.   

The Commission has promised additional guidance is coming soon, after which there will be a formal rulemaking process. As of October 27, the Commission has not issued comprehensive guidance, leading to employer confusion over several elements of the new law. 

Notice Form

The FCA also requires that an employer perform and document an analysis under Article 23-A of the New York Correction Law—the existing state law—if the employer is considering taking adverse action against an applicant based on his or her criminal history. This documented analysis must be provided to the applicant “in a manner to be determined by the [C]ommission” before an employer takes adverse action against the applicant.

On October 23, 2015, the Commission prepared and issued a Fair Chance Notice form that may be used by employers to document their analysis of the Article 23-A factors. Although the Commission’s website states that use of the Notice is not mandatory, any employer-created form must maintain the material substance of the Commission’s Notice.

The Commission’s Notice may be downloaded from the Commission’s website. An important word of caution—the Notice on the Commission’s website currently includes a “Submit” button that sends the Notice directly to the Commission (something the FCA does not require or specifically authorize and a feature perhaps inadvertently included in the pdf form by the Commission). Employers may want to consider deleting, or at least disabling, the “Submit” feature before using the Notice.

The Commission’s Notice has a number of elements—several of which appear to be contrary to New York state background check law and/or the federal Fair Credit Reporting Act (FCRA) (and which may be further fleshed out once the Commission guidance is issued and/or after legal challenges to the Notice):

• The Notice suggests that it should be distributed with the federally-mandated pre-adverse action letter, with the background check report (“based on the enclosed [background] check”), and the NYC FCA indicates the Notice should notify the applicant that an adverse action might be taken. But the Notice includes language arguably suggesting a different, later timing, after the pre-adverse action letter—specifically, (a) language suggesting an adverse decision already has been made (“If you do not contact us by then, we will withdraw the conditional offer”); and (b) a space for “evidence of rehabilitation and good conduct,” information that most employers do not solicit until after the pre-adverse action letter (and before the adverse action letter). 
• For the “amount of time that has passed” and the “applicant’s age” elements, the Notice defines the relevant date as the one on which criminal activity occurred—a potentially earlier date than New York state Article 23-A’s more general approach, which has been interpreted as the date of either the criminal activity or the conviction.
• For the “seriousness of the crime” element, the Notice expressly mentions crimes involving only violence and theft (suggesting that these are the most relevant ones) while New York state Article 23-A arguably considers all crimes (i.e., not just those involving violence and theft).
• After employers have inserted all of the required information regarding the Article 23-A factors, the Notice requires an employer to select one (and only one) of two options:

• “We believe there is a direct relationship between your criminal record and the job we offered to you, and the factors listed above do not lessen that relationship” or
• “We believe there is no direct relationship, but your criminal record creates an unreasonable risk to specific persons, the general public, or our property.”

The wording and structure of the Notice prevent employers from checking both boxes and arguing that both apply, as arguably contemplated by N.Y. Correction Law § 752 (i.e., the City has an either/or approach; the New York State law appears to embrace a both approach).

Given the current tension between the new Notice and the FCRA and New York State law, we will continue to monitor the FCA for any interpretative guidance and formal rulemaking, in an effort to reconcile New York City’s new criminal requirements with existing law.

The New York City Fair Chance Act and other background check laws, as well as all federal and state background check requirements, are summarized in the firm’s O-D Comply: Background Checks and O-D Comply: Employment Applications subscription materials, which are updated and provided to O-D Comply subscribers as the law changes.