Consider this a warning: If your company conducts criminal background checks on potential hires, you could be subject to a suit by the Equal Employment Opportunity Commission. The EEOC filed two law suits this month against BMW and Dollar General. The law suits assert that both companies violated Title VII of the Civil Rights Act by implementing and utilizing a criminal background check policy that resulted in employees being fired and others being screened out for employment. The EEOC alleges this process violated Title VII because it had a disparate impact on African Americans.
Now these are just allegations in a complaint but even that is enough to cause a headache for most companies so you should pay attention. The facts are a little different in each case.
For BMW, the company had utilized a contractor for services at its plant in South Carolina. When that contract was terminated, the contractor’s employees were told they could reapply with the new contractor. The new contractor then screened the applicants using BMW’s policy of refusing employment to anyone with a criminal record of certain offense. According to the complaint, BMW prohibited hiring employees convicted of murder, assault & battery, rape, child abuse, spousal abuse, manufacturing of drugs, distribution of drugs, weapons violations, or convictions involving theft, dishonesty, and moral turpitude. BMW allegedly placed no time limit on these convictions. The result was that 70 of 88 workers who were terminated were black.
In the Dollar General case, the company’s practice is to make conditional job offers subject to a criminal background check. Dollar General’s background check policy appears to be more detailed than BMW’s. Dollar General (with its contractor) allegedly created a matrix that specified how recent a conviction could be for a specific list of offenses that would disqualify the prospective employee from employment. The prohibited periods in this matrix ranged from 1 year to 10 years based on the offense. The EEOC claims that this policy resulted in 10% of black applicants being passed over for employment while only 7% of other applicants were excluded. The employee in this case had a job offer revoked due to a 6 year old conviction for possession of a controlled substance which she disclosed and a second conviction for possession of drug paraphernalia which she did not disclose.
On their face, each of these policies sounds pretty reasonable. So why did the EEOC have a problem with them? Disparate impact.
Neither of these cases allege direct discrimination. They both allege “disparate impact” meaning that an otherwise non-discriminatory policy has a disproportional impact on a protected class. Last year the EEOC issued guidelines for employers who choose to use criminal background checks in their hiring decisions. You can find that guidance here. The EEOC specifically stated that such policies could result in a violation of Title VII and that it would begin enforcing those guidelines to promote “eliminating barriers in recruitment and hiring.” According to the EEOC guidelines, an employer’s neutral policy may disproportionately impact some individuals protected under Title VII, and may violate the law if not job related and consistent with business necessity.
These guidelines have some basis on a 1977 8th Circuit Court decision in Green v. Missouri Pacific Railroad. That decision affirmed a district court order prohibiting the offending company from disqualifying or denying employment solely and automatically for a criminal conviction. However, that order went on to say the company is not prohibited form considering an applicants’ prior criminal record as a factor in making individual hiring decisions if the company takes into account the nature and gravity of the offense, the time that has passed, and the nature of the job.
So what does this mean practically? As ridiculous as it may sound, according to the EEOC, companies are not allowed to refuse employment to murderers, at least not as a general rule. Rapists either. Is there a job anyone can identify where a company would not be concerned about employing an individual with a proven willingness to kill another human being? Executioner, perhaps? What about employing a convicted rapist? I hope your company doesn’t employ women, of course that could lead to other issues.
And don’t worry about that whole negligent hiring cause of action. The Texas legislature just voted to limited that cause of action, unless of course the employee was convicted of, among other offenses, sexual assault or murder.
Instead, the EEOC wants your company to jump through a number of hoops to justify your decision not to hire someone based on their criminal record. And these hoops should include individualized assessments just to be safe. So, document, document, document, then watch as your compliance expenses just keep going up, up, and up…
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