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EEOC Recognizes Title VII Cause of Action For Transgender Individuals

In a recent unanimous decision, the Equal Employment Opportunity Commission (EEOC) took the dramatic step of extending the protections of Title VII of the Civil Rights Act of 1964 to transgender individuals on the basis of their “transgender” status. In doing so, the EEOC adopted the position that Title VII’s prohibition of discrimination based on “sex” also prohibits discrimination based on “gender identity,” effectively adding another protected class under Federal discrimination laws.

In Macy v. Holder, a “transgender woman” – a person who is born a male but identifies as a female – named Macy applied for a position with the crime laboratory of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Macy v. Holder, Appeal No. 0120120821, Agency No. ATF-2011-00751 (April 23, 2012). At the time of his application, Macy was still presenting himself as a male. The Director of the laboratory allegedly told Macy that he would receive the position if the results of his criminal background investigation were satisfactory. However, after the Bureau learned that Macy was transitioning from male to female, he was informed that the position had been cut due to a federal budget reduction. When Macy discovered that the Director had hired someone else for the position, he filed a complaint with the Bureau, alleging that he was discriminated against on the basis of his sex and his gender identity.

The Bureau referred only Macy’s sex discrimination claim to the EEOC because it believed that his claim for “gender identity stereotyping” was not covered by Title VII, and, consequently, was outside the jurisdiction of the EEOC. The Bureau referred Macy’s gender identity claim to the Department of Justice, which has a policy against gender identity discrimination in the Federal government but can provide fewer remedies than the EEOC under Title VII. Macy appealed the Bureau’s decision to split his claims, asserting that the EEOC had jurisdiction over his entire complaint.

On appeal, the EEOC agreed with Macy that it had jurisdiction over both of his claims because, according to its new interpretation, both asserted “sex” discrimination recognizable under Title VII. Citing the Supreme Court’s ruling in Price Waterhouse v. Hopkins, which held that an employer cannot discriminate against a woman who fails to conform to female stereotypes, the EEOC emphasized that Title VII’s ban on sex discrimination includes both discrimination based on biological sex and also “the cultural and social aspects associated with masculinity and femininity.” Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (plurality opinion), superseded by statute, Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, as recognized in Landgraf v. USI Film Products, 511 U.S. 244 (1994). The EEOC further noted decisions of later courts, such as Schwenk v. Hartford, Smith v. City of Salem, and Schroer v. Billington, which recognized claims of sex discrimination against transsexuals under a sex stereotyping theory. Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004); Schwenk v. Hartford, 204 F.3d 1187 (9th Cir. 2000); Schroer v. Billington, 424 F. Supp.2d 203, 209 (D.D.C. 2006).

In holding that Title VII’s prohibition of discrimination based on sex includes discrimination based on transgender identity, the EEOC clarified that the various articulations of Macy’s claims were “simply different ways of stating the same claim of discrimination ‘based on . . . sex.’” When an employer discriminates against an individual because he or she is transsexual, this discrimination is “related to the victim’s sex” regardless of whether the discrimination is “because the individual has expressed his or her gender in a non-stereotypical fashion, because the employer is uncomfortable with the fact that the person has transitioned or is in the process of transitioning from one gender to another, or because the employer simply does not like that the person is identifying as a transgender person.” In each scenario, the employer’s “gender-based evaluation” violates the rule that generally, “an employer may not take gender into account in making an employment decision.”

Therefore, while transgender individuals may state a claim under Title VII by alleging that his or her employer is “stereotyping” based on gender, they are not required to do so. The EEOC concluded that, alternatively, Macy could show discrimination on the basis of “sex” simply by establishing that he did not get the job because the Director was willing to hire him when he thought Macy was a man, but not after learning that he was in the process of becoming a woman.

The EEOC also analogized transgender discrimination to religious discrimination. Citing again to Schroer, it described a scenario in which an employee was terminated for converting from Christianity to Judaism, and the employer admitted to bias only against converts but not against Christians or Jews. Given that discrimination “because of religion” would include discrimination because of changing religions, Title VII would prohibit such discrimination against the convert.

Although courts are not compelled to follow the EEOC’s decision in Macy v. Holder, judges considering Title VII claims brought by transgender applicants and employees undoubtedly will be influenced by the decision, and it is now more likely that they will allow claims of transgender discrimination to survive dispositive motions. Thus, companies faced with employment decisions involving transgender individuals should consider the EEOC’s current position and seek guidance from attorneys with experience advising employers about Federal employment discrimination laws.

B.     EEOC Adopts Guidance on Employers’ Use of Criminal Background Checks

The EEOC also recently adopted updated guidance instructing employers how to comply with Title VII when using criminal background checks. See EEOC Enforcement Guidance No. 915.002, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (2012), available at http://www.eeoc.gov/laws/guidance/upload/arrest_conviction.pdf. Employers must now ask themselves if their company treats all applicants with similar criminal histories equally. Further, they may not automatically deny employment opportunities because of any criminal conduct but must consider whether the dangers of specific crimes are relevant to particular positions.

Citing the “significant increase” in Americans with criminal records and proportionally higher arrest and incarceration rates for African Americans and Hispanics, the EEOC explained that the use of background checks in employment decisions may violate Title VII under the “disparate treatment” and “disparate impact” theories. Briefly illustrating disparate treatment based on race, the EEOC described a scenario in which two candidates, a White male and an African-American male, applied for a job with the same company. Both had similar education, skills and work experience, and both had pled guilty to charges of possessing and distributing marijuana in high school. After background checks disclosed their convictions, the company only followed up with the White applicant but not the African American, stating that the company could not accept “these drug dealer types.”

However, the EEOC’s guidance focuses heavily on the disparate-impact theory, which is the principle that a neutral employment policy may violate Title VII when it disproportionately affects employees or applicants on the basis of sex, race or any other protected characteristic. If the employer’s criminal background policy disproportionately screens out a group protected by Title VII, the employer violates Title VII unless the policy is “job related for the position in question and consistent with business necessity.” An exclusionary policy is “job related” if it “bears a demonstrable relationship to successful performance of the jobs for which it was used and measures the person for the job and not the person in the abstract.” Further, the policy must be “necessary to safe and efficient job performance.”

An employer will likely meet the “job related and consistent with business necessity” requirement by doing one of two things. First, the employer can meet this standard by ensuring that the criminal background check for the relevant position is consistent with the Uniform Guidelines on Employee Selection Procedures.

Second, an employer will likely meet the EEOC’s requirement by formulating a “targeted screen” that evaluates (1) the nature and gravity of the crime, (2) the time elapsed since the crime or completion of the sentence, and (3) the nature of the job in question, and also creates an individual assessment for each applicant rejected using the screen. The nature of the crime may be gauged by considering the harm caused by the offense, such as property loss due to theft, and the legal elements of the offense, such as a theft conviction that may include the elements of deception or intimidation. Whether the crime was a misdemeanor or felony may reflect the gravity of the crime. In evaluating the time elapsed since the crime or completion of the sentence, relevant information may include studies showing whether the risk of recidivism lessens over a period of time. Last, when considering the nature of the job, employers should consider the job title, job duties, the essential functions of the job, circumstances under which the work is done (including the level of oversight and interaction with other employees or vulnerable persons), and the type of environment in which the job is performed (i.e., whether the employee interacts with co-employees, customers, and/or the public at-large).

If an employer’s policy excludes applicants from certain positions after considering the factors described above, such a “targeted exclusion” may be lawful even without an individualized assessment. However, the EEOC cautioned that such a screen must be “narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question.”

Nevertheless, the EEOC recommends the use of individualized assessments to obtain more comprehensive information on screened individuals. In an individualized assessment, an employer notifies the person that he may be excluded due to criminal conduct, allows the individual to show why he should not be excluded, and evaluates whether this additional information demonstrates that the exclusion policy as applied to this person is not job related or consistent with business necessity.

However, even if an employer shows that its policy is “job related for the position in question and consistent with business necessity,” it still may incur Title VII liability if a plaintiff demonstrates that a less discriminatory “alternative employment practice” exists that would accomplish the employer’s legitimate goals as efficiently as the disputed policy and that the employer refused to adopt this alternative.

The EEOC also explained that when assessing a criminal background policy for compliance with Title VII, arrests and convictions are treated differently. Whereas a record of conviction is usually sufficient evidence that certain conduct occurred, arrests are not proof of criminal conduct. The EEOC explained that an employer may not make an employment decision based solely on an arrest record, but it may deny employment if proven conduct underlying the arrest renders the person unfit for the position. To explain this principle, the EEOC described a scenario in which a Latino male assistant principal is arrested and charged with sexual abuse of children at his school. The school investigates the charges and after finding that his story is not credible, terminates him pursuant to its policy based on his conduct. After determining that a policy terminating him solely on his arrest would have a disparate impact based on national origin, the EEOC decided that the school’s conduct did not violate Title VII; the school’s policy is based on conduct that is pertinent to the position in question, and the employee was terminated because of his underlying conduct, not because of the arrest itself.

The guidance makes clear that employers have the right use Federal law to defend its policy. This is especially relevant for those industries where hiring is controlled by Federal laws and regulations that may restrict or exclude applicants with certain convictions from particular jobs. For example, such federal restrictions apply to airport security screeners, federal law enforcement officers, bank employees, child care workers employed in federal agencies or facilities, and port workers. However, while Title VII does not preempt federal laws or regulations, exceeding the federal requirements may lead to liability.

In contrast, an employer may not necessarily use state or local law to defend its policy. As opposed to federal laws and regulations, Title VII does preempt state and local laws and regulations “if they purport to require or permit the doing of any act which would be an unlawful employment practice under Title VII.” Thus, if the policy adopted pursuant to state or local law does not meet Title VII’s “job related and consistent with business necessity” requirement, the employer may still incur liability.

In light of this recent guidance, businesses need to re-examine their background-check policies and consult with labor and employment counsel to minimize their risk of liability under Title VII.



Originally published in the September 2012 issue of the "Corporate Counselor". Reprinted with permission.

 

 

EEOC Recognizes Title VII Cause of Action For Transgender Individuals

In a recent unanimous decision, the Equal Employment Opportunity Commission (EEOC) took the dramatic step of extending the protections of Title VII of the Civil Rights Act of 1964 to transgender individuals on the basis of their “transgender” status. In doing so, the EEOC adopted the position that Title VII’s prohibition of discrimination based on “sex” also prohibits discrimination based on “gender identity,” effectively adding another protected class under Federal discrimination laws.

In Macy v. Holder, a “transgender woman” – a person who is born a male but identifies as a female – named Macy applied for a position with the crime laboratory of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Macy v. Holder, Appeal No. 0120120821, Agency No. ATF-2011-00751 (April 23, 2012). At the time of his application, Macy was still presenting himself as a male. The Director of the laboratory allegedly told Macy that he would receive the position if the results of his criminal background investigation were satisfactory. However, after the Bureau learned that Macy was transitioning from male to female, he was informed that the position had been cut due to a federal budget reduction. When Macy discovered that the Director had hired someone else for the position, he filed a complaint with the Bureau, alleging that he was discriminated against on the basis of his sex and his gender identity.

The Bureau referred only Macy’s sex discrimination claim to the EEOC because it believed that his claim for “gender identity stereotyping” was not covered by Title VII, and, consequently, was outside the jurisdiction of the EEOC. The Bureau referred Macy’s gender identity claim to the Department of Justice, which has a policy against gender identity discrimination in the Federal government but can provide fewer remedies than the EEOC under Title VII. Macy appealed the Bureau’s decision to split his claims, asserting that the EEOC had jurisdiction over his entire complaint.

On appeal, the EEOC agreed with Macy that it had jurisdiction over both of his claims because, according to its new interpretation, both asserted “sex” discrimination recognizable under Title VII. Citing the Supreme Court’s ruling in Price Waterhouse v. Hopkins, which held that an employer cannot discriminate against a woman who fails to conform to female stereotypes, the EEOC emphasized that Title VII’s ban on sex discrimination includes both discrimination based on biological sex and also “the cultural and social aspects associated with masculinity and femininity.” Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (plurality opinion), superseded by statute, Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, as recognized in Landgraf v. USI Film Products, 511 U.S. 244 (1994). The EEOC further noted decisions of later courts, such as Schwenk v. Hartford, Smith v. City of Salem, and Schroer v. Billington, which recognized claims of sex discrimination against transsexuals under a sex stereotyping theory. Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004); Schwenk v. Hartford, 204 F.3d 1187 (9th Cir. 2000); Schroer v. Billington, 424 F. Supp.2d 203, 209 (D.D.C. 2006).

In holding that Title VII’s prohibition of discrimination based on sex includes discrimination based on transgender identity, the EEOC clarified that the various articulations of Macy’s claims were “simply different ways of stating the same claim of discrimination ‘based on . . . sex.’” When an employer discriminates against an individual because he or she is transsexual, this discrimination is “related to the victim’s sex” regardless of whether the discrimination is “because the individual has expressed his or her gender in a non-stereotypical fashion, because the employer is uncomfortable with the fact that the person has transitioned or is in the process of transitioning from one gender to another, or because the employer simply does not like that the person is identifying as a transgender person.” In each scenario, the employer’s “gender-based evaluation” violates the rule that generally, “an employer may not take gender into account in making an employment decision.”

Therefore, while transgender individuals may state a claim under Title VII by alleging that his or her employer is “stereotyping” based on gender, they are not required to do so. The EEOC concluded that, alternatively, Macy could show discrimination on the basis of “sex” simply by establishing that he did not get the job because the Director was willing to hire him when he thought Macy was a man, but not after learning that he was in the process of becoming a woman.

The EEOC also analogized transgender discrimination to religious discrimination. Citing again to Schroer, it described a scenario in which an employee was terminated for converting from Christianity to Judaism, and the employer admitted to bias only against converts but not against Christians or Jews. Given that discrimination “because of religion” would include discrimination because of changing religions, Title VII would prohibit such discrimination against the convert.

Although courts are not compelled to follow the EEOC’s decision in Macy v. Holder, judges considering Title VII claims brought by transgender applicants and employees undoubtedly will be influenced by the decision, and it is now more likely that they will allow claims of transgender discrimination to survive dispositive motions. Thus, companies faced with employment decisions involving transgender individuals should consider the EEOC’s current position and seek guidance from attorneys with experience advising employers about Federal employment discrimination laws.

B.     EEOC Adopts Guidance on Employers’ Use of Criminal Background Checks

The EEOC also recently adopted updated guidance instructing employers how to comply with Title VII when using criminal background checks. See EEOC Enforcement Guidance No. 915.002, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (2012), available at http://www.eeoc.gov/laws/guidance/upload/arrest_conviction.pdf. Employers must now ask themselves if their company treats all applicants with similar criminal histories equally. Further, they may not automatically deny employment opportunities because of any criminal conduct but must consider whether the dangers of specific crimes are relevant to particular positions.

Citing the “significant increase” in Americans with criminal records and proportionally higher arrest and incarceration rates for African Americans and Hispanics, the EEOC explained that the use of background checks in employment decisions may violate Title VII under the “disparate treatment” and “disparate impact” theories. Briefly illustrating disparate treatment based on race, the EEOC described a scenario in which two candidates, a White male and an African-American male, applied for a job with the same company. Both had similar education, skills and work experience, and both had pled guilty to charges of possessing and distributing marijuana in high school. After background checks disclosed their convictions, the company only followed up with the White applicant but not the African American, stating that the company could not accept “these drug dealer types.”

However, the EEOC’s guidance focuses heavily on the disparate-impact theory, which is the principle that a neutral employment policy may violate Title VII when it disproportionately affects employees or applicants on the basis of sex, race or any other protected characteristic. If the employer’s criminal background policy disproportionately screens out a group protected by Title VII, the employer violates Title VII unless the policy is “job related for the position in question and consistent with business necessity.” An exclusionary policy is “job related” if it “bears a demonstrable relationship to successful performance of the jobs for which it was used and measures the person for the job and not the person in the abstract.” Further, the policy must be “necessary to safe and efficient job performance.”

An employer will likely meet the “job related and consistent with business necessity” requirement by doing one of two things. First, the employer can meet this standard by ensuring that the criminal background check for the relevant position is consistent with the Uniform Guidelines on Employee Selection Procedures.

Second, an employer will likely meet the EEOC’s requirement by formulating a “targeted screen” that evaluates (1) the nature and gravity of the crime, (2) the time elapsed since the crime or completion of the sentence, and (3) the nature of the job in question, and also creates an individual assessment for each applicant rejected using the screen. The nature of the crime may be gauged by considering the harm caused by the offense, such as property loss due to theft, and the legal elements of the offense, such as a theft conviction that may include the elements of deception or intimidation. Whether the crime was a misdemeanor or felony may reflect the gravity of the crime. In evaluating the time elapsed since the crime or completion of the sentence, relevant information may include studies showing whether the risk of recidivism lessens over a period of time. Last, when considering the nature of the job, employers should consider the job title, job duties, the essential functions of the job, circumstances under which the work is done (including the level of oversight and interaction with other employees or vulnerable persons), and the type of environment in which the job is performed (i.e., whether the employee interacts with co-employees, customers, and/or the public at-large).

If an employer’s policy excludes applicants from certain positions after considering the factors described above, such a “targeted exclusion” may be lawful even without an individualized assessment. However, the EEOC cautioned that such a screen must be “narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question.”

Nevertheless, the EEOC recommends the use of individualized assessments to obtain more comprehensive information on screened individuals. In an individualized assessment, an employer notifies the person that he may be excluded due to criminal conduct, allows the individual to show why he should not be excluded, and evaluates whether this additional information demonstrates that the exclusion policy as applied to this person is not job related or consistent with business necessity.

However, even if an employer shows that its policy is “job related for the position in question and consistent with business necessity,” it still may incur Title VII liability if a plaintiff demonstrates that a less discriminatory “alternative employment practice” exists that would accomplish the employer’s legitimate goals as efficiently as the disputed policy and that the employer refused to adopt this alternative.

The EEOC also explained that when assessing a criminal background policy for compliance with Title VII, arrests and convictions are treated differently. Whereas a record of conviction is usually sufficient evidence that certain conduct occurred, arrests are not proof of criminal conduct. The EEOC explained that an employer may not make an employment decision based solely on an arrest record, but it may deny employment if proven conduct underlying the arrest renders the person unfit for the position. To explain this principle, the EEOC described a scenario in which a Latino male assistant principal is arrested and charged with sexual abuse of children at his school. The school investigates the charges and after finding that his story is not credible, terminates him pursuant to its policy based on his conduct. After determining that a policy terminating him solely on his arrest would have a disparate impact based on national origin, the EEOC decided that the school’s conduct did not violate Title VII; the school’s policy is based on conduct that is pertinent to the position in question, and the employee was terminated because of his underlying conduct, not because of the arrest itself.

The guidance makes clear that employers have the right use Federal law to defend its policy. This is especially relevant for those industries where hiring is controlled by Federal laws and regulations that may restrict or exclude applicants with certain convictions from particular jobs. For example, such federal restrictions apply to airport security screeners, federal law enforcement officers, bank employees, child care workers employed in federal agencies or facilities, and port workers. However, while Title VII does not preempt federal laws or regulations, exceeding the federal requirements may lead to liability.

In contrast, an employer may not necessarily use state or local law to defend its policy. As opposed to federal laws and regulations, Title VII does preempt state and local laws and regulations “if they purport to require or permit the doing of any act which would be an unlawful employment practice under Title VII.” Thus, if the policy adopted pursuant to state or local law does not meet Title VII’s “job related and consistent with business necessity” requirement, the employer may still incur liability.

In light of this recent guidance, businesses need to re-examine their background-check policies and consult with labor and employment counsel to minimize their risk of liability under Title VII.



Originally published in the September 2012 issue of the "Corporate Counselor". Reprinted with permission.

 

 

EEOC Recognizes Title VII Cause of Action For Transgender Individuals

In a recent unanimous decision, the Equal Employment Opportunity Commission (EEOC) took the dramatic step of extending the protections of Title VII of the Civil Rights Act of 1964 to transgender individuals on the basis of their “transgender” status. In doing so, the EEOC adopted the position that Title VII’s prohibition of discrimination based on “sex” also prohibits discrimination based on “gender identity,” effectively adding another protected class under Federal discrimination laws.

In Macy v. Holder, a “transgender woman” – a person who is born a male but identifies as a female – named Macy applied for a position with the crime laboratory of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Macy v. Holder, Appeal No. 0120120821, Agency No. ATF-2011-00751 (April 23, 2012). At the time of his application, Macy was still presenting himself as a male. The Director of the laboratory allegedly told Macy that he would receive the position if the results of his criminal background investigation were satisfactory. However, after the Bureau learned that Macy was transitioning from male to female, he was informed that the position had been cut due to a federal budget reduction. When Macy discovered that the Director had hired someone else for the position, he filed a complaint with the Bureau, alleging that he was discriminated against on the basis of his sex and his gender identity.

The Bureau referred only Macy’s sex discrimination claim to the EEOC because it believed that his claim for “gender identity stereotyping” was not covered by Title VII, and, consequently, was outside the jurisdiction of the EEOC. The Bureau referred Macy’s gender identity claim to the Department of Justice, which has a policy against gender identity discrimination in the Federal government but can provide fewer remedies than the EEOC under Title VII. Macy appealed the Bureau’s decision to split his claims, asserting that the EEOC had jurisdiction over his entire complaint.

On appeal, the EEOC agreed with Macy that it had jurisdiction over both of his claims because, according to its new interpretation, both asserted “sex” discrimination recognizable under Title VII. Citing the Supreme Court’s ruling in Price Waterhouse v. Hopkins, which held that an employer cannot discriminate against a woman who fails to conform to female stereotypes, the EEOC emphasized that Title VII’s ban on sex discrimination includes both discrimination based on biological sex and also “the cultural and social aspects associated with masculinity and femininity.” Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (plurality opinion), superseded by statute, Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, as recognized in Landgraf v. USI Film Products, 511 U.S. 244 (1994). The EEOC further noted decisions of later courts, such as Schwenk v. Hartford, Smith v. City of Salem, and Schroer v. Billington, which recognized claims of sex discrimination against transsexuals under a sex stereotyping theory. Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004); Schwenk v. Hartford, 204 F.3d 1187 (9th Cir. 2000); Schroer v. Billington, 424 F. Supp.2d 203, 209 (D.D.C. 2006).

In holding that Title VII’s prohibition of discrimination based on sex includes discrimination based on transgender identity, the EEOC clarified that the various articulations of Macy’s claims were “simply different ways of stating the same claim of discrimination ‘based on . . . sex.’” When an employer discriminates against an individual because he or she is transsexual, this discrimination is “related to the victim’s sex” regardless of whether the discrimination is “because the individual has expressed his or her gender in a non-stereotypical fashion, because the employer is uncomfortable with the fact that the person has transitioned or is in the process of transitioning from one gender to another, or because the employer simply does not like that the person is identifying as a transgender person.” In each scenario, the employer’s “gender-based evaluation” violates the rule that generally, “an employer may not take gender into account in making an employment decision.”

Therefore, while transgender individuals may state a claim under Title VII by alleging that his or her employer is “stereotyping” based on gender, they are not required to do so. The EEOC concluded that, alternatively, Macy could show discrimination on the basis of “sex” simply by establishing that he did not get the job because the Director was willing to hire him when he thought Macy was a man, but not after learning that he was in the process of becoming a woman.

The EEOC also analogized transgender discrimination to religious discrimination. Citing again to Schroer, it described a scenario in which an employee was terminated for converting from Christianity to Judaism, and the employer admitted to bias only against converts but not against Christians or Jews. Given that discrimination “because of religion” would include discrimination because of changing religions, Title VII would prohibit such discrimination against the convert.

Although courts are not compelled to follow the EEOC’s decision in Macy v. Holder, judges considering Title VII claims brought by transgender applicants and employees undoubtedly will be influenced by the decision, and it is now more likely that they will allow claims of transgender discrimination to survive dispositive motions. Thus, companies faced with employment decisions involving transgender individuals should consider the EEOC’s current position and seek guidance from attorneys with experience advising employers about Federal employment discrimination laws.

B.     EEOC Adopts Guidance on Employers’ Use of Criminal Background Checks

The EEOC also recently adopted updated guidance instructing employers how to comply with Title VII when using criminal background checks. See EEOC Enforcement Guidance No. 915.002, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (2012), available at http://www.eeoc.gov/laws/guidance/upload/arrest_conviction.pdf. Employers must now ask themselves if their company treats all applicants with similar criminal histories equally. Further, they may not automatically deny employment opportunities because of any criminal conduct but must consider whether the dangers of specific crimes are relevant to particular positions.

Citing the “significant increase” in Americans with criminal records and proportionally higher arrest and incarceration rates for African Americans and Hispanics, the EEOC explained that the use of background checks in employment decisions may violate Title VII under the “disparate treatment” and “disparate impact” theories. Briefly illustrating disparate treatment based on race, the EEOC described a scenario in which two candidates, a White male and an African-American male, applied for a job with the same company. Both had similar education, skills and work experience, and both had pled guilty to charges of possessing and distributing marijuana in high school. After background checks disclosed their convictions, the company only followed up with the White applicant but not the African American, stating that the company could not accept “these drug dealer types.”

However, the EEOC’s guidance focuses heavily on the disparate-impact theory, which is the principle that a neutral employment policy may violate Title VII when it disproportionately affects employees or applicants on the basis of sex, race or any other protected characteristic. If the employer’s criminal background policy disproportionately screens out a group protected by Title VII, the employer violates Title VII unless the policy is “job related for the position in question and consistent with business necessity.” An exclusionary policy is “job related” if it “bears a demonstrable relationship to successful performance of the jobs for which it was used and measures the person for the job and not the person in the abstract.” Further, the policy must be “necessary to safe and efficient job performance.”

An employer will likely meet the “job related and consistent with business necessity” requirement by doing one of two things. First, the employer can meet this standard by ensuring that the criminal background check for the relevant position is consistent with the Uniform Guidelines on Employee Selection Procedures.

Second, an employer will likely meet the EEOC’s requirement by formulating a “targeted screen” that evaluates (1) the nature and gravity of the crime, (2) the time elapsed since the crime or completion of the sentence, and (3) the nature of the job in question, and also creates an individual assessment for each applicant rejected using the screen. The nature of the crime may be gauged by considering the harm caused by the offense, such as property loss due to theft, and the legal elements of the offense, such as a theft conviction that may include the elements of deception or intimidation. Whether the crime was a misdemeanor or felony may reflect the gravity of the crime. In evaluating the time elapsed since the crime or completion of the sentence, relevant information may include studies showing whether the risk of recidivism lessens over a period of time. Last, when considering the nature of the job, employers should consider the job title, job duties, the essential functions of the job, circumstances under which the work is done (including the level of oversight and interaction with other employees or vulnerable persons), and the type of environment in which the job is performed (i.e., whether the employee interacts with co-employees, customers, and/or the public at-large).

If an employer’s policy excludes applicants from certain positions after considering the factors described above, such a “targeted exclusion” may be lawful even without an individualized assessment. However, the EEOC cautioned that such a screen must be “narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question.”

Nevertheless, the EEOC recommends the use of individualized assessments to obtain more comprehensive information on screened individuals. In an individualized assessment, an employer notifies the person that he may be excluded due to criminal conduct, allows the individual to show why he should not be excluded, and evaluates whether this additional information demonstrates that the exclusion policy as applied to this person is not job related or consistent with business necessity.

However, even if an employer shows that its policy is “job related for the position in question and consistent with business necessity,” it still may incur Title VII liability if a plaintiff demonstrates that a less discriminatory “alternative employment practice” exists that would accomplish the employer’s legitimate goals as efficiently as the disputed policy and that the employer refused to adopt this alternative.

The EEOC also explained that when assessing a criminal background policy for compliance with Title VII, arrests and convictions are treated differently. Whereas a record of conviction is usually sufficient evidence that certain conduct occurred, arrests are not proof of criminal conduct. The EEOC explained that an employer may not make an employment decision based solely on an arrest record, but it may deny employment if proven conduct underlying the arrest renders the person unfit for the position. To explain this principle, the EEOC described a scenario in which a Latino male assistant principal is arrested and charged with sexual abuse of children at his school. The school investigates the charges and after finding that his story is not credible, terminates him pursuant to its policy based on his conduct. After determining that a policy terminating him solely on his arrest would have a disparate impact based on national origin, the EEOC decided that the school’s conduct did not violate Title VII; the school’s policy is based on conduct that is pertinent to the position in question, and the employee was terminated because of his underlying conduct, not because of the arrest itself.

The guidance makes clear that employers have the right use Federal law to defend its policy. This is especially relevant for those industries where hiring is controlled by Federal laws and regulations that may restrict or exclude applicants with certain convictions from particular jobs. For example, such federal restrictions apply to airport security screeners, federal law enforcement officers, bank employees, child care workers employed in federal agencies or facilities, and port workers. However, while Title VII does not preempt federal laws or regulations, exceeding the federal requirements may lead to liability.

In contrast, an employer may not necessarily use state or local law to defend its policy. As opposed to federal laws and regulations, Title VII does preempt state and local laws and regulations “if they purport to require or permit the doing of any act which would be an unlawful employment practice under Title VII.” Thus, if the policy adopted pursuant to state or local law does not meet Title VII’s “job related and consistent with business necessity” requirement, the employer may still incur liability.

In light of this recent guidance, businesses need to re-examine their background-check policies and consult with labor and employment counsel to minimize their risk of liability under Title VII.



Originally published in the September 2012 issue of the "Corporate Counselor". Reprinted with permission.

 

 

EEOC Recognizes Title VII Cause of Action For Transgender Individuals

In a recent unanimous decision, the Equal Employment Opportunity Commission (EEOC) took the dramatic step of extending the protections of Title VII of the Civil Rights Act of 1964 to transgender individuals on the basis of their “transgender” status. In doing so, the EEOC adopted the position that Title VII’s prohibition of discrimination based on “sex” also prohibits discrimination based on “gender identity,” effectively adding another protected class under Federal discrimination laws.

In Macy v. Holder, a “transgender woman” – a person who is born a male but identifies as a female – named Macy applied for a position with the crime laboratory of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Macy v. Holder, Appeal No. 0120120821, Agency No. ATF-2011-00751 (April 23, 2012). At the time of his application, Macy was still presenting himself as a male. The Director of the laboratory allegedly told Macy that he would receive the position if the results of his criminal background investigation were satisfactory. However, after the Bureau learned that Macy was transitioning from male to female, he was informed that the position had been cut due to a federal budget reduction. When Macy discovered that the Director had hired someone else for the position, he filed a complaint with the Bureau, alleging that he was discriminated against on the basis of his sex and his gender identity.

The Bureau referred only Macy’s sex discrimination claim to the EEOC because it believed that his claim for “gender identity stereotyping” was not covered by Title VII, and, consequently, was outside the jurisdiction of the EEOC. The Bureau referred Macy’s gender identity claim to the Department of Justice, which has a policy against gender identity discrimination in the Federal government but can provide fewer remedies than the EEOC under Title VII. Macy appealed the Bureau’s decision to split his claims, asserting that the EEOC had jurisdiction over his entire complaint.

On appeal, the EEOC agreed with Macy that it had jurisdiction over both of his claims because, according to its new interpretation, both asserted “sex” discrimination recognizable under Title VII. Citing the Supreme Court’s ruling in Price Waterhouse v. Hopkins, which held that an employer cannot discriminate against a woman who fails to conform to female stereotypes, the EEOC emphasized that Title VII’s ban on sex discrimination includes both discrimination based on biological sex and also “the cultural and social aspects associated with masculinity and femininity.” Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (plurality opinion), superseded by statute, Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, as recognized in Landgraf v. USI Film Products, 511 U.S. 244 (1994). The EEOC further noted decisions of later courts, such as Schwenk v. Hartford, Smith v. City of Salem, and Schroer v. Billington, which recognized claims of sex discrimination against transsexuals under a sex stereotyping theory. Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004); Schwenk v. Hartford, 204 F.3d 1187 (9th Cir. 2000); Schroer v. Billington, 424 F. Supp.2d 203, 209 (D.D.C. 2006).

In holding that Title VII’s prohibition of discrimination based on sex includes discrimination based on transgender identity, the EEOC clarified that the various articulations of Macy’s claims were “simply different ways of stating the same claim of discrimination ‘based on . . . sex.’” When an employer discriminates against an individual because he or she is transsexual, this discrimination is “related to the victim’s sex” regardless of whether the discrimination is “because the individual has expressed his or her gender in a non-stereotypical fashion, because the employer is uncomfortable with the fact that the person has transitioned or is in the process of transitioning from one gender to another, or because the employer simply does not like that the person is identifying as a transgender person.” In each scenario, the employer’s “gender-based evaluation” violates the rule that generally, “an employer may not take gender into account in making an employment decision.”

Therefore, while transgender individuals may state a claim under Title VII by alleging that his or her employer is “stereotyping” based on gender, they are not required to do so. The EEOC concluded that, alternatively, Macy could show discrimination on the basis of “sex” simply by establishing that he did not get the job because the Director was willing to hire him when he thought Macy was a man, but not after learning that he was in the process of becoming a woman.

The EEOC also analogized transgender discrimination to religious discrimination. Citing again to Schroer, it described a scenario in which an employee was terminated for converting from Christianity to Judaism, and the employer admitted to bias only against converts but not against Christians or Jews. Given that discrimination “because of religion” would include discrimination because of changing religions, Title VII would prohibit such discrimination against the convert.

Although courts are not compelled to follow the EEOC’s decision in Macy v. Holder, judges considering Title VII claims brought by transgender applicants and employees undoubtedly will be influenced by the decision, and it is now more likely that they will allow claims of transgender discrimination to survive dispositive motions. Thus, companies faced with employment decisions involving transgender individuals should consider the EEOC’s current position and seek guidance from attorneys with experience advising employers about Federal employment discrimination laws.

B.     EEOC Adopts Guidance on Employers’ Use of Criminal Background Checks

The EEOC also recently adopted updated guidance instructing employers how to comply with Title VII when using criminal background checks. See EEOC Enforcement Guidance No. 915.002, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (2012), available at http://www.eeoc.gov/laws/guidance/upload/arrest_conviction.pdf. Employers must now ask themselves if their company treats all applicants with similar criminal histories equally. Further, they may not automatically deny employment opportunities because of any criminal conduct but must consider whether the dangers of specific crimes are relevant to particular positions.

Citing the “significant increase” in Americans with criminal records and proportionally higher arrest and incarceration rates for African Americans and Hispanics, the EEOC explained that the use of background checks in employment decisions may violate Title VII under the “disparate treatment” and “disparate impact” theories. Briefly illustrating disparate treatment based on race, the EEOC described a scenario in which two candidates, a White male and an African-American male, applied for a job with the same company. Both had similar education, skills and work experience, and both had pled guilty to charges of possessing and distributing marijuana in high school. After background checks disclosed their convictions, the company only followed up with the White applicant but not the African American, stating that the company could not accept “these drug dealer types.”

However, the EEOC’s guidance focuses heavily on the disparate-impact theory, which is the principle that a neutral employment policy may violate Title VII when it disproportionately affects employees or applicants on the basis of sex, race or any other protected characteristic. If the employer’s criminal background policy disproportionately screens out a group protected by Title VII, the employer violates Title VII unless the policy is “job related for the position in question and consistent with business necessity.” An exclusionary policy is “job related” if it “bears a demonstrable relationship to successful performance of the jobs for which it was used and measures the person for the job and not the person in the abstract.” Further, the policy must be “necessary to safe and efficient job performance.”

An employer will likely meet the “job related and consistent with business necessity” requirement by doing one of two things. First, the employer can meet this standard by ensuring that the criminal background check for the relevant position is consistent with the Uniform Guidelines on Employee Selection Procedures.

Second, an employer will likely meet the EEOC’s requirement by formulating a “targeted screen” that evaluates (1) the nature and gravity of the crime, (2) the time elapsed since the crime or completion of the sentence, and (3) the nature of the job in question, and also creates an individual assessment for each applicant rejected using the screen. The nature of the crime may be gauged by considering the harm caused by the offense, such as property loss due to theft, and the legal elements of the offense, such as a theft conviction that may include the elements of deception or intimidation. Whether the crime was a misdemeanor or felony may reflect the gravity of the crime. In evaluating the time elapsed since the crime or completion of the sentence, relevant information may include studies showing whether the risk of recidivism lessens over a period of time. Last, when considering the nature of the job, employers should consider the job title, job duties, the essential functions of the job, circumstances under which the work is done (including the level of oversight and interaction with other employees or vulnerable persons), and the type of environment in which the job is performed (i.e., whether the employee interacts with co-employees, customers, and/or the public at-large).

If an employer’s policy excludes applicants from certain positions after considering the factors described above, such a “targeted exclusion” may be lawful even without an individualized assessment. However, the EEOC cautioned that such a screen must be “narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question.”

Nevertheless, the EEOC recommends the use of individualized assessments to obtain more comprehensive information on screened individuals. In an individualized assessment, an employer notifies the person that he may be excluded due to criminal conduct, allows the individual to show why he should not be excluded, and evaluates whether this additional information demonstrates that the exclusion policy as applied to this person is not job related or consistent with business necessity.

However, even if an employer shows that its policy is “job related for the position in question and consistent with business necessity,” it still may incur Title VII liability if a plaintiff demonstrates that a less discriminatory “alternative employment practice” exists that would accomplish the employer’s legitimate goals as efficiently as the disputed policy and that the employer refused to adopt this alternative.

The EEOC also explained that when assessing a criminal background policy for compliance with Title VII, arrests and convictions are treated differently. Whereas a record of conviction is usually sufficient evidence that certain conduct occurred, arrests are not proof of criminal conduct. The EEOC explained that an employer may not make an employment decision based solely on an arrest record, but it may deny employment if proven conduct underlying the arrest renders the person unfit for the position. To explain this principle, the EEOC described a scenario in which a Latino male assistant principal is arrested and charged with sexual abuse of children at his school. The school investigates the charges and after finding that his story is not credible, terminates him pursuant to its policy based on his conduct. After determining that a policy terminating him solely on his arrest would have a disparate impact based on national origin, the EEOC decided that the school’s conduct did not violate Title VII; the school’s policy is based on conduct that is pertinent to the position in question, and the employee was terminated because of his underlying conduct, not because of the arrest itself.

The guidance makes clear that employers have the right use Federal law to defend its policy. This is especially relevant for those industries where hiring is controlled by Federal laws and regulations that may restrict or exclude applicants with certain convictions from particular jobs. For example, such federal restrictions apply to airport security screeners, federal law enforcement officers, bank employees, child care workers employed in federal agencies or facilities, and port workers. However, while Title VII does not preempt federal laws or regulations, exceeding the federal requirements may lead to liability.

In contrast, an employer may not necessarily use state or local law to defend its policy. As opposed to federal laws and regulations, Title VII does preempt state and local laws and regulations “if they purport to require or permit the doing of any act which would be an unlawful employment practice under Title VII.” Thus, if the policy adopted pursuant to state or local law does not meet Title VII’s “job related and consistent with business necessity” requirement, the employer may still incur liability.

In light of this recent guidance, businesses need to re-examine their background-check policies and consult with labor and employment counsel to minimize their risk of liability under Title VII.



Originally published in the September 2012 issue of the "Corporate Counselor". Reprinted with permission.

 

 

EEOC Recognizes Title VII Cause of Action For Transgender Individuals

In a recent unanimous decision, the Equal Employment Opportunity Commission (EEOC) took the dramatic step of extending the protections of Title VII of the Civil Rights Act of 1964 to transgender individuals on the basis of their “transgender” status. In doing so, the EEOC adopted the position that Title VII’s prohibition of discrimination based on “sex” also prohibits discrimination based on “gender identity,” effectively adding another protected class under Federal discrimination laws.

In Macy v. Holder, a “transgender woman” – a person who is born a male but identifies as a female – named Macy applied for a position with the crime laboratory of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Macy v. Holder, Appeal No. 0120120821, Agency No. ATF-2011-00751 (April 23, 2012). At the time of his application, Macy was still presenting himself as a male. The Director of the laboratory allegedly told Macy that he would receive the position if the results of his criminal background investigation were satisfactory. However, after the Bureau learned that Macy was transitioning from male to female, he was informed that the position had been cut due to a federal budget reduction. When Macy discovered that the Director had hired someone else for the position, he filed a complaint with the Bureau, alleging that he was discriminated against on the basis of his sex and his gender identity.

The Bureau referred only Macy’s sex discrimination claim to the EEOC because it believed that his claim for “gender identity stereotyping” was not covered by Title VII, and, consequently, was outside the jurisdiction of the EEOC. The Bureau referred Macy’s gender identity claim to the Department of Justice, which has a policy against gender identity discrimination in the Federal government but can provide fewer remedies than the EEOC under Title VII. Macy appealed the Bureau’s decision to split his claims, asserting that the EEOC had jurisdiction over his entire complaint.

On appeal, the EEOC agreed with Macy that it had jurisdiction over both of his claims because, according to its new interpretation, both asserted “sex” discrimination recognizable under Title VII. Citing the Supreme Court’s ruling in Price Waterhouse v. Hopkins, which held that an employer cannot discriminate against a woman who fails to conform to female stereotypes, the EEOC emphasized that Title VII’s ban on sex discrimination includes both discrimination based on biological sex and also “the cultural and social aspects associated with masculinity and femininity.” Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (plurality opinion), superseded by statute, Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, as recognized in Landgraf v. USI Film Products, 511 U.S. 244 (1994). The EEOC further noted decisions of later courts, such as Schwenk v. Hartford, Smith v. City of Salem, and Schroer v. Billington, which recognized claims of sex discrimination against transsexuals under a sex stereotyping theory. Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004); Schwenk v. Hartford, 204 F.3d 1187 (9th Cir. 2000); Schroer v. Billington, 424 F. Supp.2d 203, 209 (D.D.C. 2006).

In holding that Title VII’s prohibition of discrimination based on sex includes discrimination based on transgender identity, the EEOC clarified that the various articulations of Macy’s claims were “simply different ways of stating the same claim of discrimination ‘based on . . . sex.’” When an employer discriminates against an individual because he or she is transsexual, this discrimination is “related to the victim’s sex” regardless of whether the discrimination is “because the individual has expressed his or her gender in a non-stereotypical fashion, because the employer is uncomfortable with the fact that the person has transitioned or is in the process of transitioning from one gender to another, or because the employer simply does not like that the person is identifying as a transgender person.” In each scenario, the employer’s “gender-based evaluation” violates the rule that generally, “an employer may not take gender into account in making an employment decision.”

Therefore, while transgender individuals may state a claim under Title VII by alleging that his or her employer is “stereotyping” based on gender, they are not required to do so. The EEOC concluded that, alternatively, Macy could show discrimination on the basis of “sex” simply by establishing that he did not get the job because the Director was willing to hire him when he thought Macy was a man, but not after learning that he was in the process of becoming a woman.

The EEOC also analogized transgender discrimination to religious discrimination. Citing again to Schroer, it described a scenario in which an employee was terminated for converting from Christianity to Judaism, and the employer admitted to bias only against converts but not against Christians or Jews. Given that discrimination “because of religion” would include discrimination because of changing religions, Title VII would prohibit such discrimination against the convert.

Although courts are not compelled to follow the EEOC’s decision in Macy v. Holder, judges considering Title VII claims brought by transgender applicants and employees undoubtedly will be influenced by the decision, and it is now more likely that they will allow claims of transgender discrimination to survive dispositive motions. Thus, companies faced with employment decisions involving transgender individuals should consider the EEOC’s current position and seek guidance from attorneys with experience advising employers about Federal employment discrimination laws.

B.     EEOC Adopts Guidance on Employers’ Use of Criminal Background Checks

The EEOC also recently adopted updated guidance instructing employers how to comply with Title VII when using criminal background checks. See EEOC Enforcement Guidance No. 915.002, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (2012), available at http://www.eeoc.gov/laws/guidance/upload/arrest_conviction.pdf. Employers must now ask themselves if their company treats all applicants with similar criminal histories equally. Further, they may not automatically deny employment opportunities because of any criminal conduct but must consider whether the dangers of specific crimes are relevant to particular positions.

Citing the “significant increase” in Americans with criminal records and proportionally higher arrest and incarceration rates for African Americans and Hispanics, the EEOC explained that the use of background checks in employment decisions may violate Title VII under the “disparate treatment” and “disparate impact” theories. Briefly illustrating disparate treatment based on race, the EEOC described a scenario in which two candidates, a White male and an African-American male, applied for a job with the same company. Both had similar education, skills and work experience, and both had pled guilty to charges of possessing and distributing marijuana in high school. After background checks disclosed their convictions, the company only followed up with the White applicant but not the African American, stating that the company could not accept “these drug dealer types.”

However, the EEOC’s guidance focuses heavily on the disparate-impact theory, which is the principle that a neutral employment policy may violate Title VII when it disproportionately affects employees or applicants on the basis of sex, race or any other protected characteristic. If the employer’s criminal background policy disproportionately screens out a group protected by Title VII, the employer violates Title VII unless the policy is “job related for the position in question and consistent with business necessity.” An exclusionary policy is “job related” if it “bears a demonstrable relationship to successful performance of the jobs for which it was used and measures the person for the job and not the person in the abstract.” Further, the policy must be “necessary to safe and efficient job performance.”

An employer will likely meet the “job related and consistent with business necessity” requirement by doing one of two things. First, the employer can meet this standard by ensuring that the criminal background check for the relevant position is consistent with the Uniform Guidelines on Employee Selection Procedures.

Second, an employer will likely meet the EEOC’s requirement by formulating a “targeted screen” that evaluates (1) the nature and gravity of the crime, (2) the time elapsed since the crime or completion of the sentence, and (3) the nature of the job in question, and also creates an individual assessment for each applicant rejected using the screen. The nature of the crime may be gauged by considering the harm caused by the offense, such as property loss due to theft, and the legal elements of the offense, such as a theft conviction that may include the elements of deception or intimidation. Whether the crime was a misdemeanor or felony may reflect the gravity of the crime. In evaluating the time elapsed since the crime or completion of the sentence, relevant information may include studies showing whether the risk of recidivism lessens over a period of time. Last, when considering the nature of the job, employers should consider the job title, job duties, the essential functions of the job, circumstances under which the work is done (including the level of oversight and interaction with other employees or vulnerable persons), and the type of environment in which the job is performed (i.e., whether the employee interacts with co-employees, customers, and/or the public at-large).

If an employer’s policy excludes applicants from certain positions after considering the factors described above, such a “targeted exclusion” may be lawful even without an individualized assessment. However, the EEOC cautioned that such a screen must be “narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question.”

Nevertheless, the EEOC recommends the use of individualized assessments to obtain more comprehensive information on screened individuals. In an individualized assessment, an employer notifies the person that he may be excluded due to criminal conduct, allows the individual to show why he should not be excluded, and evaluates whether this additional information demonstrates that the exclusion policy as applied to this person is not job related or consistent with business necessity.

However, even if an employer shows that its policy is “job related for the position in question and consistent with business necessity,” it still may incur Title VII liability if a plaintiff demonstrates that a less discriminatory “alternative employment practice” exists that would accomplish the employer’s legitimate goals as efficiently as the disputed policy and that the employer refused to adopt this alternative.

The EEOC also explained that when assessing a criminal background policy for compliance with Title VII, arrests and convictions are treated differently. Whereas a record of conviction is usually sufficient evidence that certain conduct occurred, arrests are not proof of criminal conduct. The EEOC explained that an employer may not make an employment decision based solely on an arrest record, but it may deny employment if proven conduct underlying the arrest renders the person unfit for the position. To explain this principle, the EEOC described a scenario in which a Latino male assistant principal is arrested and charged with sexual abuse of children at his school. The school investigates the charges and after finding that his story is not credible, terminates him pursuant to its policy based on his conduct. After determining that a policy terminating him solely on his arrest would have a disparate impact based on national origin, the EEOC decided that the school’s conduct did not violate Title VII; the school’s policy is based on conduct that is pertinent to the position in question, and the employee was terminated because of his underlying conduct, not because of the arrest itself.

The guidance makes clear that employers have the right use Federal law to defend its policy. This is especially relevant for those industries where hiring is controlled by Federal laws and regulations that may restrict or exclude applicants with certain convictions from particular jobs. For example, such federal restrictions apply to airport security screeners, federal law enforcement officers, bank employees, child care workers employed in federal agencies or facilities, and port workers. However, while Title VII does not preempt federal laws or regulations, exceeding the federal requirements may lead to liability.

In contrast, an employer may not necessarily use state or local law to defend its policy. As opposed to federal laws and regulations, Title VII does preempt state and local laws and regulations “if they purport to require or permit the doing of any act which would be an unlawful employment practice under Title VII.” Thus, if the policy adopted pursuant to state or local law does not meet Title VII’s “job related and consistent with business necessity” requirement, the employer may still incur liability.

In light of this recent guidance, businesses need to re-examine their background-check policies and consult with labor and employment counsel to minimize their risk of liability under Title VII.



Originally published in the September 2012 issue of the "Corporate Counselor". Reprinted with permission.