When Crime Doesn't Pay: Recent Activity from the EEOC
According to a 2010 survey conducted by the Society for Human Resource Management, approximately 73 percent of major employers report that they always check a job applicant’s criminal records, while 19 percent of those surveyed reported that they do so only for select job candidates. Employers should take note: using arrest and/or conviction records to deny employment can be illegal if it is irrelevant to the particular job, according to the Equal Employment Opportunity Commission (“EEOC”), the federal agency which enforces federal employment discrimination laws and investigations of alleged violations.
On January 11, 2012, the EEOC publically announced that it had entered into a conciliation agreement with Pepsi Beverages Company for $3.13 million. The agreement stemmed from allegations that Pepsi discriminated against African American job applicants based on Pepsi’s use of the applicants’ criminal histories in the hiring process. According to the EEOC’s press release, its investigation revealed that Pepsi had a policy of refusing to hire applicants with pending criminal charges that had not resulted in convictions, and had failed to hire job applicants with arrests or minor conviction records. The EEOC’s position is that people of a certain race or color are arrested and convicted more frequently than others outside of these protected groups and, therefore, employers using such information in hiring decisions can cause a disparate impact on those protected classes.
The EEOC’s past guidance, issued over two decades ago, provides that an employer’s selection criteria regarding criminal history information must take into consideration certain factors to demonstrate the “business necessity” of the criteria (i.e. to be sure that the exclusion of the person due to criminal history is important for the particular position), including: (1) the nature and gravity of the offense or offenses, (2) the time that has passed since the conviction and/or completion of the sentence, and (3) the nature of the job held or sought as related to the conviction. EEOC officials have said, for example, that a drunk driving conviction from years past may not be relevant to a clerical job, but a theft conviction may disqualify someone from working at a bank.
The Commission has also advised that when using arrest records, employers must consider the likelihood that the individual engaged in the conduct for which he/she was arrested, and the “job-relatedness” of the allegations, before making a hiring decision. According to the EEOC, a blanket exclusion of individuals with arrest records (without convictions) would almost never withstand scrutiny.
On July 26, 2011, the EEOC held a public meeting to revisit the use of arrest and conviction records in employment. As a result, and considering the Pepsi agreement, it is anticipated that the EEOC will likely issue new or updated policy guidance regarding the use of criminal records in employment in the near future. In the meantime, employers should be mindful of the EEOC’s apparent renewed interest in the topic, evidenced by it’s commentary regarding the Pepsi matter, including this directive from one Acting Director: "We hope that employers with unnecessarily broad criminal background check policies take note of this agreement and reassess their policies to ensure compliance with Title VII." Indeed, the Pepsi lawsuit demonstrates that employers must be careful how they use information obtained when conducting background checks for applicants. Using arrest-only records can be risky, and even where there is evidence of a conviction, an employer who disqualifies a large number of applicants on the basis of criminal convictions should consider whether this practice has a disproportionate effect on individuals of any particular race, national origin, gender, or any other protected class, and whether exclusion of a particular applicant is for a legitimate purpose related to the job position.
Finally, employers obtaining criminal histories must also be mindful of the need to comply with the consent and disclosure requirements of the Fair Credit Reporting Act (FCRA) when ordering any kind of consumer report, including background checks.
Ms. Melissa Shirley is a partner in the Baton Rouge office of Breazeale, Sache & Wilson, L.L.P. where she practices in issues involving labor and employment law.