We have all seen over the last number of years that the tentacles of government involvement – on both federal and state levels – have drastically increased the costs to business and the potential liabilities of an employer for alleged discriminatory practices. For many employers, credit checks and criminal background checks are absolute necessities, but be it the Federal Trade Commission or the Equal Employment Opportunity Commission, these agencies have attempted to chip away at the employer’s right to perform these checks over the last few years. On or about April 25, 2012, the EEOC released their new Enforcement Guidelines for employers dealing with criminal background checks and the clear emphasis that it is the EEOC’s presumption that consideration of a criminal history is patently unlawful unless the involved employer can prove that its policy is narrowly tailored, clearly job-related, and consistent with business necessity.

The EEOC premises its position on the fact that criminal background checks have a presumed disparate impact on African American and Hispanic job applicants. Based on recent statistics in calendar year 2009, African Americans comprise about 40% of the prison and jail population, while they only represent approximately 13% of the total United States population. Hispanics make up approximately 21% of the prison and jail population and yet represent a little over 16% of the total United States population. Obviously, there is some validity to the EEOC’s position that criminal background checks could have a disparate impact on African Americans and Hispanics. The Commission’s Enforcement Guidelines reiterate that there are a number of factors that the employer must consider when evaluating applicants’ conviction records to establish business necessity:

• The nature and gravity of the convicted offenses;
• The amount of time that has passed from the date of conviction and/or completion of sentence to the application date; and
• The type of job to be held.

The EEOC also expects that in all cases where an individual’s criminal history has been used as a basis to deny employment, the employer must inform the involved individual that he/she has been excluded because of their past criminal conduct and provide an opportunity to the involved individual to demonstrate that he/she should not be excluded because of this past history. Although the guidelines provided by the EEOC regarding criminal history issues state that “individualized assessments” are not required in every case, the EEOC also clearly states that such “individualized assessments” may help an employer better explain the reasons for its decision and thereby evade responsibility under Title VII.

While the Enforcement Guidelines recognize that, based on certain federal laws or regulations, employers may be barred in certain industries from hiring individuals with particular criminal convictions, the Commission takes the position that compliance with similar state laws will not shield an employer from liability because those state laws may be pre-empted by the expanse of Title VII. While this may have questionable legal standing, the Commission supports its position on pre-emption predicated on the fact that state laws have been struck down, that on their face mandated discriminatory practices such as limitations on the number of hours of work women could do or weight-lifting requirements. Whether or not this standard will be followed in the course of litigation is subject to speculation, but with the number of EEOC litigations in the past 10 years increasing almost exponentially, which employer wants to be the “guinea pig” to test this standard?

In light of these developments, all employers who are currently using criminal background checks as part of their hiring process should re-examine their policies and make sure that they are narrowly tailored to meet the business needs. In the opinion of the author, the nature of the job sought to be held must have a direct correlation to the exclusion because of previous criminal activity.

Questions? Contact Walter J. Liszka in the Chicago office at waliszka@wesselssherman.com or by phone at (312) 629-9300.