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EEOC Locks Down Employers' Use of Arrest and Conviction Information

Melissa Siebert

Corporate Counsel

09-12-2012


On April 25, 2012, the U.S. Equal Employment Opportunity Commission issued an extensive document titled “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.” Although the EEOC describes the April 2012 guidance as an update, the accompanying EEOC questions and answers indicate that the guidance actually expands the EEOC’s review of employers’ use of arrest/conviction information when EEOC charges are brought alleging that an employer’s use of the information had a discriminatory effect.

The EEOC takes the position that employers’ use of arrest or conviction information may be discriminatory in two potential ways:

  1. Disparate Treatment Discrimination: An employer may violate Title VII by “treating job applicants with the same criminal records differently because of their race, color, religion, sex, or national origin.”
  2. Disparate Impact Discrimination: An employer may violate Title VII when a company-wide policy about criminal records, applied in a non-discriminatory manner, unjustifiably or disproportionately excludes applicants of a particular race or national origin.

This article focuses primarily on disparate impact risks.

Why Now? Factors Leading to the April 2012 Guidance

The EEOC uses guidance materials to assess and investigate charges of discrimination. While guidance materials are not controlling on federal courts, they are often viewed as persuasive, particularly when the guidance materials are thorough and are statistically validated. In 2007, the Third Circuit Court of Appeals stated that the EEOC’s then-existing guidance regarding employers’ use of conviction/arrest information was “not entitled to great deference,” because that earlier guidance did not substantively analyze the Civil Rights Act of 1991 and did not provide statistical analysis. El v. Southeastern Pennsylvania Transp. Auth., 479 F.3d 232 (3d Cir. 2007). The newly issued April 2012 guidance, containing nearly 170 footnotes and detailed statistical information, is clearly designed to address the El Court’s criticisms.

The April 2012 guidance draws upon statistical findings to support its position that consideration of arrest and conviction records is more likely to lead to disparate impact discrimination for certain protected groups. The statistics cited indicate disproportionately higher arrest, conviction, and incarceration rates for African American and Hispanic populations, given their proportion in the general population. For employers hiring an increasingly diverse work force, these statistics indicate a potentially increased litigation risk where employers utilize arrest/conviction selection criteria.

Many employers (some 92 percent, per the EEOC) report using criminal background checks. These checks may rely upon criminal records databases that the guidance indicates may be incomplete. For example, the guidance cites a U.S. Department of Justice study finding that as of 2006, almost 50 percent of arrest records in a federal criminal records database did not indicate a final disposition for arrests reported. Thus, employers could potentially face an unanticipated litigation risk by relying on criminal background check information that may not fully portray the arrest/conviction record of the applicant or employee.

The EEOC has made it clear that it will assess arrest/conviction-based EEOC charges using the above statistics, as well as general labor market statistics, externally validated job/industry data, and an employer’s own applicant flow indicating the bases for applicant acceptances/rejections. Moreover, the April 2012 guidance takes the position that even when an employer provides evidence that it has a racially balanced workforce, this fact alone will not be sufficient to disprove potential disparate impact.

Now more than ever, employers should be aware that the application of a facially neutral hiring policy utilizing arrest/conviction information may have the unintended effect of subjecting them to potential disparate impact claims, and that the burden of establishing non-discriminatory decisions is arguably greater than in the past.

Key Elements Considered When Investigating a Charge of Disparate Impact Discrimination

In the event that an applicant/employee files an EEOC charge alleging that the use of arrest/conviction information was discriminatory, the EEOC will expect the employer to be able to establish that its use of the records was job-related and a business necessity. The EEOC will also assess whether the employer gave applicants the opportunity to explain the circumstances surrounding the arrest/conviction record. Employer policies or practices that include “blanket exclusions” of applicants or employees based on such records will be viewed by the EEOC as per se discriminatory.

With regards to job-relatedness and business necessity, the EEOC will consider the following factors:

  1. The nature and gravity of the offense or conduct.
  2. The time that has passed since the offense or conduct and/or completion of the sentence.
  3. The nature of the job held or sought. Green v. Missouri Pacific Railroad Co., 523 F.2d 1158, 1160 (8th Cir. 1975).

Although the EEOC concedes that individualized analysis of an arrest/conviction record is not required by Title VII in all circumstances, it strongly suggests that such assessments can help employers avoid Title VII liability. In addition to these factors, an employer can validate an arrest/conviction policy by providing an actual validation study for the position being applied for, which must connect the criminal activity to specific behaviors/risks inherent in the position in question.

The EEOC takes a dim view of certain employment practices. First, some employers use arrest records to make employment decisions. The EEOC firmly states that these records, standing alone, are not going to be viewed as justifiable grounds for an employer to exclude applicants. This is the case even when state law does not prohibit employers from considering arrest records, or otherwise allows the consideration of such records. Second, the EEOC recommends that employers not ask about convictions on actual job applications, including felony convictions. Instead, the EEOC recommends waiting until the interview process to inquire about an applicant’s criminal history.

EEOC Settlements/Litigation in 2012

The EEOC has obtained several settlements over the past year regarding the use of arrest/conviction information. In January 2012, the EEOC obtained a settlement of over $3 million dollars following an investigation of a charge brought before the EEOC on this issue. The EEOC, on behalf of a group of several hundred applicants, alleged that the company’s use of arrest and conviction information in its hiring process for applicants resulted in disparate impact discrimination against African Americans.

Smaller companies are not immune from such claims. In 2008, the EEOC entered into a $20,000 settlement with a carrier company based on the company’s policy of inquiring into an applicant’s felony conviction history, which was alleged to have a disparate impact on African American applicants. Additionally, in 2009, the EEOC reached a settlement with a food-services company for allegedly denying an African American applicant employment after the applicant disclosed a felony conviction on his application, when a white applicant who had disclosed a similar felony conviction had been hired.

It remains to be seen whether EEOC settlements will increase under the heightened analysis proposed by the April 2012 guidance. Certainly, the bar seems to have been raised for employers defending themselves in these types of EEOC-related matters.

Best Practices

The EEOC concludes the April 2012 guidance by summarizing what it terms “best practices,” which include:

  1. Eliminating policies that preclude employment based on any criminal record.
  2. Training hiring managers/decision-makers about Title VII and how to legally apply an employer’s particular policy.
  3. Developing a narrowly-tailored policy that identifies essential job requirements, determines specific offenses that may demonstrate lack of fitness for a job, sets a time limit for consideration of criminal history, and allows individuals to respond to criminal history reports.
  4. Recording and justifying the policy.
  5. Recording “consultations” and research used to craft the policy.
  6. Maintaining records confidentiality.

Employers may want to review any current policies and practices in these areas in light of these recommendations.

Melissa Siebert is a partner in K&L Gates’s labor and employment group, concentrating her practice in employment consulting and litigation, and in labor negotiation and arbitration. She regularly advises employers, defending actions in federal and state court, and before various federal, state, and county human rights commissions. She may be reached at melissa.siebert@klgates.com.