On the subject of criminal background checks, employers are often caught between the proverbial rock and a hard place. On the one hand, use of criminal background checks can, and has, led to discrimination lawsuits in a variety of contexts. On the other, background checks can provide relevant information about candidates and can help the employer avoid a negligent hiring lawsuit. Both the Equal Employment Opportunity Commission and various courts have weighed in on this issue and the guidance they have provided is mixed. Damned if you do, damned if you don’t. This article will provide guidance on the benefits of criminal background checks and how to use them both legally and effectively.

The Current Law on Background Checks

The EEOC has long taken the position that broad use of criminal background checks to screen applicants and policies prohibiting the hiring of applicants with a criminal record are likely to disparately impact minorities, and that employers causing such an impact violates Title VII. Notably, the EEOC does not prohibit, or even recommend against using, criminal background checks to screen applicants. Rather, the EEOC cautions against blind disqualification of an applicant based purely on the fact that the applicant has a criminal record.

In a recent enforcement guidance release titled, “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964,” the EEOC reiterated its position that certain uses of criminal background checks in making employment decisions can violate Title VII. Once again, the EEOC stated its position that disqualification of an applicant based purely on the existence of a criminal record is likely to discriminate against applicants based on race and national origin.

The EEOC is highly suspicious of employment decisions based purely on an arrest record. According to the EEOC, the “fact of an arrest does not establish that criminal conduct occurred, and an exclusion based on an arrest, in itself, is not job-related and consistent with business necessity.” After all, an arrest is merely a governmental act. A conviction, on the other hand, sufficiently establishes that the underlying conduct occurred. Nevertheless, the EEOC notes that there may be reasons for an employer not to rely on a conviction record alone in making hiring decisions.

According to the EEOC, an employer’s facially neutral policy that all individual applicants will be screened and that those with records of certain crimes is not enough, in and of itself, for the employer to establish a defense that the background screening policy is job-related and consistent with business necessity. Instead, the EEOC would require that the employer develop a “targeted screen considering at least the nature of the crime, the time elapsed and the nature of the job,” followed by an opportunity for the candidate to be individually assessed to determine if the exclusion of the individual candidate would be reasonable and necessary under the circumstances. In essence, the EEOC wants employers to consider each applicant individually before excluding a portion of applicants based on a criminal record.

Pennsylvania law on background checks in employment decisions is similar to the EEOC’s position. The use of background checks in hiring decisions in Pennsylvania is governed by 18 Pa. C.S. §9125, which expressly permits employers to consider felony and misdemeanor convictions of applicants in making hiring decisions. However, an applicant’s conviction may only be considered if the conviction relates to the applicant’s suitability for the specific job for which the applicant has applied. If the employer relies on a criminal conviction that is unrelated to the job, the act authorizes the applicant to sue and to recover actual damages, punitive damages and attorney fees. Finally, if an employer relies on a criminal conviction, in whole or in part, in choosing not to hire an applicant, the employer must notify the applicant in writing of that decision.

In Philadelphia, the mayor recently signed the “Fair Criminal Records Screening Standards” ordinance, which was affectionately dubbed “Ban the Box,” and which has the effect of limiting the ability of a Philadelphia employer from considering criminal records at an early stage in the interviewing process. In essence, the employer may not inquire about an applicant’s criminal record during the application process and bans the use of criminal background checks during the same period. From a practical perspective, “Ban the Box” prohibits the use of questions regarding criminal backgrounds and the use of background screening until after the applicant has had an initial interview.

The Benefits of Screening for Your Company

While the EEOC’s position on the use of criminal background checks adds to the time and cost of implementing a screening policy, there remain many benefits to screening potential candidates, including:

• Screening required by law. Some jobs, including those in child care, teaching, health care, law enforcement, finance and government require the screening of candidates for criminal records and disqualification of applicants convicted of certain crimes. Employers in these fields must implement and follow screening policies and make hiring and termination decisions accordingly.

• Screening to reduce attrition. Criminal background screening can increase the quality of the applicant pool of the workforce by reducing employee turnover, increasing satisfaction and reducing disciplinary issues. Simply put, recidivism and attrition could be twins.

• A safer workplace. Violence in the workplace has increased dramatically in recent years. Background checks can help eliminate potential employees with anger management issues from the applicant pool. Also, theft is always a concern at the office.

• Reduction in the risk of negligent hiring liability. Under a theory of negligent hiring, employers can be held responsible for injuries caused by their employees if the employer failed to exercise reasonable care in hiring the employee. Obvious examples include failing to screen out a truck driver with multiple DUIs who then causes an accident; failing to screen out a convicted child molester from a position at a day care center; the hiring of a security guard with prior convictions for assault who then unjustifiably harms a patron; or failure to screen out a convicted stalker who then harasses a co-worker. The risk of negligent hiring liability can be substantially reduced through criminal background screening.

Lessons for Employers and In-House Counsel

So how can employers implement beneficial, effective criminal background screening in their hiring processes while ensuring that they remain in compliance with the law? A few simple steps will go a long way.

1. Draft a written background check policy that complies with the law.

Any employer choosing to use criminal background checks as part of a hiring process should have a policy. The policy should be written in clear, plain language and made available to applicants. It should state that the employer will use the background check to search for criminal history that has a direct relationship to the job at issue, and that only those criminal convictions will be considered. The policy should also expressly state that the employer is an equal opportunity employer and that it will not discriminate on the basis of any protected characteristic in the use of background checks or in hiring decisions. Finally, the employer may consider providing candidates not hired because of the existence of criminal convictions the opportunity to discuss the conviction with the employer.

2. Follow the policy in performing background checks and making hiring decisions.

If an employer has a background check policy, it must be followed. All applicants for a given job should be screened. Screening must not be used selectively or on an individual basis. Doing so is a recipe for a discrimination lawsuit. The employer must also make sure that anyone involved in hiring or background screening is trained on the employer’s policy and on how to implement and follow it. Interviewers should be prepared to field questions from applicants about the screening policy and what it means if an applicant has a criminal conviction. Finally, the employer must abide by the policy and only consider convictions that have a direct impact on the applicant’s fitness for the particular job at issue.

3. Document everything, including the reasons for hiring decisions.

If criminal background screening is performed on applicants, the fact that a check was performed and its results should be made part of the applicant’s file. If a conviction is uncovered and that conviction is used in evaluating the applicant, the employer should document the ways in which the conviction is related to the job at issue and the weight given to the conviction in evaluating the applicant. If the applicant is not hired or given further consideration solely or partly due to a conviction, the employer should document that fact. If the employer disregards the conviction and hires the applicant, the reasons for that decision should be documented as well. Finally, the employer should provide an applicant who was not hired based on the existence of a criminal conviction a copy of the background check and the reasons for nonhire.

4. Consider outsourcing.

Often, an employer can shift the downside risk for criminal background screening to a third party by hiring a vendor to perform the screens. If an employer chooses this method, the employer should be sure that the contract clearly spells out which party will bear responsibility for discrimination or negligent hiring claims. The employer may also want to insist on an indemnification, if possible, from the vendor.

This law on the use of criminal background checks in hiring decisions is extremely dynamic and is under constant scrutiny from both advocates and opponents. Consideration is constantly being given to proposed changes in the laws at the federal, state and local levels. Other local governments are considering ordinances similar to “Ban the Box.” Lobbying groups are pushing hard for similar laws on the state and local levels. Employers utilizing criminal screening processes and interview questions must know the law in each area in which they do business and monitor for changes in those laws. Most of us believe, deep down, in second chances. However, businesses must be vigilant in employment decisions by using background checks.

By implementing reasonable, written policies on criminal background checks, documenting the reasons for hire and paying careful attention to the law, employers can reap the benefits of applicant screening and reduce liability. •

Hayes Hunt, a member of Cozen O’Connor in the firm’s commercial litigation and criminal defense and government investigations practice groups, concentrates his practice in the representation of individuals, corporations and executives in a wide variety of federal and state criminal law and regulatory enforcement matters, as well as complex civil litigation. He can be reached at hhunt@cozen.com.

Jonathan R. Cavalier is an associate in the firm’s commercial litigation group. He has substantial trial experience, including experience as first-chair jury trial counsel. He can be reached at jcavalier@cozen.com.