New EEOC enforcement guidance on arrests and convictions in employment decisions

Posted on 05/03/2012 at 03:44 PM by Jill Jensen-Welch

This spring, the EEOC issued an updated Enforcement Guidance (EG) titled Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII.  The new EG focuses on preventing employment discrimination based on race and national origin, and particularly, the disparate impact on African Americans and Hispanics from neutral policies and practices in employment regarding arrest and conviction records. As good as that sounds, in order to comply, employers have extra work ahead of them if they want to continue using criminal background information for employment decisions, which some believe is necessary to reduce the risk of theft, fraud, workplace violence, and negligent hiring claims.

Out with the Old, In with the New

The new EG is available on the EEOC's website.  The EEOC also has provided a shorter, but still helpful, Question and Answer page.

Politics and Process

To-Do List

If you are an employer with 15 or more employees (therefore, covered by Title VII), you should add more items to the growing to-do list of your human resource professional.  Because the Iowa Civil Rights Act is patterned after Title VII, and Iowa generally follows the EECO's lead, employers with four or more employees should pay attention, too.  (Hey, don't shoot the messenger.)  Following is our list of recommendations for the to-do list.  Again, keep reading to get to our details on where this list came from, and what it means.

  • Job Applications – Remove any questions about criminal convictions from the job application form both paper and electronic versions.  While this is not required by the EEOC, it comes with a strong recommendation (a 'best practice'), with which we concur after slogging through the new EG.  Removing the questions will give you some additional arguments and defenses in the event of a discrimination claim over the use of criminal records, and we defense lawyers want all the arguments and defenses we can get.

  • New Applicant Disclosure Form – Use a separate form to obtain criminal conviction information from applicants.  While this is not required by the EEOC we recommend it so you can still get the information that was stripped from your job applications, but be mindful of who sees it and how it is used.  As an aside, remember that the Fair Credit Reporting Act has specific requirements for yet other permission forms when a background check is conducted by a "consumer reporting agency".

  • Policy/Practice

    • Eliminate any policy or practice that automatically excludes a person from all jobs due to any arrest or conviction.  This is a requirement, unless you want the EEOC to issue a probable cause determination with the first complaint it gets about your policy/practice.

    • Continue to perform criminal background checks on applicants and employees, but rethink when you get that information, what information you get, and what you do with it.  The EG requires developing a 'Targeted Screen,' supported by data, which is narrowly tailored for a tight link between specific criminal records and specific jobs.  Generalized concerns will not cut the mustard for this; you will need cold, hard facts and statistical data.  Document your rationale for your policy/practice.  More details on this will be provided in future posts. Note, that if you are a rare employer who prefers and is familiar with validation studies under the EEOC's Uniform Guidelines for Employee Selection, then you can substitute validation of your policy/practice for the Targeted Screen.  Either way, the new EG appears to require either a data-supported Targeted Screen or a Validation Study.

    • If you develop a Targeted Screen, add an 'Individualized Assessment' process to go with it.  An Individualized Assessment gives the applicant/employee who would otherwise be excluded from employment based on the Targeted Screen a chance to provide additional information to try to change your mind about sending them packing due to an arrest or conviction.  More details on this will be provided in future posts.  This is not required, but it is strongly recommended and it was heavily discussed in the EG.

    • Note: The Targeted Screen and Individualized Assessment are not necessarily policies to be included in your employee handbook.  That's because they are primarily applicable to applicants (who don't get an employee handbook), and they primarily concern internal procedures for HR and supervisors.  It is sufficient to have these policies/practices documented for management/HR use only, and not published for general consumption by all employees.

  • Training – Train hiring officials and affected decision makers in your new policies/practices.  This is recommended by the EEOC as a best practice.

  • Recordkeeping – Keep criminal record information of applicants and employees confidential.  In other words, treat it like medical information.  This is recommended by the EEOC as a best practice.

Where the EEOC Comes In To be clear, the EEOC is responsible for enforcing Title VII, which prohibits discrimination in employment based on the protected characteristics of race, national origin, color, sex (and pregnancy), and religion.  But Title VII does not include being arrested or being convicted of a crime as a protected characteristic and neither does the Iowa Civil Rights Act.  We recently heard that at least one Iowa municipality is informally considering amending their local ordinance to protect those convicted of a crime from employment discrimination.  Iowa employers may want to watch the agendas of their local commissions and of the local city council.

Also, Title VII does not regulate criminal background checks or the acquisition of criminal history information in employment.  That is regulated under the Fair Credit Reporting Act, as enforced by the Federal Trade Commission, for employers using a 'consumer reporting agency' to conduct criminal background checks.

So where does the EEOC get the authority to issue guidance on discrimination in the use of arrests and convictions for employment decisions?

Statistically, African Americans and Hispanics are arrested and convicted more than whites, and studies cited by the EEOC show that criminal records have a negative impact on employability on these minority groups.  Hence, the EEOC has a longstanding interest under Title VII in preventing both disparate treatment and disparate impact discrimination against African Americans and Hispanics that can occur when employment decisions are motivated by criminal records.

Disparate Treatment Discrimination

Stereotypes have developed such that the criminal history of a white person can be seen as less of a problem by some than the same criminal history of an African American or Hispanic.  When this affects an employment decision, disparate treatment discrimination under Title VII has occurred.  The EG devotes a little, but not much, space to disparate treatment discrimination.  It provides examples of where the EEOC will look for evidence of such stereotypes and unlawful motivations, including statements of decision makers, inconsistencies in the hiring process, similarly situated comparators, matched pair testing done by government agencies or advocacy groups, as well as applicant flow and workforce statistics.  Efforts to prevent claims of disparate treatment discrimination over the use of criminal background information should include obtaining criminal histories consistently across applicants/employees and within similar job categories, then evaluating that information in a fair and consistent manner that does not take race or national origin into account.

Disparate Impact Discrimination Disparate impact discrimination occurs when an employer's neutral and evenly-applied policy or practice regarding applicants or employees – including a policy or practice with criminal records – falls more heavily on African Americans and Hispanics (or any other protected class or basis). This violates Title VII, too, and it is clearly the focus of the EG.

The EG lays out the burden-shifting analysis the EEOC undertakes to analyze a disparate impact claim.  First, the applicant/employee carries the burden to identify a specific, neutral and evenly-applied policy or practice of the employer that is resulting in a discriminatory disparate impact.  In this context, such a policy or practice may include questions about convictions on the job application or in the interview, practices for obtaining criminal background checks, or the way the employer handles the criminal histories of applicants/employees.  Disparate impact is shown with statistical evidence.  The EEOC cautions that a racially balanced workforce will not necessarily disprove disparate impact.  The EEOC allows employers to submit evidence that arrest or conviction statistics in the local community differ from national statistics to rebut the applicant's/employee's disparate impact evidence. (Never mind that this seems to unfairly shift the burden of proof to the employer, which is not proper at the first stage.)

For the next stage of the analysis, the employer carries the burden to rebut the evidence of disparate impact.  The EG provides three options here, which will be discussed in detail below.

For the third and final stage, the burden shifts back to the applicant/employee to show that a less discriminatory alternative policy or practice exists to serve the employer's legitimate goals as effectively as the challenged policy or practice, but the employer refused to adopt it.  The EG spends precious little time on this final analysis.  We suggest that the prepared and cautious employer will monitor its selection and retention policies and practices, vis-à-vis criminal records, to identify disparate impact and consider alternatives if any disparate impact is discovered.

Rebutting Disparate Impact Evidence: What's an Employer To Do? Sometimes a disparate impact cannot be justified.  The EEOC lists three ways employers can rebut evidence of disparate impact due to use of criminal records.

  1. Other Federal Laws If a federal law prohibits hiring or employing someone with a particular criminal record in a particular job or industry, then the employer has a pretty good defense against unlawful discrimination.  As slam-dunk as this defense appears, there are a couple of interesting catches.  If the federal law only requires exclusion from employment for a period of time, rather than indefinitely, then the employer who extends that exclusionary time may be unlawfully discriminating.  Also, if the federal law provides an appeal or waiver process, the employer would be wise to use it (or advise the applicant/employee to use it).  Finally, complying with the state and local laws does not provide the employer with this same defense.  The EG advises that Title VII may pre-empt state or local laws that are less protective. 

    A number of laws exclude persons convicted of certain crimes from working in federally insured financial institutions.  Some of them provide an indefinite bar of employment, others just a 10 year bar, and some of them have appeal or waiver procedures.  Banks, thrifts, credit unions, and other financial institutions should seek competent legal counsel to help navigate these complicated waters when developing policies or practices regarding employment decisions for persons with criminal records - including when developing Targeted Screens and Individualized Assessments.

    Other industries and occupations that the EG notes (in its non-exhaustive list) that may be subject to federal laws regarding criminal records and employment decisions include child care workers in federal agencies or facilities, port workers, the insurance industry, employee benefits workers, workers in Medicare or state funded health programs, federal defense contractors, federal government contractors, and court-imposed occupational restrictions.

  2. UGESP Validation The EEOC's Uniform Guidance for Employee Selection Procedures (UGESP) contains a complex and detailed process for statistically validating any part of the selection process.  Although normally used to validate employment "tests", the UGESP can be used for other selection requirements.  We doubt many employers will take this route to validate the use of criminal records information in the selection process given its complexity and cost.

  3. Targeted Screen and Individualized Assessments The most likely path employers will take to comply with the EG is the Targeted Screen and Individualized Assessments.  Because of this, it bears special attention.

Targeted Screens For its defense, an employer must prove that it had job-related reasons, consistent with business necessity, for its neutral policy or practice, even though the policy or practice may have caused a discriminatory disparate impact.  Under the EG, employers can meet this burden of proof with proper Targeted Screens.

Targeted Screens are used to identify applicants or employees who legitimately should be screened out due to a criminal record.  Because a Targeted Screen needs to be narrowly tailored in order to link particular criminal records to particular jobs, employers will likely have to create multiple Targeted Screens.  Each Targeted Screen must be documented, including the data and rationale behind the decisions for the screen.

Individualized Assessment This method of defense is not necessarily complete when a Targeted Screen excludes an individual from a specific job due to a criminal record.  The EEOC recommends another phase called Individualized Assessment.  Not to be confused with the individualized analysis conducted under the Americans with Disabilities Act to determine whether a person is disabled under the Act, the Individualized Assessment here is different.  It might be analogized to a 'due process' requirement of notice and an opportunity to be heard.  In this, the Individualized Assessment is more like the Fair Credit Reporting Act's requirement of pre-adverse action notice.

Per the EG, an Individualized Assessment requires giving notice to the individual that his criminal record caused him to be screened out (excluded) from employment.  While the EG is silent as to the content of the notice, employers would be wise to specifically identify the conviction and why it bars employment in the job at issue.  In addition, employers may consider providing the individual with a summary of the Targeted Screen's factors.

Then, the individual is to be given an opportunity to explain the criminal record and demonstrate why the Targeted Screen's exclusion should not be applied to him/her under the circumstances.  Such information, per the EG, may include evidence of an error in the criminal record, facts surrounding the conviction, age at the time of conviction and/or release from prison, evidence of a clean criminal and employment record since release, rehabilitation efforts, positive references, and evidence he/she is bondable.

Finally, under the EEOC's scheme, the employer is to give the individual further consideration.  This may lead to an exception to the Targeted Screen, or the realization that the Targeted Screen needs to be modified or is not operating properly.

The Green Factors What criteria are employers to use to develop and apply Targeted Screens and Individualized Analyses?  At a minimum, the EEOC's new EG would require employers to consider three factors articulated by our own Eighth Circuit Court of Appeals in Green v. Missouri Pacific Railroad, way back in 1975.  The Green factors include the following:

  1. The nature and gravity of the offense. For this factor, considerations include the harm caused by the crime (for example, property damage or personal injury), the legal elements required to prove the crime (for example, whether deception was part of the crime), and the classification of the crime (felony or misdemeanor, and the level of felony or misdemeanor).

  2. The passage of time since the offense and/or the completion of the sentence. As the EEOC sees it, the longer the gap between the offense (or completion of the sentence) and the employment decision that is to be made, the less likely the conviction should serve as a bar to employment.  Permanent exclusions from employment rarely meet the business necessity test, unless a federal law requires an indefinite bar from a particular job or industry.  Here, the EEOC expects employers to obtain recidivism data in order to justify durational limits in Targeted Screens and Individualized Assessment.

  3. The nature of the job sought or held. Concern over the conviction must be tied to a specific job for the Targeted Screen and Individualized Assessment to be properly applied.  Considerations include the job duties (not merely the title), the level of supervision to be provided, the working environment (e.g., private home, outdoors, warehouse), interaction with others (especially with vulnerable individuals), and the relationship of the criminal history to the job to be performed.

What Employers Can Do with Arrest Information Arrests are not proof of criminal conduct; indeed, in the United States an arrestee is to be presumed innocent until proven otherwise (convicted).  The EEOC's position in the EG cites to research showing that African Americans and Hispanics are arrested two to three times their proportion in the general population.  Furthermore, arrest records can be inaccurate or incomplete.  Although more and more criminal records are readily available online, such databases may not be timely, completely, or accurately maintained.  Therefore, under Title VII, employers generally cannot take adverse employment action based merely on arrest information about an applicant or employee.  However, as noted in the EG:

"Although an arrest record standing alone may not be used to deny an employment opportunity, an employer may make an employment decision based on the conduct underlying the arrest if the conduct makes the individual unfit for the position in question.  The conduct, not the arrest, is relevant for employment purposes."

Employers may engage in their own investigation and evaluation of the conduct underlying an applicant's or employee's arrest, but not the arrest itself, to take action.  (As an example of the distinction, Iowa employers may recall the next-day firing of an elementary school principal the day following his arrest for child pornography.)  In addition, if an arrest results in the loss of a license or registration that is required as an essential function of the job, the employer may take action based on that result.

What Employers Can Do with Conviction Information Employers may rely on convictions as evidence that the underlying criminal conduct occurred.  This is acceptable, even though the applicant or employee denies guilt and professes innocence when disclosing convictions or explaining them in the Individual Assessment phase.

Yet even conviction records should be approached with caution by employers because they can be inaccurate, incomplete, or outdated.  There also may be other facts and circumstances to indicate that the conviction record is not reliable evidence that the applicant or employee actually engaged in the criminal conduct.  For example, an individual may have steadfastedly professed innocence, despite conviction, and be out of prison on bond awaiting a new trial because DNA testing (which wasn't available at the time of conviction) indicates innocence.  This is why the EEOC requires employers to defend actions taken in response to criminal convictions by one or more of three methods exclusion under federal law, validation under the Uniform Guide on Employee Selection Procedures, or Targeted Screens and Individualized Assessments.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.


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