EEOC Loses (Again) On Criminal-Background Checks
Date: September 1, 2013
(Retail Industry Update, No. 3, September 2013)
Last year, we wrote about the EEOC’s then-new guidance on the use of criminal-background checks in hiring decisions. [“Using Conviction Records As A Screening Tool,” Retail Industry Update, June 2012]. In December 2012, the Commission issued a strategic enforcement plan that included targeting background checks as a barrier to employment of minorities. In June of this year, the Commission trumpeted the filing of lawsuits against Dollar General and BMW North America claiming their use of criminal convictions in hiring violates Title VII.
But these latest lawsuits were not the EEOC’s first attempt to challenge an employer’s alleged blanket use of criminal-background checks in hiring. In 2009, prior to the publication of the latest guidance, it sued Freeman Companies in federal court in South Carolina alleging that the manner in which Freeman used background checks had a disparate impact on minorities. Recently, the district court sent the EEOC packing with its tail between its legs.
Title VII prohibits both intentional discrimination and disparate-impact discrimination. The EEOC’s criminal-background check guidance and lawsuits over the use of them all fall under the disparate-impact theory. In this model, an employer does not have to intentionally discriminate to have liability for violating Title VII. Rather, the employer must only use a neutral policy or practice that screens out a disproportionate number of a particular protected class. And even if a neutral practice does have such a disparate impact, a business will not violate Title VII if it can prove that the neutral practice is job related and consistent with business necessity.
The EEOC holds out that the use of criminal-background checks in the hiring process can have a disparate impact on African Americans. The basis for this conclusion appears to be extrapolated from generic figures related to the conviction rates of African Americans and other minorities versus whites. Additionally, the EEOC has for years contended that blanket exclusions based on criminal convictions are not a business necessity relying on the 1975 decision in Green v. MoPac RR. In that case the U.S. Court of Appeals for the 8th Circuit noted, “[w]e cannot conceive of any business necessity that would automatically place every individual convicted of any offense, except a minor traffic offense, in the permanent ranks of the unemployed.”
Disparate-treatment cases rely on statistical evidence. In Green, the proof of the disparate impact came from a very rudimentary statistical analysis of the difference in rejection rates of white applicants and black applicants. Since using the rule excluded black applicants two and a half times for every one time a white applicant was rejected, the court concluded disparate impact had been proven. (Continue at F & P website).