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.

The Theory

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).

About mavity2012

I am a Senior Partner operating out of the Atlanta office of Fisher & Phillips LLP, one of the Nation’s oldest and largest management employment and labor firms. My practice is national and keeps me on the road or in one of our 28 offices about 50 percent of the time. I created and co-chair the Firm's Workplace Safety and Catastrophe Management Practice Group. I have almost 29 years of experience as a labor lawyer, but rely even more heavily on the experience I gained in working in my family's various businesses, and through dealing with practical client issues. Employers tell me that they seldom meet an attorney who delivers on his promise to provide practical guidance and to be a business partner. As a result, some executives probably use different terms than “practical” to describe my fellow travelers in the profession. I don't enjoy the luxury of being impractical because I spend much of my time on shop floors and construction sites dealing with safety, union and related issues which are driven by real world processes and the need to protect and get the most out of one's most important business assets ... its employees. That's one of the reasons that I view safety compliance as a way to also manage problem employees, reduce litigation and develop the type of work environment that makes unions unnecessary. Starting out dealing with union-management challenges and a stint in the NLRB have better equipped me to see the interrelationship of legal and workplace factors. I am proud also of my experience at Fisher & Phillips, where providing “practical advice” is second only to legal excellence among the Firm’s values. Our website lists me as having provided counsel for over 225 occasions of union activity, guided unionized companies, and as having managed approximately 450 OSHA fatality cases in construction and general industry, ranging from dust explosions to building collapses, in virtually every state. I have coordinated complex inspections involving multi-employer sites, corporate-wide compliance, and issues involving criminal referral. As a full labor lawyer, I oversee audits of corporate labor, HR, and safety compliance. I have responded to virtually every type of day-to-day workplace inquiry, and have handled cases before the EEOC, OFCCP, NLRB, and numerous other state and federal agencies. At F & P, all of us seek to spot issues and then rely upon attorneys in the Firm who concentrate on those areas. No tunnel vision. I teach or speak around 50 times per year to business associations, bar and professional groups, and to individual businesses. I serve on safety committees at three states’ AGC Chapters, teach at the AGC ASMTC

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