Changing the Way Employers Screen Applicants for Criminal History: EEOC Guidance and Ban the Box Laws

Today, there are an estimated 70 million adults -- or almost one in three adults -- living in the U.S. that have some kind of arrest or conviction that will show up on a routine criminal background check. Furthermore, approximately 9 out of 10 employers now use criminal background checks at some point in their hiring process for at least some of their applicants. Concerned about the disproportionate impact that certain screening practices, particularly at the outset of the hiring process, have on the job prospects of individuals from low-income communities of color -- mostly African Americans and Latinos -- who are more likely to have been arrested, convicted and incarcerated, as well as curbing recidivism rates, the U.S. Equal Employment Opportunity Commission (EEOC) has issued formal guidance to employers, warning of the risks inherent in criminal background checks; and a growing number of state and local governments have adopted so-called “ban the box” laws, which require employers to refrain from making criminal history inquiries until later in the hiring process. In light of this increased scrutiny over how employers perform criminal background checks, now is as good a time as ever to review your screening policies and procedures to ensure compliance with laws regulating the use of criminal background checks in the hiring process.

EEOC Charge Filed Against Department Store Chain Over Screening Policies and Practices

Highlighting the importance of reviewing your hiring process to ensure compliance with the law, on May 15, 2017, an EEOC charge was filed against Macy’s by Fortune Society, a group that advocates for and provides job training and placement services for ex-inmates, alleging that the retailer’s criminal background check policies and practices result in discrimination against African American and Latino male job seekers in violation of Title VII of the Civil Rights Act. Specifically, the charge alleges that job applicants sent to Macy’s by Fortune Society were turned away because of their criminal histories that are unrelated to their ability to perform the job. The charge requests that the EEOC, the agency charged with enforcing federal laws prohibiting employment discrimination, investigate the claims against Macy’s on a class-wide basis and states that it is intended to place the retailer on notice of class-wide allegations of race, color, national origin, and sex discrimination. Although Macy’s has denied that its screening policies and practices violate any federal or state law, one can expect that the EEOC will aggressively investigate and carefully scrutinize Macy’s hiring practices, and if probable cause for a violation is found, initiate litigation and otherwise attempt to use its enforcement powers to reform the company’s policies and practices to ensure future compliance.

EEOC Guidance on Consideration of Arrest and Conviction Records in Employment Decisions

In 2012, the EEOC issued a formal Enforcement Guidance, addressing the use of an applicant’s criminal history in hiring and clarifying the standards under Title VII of the Civil Rights Act of 1964 that regulate background checks for employers. The Guidance, which was further clarified in 2014, examines the problems associated with policies that categorically exclude applicants from hiring consideration based strictly on having a criminal history. For example, while discrimination based on criminal history alone is not direct evidence of intentional “disparate treatment” discrimination under Title VII, it can become a form of unlawful discrimination under a “disparate impact” theory when an employer’s screening policy or practice has the effect of disproportionately screening out applicants of certain races, national origins, or sexes, and the employer cannot demonstrate that the policy or practice is “job related for the positions in question and consistent with business necessity.” Accordingly, the EEOC has taken the position that blanket prohibitions against hiring people with criminal records, such as hiring practices rejecting anyone with a prior conviction or arrest, generally violate Title VII.

Specifically, the Guidance explains that because an arrest does not establish that criminal conduct has occurred, an exclusion based solely on one’s arrest record is not job related and consistent with business necessity, although an employer may still act based on separate evidence discovered regarding the underlying conduct that would disqualify an individual from a particular position. The Guidance further explains that in order to meet the “job related and consistent with business necessity” defense to a claim that a criminal record exclusion based on convictions has an unlawful disparate impact, employers should undertake an “individualized assessment” that takes into account “at least” the nature of the crime, the time elapsed, the nature of the job, and whether the offense is related to the job position, and also provides an opportunity for the individual to present other mitigating circumstances and rehabilitation evidence and explain why the exclusion should not be applied due to his or her particular circumstances.

Ban the Box Laws and Application to Private Employers

In addition to the EEOC’s Guidance, employers also need to be aware of what are widely known as “ban the box” laws that a growing number of states, cities and counties across the U.S. have adopted in recent years. In 2016 and 2017 alone, Louisiana, Pennsylvania, Tennessee, Utah, Vermont, and Wisconsin adopted ban the box laws, with Connecticut, Vermont, Austin (TX) and Los Angeles (CA) also passing private employer ban the box legislation. These laws are aimed at improving the employment opportunities of ex-offenders by prohibiting employers from asking about a job candidate’s criminal record at the outset of the hiring process and compelling employers to focus on candidate skills and qualifications first before allowing such inquiries to occur at a later stage, such as after a candidate is interviewed or after a conditional offer of employment has been extended. The term “ban the box” refers to the removal of the box on job applications that applicants are asked to check if they have been convicted of a crime in the past. In 2000, just one state, Hawaii, adopted such legislation. Now, 27 states and more than 150 cities and counties have adopted some form of ban the box legislation, with more cities and states expected to follow suit.

While the first wave of ban the box laws applied mainly to public employers, many are now being extended to private employers as well. Currently, nine states have passed ban the box statutes that regulate private employers’ use of criminal records:

• Connecticut
• Hawaii
• Illinois
• Massachusetts
• Minnesota
• New Jersey
• Oregon
• Rhode Island
• Vermont

In addition to these statewide laws, 15 cities and counties throughout the country, including the District of Columbia, have adopted ban the box ordinances that apply to private employers within their jurisdictions:

• Austin, TX
• Baltimore, MD
• Buffalo, NY
• Chicago, IL
• Columbia, MO
• District of Columbia
• Los Angeles, CA
• Montgomery County, MD
• New York, NY
• Philadelphia, PA
• Portland, OR
• Prince George’s County, MD
• Rochester, NY
• San Francisco, CA
• Seattle, WA

In addition to those states and localities, several other cities and counties extend their ban-the-box policies to private employers who are also government contractors doing business with the city or county. Today, almost two-thirds of the U.S. population from nearly every region in the country live in a jurisdiction with some form of ban the box law, and over 20% live in a jurisdiction requiring private employers to ban the box.

Beyond the basic prohibition from asking an applicant about his or her criminal history on the initial job application, how ban the box laws work varies considerably by state or by city or county if no statewide law has been enacted. For example, while most laws still apply only to public employers, others also apply to government contractors and private employers. Some jurisdictions with laws that apply to private employers provide exemptions for small employers, while others do not. Some jurisdictions prohibit asking about criminal history only at the application stage, while others prohibit the inquiry further into the hiring process such as during or after an interview or after making a conditional offer of employment. Some jurisdictions also take it a step further by incorporating the best practices set forth in the EEOC’s 2012 Guidance, prohibiting consideration of certain types of criminal records (e.g., arrest records, sealed or expunged records, etc.), requiring employers to consider the severity, nature, and job-relatedness of the offense, the amount of time passed since the offense, the candidate’s age at the time of the offense, and other mitigating circumstances or rehabilitation evidence during the decision-making process, and also requiring that notice, a copy of the criminal history report, and an opportunity to explain or rebut the report be provided before taking adverse action such as rescinding a conditional job offer due to conviction history.

Employer Outlook

It is important to remember that nothing in Title VII or ban the box laws prohibit employers from performing criminal background checks and considering criminal histories altogether, nor do they force employers to hire someone with a criminal background. Employers can still consider an applicant’s criminal record before making a hiring decision, although they may have to delay inquiry and consideration of criminal background until later in the hiring process and would be wise not to have blanket exclusions based on certain criminal records unless otherwise required by other federal, state, or local laws. As to those laws that may require criminal background checks and prohibit employers from hiring persons convicted of certain crimes for certain types of jobs, such as law enforcement, airport security, schools, child care, elder care, and other occupations, ban the box laws do not supersede such laws.

That said, employers should review their existing employment applications and other relevant employment forms to ensure compliance with federal, state, and local laws regulating the use of criminal background checks in the hiring process, including Title VII, ban the box laws, and the Fair Credit Reporting Act (for those employers who use a third party to perform background checks and provide reports). Specifically, employers should evaluate whether they need to revise their existing employment application to remove the “box” asking about an applicant’s criminal history, either for use in those jurisdictions that have ban the box laws or altogether, as some large employers have elected to do. Employers who operate in multiple cities or states, in particular, should also review the timing of criminal background checks and inquiries in those jurisdictions to ensure compliance with ban the box laws.

When making hiring decisions and taking into account an applicant’s criminal history, according to the EEOC Guidance, employers should not base hiring decisions on arrest records; however, if an arrest is discovered, and the jurisdiction does not prohibit inquiring about it, the conduct underlying the arrest may be considered. As to conviction records, employers would be well advised to use an individualized assessment that evaluates a candidate’s record in light of factors such as the nature of the offense, the time elapsed and the person’s age at the time of the offense, the nature of the job sought, evidence that the applicant has held similar jobs post-conviction without incident, rehabilitation efforts, employment and character references presented by the candidate, and the candidate’s employment history before and after conviction. As part of that individualized assessment, employers should also provide candidates with an opportunity to explain the facts surrounding a criminal conviction and review a copy of the criminal record report, which may expose the possibility that the record contains errors or identifies the wrong person.

Lastly, employers should ensure that hiring and recruiting personnel are aware of ban the box laws and potential Title VII liability for discrimination under a disparate impact theory when criminal history is taken into account in making hiring decisions. These employees who review applications, conduct job interviews, and are involved in hiring decisions should be trained to avoid premature inquiries or questions into an applicant’s criminal history and on how to make individualized assessments to determine whether a candidate’s criminal history should affect his or her candidacy for the position sought. Employers with questions regarding Title VII, “ban the box,” or FCRA compliance should consult with counsel.