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Employers Guide to Navigating the Criminal Background Check and Application Process

Evaluating a potential new hire? Keep these six tips in mind.

Employers are constantly faced with issues involving competing interests and obligations.  One of the more pressing is the apparent conflict between applicants’ rights to be free from discrimination through the use of criminal background checks and an employer’s obligation to keep its employees and clients safe and, by extension, avoid liability for failing to do so. 

The Equal Employment Opportunity Commission (EEOC) notes that 92% of employers subjected all or some of their job applicants to criminal background checks.  There are several reasons employers perform such checks: to verify applicant identity, to confirm information, to ensure compliance with state and federal regulations, to obtain security clearances and to reduce employee turnover and, by extension, to save money.

Dove A.E. Burns

Perhaps most importantly, however, employers perform criminal background checks to decrease the chances of workplace violence, as well as the related potential for liability and negative publicity. In many states, an employer’s failure to perform background checks could result in liability for claims such as negligent hiring, negligent retention, vicarious liability, or harassment. 

The National Institute for Occupational Safety and Health (NIOSH) reports that on average, 1,700,000 workers are injured each year as a result of workplace violence, while the National Center for Victims of Crime reported that one of six violent crimes experienced by U.S. residents occur at work.

With statistics like this, it’s not surprising that employers are taking various steps to combat workplace violence -- and to that end, most human resources organizations recommend that employers perform comprehensive background checks of job applicants. 

Stacey L. Pitcher

Despite the obvious benefits of criminal background checks, the EEOC has taken the position for the last 40 years that the blanket use of criminal history to screen jobseekers creates a disparate impact on minority applicants and thus violates Title VII of the Civil Rights Act of 1964.  The disparate impact model does not require that an employer intentionally discriminate for liability to attach. Instead, the applicant or employee must only prove that the employer uses objective criteria that have a disproportionate impact on a particular group. 

If a disparate impact is established via statistical analysis, the burden shifts to the employer to prove that the neutral practice is related to the job and is objectively consistent with the needs of the business.  If such a showing is made, the applicant can still prevail if they can establish that an equally valid, but less discriminatory, selection method existed. 

Government scrutiny even extends to when employers can seek criminal background information in the employment process. The so-called “ban the box” campaign is an international initiative initially propelled by human rights groups in the 1990s. With research affirming that a criminal record reduces the likelihood of a job call back or offer by nearly 50%, the goal of the campaign -- and now legislation -- is to require that employers allow ex-offenders and convicted criminals (of which there are 70 million U.S. adults) to display their credentials prior to having to reveal their criminal history, thereby banning a box on the application requiring applicants to provide information on criminal history.

Eighteen states, Washington, D.C., and 100 cities and counties have removed the conviction history question on job applications. Seven states, Washington, D.C., and 26 cities and counties extend the prohibition by requiring that government contractors or private employers refrain from requiring criminal history information on employment applications.

According to the 2010 U.S. Census, Hispanics are nearly twice as likely to be incarcerated as whites, while blacks are incarcerated at five times the rate of whites. These significant racial disparities support a finding that criminal record exclusions have a disparate impact on minority applicants. On June 11, 2013, the EEOC brought separate actions against BMW Manufacturing Corp. LLC and Dollar General Corp. making just such a claim.

In the case against BMW, which is currently pending before the District of South Carolina, BMW ended its contract with a logistics services provider and required that the new company perform criminal background checks on the employees who were reapplying to continue working at BMW.  The 69 claimants were denied access to BMW’s facility based on their prior criminal convictions. The EEOC alleges that statistical data shows that 80% of the employees who BMW denied access to its facility were black, while only 20% were non-black and thus use of the background checks discriminated against the black applicants. BMW’s written criminal background check policy allegedly excludes from hiring individuals with convictions for murder, assault and battery, rape, child abuse, domestic violence, drug manufacturing and/or distribution, weapons violations, crimes of a violent nature, and of those involving theft, dishonesty or moral turpitude.

The policy has no time limit and makes no distinction between felony and misdemeanor convictions. The EEOC further alleges that, as a result of this policy, the claimants were denied access to BMW’s facility without any individualized assessment of the nature or gravity of their criminal offenses, the ages of the convictions, or the nature of their respective positions. As set forth above, BMW will have to prove that its policy is consistent with the needs of the business; if it cannot make that showing, it will be held liable. The parties have filed cross motions which if granted would end the litigation, and a decision could be issued at any time.

Be prepared to explain what factors you considered and why you reached the decision you did -- regardless of the decision you make.

In the case against Dollar General, pending in the Northern District of Illinois, that company’s criminal background check policy provides that an applicant’s information is submitted to a third-party vendor to perform a criminal background check once he or she is offered employment. The vendor utilizes a matrix that identifies specific felonies and misdemeanors and specifies how recent these convictions must be before they are deemed to require rescinding an offer of employment. Dollar General is informed that the applicant failed the background check if certain conditions are met using the matrix, and the offer is rescinded.

The EEOC alleges that this matrix does not take into account factors such as the age of the offender, any nexus between the crime and the specific job duties or employee safety, or the time or events that have transpired since the offense. The EEOC further alleges that this policy has a disproportionate effect on black applicants. The parties in this case are still exchanging information through discovery, so any decision is much further out.

It is likely that the outcome of these cases will provide greater clarity on the issue of whether, and in what contexts, the use of criminal background checks violates Title VII.  However, even with such clarity, employers will likely still be left in a Catch 22.  On the one hand, they can continue the blanket use of criminal background checks, thus limiting the potential for workplace violence and the resulting liability.  However, continuing in this manner will expose employers to liability for unintentional discrimination.  The other option is to stop or limit the use of criminal background checks and thereby avoid liability for discrimination, but then risk liability for an employee’s improper conduct.

New York Statute Offers a Compromise

Some states have taken note of this Hobson’s choice and have enacted laws that protect employers who hire individuals with criminal records. In New York, for example, employers with at least 10 employees may not refuse to hire an applicant based on a criminal conviction unless hiring the applicant would pose an unreasonable risk to property or to public or individual safety, or the conviction bears a direct relationship to the job. The law then lists eight different factors that must be considered in deciding whether an applicant can be excluded based on their criminal history. If, after that analysis, the employer decides to hire the applicant and the employer is later sued for negligent retention or hiring by someone who is harmed by the employee’s actions, there is a rebuttable presumption that the employee’s criminal history should not be admitted into evidence. As a result, the jury considering whether the employer acted carelessly in hiring or keeping the employee won’t know that the employee had a criminal record of which the employer was aware. 

The New York statute seems to provide a reasonable compromise. On the one hand, it promotes the public policy of hiring rehabilitating criminals and returning them to society as productive citizens and does not appear to run afoul of Title VII’s prohibition on disparate impact. On the other, it reduces workplace violence by not entirely prohibiting background checks and works to insulate employers from liability for hiring applicants with criminal histories. 

Tips for Employers

1. Know your state, city and county laws. The EEOC is actively investigating in this area and is looking to bring lawsuits. Therefore, employers need to keep abreast of this issue and be aware of how future developments can affect their policies and procedures.

2. Eliminate blanket policies and evaluate each applicant individually. Consider factors such as the nature of the job the applicant is seeking, the amount of time that has passed since the offense, and the nature and gravity of the offense. 

3. Some industries require employers to obtain criminal conviction histories: healthcare, education, security, policing, etc. Ensure that you are compliant with state and local laws compelling background checks.

4. Do not reject applicants absent a conviction, as arrests are not proof of criminal conduct.

5. Give applicants an opportunity to explain their criminal records before they are rejected.

6. Be prepared to explain what factors you considered and why you reached the decision you did -- regardless of the decision you make.

Dove A.E. Burns is a partner in Goldberg Segalla’s employment and labor and professional liability practice groups. She defends corporate clients and executives in highexposure employment and professional negligence matters, and is a frequent speaker to national audiences on employment liability topics. She may be reached at dburns@goldbergsegalla.com.

Stacey L. Pitcher is a partner in Goldberg Segalla’s employment and labor and professional liability practice groups. She focuses her practice on employment matters in state, federal and appellate courts, as well as before administrative agencies such as the Connecticut Commission on Human Rights and Opportunities, Equal Employment Opportunities Commission and Workers Compensation Commission. She also defends a range of professionals in liability claims and cases, including claims against realtors, appraisers, home inspectors, plumbers, and more. Stacey may be reached at spitcher@goldbergsegalla.com.

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