This shouldn’t be a newsflash, but employers have been performing background checks as part of the hiring process for quite a long time.  Lately, the practice has become even more common, since information is more readily available in the internet age.  Most employers use these checks to help ensure they hire the best qualified employees; some employers are required to use them under federal or state regulations governing their industries.

In April 2012, the Equal Employment Opportunity Commission (EEOC) – the agency charged with enforcing Title VII of the Civil Rights Act of 1964 – issued revised guidance relating to employers’ use of arrest and conviction records when making employment decisions.  The EEOC issued the revised guidance because of its concern that the use of criminal records had been increasingly, and disproportionately, excluding minority candidates from employment.  In fact, just last month, the EEOC filed separate suits against an international car manufacturer and a national retailer alleging that the application of their respective background screening policies was discriminatory. 

One issue that has posed a headache for employers is harmonizing the EEOC’s new guidance with certain state laws and regulations which require employers in certain industries to screen and exclude certain individuals with criminal backgrounds from employment.  For example, in Waldon v. Cincinnati Public Schools, the United States District Court for the Southern District of Ohio recently examined the interplay of the EEOC’s guidance and a newly enacted Ohio law that required school systems to conduct background checks on all current employees even if their duties did not involve the care, custody, or control of children.  The Ohio statute required school systems to terminate employees who had been convicted of certain crimes regardless of when the crimes occurred or what relation the crime had to the employees’ job duties. 

In Waldon, the school system complied with the Ohio statute and terminated ten employees after it conducted background checks and found that the employees had been convicted of crimes prescribed in the statute.  Nine of the ten employees terminated were African-American.

Two of the employees later filed suit, alleging disparate impact discrimination under Title VII.  Unlike the type of case which claims that one employee in a protected class was intentionally treated differently than someone similarly situated but not in the class, disparate impact does not require any intent to discriminate.  Rather, disparate impact results from facially neutral employment practices which have a discriminatory effect on protected groups. Commonly, an employer will defend a disparate impact claim by showing that the challenged practice is “job-related and consistent with business necessity.”

The employer in Waldon argued that following a mandatory state law was a defense to the claim for discrimination.  Seems fair and rational, right?  After all, most employers aren’t interested in defending a negligent hiring suit, or dealing with a situation where they employ a former felon who one day provides support for a recidivism theory about criminals and shoots up their workplace.

Unfortunately, the federal court didn’t share the same view.  It basically held that Title VII supersedes any state laws to the contrary, including those laws that would have a disparate impact on minority employees when carried out.  More specifically, the court concluded that the school system could not meet the business necessity defense.  It agreed that the policy – as applied to serious recent crimes – addressed a risk that the school system was justified in managing because of the employees’ proximity to children; however, according to the court, the policy discriminatorily excluded employees who had been convicted of crimes years earlier, had been convicted of insubstantial crimes, and had exhibited a good work record with the school system.  While the EEOC wasn’t a party to this case, it certainly would have advocated for such a result.

In response to the EEOC’s increased enforcement in this area – and recognizing the extremely difficult position in which the EEOC’s new enforcement guidance places employers – the West Virginia and Colorado Attorneys General, along with seven others, recently sent a letter to the EEOC on July 24, 2013 asking the Commission to reconsider its enforcement guidance.  The letter argues that the above-referenced lawsuits and the EEOC’s enforcement guidance are misguided and constitute an inappropriate expansion of Title VII. 

So what is an employer confronted with this situation to do?  Notwithstanding the letter from the Attorneys General, don’t expect the EEOC to change its position on this issue anytime soon.  Their enforcement guidance remains in effect for employers to contend with, and now the agency is starting to get support on the issue from the federal courts, as well.  Moreover, because this will continue to be a focus issue for the EEOC going forward (it represents a part of the agency’s Strategic Enforcement Plan through 2016), employers unfortunately are not going to be able to escape this headache anytime soon.  Still, there may be times when choosing to follow state law and risk the EEOC’s wrath is more advisable.  Consulting competent counsel on whether your situation presents such a circumstance is obviously advised.


Joseph Leonoro concentrates his practice in matters involving labor and employment law.
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