Recently, the Equal Employment Opportunity Commission filed class actions against two well known employers—BMW and Dollar General—on the theory that their employee background screening programs had a disparate impact on African-Americans, in violation of Title VII of the Civil Rights Act.  These cases reinforce the need for employers to revisit their background screening policies and decision-making processes.

The BWM and Dollar General class actions are important not only because they continue the three-year trend of heightened attacks on employee background checks, but also because they reflect the first attempt by the EEOC to enforce its 2012 guidance on employers’ use of criminal history information.

The EEOC’s 2012 Criminal History Guidance

As you may recall, in its 2012 guidance, the EEOC cautioned employers against maintaining a “no felons allowed” or “no convicts allowed” policy.   It stated that such a policy would violate Title VII wherever it produced a disparate impact on minorities.

According to the EEOC’s guidance, to avoid the risk of Title VII liability, employers must generally engage in a “targeted screen.”  Under a targeted screen, an employer must first consider whether a conviction bears a substantial relationship to the job.  Factors include:  the nature of the crime, the nature of the job, and the amount of time that has passed since the crime took place.

Assuming the employer preliminary determines that a substantial relationship exists, the EEOC advises employers to engage in a new second step, called an “individualized assessment.”  The “individualized assessment” consists of a series of questions aimed at determining whether the specific employee in question may present less risk than first suspected.  For example, the EEOC urges employers to consider: (1) the facts or circumstances surrounding the conviction; (2) the number of offenses for which the individual was convicted; (3) the individual’s age at the time of the conviction; (4) evidence that the individual previously performed the same type of work post-conviction with no known incidents of criminal conduct; (5) the length and consistency of employment history before and after the offense; (6) rehabilitation efforts (e.g., training or education); (7) employment or character references, and (8) whether the individual is bonded.  Presumably, the EEOC envisions that such information would be obtained through further communications with the applicant.

For the last year, many employers have expressed skepticism about the EEOC’s criminal history guidance because it was issued with very little input from employers.  Employers have also accused the EEOC—in my mind justifiably—of improperly treating the guidance as a regulation or a law.  Finally, many employers have suggested that the guidance goes well beyond the EEOC’s real mission, which is to eliminate discrimination.  Put simply, Title VII says nothing about protecting “convicts.”

The EEOC’s New Background Screening Cases

In its newly-filed suits against BWM and Dollar General, the EEOC seeks to bring renewed public focus on its 2012 criminal history guidance.  In these lawsuits the EEOC claims that the companies violated Title VII principally by not conducting the “requisite” “individualized assessment.”  Most companies will be concerned to learn that the EEOC brought these lawsuits despite the fact that that neither BWM nor Dollar General maintained a blanket bar on the hiring of felons or convicts.

The Complaint against Dollar General alleges that between 2004 and the present, Dollar General made employment decisions using an improper matrix. The matrix identified specific felonies and misdemeanors that required rescinding a job offer or otherwise disqualifying an applicant. Dollar General allegedly assigned a specific relevant time frame for each conviction.  Nevertheless, the EEOC insists that Dollar General violated Title VII by considering convictions that were not job-related (such as improper supervision of a child, reckless driving, and failure to file an income tax return) and that Dollar General did not evaluate other “individualized assessment” criteria, such as the age of the offender at the time of the crime.

As for BMW, the EEOC alleges that, in 2008, individuals convicted of certain crimes were automatically disqualified by BMW.  Notably, the automatic disqualifiers involved the types of convictions that most employers believe easily qualify as job-related:  violence, theft, weapons, and drug distribution convictions.  According to the complaint, BMW’s screening policy failed because it did not take into account how long ago the crime took place, nor did it embrace the “individualized assessment” criteria specified by the EEOC.

These EEOC cases remain in their infancy. No one knows how the EEOC’s new cases will turn out.  Its previous attacks on the background screening policies of Pepsi, Kaplan, and PeopleMark have produced mixed results. However, regardless of how these cases unfold, the bottom line is that attacks on employer background screening practices are becoming more and more prevalent.  We have previously suggested some ways for employers to avoid background screening risks.  However, below are some additional ones:

What Reasonable Steps Can You—An Employer—Take To Limit Risk?

1. Instruct your background screening company to provide you only with conviction information that you deem job-related.  If there are certain crimes that you know will not be relevant (e.g., domestic abuse offenses, driving offenses, or 20 year-old minor drug offenses), don’t ask for that information.
2. Eliminate background screening matrices that specify that if a person is convicted of X crime, he or she will automatically be disqualified from the job.  Such matrices provide a road map to class action complaints.  If you intend to maintain a matrix, adjust the wording.  Avoid any suggestion of an automatic disqualifier and instead indicate that circumstances will be “reviewed.”
3. Develop a written background screening policy that emphasizes your commitment to following the law.  Make sure that this policy expressly factors in the job-relatedness and “individualized assessment” criteria identified by the EEOC.   This will help you to avoid being an obvious EEOC target.
4. Consider ways to share the burden of the EEOC’s “individualized assessment” mandate with job applicants where possible.  For example, think about sending applicants that have concerning criminal convictions a written questionnaire asking them to provide a written response on each of the eight or nine “individualized” assessment criteria identified in the EEOC guidance.
5. Conduct training for staff on background screening issues.  If you do not have enough familiarity with such issues, bring in a knowledgeable third-party.
6. Involve legal counsel both in establishing a background screening decision-making process and in making final decisions on applicants based upon criminal records. This is no longer an area where employers should assume that simple good faith is enough.

About the Author:

Scott M. Paler  is an attorney with the Law Firm Dewitt, Ross & Stevens. He is a member of the Labor & Employment Relations and Litigation practice groups. Contact Scott at 608.252.9213.