Recently, the U.S. Equal Employment Opportunity Commission (EEOC) issued its Enforcement Guidance (Guidance) regarding employer use of arrest and conviction records in employment decisions. The Guidance highlights the EEOC's approach to the use of criminal records in background checks, but should not be considered by an employer in a vacuum.
Because negligent hiring or retention is a claim that may be made against employers of those who are injured by negligently hired or retained employees, employers need to remain aware of the risks involved in hiring decisions. Employers must walk the tightrope between potential claims of race discrimination by their employees or the EEOC and claims by victims of the actions of the employees hired. What is clear is that employers must undertake due care in hiring to avoid presenting unreasonable risks of injury to their employees (and others), while limiting the use of arrest or conviction records in their hiring decisions.
Negligent hiring and retention is a civil action (called a tort) recognized across the United States. Generally, an employer may be liable for negligent hiring, if it hires an incompetent, unfit, or dangerous employee whom it knows, or by the exercise of reasonable care should have known, was incompetent, unfit, or dangerous thereby creating a foreseeable unreasonable risk of harm to others.
Title VII of the Civil Rights Act of 1964 (Title VII) prohibits employment discrimination based on race, color, religion, sex, or national origin, and is enforced by the EEOC. According to the EEOC, "approximately 6.6 percent of all persons born in the United States in 2001 will serve time in state or federal prison during their lifetimes." Of that African- and Hispanic- American men have higher conviction rates than Caucasian men. Given this, EEOC issued the Guidance to update its prior policy statements about Title VII and the use of criminal records in employment decisions.
Use of Arrest and Conviction Records
The EEOC found the reliability of criminal arrest and conviction records suspect, given inaccuracy in documentation and incomplete criminal records in a number of state and federal criminal record databases. Additionally, the EEOC concluded that third-party proprietary databases vary significantly in the types of information compiled and may be "missing certain types of disposition information, such as updated convictions, sealing or expungement orders or orders for entry into a diversion program."
In essence, "whether a covered employer's reliance on a criminal record to deny employment violates Title VII depends on whether it is part of a claim of employment discrimination based on race, religion, sex, or national origin." The two analytical frameworks used by the EEOC and the courts to determine employment discrimination under Title VII are "disparate treatment" and "disparate impact."
According to the EEOC, "an employer's decision to reject a job applicant based on ethnic or racial stereotypes about criminality—rather than qualifications and suitability for the position—is unlawful disparate treatment that violates Title VII." Among the evidence cited by the EEOC that may be used to support a claim of disparate treatment are: biased statements, inconsistencies in the hiring process, similarly situated comparators, employment testing and statistical evidence. Disparate treatment liability is established when an employer treats criminal history information differently for different applicants or employees, based on their race or national origin.
Title VII disparate impact liability may arise "where the evidence shows that a covered employer's criminal record screening policy or practice disproportionately screens out a Title VII-protected group and the employer does not demonstrate that the policy or practice is job related for the positions in question and inconsistent with business necessity." Disparate impact analysis involves identifying the policy or practice, including without limitation what types of offenses were reported, whether only convictions or also arrests or other charges are reported, how far back in time the reports reached, and the jobs for which the criminal background screening was conducted.
How An Employer Can Protection Itself
Once disparate impact is established, the burden is then shifted to the employer to "demonstrate that the challenged practice is job-related for the position in question consistent with business necessity." The business necessity inquiry is fact-intensive, and the EEOC suggests three factors as relevant to assessing business necessity: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense or conduct/or completion of the sentence; and (3) the nature of the job held or sought.
The Guidance states that an arrest alone does not establish criminal conduct. However, an arrest "may in some circumstances trigger an inquiry into whether the conduct underlying the arrest justifies an adverse employment action." The Guidance contrasts this with a conviction, which "will usually serve as sufficient evidence that a person engaged in particular conduct, given the procedural safeguards associated with trial and guilty pleas." The EEOC "recommends that employers not ask about convictions on job applications and that, if and when they make such inquiries, the inquiries be limited to convictions for which exclusion would be job related for the position in question and consistent with business necessity."
The Guidance also includes a section of "employer best practices," which includes creating a narrowly tailored written screening policy; archiving research and notes relating to and recording the justification for this policy; training managers and human resource personnel on this policy; and taking steps to ensure applicant questions about criminal records are related to the job and consistent with business necessity.
Although an "employer's evidence of a racially balanced workforce will not be enough to disprove disparate impact," the EEOC will closely consider an employer's reputation in the community for excluding individuals with criminal records.
The EEOC's Guidance does not ban the use of legitimate information regarding arrests or convictions, but does require thoughtful analysis of the information learned from such records. With the very real potential for negligent hiring exposure, an employer continues to be well served by conducting background checks of public records for such information. However, given the EEOC's disapproval of blanket bans and the agency's goal of reducing race discrimination, company policies regarding prior convictions should be narrowly tailored to limit the hiring only of those individuals whose prior conduct – as shown by their current arrest or prior conviction – could be reasonable predictors of future similar behavior.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
