United States: San Francisco's Board Of Supervisors "Bans The Box" And Further Complicates Criminal History Checks By The City's Employers

Last Updated: February 11 2014
Article by Philip L. Gordon and Zoe M. Argento

Yet another legislative body, San Francisco's Board of Supervisors, is ready to "ban the box," the widely used criminal history check box on employment applications.  A new ordinance, which is set to be approved by the Board of Supervisors tomorrow and then sent to the Mayor for his signature, would make San Francisco the ninth jurisdiction to enact ban-the-box legislation applicable to private employers. In addition to banning the box, the new San Francisco legislation imposes a host of additional new restrictions on the use of criminal history for employment purposes.  These restrictions supplement those already imposed by the federal Fair Credit Reporting Act (FCRA) and arguably make San Francisco the toughest jurisdiction in the U.S. for employers to use criminal history.

Ban-the-Box Requirements

Under San Francisco's Fair Chance Ordinance (the "Ordinance"), employers are prohibited from inquiring into an applicant's criminal history, i.e., criminal convictions and pending charges, on the employment application or during the first live interview.  This restriction and the Ordinance's other restrictions apply to any employer that employs 20 or more employees in San Francisco. 

For multi-state employers trying to manage ban-the-box legislation, the Ordinance adds yet another jurisdiction to the matrix of timing restrictions on the criminal history question.  That matrix currently is as follows:  (a) any time after the initial application – Massachusetts; (b) after the initial screening of applicants to eliminate unqualified applicants – Seattle; (c) after the applicant has been selected for an interview – Minnesota; (d) at the first interview – Buffalo and Rhode Island; (e) after the first interview – Philadelphia and San Francisco; and (f) after a conditional offer of employment – Hawaii and Newark (NJ).

Restrictions on use of Criminal History for Employment Purposes

Even at the point when employers can inquire into criminal history, they can ask only about misdemeanor and felony convictions that occurred within seven years of the inquiry.  The Ordinance prohibits employers from asking about (a) arrests other than those for which charges are still pending, (b) the completion of a diversion program, (c) sealed and juvenile offenses, and (d) infractions that are not felonies or misdemeanors.  Moreover, before making a permissible inquiry, employers must provide the applicant with a notice regardless of whether the inquiry is made directly to the applicant or to a third-party consumer reporting agency, i.e., a background check vendor.  The notice must contain the same information as the information contained in a poster (described below) that the Ordinance requires San Francisco's Office of Labor Standards Enforcement (OLSE) to create and publish.  Consequently, the Ordinance effectively requires employers to supplement the disclosure used to comply with the FCRA and California's Investigative Consumer Reporting Agencies Act.

If an applicant does disclose criminal history, San Francisco employers can consider the information only if it has "a direct and specific negative bearing on [the applicant's] ability to perform the duties or responsibilities necessarily related to the employment position."  In evaluating whether criminal history meets this standard, the employer must consider (a) whether the position offers the opportunity for the same or similar offenses to occur, and (b) whether the underlying conduct will recur in the position.  In addition to considering the job-relatedness of the offense, the employer must consider the time that has elapsed since the conviction or unresolved arrest and must conduct an individualized assessment taking into account a long list of factors that might evidence rehabilitation or mitigating circumstances.  While the EEOC recommends in its April 2012 guidance on the use of criminal history for employment decisions that employers conduct individualized assessments before relying on criminal history, the Ordinance is the first law of which we are aware that incorporates, and indeed expands on, the EEOC's guidance.

If the employer decides to reject an applicant based on criminal history, it must provide a pre-adverse action notice and a final adverse action notice.  The pre-adverse action notice requirement varies from the FCRA's pre-adverse action notice requirement in several important respects.  First, the notice must be provided regardless of whether the employer obtains the criminal history information through the applicant's self-disclosure or a background report provided by a consumer reporter agency.  Second, the notice must identify the specific criminal history that provides the basis for the adverse decision, whereas the FCRA has no such requirement.  Third, the employer must wait at least seven days from the date of the notice before taking final adverse action.  By contrast, the FCRA requires employers to wait a "reasonable time," which the Federal Trade Commission construed in an informal opinion letter to mean at least five days.  Finally, if during the seven-day waiting period the applicant disputes the criminal history or provides information regarding rehabilitation or mitigating factors, the employer must wait a "reasonable time" before taking adverse action.  The FCRA has no such requirement.

Other Requirements and Enforcement

The Ordinance does not stop there.  Employers are required to state in job advertisements that they will consider qualified applicants with a criminal history.  Also, as noted above, employers must display a poster regarding the Ordinance in each San Francisco location where applicants or employees visit and send the poster to each labor union that represents employees in the employer's workplace.  The poster must provide the following information in English, Spanish and Mandarin:  (a) the criminal history information that employers are prohibited from considering; (b) the restrictions on employers' inquiry into criminal history; (c) the individual's right to submit information about rehabilitation and mitigating factors, a list of those factors, and the timeline for providing the information; and (d) contact information for the OLSE to report suspected violations.  The OLSE is required to publish this poster within six months after the Ordinance goes into effect. 

Although the Ordinance does not create a private right of action for employees, the consequences of non-compliance could be significant. The City can pursue civil remedies for violation of the Ordinance, including an injunction, reinstatement of the employee, back pay, benefits, $50 per employee for each day the Ordinance was violated, and attorneys' fees and costs.  Alternatively, the OLSE can pursue administrative enforcement which, during the first 18 months after the Ordinance's effective date and for a first violation, is limited to a warning and an offer of assistance with compliance.  After the initial grace period, the OLSE can seek penalties of up to $50 per employee for a second violation and of up to $100 per employee for each subsequent violation.  Employers must retain records related to the hiring process for three years and provide them to the OLSE for inspection upon request.

Recommendations for Employers

To comply with the Ordinance, which likely will go into effect by mid-March, San Francisco employers with more than 20 employees should consider taking the following steps:

  1. Review their employment application to remove questions about criminal history;
  2. Revise their hiring procedures to delay inquiry about criminal history until after the first live interview;
  3. Develop a criminal history questionnaire that (a) limits the inquiry as permitted by the Ordinance, and (b) includes the required notice;
  4. Establish a procedure for documenting evidence of rehabilitation and mitigating factors received from applicants and for considering that information before making an adverse employment decision;
  5. Ensure that applicants who likely will be rejected based on criminal history receive a pre-adverse action notice that complies with both the Ordinance and, if the employer received a background report from a background check vendor, the FCRA;
  6. Establish a minimum seven-day waiting period before sending a final adverse action notice and an additional waiting period if the applicant submits evidence of rehabilitation or mitigating factors;
  7. Revise job advertisements to include required language;
  8. Post the required poster after the OLSE publishes it;
  9. Retain all documents demonstrating compliance with the Ordinance for at least three years.

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.

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Philip L. Gordon
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