United States: Beyond "Ban The Box" – Philadelphia Makes Sweeping Changes To Criminal Records Screening Ordinance

Last Updated: December 17 2015
Article by William Simmons and Thomas Benjamin Huggett

On December 15, Mayor Michael Nutter signed sweeping amendments to Philadelphia's so-called "ban the box" law, the Philadelphia Fair Criminal Records Screening Ordinance.1 In enacting the amendments, Philadelphia joins a growing number of jurisdictions, including most recently Portland and New York City,2 mandating that employers revise their entire criminal record screening programs, not just modify or remove the criminal records question on their employment applications. The amendments are set to become effective March 14, 2016.

Previous Ban the Box Ordinance

Previously, Philadelphia's ban the box Ordinance primarily required employers to postpone any criminal record inquiries until after a "first interview" with an applicant (which was defined very broadly to include even telephone screening interviews) and prohibited employers from considering non-pending arrests not resulting in conviction. There was no private right of action under the Ordinance, which carried an administrative penalty of $2,000. The Ordinance also applied only to employers with at least 10 employees in Philadelphia.

Major Amendments

Now, with limited exceptions, Philadelphia will require all employers with at least one employee in Philadelphia to:

(1) defer any criminal record inquiries until after a conditional offer has been extended;

(2) remove any criminal records question from employment applications (the Ordinance specifically notes that multi-state applications may not include the question with an instruction for Philadelphia applicants not to answer);

(3) remove any question in employment materials regarding the applicant's willingness to submit to a background check before a conditional offer;

(4) ignore any criminal record in employment decisions unless it is a conviction that occurred less than seven years ago (employers may add to the seven year period any time of actual incarceration served because of the offense);3

(5) rescind any automatic rules employers may have in place to exclude candidates with criminal records from employment;

(6) establish a process for an individual assessment for each applicant;

(7) reconsider procedures when rejecting applicants based on criminal record histories; and

(8) revise posted workplace notices to include notice of the Ordinance, once a poster is issued by the Philadelphia Commission on Human Relations.

The Ordinance makes two relatively minor concessions to employers. First, if an applicant voluntarily discloses information regarding his or her criminal convictions during the application process, the employer may discuss the issue with the applicant at that time. Second, an employer may give notice of its intent to conduct a criminal background check after any conditional offer is made. The Ordinance specifies that the notice must be "concise, accurate, made in good faith, and shall state that any consideration of the background check will be tailored to the requirements of the job."

The Ordinance carries additional penalties, such as the potential for an administrative assessment of damages, attorneys' fees, and up to $2,000 in "punitive damages" per violation. The Ordinance now also includes a private right of action for actual damages, attorneys' fees, equitable relief, and punitive damages. There is no default statutory damages penalty, so the amount of potential liability for purely technical violations of the Ordinance's requirements that cause no actual damage is unclear.

Individual Assessment

In requiring the elimination of any automatic rule excluding candidates with specific types of criminal records, the new amendments specifically require that employers consider the following for each employee:

(a) The nature of the offense;

(b) The time that has passed since the offense;

(c) The applicant's employment history before and after the offense and any period of incarceration;

(d) The particular duties of the job being sought;

(e) Any character or employment references provided by the applicant; and

(f) Any evidence of the applicant's rehabilitation since the conviction.

Under Pennsylvania state law, 18 Pa. C.S. § 9125, employers are already required to assess whether convictions "relate to the applicant's suitability for employment in the position for which he has applied" before using them to take adverse action. But no statutory requirement in Pennsylvania requires specific consideration of the factors identified in the Philadelphia amendments.

Notification Requirements

As noted above, employers must also assess their notification procedures when an applicant is rejected as a result of criminal record history. The amended Ordinance now states:

"If an employer rejects an applicant for a job opening based in whole or in part on criminal record information, the employer shall notify the applicant in writing of such decision and its basis, and shall provide the applicant with a copy of the criminal history report. The employer shall allow the applicant ten (10) business days to provide evidence of the inaccuracy of the information or to provide an explanation."

Ten business days is the longest period an Ordinance to date has specified for allowing employees to address reported criminal records with their employers.

Importantly, this requirement is different from the federal Fair Credit Reporting Act ("FCRA") because it applies regardless of whether the employer has obtained criminal record history from a consumer reporting agency or has conducted its own research. Therefore, Philadelphia employers who may not have been covered by the FCRA, and thus not given applicants an opportunity to provide evidence of inaccuracy or explain their records, will now have to do so.

It is unclear whether the notice and opportunity to provide additional information is required only after an adverse action or whether it is a pre-adverse action requirement. Under the FCRA, employers are required in most circumstances to provide a pre-adverse action notice "before taking any adverse action based in whole or in part on the report," 15 U.S.C. § 1681b(b)(3). The FCRA requires a second notice, often called an "adverse action notice," when the adverse employment decision becomes final. 15 U.S.C. § 1681m. The language of the Philadelphia legislation as to the timing of the required notice is phrased in the past tense, suggesting perhaps that it is an "adverse action" notice. Arguably, such additional adverse action notice requirements, i.e., steps employers must take only after a decision has become final, are preempted by the FCRA.4 Employers should exercise caution in applying these provisions until this issue is resolved by the courts or regulators.

Significantly, by its own terms, the notice requirement also applies only to "applicants" for "a job opening." Thus, it appears the notice requirement does not apply to decisions made regarding current employees whose previously unknown criminal background is brought to an employer's attention. It is unclear whether the provisions would be applied to a current employee seeking a new position with the employer and subject to a new criminal background check. Until the issue is addressed by the courts or regulators, employers should exercise caution in interpreting coverage under the amendments.

Application Outside of "Employment"

Philadelphia's original Ordinance applied not just to typical "employment" but also to "contracted work, contingent work and work through the services of a temporary or other employment agency; or any form of vocational or educational training with or without pay." The amendments do not change that definition, and therefore the sweeping changes may impact practices for screening not just traditional applicants for employment but also potential contract and other relationships as well.

Background Checks Required By Ordinance - Exclusions

The requirements of the Ordinance do not apply where "the inquiries or adverse actions prohibited herein are specifically authorized or mandated by any other applicable Ordinance or regulation." Philadelphia previously released a non-binding FAQ on the original ordinance interpreting this language narrowly, stating:

"most employers will be able to comply with both Ban the Box and the state or federal Ordinance by waiting until after the first interview to make criminal history inquiries; unless the state or federal Ordinance specifically requires that the inquiry be made on the employment application or during the first interview, employers are required to comply with Ban the Box."

Because the intent of the City Council and the Mayor in passing the revisions to the Ordinance was to expand its protections, it is unlikely that they will change this interpretation. Thus, employers should work to balance the language of laws requiring background checks or restricting employment of offenders with the language of Philadelphia's amended Ordinance and the likely regulatory interpretation of the Ordinance when assessing potential revisions to their screening programs.

Conclusion

The "amendments" to Philadelphia's Fair Criminal Records Screening Ordinance are more accurately described as a complete rewriting of the Ordinance and create a substantial risk of civil liability for employers who have criminal records screening programs, even those who have recently had a compliance review under the FCRA.5 It will be left to courts and regulators to clarify ambiguities in the Ordinance as well as whether any portions of the Ordinance, or the Ordinance in its entirety, is preempted or unconstitutional. In the meantime, employers should carefully review the impact of the Ordinance on their screening programs, as well as any analysis they may have planned to undertake for FCRA, Title VII, other equal employment opportunity compliance, or other local legislation.

Footnotes

1 See Rod Fliegel and William Simmons,Philadelphia Passes Ordinance Restricting Certain Employer Inquiries Into, and Use of, Criminal Record History, Littler Insight (Apr. 14, 2011).

2 See Jennifer Mora, David Warner, and Rod Fliegel,New York City Council Bans the Box, Littler Insight (Jun. 12, 2015); Jennifer Warberg and Philip Gordon,Portland, Oregon Band the Box, Littler Insight (Dec. 3, 2015).

3 In contrast, under the federal Fair Credit Reporting Act, consumer reporting agencies may report convictions to employers regardless of the date of conviction.

4 15 U.S.C. § 1681t(b)(1)(C); see, e.g., a recent decision by a Massachusetts district court finding that the FCRA preempts any Massachusetts state law purporting to impose adverse action requirements.

5 See Rod Fliegel, William Simmons, and Jennifer Mora,The Swelling Tide of Fair Credit Reporting Act (FCRA) Class Actions: Practical Risk-Mitigating Measures for Employers, Littler Insight (Aug. 1, 2014).

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