United States: N.Y. Appellate Court Scopes Out Liability: Using Criminal Convictions In Employment

Seyfarth Synopsis: The New York Court of Appeals' ruling on questions regarding the use of criminal convictions in hiring will impact employers and may impact the background screening industry, the temporary staffing industry, and other businesses requiring its affiliates or contractors to adhere to certain criminal history guidelines.

In Griffin v. Sirva, Inc., 835 F.3d 283 (2016), the United States Court of Appeals for the Second Circuit certified several questions to the New York Court of Appeals, seeking clarification on provisions of the New York States Human Rights Law relating to consideration of criminal convictions in hiring.

The Background Facts

Trathony Griffin and Michael Godwin worked for Astro Moving and Storage Company, a company providing local warehouse and transportation services in New York. Astro had an agency contract with Allied Van Lines to provide household moving services on behalf of Allied. Pursuant to the contract, all Astro employees working on Allied jobs were required to pass criminal background checks. Allied engaged a third party to conduct the background checks and to apply Allied's adjudication guidelines. Under Allied's guidelines, a felony conviction for any sexual offense disqualified an individual from working on Allied jobs. That disqualification applied only to Allied jobs; it did not prohibit an individual from working for Astro on non-Allied jobs.

Griffin and Godwin were employed by Astro. At some point, Astro required them to undergo background checks so that they could continue to work on Allied jobs. The background checks revealed that both men had been convicted of felony sexual offenses and were designated as "Sexually Violent Offenders." According to Griffin and Godwin, Astro terminated them after receiving their background reports.

Sometime later, Griffin and Godwin sued Allied and Sirva, Inc., a holding company related to Allied, alleging that they had violated the New York State Human Rights Law by denying them employment because of their criminal convictions or, alternatively, by requiring Astro to deny them employment because of the convictions.

The New York State Human Rights Law

Section 296 of the New York State Human Rights Law. Section 296(15) generally makes it unlawful for "any person, agency, bureau, corporation, or association ... to deny ... employment to any individual" because of a criminal conviction unless there is a direct relationship between the criminal offense and the employment at issue or the employment would involve an unreasonable risk to property or to the safety or welfare of individuals or the general public. Section 296(6) also makes it unlawful for "any person to aid, abet, incite, compel or coerce" a violation of Section 296(15).

The Litigation

The district court entered judgment for Allied and Sirva. The district court held that only employers can be liable for denying employment and that, to be liable for aiding and abetting a denial of employment, a business must be a joint employer of the individual denied employment. The court determined that Allied and Sirva were not "employers" or "joint employers" of Griffin or Godwin.

On appeal, the Second Circuit cast doubt on the district court's ruling and concluded that the New York State Human Rights Law may apply to Allied and Sirva even though they did not employ Griffin and Godwin. The Second Circuit stated that Section 296(15) applied to "any person, ... corporation, or association," and thus the Section may apply to companies other than employers. Even if Section 296(15) is limited to "employers," the Second Circuit concluded that the term "employer" could be read to encompass entities like Allied and Sirva. Last, the Second Circuit stated that the standard for aiding and abetting liability was unclear and indicated that New York may have intended for the provision to have a broad reach that encompasses non-employers, including contracting parties, regardless of their intent.

Because New York courts have not determined who may be liable under Section 296(15) or addressed the scope of Section 296(6) liability for businesses, the Second Circuit certified the following issues to the New York Court of Appeals for it to decide:

  1. Does Section 296(15) of the New York State Human Rights Law, prohibiting discrimination in employment on the basis of a criminal conviction, limit liability to an aggrieved party's "employer"?
  2. If Section 295(15) is limited to an aggrieved party's "employer," what is the scope of the term "employer" for these purposes, i.e. does it include an employer who is not the aggrieved party's "direct employer," but who, through an agency relationship or other means, exercises a significant level of control over the discrimination policies and practices of the aggrieved party's "direct employer"?
  3. Does Section 296(6) of the New York State Human Rights Law, providing for aiding and abetting liability, apply to § 296(15) such that an out-of-state principal corporation that requires its New York State agent to discriminate in employment on the basis of a criminal conviction may be held liable for the employer's violation of § 296(15)?

The New York Court of Appeals accepted the certification, and oral argument in the case is expected to occur later this year.

The Takeaway

Employers, staffing agencies, background screeners, and others should be watching Griffin v. Sirva, Inc. How the New York Court of Appeals will rule on the certified questions is uncertain. The court could interpret Section 296 narrowly to apply only to employers, or the court could interpret the section broadly in a manner that expands liability to non-employers. Regardless of the outcome, any ruling is likely to provide guidance to employers and others, which will enable businesses to better manage risk.

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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