United States: New Regulations Restricting California Employers' Use Of Applicant And Employees' Criminal Conviction History

On January 10, 2017, the California Fair Employment & Housing Council ("FEHC") approved regulations that identify a number of ways in which employers can face liability when using a job applicant or employee's criminal conviction history to influence employment decisions. The new regulations prohibit employers from using an applicant or employee's criminal conviction history in a manner that results in an adverse impact on protected classes under the Fair Employment Housing Act ("FEHA"). The regulations will go into effect on July 1, 2017.

Prohibited Employer Use of Criminal Records

California employers are currently prohibited from seeking information about, or considering, certain types of criminal records when it comes to making employment decisions, regardless of whether or not doing so would have an adverse impact on an individual in a protected class.1 The types of criminal records include:

  • Arrest or detention that did not result in a conviction;
  • Referral to or participation in a pretrial or post-trial diversion program;
  • A conviction that has been judicially dismissed or ordered sealed, expunged, or statutorily eradicated pursuant to the law (e.g., sealed juvenile offense records);
  • Arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while a person was subject to the process and jurisdiction of juvenile court law; and
  • Certain marijuana infractions and misdemeanor convictions that are two or more years old.

The FEHC approved regulations expand the above list to include any non-felony convictions for possession of marijuana that are at least two years old.

Employer Use of Criminal Records Resulting in an Adverse Impact

The FEHC regulations prohibit an employer from considering other forms of criminal convictions not listed above if doing so would result in an adverse impact on individuals who are members of a protected class under the FEHA. In other words, employers cannot utilize criminal record screening policies that disproportionately affect individuals who fall within the previously identified protected categories.

The Applicant/Employee Has the Burden of Proving the Adverse Impact

An applicant or employee must prove that the employer's criminal conviction history screening policy has an adverse impact on individuals of a protected class. One way of establishing an adverse impact is through state or national statistics showing that a protected class is affected by the policy in a disproportionate manner when compared to other groups. An employer, however, may rebut this presumption by showing there is a reason to expect a result different from the aforementioned statistics once any particularized circumstances are taken into account (e.g., the types of convictions being considered, the geographic area covering the applicant or employee pool, or the particular job at issue).

The Burden Shifts to the Employer to Prove the Policy is Job-Related and Consistent with Business Necessity

The FEHC regulations state that if an applicant or employee can establish an adverse impact on a protected class, the burden shifts to the employer to prove that the subject policy is job related and consistent with a business necessity. To this end, the regulations require that the employer show that its policy bears a demonstrable relationship to successful performance on the job. That is, it must measure the individual's fitness for his or her specific position(s). To establish this, an employer must demonstrate that the policy is appropriately tailored, taking into account at least the following factors: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense, conduct, and/or completion of the sentence; and (3) the nature of the job held or sought. The determination of whether the policy at issue is sufficiently tailored will be based on whether the employer has a proper "bright line" conviction disqualification rule or conducts individualized assessments of each candidate's convictions.

Establishing A Bright-Line Policy is Appropriately Tailored

Under the FEHC a "bright-line" conviction rule means the employer does not consider the applicant or employee's individualized circumstances in making an employment decision based on criminal conviction history. An employer can demonstrate that its policy is appropriately tailored if the employer can demonstrate that any "bright-line" conviction disqualification or consideration can properly distinguish between applicants or employees that do and do not pose an unacceptable level of risk and that the conviction being used to adversely impact applicants or employees has a direct and negative bearing on the individual's ability to perform the job duties essential to the position sought. A "bright-line" rule that takes into account conviction-related information that is seven or more years old is subject to a rebuttable presumption the rule is not appropriately tailored to meet the job-related and business necessity affirmative defense.

Proving An Individualized Assessment Policy is Appropriately Tailored

An employer can likewise satisfy the tailoring requirement if it makes an individualized assessment (i.e., considers the candidate's circumstances and qualifications before making an employment decision based on criminal history). Such an assessment must involve:

  • Notice to the adversely impacted applicant or employee – before any adverse action is taken – that they have been screened out because of a conviction;
  • A reasonable opportunity for the candidate to demonstrate that the exclusion should not be applied due to his or her particular circumstances; and
  • Consideration by the employer as to whether the additional information provided by the individual or otherwise obtained by the employer warrants an exception to the exclusion and shows that the policy, as applied to the applicant or employee, is not job-related and consistent with business necessity.

Notice Requirements

An employer must give the impacted individual notice of the disqualifying conviction and a reasonable opportunity to present evidence that the information is factually inaccurate before an employer can take an adverse action based on information it obtained from a source other than the applicant or employee, such as a criminal background report obtained from a third-party consumer reporting agency. Of note, this requirement is different from the requirements of the Fair Credit Reporting Act ("FCRA") and various "ban the box" laws.

Exceptions for Certain Employers

Compliance with federal or state laws and regulations constitutes a rebuttable defense to an adverse impact claim. Such laws include those that prohibit individuals with certain criminal records from holding specific positions or occupations or require enumerated employers to subject these individuals to a screening process. For example, government agencies employing peace officers and health facilities or pharmacies whose employees have access to medications and controlled substances may be subject to certain heightened requirements for their candidates.

Less Discriminatory Alternatives

Notably, even if an employer demonstrates that its policy or practice is job-related and consistent with business necessity, an adversely impacted applicant or employee may still prevail on a FEHA claim if the individual can demonstrate there is a less discriminatory policy or practice that serves the employer's goals as effectively as the challenged policy or practice. Examples include a more narrowly targeted list of convictions or another form of inquiry that evaluates job qualification or risk as accurately, and without significantly increasing the cost to, or burden on, the employer.

Next Steps for Employers

California employers should review their policies and procedures regarding use of applicant and employee's criminal conviction history to ensure they are compliant not only with the FEHC regulations, but also with "ban-the-box" laws, and federal and state fair credit reporting laws, such as the FCRA.

We will keep you apprised of any future developments affecting criminal conviction policies, and are available to assist with revising existing policies or developing new policies and practices consistent with all applicable laws that address employers' use of criminal records.


1 Under the FEHA, protected categories include race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. See Cal. Gov't Code § 12940(a).

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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