Recently, one of my partners, David Mellon, presented a talk entitled "Background Checks & Title VII: Discriination Lurking in the Shadows". When a criminal background check is provided to an employer by a consumer reporting agency (CRA), the Fair Credit Reporting Act (FCRA), 15 U.S.C.Section 1681 et seq is applicable. The FCRA creates obligations for both the CRA preparing criminal background reports and for employers using them. A CRA may furnish a consumer report to an employer for employment purposes. A CRA may not report arrests or other adverse information (other than convictions of crimes) that are more than 7 years old. Before an employer (other than in the trucking industry) obtains a consumer report of criminal records from a CRA for purposes of employment decisions, the employer must do certain things, inlcuding providing the applicant with "clear and conspicuous disclosure" that the report may be obtainted for employment purposes, ensure that the disclosure is written in a document that consists only of the disclosure, and receive the applicant's written authorization to obtain the report.
Recently, Law.com reported that Bank of America Corp and Manpower Inc. were accused of discriminatory hiring practices when Manpower Inc. distributed fliers stating that qualified candidates "must be able to pass a background check and have no felonies or misdemeanors". Although there is no federal law that specifically imposes any limitations on an employers' decision predicated on criminal records (although 4 states do, Hawaii, New York, Pennsylvania and Wisconsin), the EEOC has found that employer policies that reject job applicants with criminal records, even if they are neutral on their face, have a racially disparate impact. In 1985, the EEOC issued a policy setting forth the business necessity standard for the consideration of convictions:
1. The nature and gravity of the offesne.
2. The time that has passed since the conviction and/or completion of the sentence.
3. The nature of the job.
The EEOC Policy Guidelines on Arrests reaffirms the 3 progned business necessity test set forth in their Policy Guidelines on Convictions. The arrest guidelines go on to state that with respect to consideration of arrests, "a blanket exclusion of people with arrest records will almost never withstand scrutiny".
Practice Pointer. In the event a company uses a CRA to conduct background investigations, that include criminal history, the company must ensure that all applicable rules and regulations are followed by the CRA, and any history of arrests or convictions be used in compliance with EEOC policies.