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Changes may prompt review of background check policies

August 14, 2013
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Indiana Lawyer Focus

For more than 20 years, the Equal Employment Opportunity Commission has taken the position that an employer’s use of applicants’ criminal history in making employment decisions may constitute discrimination under Title VII of the Civil Rights Act of 1964, as amended. The underlying premise has always been that because minorities are historically and statistically arrested and incarcerated at higher rates than their representation in the general population, the use of criminal records by employers in making hiring and retention decisions may be discriminatory.

erdel-katherine.jpg Erdel

The EEOC’s enforcement guidance

Citing increased access to criminal history information as motivation, the EEOC issued an updated “Enforcement Guidance” memo on this topic in April of 2012. This past June, the EEOC filed two lawsuits against employers alleging that the employers’ respective criminal background policies violated Title VII. The lawsuits both seem to highlight the EEOC’s increased interest in the potential discriminatory impact of employers’ use of criminal records in employment decisions.

In EEOC v. BMW Manufacturing Co., LLC, pending in the U.S. District Court of South Carolina, the EEOC alleges that BMW’s background check policy disproportionately screened out African-Americans and that the policy is not job related or consistent with business necessity. The second suit, a nationwide lawsuit pending in District Court in Chicago, EEOC v. Dolgencorp (which does business as Dollar General), addresses discrimination charges filed by two rejected black applicants. That suit alleges that Dollar General conditions its job offers on criminal background checks and that the policy results in a disparate impact against blacks.

Indiana law

States, including Indiana, are also showing an increased interest in this area. Though there is no federal law or law in Indiana prohibiting employers from using criminal background information in the hiring process, a new state background check law includes several provisions aimed at limiting the types of information that may be disclosed to employers in Indiana.

Effective July 1, 2013, House Enrolled Act 1033 (2012) permits Indiana residents with restricted or sealed criminal records to state on an employment application that they have not been adjudicated, arrested or convicted of the offense included in the restricted records. On the flip side, the new law prohibits employers from asking about sealed and restricted criminal records, and courts are prohibited from disclosing information related to certain infractions. For example, a court cannot disclose information related to an infraction (which generally includes traffic citations and other minor violations) when the individual has satisfied the judgment and five years has passed since that satisfaction. Criminal history providers may be penalized for violating this law, including up to $1,000 for a first violation, up to $5,000 for a second violation, actual damages, liquidated damages, and costs and attorney’s fees. The text of the bill can be found at: http://www.in.gov/legislative/bills/2012/HE/HE1033.1.html.

Appropriate use of criminal history information

While Indiana law and the EEOC’s Enforcement Guidance provide clear guidance on certain prohibited conduct, many employers are still unclear on what they can and should do to appropriately use criminal history information in the hiring process. In its Enforcement Guidance, which can be found at www.eeoc.gov/laws/guidance/arrest_conviction.cfm, the EEOC concludes that employers cannot exclude an applicant from employment based on an arrest record alone. The EEOC also recommends that “employers not ask about convictions on job applications and that, if and when [employers] make such inquiries, the inquiries be limited to convictions for which exclusion would be job related for the position in question and consistent with business necessity.”

Policy validation under the EEOC’s Enforcement Guidance

The EEOC’s Enforcement Guidance goes on to suggest two methods under which an employer may be able to “validate” that its background check policy and use of criminal records to exclude individuals from employment is job related and consistent with business necessity.

The first involves validation using Uniform Guidelines on Employee Selection Procedures, found at 29 C.F.R §1607. However, the EEOC seems to acknowledge that this particular method is currently unworkable given the limited amount of empirical data on the links between certain conduct, criminal histories and job performance. As a result, most employers will likely need to rely upon the second method to determine whether its policies and practices are job related and consistent with business necessity.

Under the second method proposed by the EEOC, an employer first develops a “targeted screen” that considers, at a minimum, the nature of the crime, the time elapsed since the offense or completion of the sentence, and the nature of the job. After an applicant has been preliminarily disqualified by the screen, the employer conducts an individualized assessment to determine whether the screen, as applied, is actually job related and consistent with business necessity.

For example, if employer XYZ determines that any individual who has been convicted of embezzlement in a business setting in the last five years should be preliminarily disqualified from a job as an accounting department manager, XYZ has likely created a reasonable “targeted screen” that takes into account the three factors required by the EEOC. However, when applicant John Doe applies for an accounting department manager position and is preliminarily screened out because of his four-year-old embezzlement conviction, XYZ must then talk with Mr. Doe and conduct an individualized assessment.

The EEOC provides a list of criteria that employers should consider in the course of an individualized assessment: whether the individual identified in the report is the same individual who has applied for the position; the facts or circumstances surrounding the conduct; the number of offenses; older age at the time of conviction or release; evidence that the individual has performed the same type of work successfully post-conviction; the length and consistency of employment history before and after the conduct; rehabilitation efforts (like education or training); employment or character references or other information regarding fitness for the position; and whether the individual is bonded under a state or local bonding program. Only after considering all of these factors should XYZ make its ultimate decision as to whether or not to hire Mr. Doe.

Simple, right? Not quite. As interest grows in this area and as the courts involved hand down decisions on related cases, additional guidance and examples should be forthcoming. In the meantime, all attorneys, especially those who advise employers, should familiarize themselves with the EEOC’s Enforcement Guidance and HEA 1033 (2012).•

__________

Katherine G. Erdel is a member of Bingham Greenebaum Doll LLP’s Labor and Employment Practice Group, focusing her practice in the areas of discrimination defense, wage and hour advice, general workplace policies, and employment agreements and covenants not to compete. Kate regularly advises clients in these areas and is familiar with background checks, pre-employment inquiries and other employment best-practice issues. Opinions expressed are those of the author.

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  1. Call it unauthorized law if you must, a regulatory wrong, but it was fraud and theft well beyond that, a seeming crime! "In three specific cases, the hearing officer found that Westerfield did little to no work for her clients but only issued a partial refund or no refund at all." That is theft by deception, folks. "In its decision to suspend Westerfield, the Supreme Court noted that she already had a long disciplinary history dating back to 1996 and had previously been suspended in 2004 and indefinitely suspended in 2005. She was reinstated in 2009 after finally giving the commission a response to the grievance for which she was suspended in 2004." WOW -- was the Indiana Supreme Court complicit in her fraud? Talk about being on notice of a real bad actor .... "Further, the justices noted that during her testimony, Westerfield was “disingenuous and evasive” about her relationship with Tope and attempted to distance herself from him. They also wrote that other aggravating factors existed in Westerfield’s case, such as her lack of remorse." WOW, and yet she only got 18 months on the bench, and if she shows up and cries for them in a year and a half, and pays money to JLAP for group therapy ... back in to ride roughshod over hapless clients (or are they "marks") once again! Aint Hoosier lawyering a great money making adventure!!! Just live for the bucks, even if filthy lucre, and come out a-ok. ME on the other hand??? Lifetime banishment for blowing the whistle on unconstitutional governance. Yes, had I ripped off clients or had ANY disciplinary history for doing that I would have fared better, most likely, as that it would have revealed me motivated by Mammon and not Faith. Check it out if you doubt my reading of this, compare and contrast the above 18 months with my lifetime banishment from court, see appendix for Bar Examiners report which the ISC adopted without substantive review: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS

  2. Wow, over a quarter million dollars? That is a a lot of commissary money! Over what time frame? Years I would guess. Anyone ever try to blow the whistle? Probably not, since most Hoosiers who take notice of such things realize that Hoosier whistleblowers are almost always pilloried. If someone did blow the whistle, they were likely fired. The persecution of whistleblowers is a sure sign of far too much government corruption. Details of my own personal experience at the top of Hoosier governance available upon request ... maybe a "fake news" media outlet will have the courage to tell the stories of Hoosier whistleblowers that the "real" Hoosier media (cough) will not deign to touch. (They are part of the problem.)

  3. So if I am reading it right, only if and when African American college students agree to receive checks labeling them as "Negroes" do they receive aid from the UNCF or the Quaker's Educational Fund? In other words, to borrow from the Indiana Appellate Court, "the [nonprofit] supposed to be [their] advocate, refers to [students] in a racially offensive manner. While there is no evidence that [the nonprofits] intended harm to [African American students], the harm was nonetheless inflicted. [Black students are] presented to [academia and future employers] in a racially offensive manner. For these reasons, [such] performance [is] deficient and also prejudice[ial]." Maybe even DEPLORABLE???

  4. I'm the poor soul who spent over 10 years in prison with many many other prisoners trying to kill me for being charged with a sex offense THAT I DID NOT COMMIT i was in jail for a battery charge for helping a friend leave a boyfriend who beat her I've been saying for over 28 years that i did not and would never hurt a child like that mine or anybody's child but NOBODY wants to believe that i might not be guilty of this horrible crime or think that when i say that ALL the paperwork concerning my conviction has strangely DISAPPEARED or even when the long beach judge re-sentenced me over 14 months on a already filed plea bargain out of another districts court then had it filed under a fake name so i could not find while trying to fight my conviction on appeal in a nut shell people are ALWAYS quick to believe the worst about some one well I DID NOT HURT ANY CHILD EVER IN MY LIFE AND HAVE SAID THIS FOR ALMOST 30 YEARS please if anybody can me get some kind of justice it would be greatly appreciated respectfully written wrongly accused Brian Valenti

  5. A high ranking Indiana supreme Court operative caught red handed leading a group using the uber offensive N word! She must denounce or be denounced! (Or not since she is an insider ... rules do not apply to them). Evidence here: http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

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