Editor: The EEOC has just issued an updated Guidance with respect to the use of arrest and convictions records in hiring. Why has it done so?
Friedman: The EEOC had not significantly addressed the issue of the use of arrest and convictions in hiring since 1990. One reason they issued the Guidance was in response to hiring trends following the collapse of the economy in 2008, where employers, among other things, were becoming far more selective vis-a-vis their applicant pool, and using various neutral screenings methods, such as conviction records and credit reports, more frequently than in the past to winnow down the applicant population. It was the EEOC’s view that these neutral methods were having an adverse impact based on race and national origin.
Another reason for the Guidance was the technological advancements that had taken place since 1990. The study cited by the EEOC in its Guidance indicated that approximately 92 percent of all employers were using some form of background check (up from 51 percent in 1996). With the advent of the Internet and the ease with which background information can be obtained electronically, it has become both easy and relatively inexpensive for employers to routinely conduct background checks.
Editor: Please describe the updated Guidance and its impact.
Friedman: The updated Guidance is designed to address how employers should deploy the use of arrest and convictions in hiring, and frankly seeks to sharply limit their use. The EEOC, in its preliminary statement, states that its updated Guidance is not designed to transform or materially change its prior views but rather to focus on certain issues and recommend best practices in employers’ use of arrest and convictions in hiring. According to the EEOC, the Guidance is designed to put the employer community on notice that the EEOC intends to scrutinize these practices carefully.
Editor: What was the process followed by EEOC in adopting the Guidance?
Friedman: It was adopted by a four to one vote of the five EEOC commissioners, with the four Democrats voting to proceed with the updated Guidance and the one Republican, Constance Barker, objecting. Ms. Barker’s primary objection and that of the U.S. Chamber of Commerce and many organizations in the employer community was focused on the absence of the stakeholders’ ability to review and comment on the Guidance before its promulgation.
Editor: I understand there is a question about the ability of the EEOC to engage in rulemaking.
Friedman: The U.S. Chamber and other employer organizations argued that the EEOC’s process was in essence akin to rulemaking and therefore went beyond what it legitimately could do under Title VII. My view is that, although the Guidance articulates strong positions by the EEOC on the use of arrests and convictions in hiring, the EEOC was cognizant not to try and transcend the permissible boundaries of Title VII.
EEOC guidances are not given the same deference by the courts as regulations issued by a rulemaking body that has the authority to promulgate its own regulations. The guidances come nowhere close to having that kind of sway in a litigation, but courts do consider them to varying degrees.
Editor: Most employers want to avoid litigation at almost any cost, so what should they do to avoid or minimize exposure to a proceeding against them by the EEOC?
Friedman: Not surprisingly, the EEOC makes a distinction between use of arrests and use of convictions in hiring. It views use of arrests in hiring as much more problematic than convictions because arrests are merely charges, and may not be proof of any criminal conduct. In fact, many states either prohibit or limit the use of arrests in hiring.
The EEOC concedes in its updated Guidance that a conviction record will usually serve as sufficient evidence that a person engaged in the particular conduct, but it recommends that employers not have a blanket prohibition on hiring someone who has been convicted of a crime.
They don’t go so far as to say that such a blanket policy is prohibited under Title VII, but urge employers not to ask about convictions on job applications, and, if they do, that it be limited to convictions that are job-related for the position and consistent with business necessity.
The lynchpin of the analysis under Title VII is that a denial of employment based on a conviction of a crime be job-related and consistent with business necessity. The EEOC’s updated Guidance stopped just short of stating that presumptively, a neutral policy of not hiring those convicted of crimes has a disparate impact on African Americans and Hispanics, but observed that there are studies which support that proposition, and that the EEOC will, therefore, look at such broad policies with a jaundiced eye in the future.
Editor: What do employers have to show in order to carry that burden?
Friedman: What employers are going to have to show is that the conviction was job-related and the failure to hire was motivated by business necessity. When Title VII was amended in 1991, the codification of the disparate impact analysis was that if a neutral policy has a disparate impact on the basis of race, color, religion, age, sex, etc., the employer has to demonstrate that the challenged practice is job-related for the position in question and consistent with business necessity.
Under the updated Guidance, the EEOC identifies two circumstances in which it believes employers will be able to rebut the presumption of disparate impact: one would be to use validation studies to show that the type of conviction that is excluding the individual from the job can be linked to future behaviors, traits or conduct with workplace ramifications. The second is that the employer will be able to satisfy its burden through what the Guidance calls a “targeted screen,” and this is what I think most employers will use. It is a form of decisional or adjudication matrix that considers a variety of factors in determining the eligibility or ineligibility for the job which would include (1) the nature of the crime, (2) the time that has elapsed and (3) the nature of the job, which are the three factors articulated in the Eighth Circuit’s Green v. Missouri Pacific Railroad case, the decision which remains the foundation of the law on this issue to date.
Editor: How are employers going to cope with the complexities you have described?
Friedman: The upshot of the updated Guidance is that employers are going to need to sharpen their focus as to what job they’re hiring for and how relevant a particular conviction is for that particular job. Employers may need to revise their job descriptions in much the same way they had to in connection with the Americans with Disabilities Act over twenty years ago. They should identify the essential elements of the job, which will allow the hiring decision makers to make an informed decision as to whether the nature of the offense is related to the job.
I would recommend that employers create a committee comprised of suitably qualified representatives from legal, human resources, security (depending on the nature of the business) and perhaps someone on the operations side to participate in making decisions where background checks reveal a conviction. This committee (which would not know the race or national origin or any other protected characteristic of the applicant at the time the decision is made) would look at the nature of the offense and the nature of the job and make a determination whether the individual who’s been convicted (based on all the Green factors we discussed before) would be eligible or ineligible for the job.
Even in the case of large companies which hire hundreds of employees that use standard background checks to pick up convictions, such a committee would not be overburdened because each year it is likely to have to adjudicate only a few (or a few dozen, at most) cases involving convictions. It’s a minimal burden that’s worth incurring to protect a company as best as it can against disparate treatment and disparate impact cases, while at the same time acting equitably and responsibly.
Editor: What requirements of the updated Guidance may seem problematic to employers?
Friedman: There are a couple of aspects to the updated Guidance that will probably make employers shiver.
One is the EEOC’s position that there should no longer be blanket policies eliminating from hire those who have been convicted of crimes.
Another is the EEOC’s view that employers should not ask on the employment application whether the applicant has ever been convicted of a crime, but that this question should be deferred until later in the hiring process (much as is currently the case with disabilities, where an employer cannot inquire until the post-offer stage). The theory behind this is that you should learn as much as you can about the applicant’s ability to do the job before you ask that question.
A third aspect of the updated Guidance that may also cause employers some problems is the EEOC’s view with respect to state laws and local laws that prohibit the hiring of individuals in certain industries based on certain types of convictions. The EEOC suggests that in this area Title VII would preempt any state law that would prohibit an employer from hiring a person with a particular type of conviction. Take, for example, nursing homes or day care centers, which are subject to state regulations that prohibit the hiring of individuals who have been convicted of certain offenses. If an employer follows state law, the EEOC seems to suggest that it’s possible that it could bring a disparate impact case against that employer even though it’s complying with state law. This is one aspect of the updated Guidance that I think is going to be tested in the courts and create a lot of pushback from the employer community.
Editor: What do you see happening at the end of the road? Will the updated Guidance be challenged in federal court as arbitrary and capricious?
Friedman: I don’t think so because the arbitrary and capricious standard wouldn’t apply to EEOC guidances because they’re neither rules nor regulations. More likely, it will be tested in the context of EEOC investigations and proceedings. For example, if the EEOC were to go after an employer who was complying with a state law requirement with respect to not hiring certain convicts, I think that would be challenged in the courts.
Editor: What is your reaction to the suggestions as to best practices set forth in the updated Guidance?
Friedman: The Guidance recommends that employers enhance their training of managers, hiring officials and decision makers. Training with respect to sex harassment, sex discrimination and anti-harassment is fairly commonplace now, 14 years after the Supreme Court’s Faragher decision. Similarly, I think that the updated Guidance will engender considerably more training and written policies with respect to the use of arrests and convictions in hiring. That’s an area that has not traditionally been one of focus for most employers, and will likely become so in the wake of the updated Guidance.
I would strongly recommend that employers update their policies, create procedural documents reflecting their neutral decision making processes and enhance their training of hiring decision makers. In addition, it would be prudent to have an internal appeals process to allow an applicant to challenge the conviction record (much as the Fair Credit Reporting Act allows an applicant to challenge a credit report), as sometimes these records are inaccurate, incomplete or not up to date. We have already been approached by clients to create manuals and documents to reflect the policies and documents I have described in this interview.
Published May 20, 2012.