June 7, 2012

Recently, the EEOC issued an updated Enforcement Guidance on Employer Use of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964.  This new Guidance places a heavy burden on employers who wish to continue to use prior criminal information in employment decisions.  The EEOC will analyze whether a criminal record exclusion policy violates Title VII under two analytical frameworks: “disparate treatment” and “disparate impact.”  Under the disparate treatment analysis, the employer may be liable for violating Title VII when a plaintiff can demonstrate that the employer treated him differently because of his race, national origin or other protected basis.  For instance, disparate treatment analysis would be applicable where there is evidence that a covered employer rejected an African American applicant based on his criminal record but hired a similarly situated white applicant with a comparable criminal record.  Under the disparate impact analysis, an employer has violated Title VII through its use of criminal records where the employer’s neutral policy or practice has an effect of disproportionately screening out a Title VII-protected group and the employer cannot demonstrate that the policy is job related for the position in question and consistent with a business necessity.

In investigating a claim relating to a criminal exclusion policy under a disparate impact analysis, the EEOC will require an employer to show that its criminal conduct exclusion policy does not cause a disparate impact on the protected groups.  The employer may present regional or local data, for instance, showing that African American or Hispanic men are not arrested or convicted at a disproportionately higher rate in that employer’s particular geographic area.  An employer also may use its own applicant data to demonstrate that its policy or practice did not cause a disparate impact.  However, an employer’s evidence of a racially balanced workforce is not sufficient to dispute disparate impact because an employer’s application process may itself be found to not adequately reflect the actual potential applicant pools since otherwise qualified people may be discouraged from applying because of the alleged discriminatory policy or practice.  Hence, even under the first step of the analysis, an employer wishing to use a criminal conduct exclusion may be required to engage in a sociology study of sorts to gather relevant data to support its defense – a burden likely too significant for most employers.

Once the plaintiff has established a disparate impact, the Title VII burden shifts to the employer to demonstrate that the challenged criminal exclusion practice or procedure is related to the position in question and consistent with a business necessity.  In order for an employer to show that a criminal conduct exclusion policy or practice is job related and consistent with a business necessity under Title VII, the employer must demonstrate that the subject policy operates to effectively link specific criminal conduct, and its dangers with inherent risks in the duties of the position at issue.  However, even if an employer demonstrates that its criminal exclusion policy is job related for the position in question and consistent with a business necessity, a Title VII plaintiff still may prevail by demonstrating that there is a less discriminatory “alternative employment practice” that serves the employer’s legitimate goals as effectively as the challenged practice.

While there are some positions in which criminal conduct exclusions will be upheld, across the board criminal conduct exclusions will be found to violate Title VII.  If employers have a significant business justification for asking about convictions on job applications, the inquiry should be limited to convictions for which the exclusion would be job related to the position in question.  When developing a policy regarding past criminal conduct or analyzing a current policy in light of the new guidance, employers must implement a narrowly tailored policy for screening applicants and employees for criminal conduct which includes: identifying essential job requirements and the actual circumstances under which the jobs are performed; determining the specific offenses that might demonstrate unfitness for the particular job; determining the duration of exclusions for criminal conduct based upon all available evidence which would require an individualized assessment; recording the justification for the policy and procedure and maintaining a record of consultations and research considered in crafting the policy and procedures; and, training managers, hiring officials and decision-makers on how to implement the policy and procedures consistent with Title VII.  Finally, when asking questions regarding prior criminal conduct, the questions must be limited to inquiries or records for which the exclusion would be job related for the position in question and consistent with the business necessity.