Two large companies that rely on on background checks to screen new hires are being sued by the U.S. Equal Employment Opportunity Commission.
It is not illegal for employers to refuse a job to an employee with a criminal background. But in one case the EEOC alleges that a BMW manufacturing facility in South Carolina disproportionately screened out African Americans from jobs, and that its policy of not hiring people with criminal backgrounds is not job related and is consistent with business necessity. The claimants were employees of UTi Integrated Logistics, Inc., which provided logistic services to BMW at the South Carolina facility. The logistics services included warehouse and distribution assistance, transportation services and manufacturing support.
Separately, the EEOC filed a nationwide lawsuit charging that retailing giant Dollar General conditions all its job offers on criminal background checks. The policy, EEOC claims, results in a disparate impact against blacks. Dollar General operates 10,000 stores in 40 states, plus 11 distribution centers. Ninety percent of all Dollar General employees are store clerks who are both stockers and cashiers at the stores.
Driving the case at BMW
Since 1994, BMW has had a criminal conviction policy that denies facility access to BMW employees and employees of contractors with certain criminal convictions. However, when UTi assigned the claimants to work at the BMW facility, UTi screened the employees according to UTi’s criminal conviction policy. UTi’s criminal background check limited review to convictions within the prior seven years. BMW’s policy has no time limit with regard to convictions. The policy is a blanket exclusion without any individualized assessment of the nature and gravity of the crimes, the ages of the convictions or the nature of the claimants’ respective positions.
In 2008, UTi ended its contract with BMW. During a transitional period, UTi employees were informed of the need to re-apply with the new contractor to retain their positions in the BMW warehouse. As part of the application process, BMW directed the new contractor to perform new criminal background checks on every current UTi employee applying for transition of employment. The new contractor subsequently discovered that several UTi employees had criminal convictions in violation of BMW’s criminal conviction policy. As a result, those employees were told that they no longer met the criteria for working at the BMW facility. They were subsequently terminated and denied rehire as employees of the new contractor, despite the fact that many of the employees had worked at the BMW facility for years.
Taking Stock at Dollar General
According to the EEOC, one of two Dollar General job applicants who had filed a charge with EEOC was given a conditional employment offer although she had disclosed a six-year-old conviction for possession of a controlled substance. Her application also showed that she had previously worked for another discount retailer as a cashier-stocker for four years.
Her job offer was allegedly revoked because Dollar General’s practice was to use her type of conviction as a disqualification factor for 10 years.
Another Dollar General employee was fired although, according to the EEOC, the conviction records check report about her was wrong. Contrary to the record, she did not have the felony conviction attributed to her. The EEOC said that although she advised the Dollar General store manager of the mistake in the report, the company did not reverse its decision and her firing stood.
“Title VII of the Civil Rights Act of 1964 prohibits discrimination against job applicants and employees on account of their race,” said EEOC Chair Jacqueline A. Berrien. “Since issuing its first written policy guidance in the 1980s regarding the use of arrest and conviction records in employment decisions, the EEOC has advised employers that under certain circumstances, their use of that information to deny employment opportunities could be at odds with Title VII.”
Both lawsuits were brought under Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race and national origin as well as retaliation. The EEOC will assert claims of disparate impact, in both cases, against African Americans, according to an agency release.
What You Should Know About the EEOC and Arrest and Conviction Records
Is it illegal for employers to obtain and use criminal background reports about job applicants or employees?
No. The EEOC does not have the authority to prohibit employers from obtaining or using arrest or conviction records. It’s the EEOC’s job, however, ensure that such information is not used in a discriminatory way.
How could an employer use this information in a discriminatory way?
There are two ways in which an employer’s use of criminal history information may be discriminatory. First, the relevant law, Title VII of the Civil Rights Act of 1964, prohibits employers from treating job applicants or employees with the same criminal records differently because of their race, national origin or another protected characteristic (disparate treatment discrimination).
Second, the law also prohibits disparate impact discrimination. This means that, if criminal record exclusions operate to disproportionately exclude people of a particular race or national origin, the employer has to show that the exclusions are “job related and consistent with business necessity” under Title VII to avoid liability.
How would an employer prove “job related and consistent with business necessity”?
Proving that an exclusion is “job related and consistent with business necessity” is not burdensome, according to the EEOC. The employer can make this showing if, in screening applicants for criminal conduct, it:
- considers at least the nature of the crime, the time elapsed since the criminal conduct occurred and the nature of the specific job in question; and
- gives an applicant who is excluded by the screen the opportunity to show why he should not be excluded.
When the EEOC released new guidance on criminal background checks in 2012, did it establish new policy?
No. The guidance follows the text of the law about disparate treatment and disparate impact discrimination.
Source: Adapted from the EEOC’s, What You Should Know About the EEOC and Arrest and Conviction Records