by Joshua Wood
The Equal Employment Opportunity Commission (EEOC), the agency responsible for enforcing federal employment discrimination laws, periodically issues enforcement guidance to aid employers in complying with the laws it enforces. The guidance is usually published on the agency’s website at www.eeoc.gov and can be an indication of how the EEOC will interpret or apply the laws it enforces. Although EEOC guidance isn’t “law” ― and may even conflict with how courts have interpreted federal antidiscrimination laws―it’s nonetheless important in helping employers understand the agency’s views. 
EEOC’s guidance
Title VII of the Civil Rights Act of 1964, one of the many laws enforced by the EEOC, prohibits employment discrimination based on race, color, religion, sex, and national origin. On April 25, 2012, the agency published guidance detailing its position on whether an employer’s consideration of arrest and conviction records in employment decisions has any implications under Title VII.
The EEOC’s guidance discussed the disparate impact theory of liability, which is one way an employer’s conduct can violate Title VII. Under that theory, an employer’s facially neutral policy or practice (i.e., a policy that doesn’t specifically refer to a protected trait such as race or color) may result in liability for employment discrimination if it disproportionately harms a class of individuals protected under Title VII. In other words, disparate impact claims can be successful even if a policy is applied uniformly and even if the employer has no intent to discriminate against a protected class.
The EEOC’s guidance addressed whether and when a policy or practice of considering arrest and conviction records when making employment decisions will violate Title VII. The agency noted that an adversely affected applicant or employee generally must show that the policy screens out members of a protected class disproportionately compared to individuals outside the protected class. For example, he must establish that the policy tends to exclude more black or Hispanic individuals than white individuals.
The EEOC explained that statistics illustrate that certain minority groups are arrested and incarcerated in numbers disproportionate to their representation in the general population. As a result, the agency concluded that disparate impact claims based on criminal background policies may be easier to prove than many employers imagine. However, the EEOC’s guidance emphasized that an employer may still be able to defend its policies even after an applicant or employee establishes that the policies disparately affect members of a protected class.
After a disparate impact is established, the employer must show that the criminal background policy is job-related and consistent with business necessity. The EEOC has suggested that to ensure policies meet that standard, an employer should develop narrowly defined criminal background policies that include individualized assessments before an adverse employment decision is made. Bright-line policies that exclude all applicants arrested for or convicted of nearly any crime will rarely be upheld as job-related and consistent with business needs, according to the agency. Instead, employers should aim for targeted policies that exclude applicants only for criminal conduct that specifically relates to the position in question.
The agency’s guidance also highlighted the significance of individualized analysis, which allows an employer to consider whether special circumstances call for an exception to any criminal background exclusions. For example, an individualized assessment may allow the employer to gather information about a conviction, including how old it is, whether the individual completed any available rehabilitation programs, and other circumstances bearing on whether the conduct is related to the job sought or held.
AGs challenge EEOC’s position
In response to the criminal background check guidance, the attorneys general (AGs) of nine states wrote a letter characterizing the EEOC’s position as an incorrect application of the law. The AGs’ position centered on the practical consequences, financial burdens, and legal implications the guidance would have on employers.
From a practical standpoint, the AGs argued that the EEOC’s emphasis on individualized assessments functions as a prohibition of nearly all bright-line criminal background screens. The AGs highlighted several business-driven reasons employers have for not wanting to hire individuals who have been convicted of various crimes, including employee and customer safety and a desire to minimize the risk of liability. The AGs also noted that criminal background may be indicative of a lack of dependability, reliability, or trustworthiness.
From a financial standpoint, the AGs expressed concerns over the costs associated with forcing employers to perform individualized assessments when evaluating job applicants. The additional time and money used to evaluate applicants individually was seen as a waste of resources. That’s especially true in cases where an employer is unlikely to hire an applicant even if a more thorough and individualized screening process is performed.
Finally, the AGs criticized the EEOC’s position as an illegitimate expansion of Title VII protections to former criminals. The expansion of those protections is especially troubling to the AGs because of the agency’s claimed ability to preempt state and local laws that prohibit the hiring of people with criminal records. Because AGs are responsible for enforcing the laws of their respective states, their concern is largely that many states’ laws would be circumvented by the EEOC guidance. In light of those concerns, the AGs ultimately requested that the agency rescind its guidance on criminal background checks.
EEOC clarifies its position
In addressing the AGs’ letter, the EEOC first emphasized that it isn’t illegal for employers to use the results of criminal background checks when making employment decisions. However, the use of an individual’s criminal history may, in some instances, result in employment discrimination under Title VII. The legality of screening policies will almost always depend on whether an employer can demonstrate that its exclusion of an applicant is job-related and consistent with business necessity.
The EEOC further clarified that it doesn’t urge or require employers to individually assess all applicants rather than using bright-line criminal background screens. Instead, the EEOC encourages a two-step process that includes targeted screening and individual assessments.
In step one of the process, employers may use a targeted screen of criminal records, which considers at least three factors known as the Green factors. These factors come from a 1977 case, Green v. Missouri Pacific Railroad, in which a federal appellate court rejected an employer’s particularly broad criminal screening policy. According to the EEOC, the Green factors should be used to guide employers in developing narrowly tailored policies that limit exclusions to applicants based on conduct that’s directly linked to the jobs they’re applying for.
The first Green factor considers the nature and gravity of the crime or offense. Under this factor, you should analyze whether the criminal conduct at issue presents relevant concerns about the duties of the particular position. Second, you should consider the length of time that has elapsed since the criminal conduct occurred and refrain from implementing blanket exclusions based on any offense ever committed. Instead, you should consider whether the amount of time that’s elapsed indicates that the applicant is no longer prone to engaging in criminal conduct. Finally, you should consider the nature of the position and exclude applicants only for conduct that can be directly linked to the qualifications or responsibilities of that job.
The Green factors should be used as a guide to develop targeted policies that exclude individuals only from a particular position for specified criminal conduct within a defined period of time, according to the EEOC. For example, the agency considers a bright-line screening policy that disqualifies any applicant with a conviction for any crime other than a minor traffic violation to be inconsistent with the Green factors. Similarly, screening policies that exclude every applicant ever convicted of a violent crime are unlikely to be upheld as job-related and consistent with business necessity. The use of a carefully tailored policy is step one in ensuring that employment decisions based on criminal conduct are job-related and consistent with business needs.
The EEOC suggests that once the initial screening has been performed, employers take another step and individually assess applicants who were screened out by step one. The agency explains an individualized assessment provides a way to ensure that you haven’t mistakenly screened out applicants based on incorrect, incomplete, or irrelevant information. The assessment should include notice to applicants who have been screened out along with an opportunity to demonstrate that the exclusion shouldn’t apply in their situation. Because this step focuses on applicants identified by the targeted screening in step one, performing individualized assessments shouldn’t result in significant costs to businesses.
The EEOC further noted that individualized assessments are merely a suggested safeguard intended to help employers avoid liability. Although the two-step approach is encouraged, an employer may decide never to conduct the second step or to adopt another approach altogether. Instead, you may defend against disparate impact claims by demonstrating that your screening policy always results in exclusions that are job-related and consistent with business necessity.
In other words, employers may justify background check policies based on compliance with the Green factors alone. Although that may be an attractive option for many employers, it’s important to note the risks associated with forgoing individualized assessments. The EEOC requires that screening policies always be “narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question.” Therefore, according to the EEOC, an employer must be prepared to meet this standard each time the policy or practice is applied.
The individual assessment step gives employers more evidence to defend employment decisions with facts and circumstances specific to each excluded applicant. Without this safeguard, you must defend each exclusion relying solely on your policy. In the end, the EEOC emphasizes that although Title VII doesn’t require individualized assessment in all circumstances, policies that don’t include individualized assessments are more likely to violate the Act.
Finally, the EEOC addressed the potential impact its guidance may have on state and local laws. The guidance does not completely supersede all state or local laws on the use of arrest and conviction records. Instead, federal laws such as Title VII preempt state and local laws only when they contradict or conflict with federal law. Therefore, state and local laws that regulate employers’ use of criminal background information are superseded only to the extent that they require or permit you to act in a manner that’s inconsistent with Title VII, according to the EEOC.
Although some states have adopted laws that prohibit employers from asking about certain criminal backgrounds. In states that haven’t adopted any such laws, employers still have the right, subject to federal law, to ask about arrests and convictions. Keep the EEOC’s position in mind, however, to avoid potential liability for policies that screen out candidates too broadly and may adversely affect certain minorities.
Final thoughts
One thing we can be sure of is that the current debate over employers’ Title VII obligations when implementing or applying criminal background screening will be played out in courts across the country. The EEOC has recently challenged some employer policies under the disparate impact theory. We’ll be monitoring developments in this area and reporting on any significant decisions or legislation that affects employer policies.
Joshua Wood is an associate in Jones Walker’s New Orleans, Louisiana, labor relations and employment practice. He may be contacted at jwood@joneswalker.com.