Transcript Understanding the EEOC Guidance on Consideration of Arrest and

How Does it Affect Me as an Employer?
Beth Langley
Hagan Davis Mangum
Barrett & Langley PLLC
Myth Busters Around the FCRA
Jennifer Smith
Director of Compliance
FirstPoint, Inc.
 Title VII of the Civil Rights Act of 1964, as
amended
 Fair Credit Reporting Act

Prior to April 25, 2012, the EEOC had generalized
Enforcement Guidance that

Discouraged employers from inquiring about arrests in
employment decisions, due to the risk of disparate treatment
(adverse impact) on certain minorities; and

Encouraged employers to look at the circumstances underlying a
record of a criminal conviction in relation to the employers’ job
prior to making an adverse employment decision.
 The Fair Credit Reporting Act requires:

Voluntary consent and detailed notices to all
applicants/employees who are the subject of criminal
background screenings through third party consumer reporting
agencies (CRA’s).

CRA may not report records of arrests more than 7 years old.

The FCRA does not limit reporting of convictions. It does,
however, provide an extensive mechanism for disputing
inaccuracies in background screening and other consumer
reports.
 Disproportionately high incarceration rates of African
Americans and Hispanics, particularly men.
 “Disparate Impact” discrimination of African Americans
and Hispanics by Employers’ use of criminal background
screening.
Disparate Treatment Discrimination
and
Disparate Impact Discrimination
 Race, color, religion, sex and national origin.
 An individual is treated differently in the terms and
conditions of employment on the basis of race, color,
religion, sex or national origin.
Example:
Employer rejected an African American candidate with a nonviolent misdemeanor offense that occurred more than 10 years
ago, but has a history of hiring white candidates with
comparable criminal records.
 1991 Amendment to Title VII:
A particular employment practice that causes a
disparate impact on the basis of race, color, religion,
sex or national origin and the employer fails to
demonstrate that the challenged practice is job
related for the position in question and consistent
with business necessity…” (emphasis added)
The bulk of the EEOC
Guidance addresses
the EEOC’s concerns
of Disparate Impact
Discrimination of
African-Americans
and Hispanics as a
result of criminal
background screening.
What is a
“disparate impact?”
• Facially neutrally
• Has a disproportionately
negative impact on a
protected class
How is “Disproportionate Negative Impact” established?
 How is “Disparate Negative Impact” established?

Employer’s inconsistent hiring/employment practices

Comparisons of similarly situated employees


Protected category vs. Non-protected category
Statistical Evidence
 To avoid Title VII liability

If a facially neutrally policy has a disproportionate effect of
screening out a Title VII protected group (e.g., a particular
race), the Employer has the burden of establishing that the
employment policy/practice is job-related for the position
in question and consistent with business necessity.

Per the EEOC Guidance:

In 2010, 28% of all arrests were of African Americans, even
though African Americans comprised approximately 14% of
the general population.

In 2008, Hispanics were arrested for federal drug charges at
approximately 3 times the rate of the general population.

African Americans and Hispanics are incarcerated at rates
disproportionate to their numbers in the general population.
Based upon the statistics cited by the EEOC in its
Guidance, the EEOC has concluded that criminal
record exclusions have a disparate impact based on
race and national origin, particularly as to African
Americans and Hispanics.
The proverbial
“Catch 22”.
 EEOC Guidance does not affect liability for:

Negligent hiring/retention

Workplace violence

Homicide is the 4th leading cause of death in the workplace
(U.S. Department of Labor, 2011)
 Neither does the Guidance affect liability for:

Theft and fraud

Failure to comply with licensure requirements
 Arrests:

An arrest should not be grounds for adverse action.

The facts underlying the arrest can be the basis for an
adverse action.
 Convictions:

“No Convictions/No Job” is no longer acceptable.

Inquire about criminal history when conditional offer is
made, and not on job application.
 Convictions:

Engage in a case-by-case analysis for each
applicant/employee:




Nature and gravity of offense or conduct;
Time that has passed since the offense or conduct
occurred /sentence was completed;
Nature of the job held or sought.
Provide applicant/employee an opportunity to explain
circumstances.
 Update Job Descriptions so it is apparent why background
screening is job-related and consistent with business
necessity.
 Examples:

Handles money

Serves alcoholic beverages

Has access to sensitive financial information

Has access to patrons’ valuables
 Examples, continued:

Works in close proximity to small children or to elderly

Security position

Inventory control position

Mobile workplace (e.g., shuttle drivers)
 Examples, continued:

Works in stressful work environment

Delivers passengers, goods or services

Works in high crime area

Has access to medical supplies and pharmaceuticals
 Examples, continued:

Works at night

Works alone

Document objective factors for employment decisionmaking

If background screening results are a factor in adverse
decision, document why.

Review prior employment decisions for consistency.

Centralize employment decisions as much as possible to
ensure consistency.

First, contrary to popular belief, there is no national
computer or database of criminal records that contains all
jurisdictions within the United States

Information Excluded from Consumer Reports


Suits and judgments which from the date of entry antedate the
report by more than seven (7) years
Records of arrest or indictment which from the date of
disposition, release or parole antedate the report by more than
seven (7) years
Convictions, except in certain states, are reported indefinitely
Examples of states with reporting restrictions limit reporting of criminal convictions to 7
years:




California (Cal Civil Code § 1785.13
Nevada (NRS §598C.150)
New Mexico (N.M. Stat. Ann. §56-3-6)
Hawaii (HRS §378-2-§378-3) limits reporting to 10 years
Employers may not receive information on certain cases that have been…

Sealed

Pardon granted

Where the applicant received “diversion” which is a special procedure that does not count
as a conviction
Certain States have more restrictive versions of the FCRA

For instance, Kentucky KRS Chapter 367.310 . No consumer reporting agency shall
maintain any information in its files relating to any charge in a criminal case, in any court
of this Commonwealth, unless the charge has resulted in a conviction.

In Hawaii, inquiry into and consideration of conviction records for prospective employees
shall take place only after the prospective employee has received a conditional offer of
employment which may be withdrawn if the prospective employee has a conviction record
that bears a rational relationship to the duties and responsibilities of the position.

Massachusetts Employers may not, under any circumstances, inquire or maintain records
related to a first conviction for any of the following misdemeanors: drunkenness, simple
assault, speeding, minor traffic violations, affray, or disturbance of the peace.
Written Consent and Disclosure
Section 604(b)(2)(A) Disclosure to Consumer - a clear and conspicuous disclosure has
been made in writing to the consumer at any time before the report is procured or
caused to be procured, in a document that consists solely of the disclosure, that a
consumer report may be obtained for employment purposes;
While the section reads “solely of the disclosure”, the document may also include:
 A brief description of the nature of the consumer report
The consumer’s authorization for procurement of the report
However, it may NOT be included in the employment application
Effectiveness of Disclosure and Authorization
An employer may use a one-time evergreen disclosure, and obtain permission
from applicants or current employees to procure consumer reports, at any time
during the employee’s tenure. The disclosure must state “clearly and
conspicuously “ that the employer intends for the disclosure and authorization
to cover both the application for employment and for the duration of the
employment.
Adverse Action Notices
Adverse action: a negative employment action such as not hiring an applicant; not retaining an
employee or denying a promotion.
If an employer takes adverse action against an applicant or employee based in whole or in
part on information contained in a consumer report or an investigative consumer report, the employer
must provide a “pre-adverse action” notice under Section 604(b) before taking the adverse action and a
subsequent “adverse action” notice under Section 615(a) after adverse action is taken.
Once the employer provides the pre-adverse action notice, including a copy of the background report
as well as a statement of rights prepared by the Federal Trade Commission (FTC), the employer must
wait a “reasonable period of time” before sending the second notice. Therefore, the notices may not be
included in the same document.
The adverse action notice does not need to include the specific reason for the adverse action,
but it must include:
Note that the adverse action is based either in whole or in part on information
contained in the background report.
State the consumer reporting agency did not make the adverse employment decision
and does not know the basis for the decision
Include the name, address and toll free number of the consumer reporting agency
Inform the applicant of his/her right to obtain another free copy of his/her consumer
report within the next 60 days.
Recent Class Actions against Employers for Violations of the
Fair Credit Reporting Act



'Singleton, et. al. vs. Domino's Pizza' (United States District Court - Maryland) The
lawsuit contends that the plaintiffs were terminated after background checks were
completed, but were not provided with a copy of the report or advised of any rights
before their termination. Furthermore, both plaintiffs alleged that the background
screening consent they signed included a release of liability for the background
check on the form that was part of the application packet.
If Domino’s is found to have willfully violated the FCRA, then the damage can be
up to $1,000 a person regardless of actual damages
Note: Just because a lawsuit is filed and allegations are made by no means proves
the validity of the plaintiff’s claims. However, this highlights the need for
employers to review their background screening programs to ensure they are in
compliance with the Fair Credit Reporting Act.