From the ESR Mail Box

Question:

Can an employer automatically exclude an applicant with a felony or criminal record? What about automated processes that use a system to identity applicants with a criminal record?

Pledge:

The one thing that an employer can be advised with some certainty is that any sort of automatic policy based upon a person’s status as an ex-offender is very likely to expose a firm to a federal or disorder Equal Employment Opportunity Commission (EEOC) issue.  That is why nearly every employment application not only questions about past criminal records but also has a disclaimer that a criminal record will not be used automatically.  The rule is clear that an employer needs a “business justification” before excluding someone based upon a past criminal record.  A blanket policy does not allow consideration of the individual, taking into account factors such as the scenery and gravity of the past offense, the relevance to the job and how much time has passed.  In fact, in 2009, New York passed a law that requires an employer to review a longer list of factors related to a past crimes.  This is why ESR advises clients to deal with any sot of automated software processes with extremes caution.

The thought is that an applicant should not be the subject of prejudice based on their status as opposed to who they are as a person. After all, the root of the word prejudice is to “pre-judge.”  Of course, that does not mean a sex offender should be supervising a playground or an embezzler usage money, but the bottom-line is that there is a job for all, although not all is entitle to every job.  As a society, we cannot afford to build extra prisons then schools or hospital, so there is a huge need to get past offenders employed. In fact, nationally, it expenditure about $30,000 a year to incarcerate a person.  If a person leaves jail or prison and cannot get a job, there is a high likelihood of recidivism and extra expenditure to society. 

On the other hand, they need to be employed in an apt job, to avoid harm to the firm or the public and to avoid lawsuits for negligent hiring.  There is no perfect solution, but as with many things associated with HR, it is the process that is critical.  The process should certainly allow for individual consideration of all applicant on their qualities as it relates to a job.  Of course, if a person has lied on level application and was dishonest about past criminal history then the employer may rightly be concerned about the lack of honesty on the application especially if the application clearly indicates hat any notes omission or misinformation is grounds to terminate the hiring process or employment, no matter when learned.

There are numerous ESR blogs on the subject that can help employers in navigating these issues:

• 2010 Trend on Increased Focus on Whether Credit Reports and Criminal Records are Discriminatory
• Discrimination Lawsuit Shows Importance of Employer Policy on the Use of Criminal Records During Background Checks
• The Unfair Use of Credit Reports and Criminal Records and the EEOC E-Race Initiative 

For extra in rank about background checks, visit Employment Screening Resources (ESR) at http://www.esrcheck.com.

Sources:

http://www.esrcheck.com/wordpress/2010/01/04/2010-trend-on-increased-focus-on-whether-credit-reports-and-criminal-records-are-discriminatory/

http://www.esrcheck.com/wordpress/2010/04/12/discrimination-lawsuit-shows-importance-of-employer-policy-on-the-use-of-criminal-records-during-background-checks/

 http://www.esrcheck.com/wordpress/2010/01/07/the-unfair-use-of-credit-reports-and-criminal-records-and-the-eeoc-e-race-initiative/

As a recently filed lawsuit alleging one of the largest management consulting firms in the world conducted discriminatory background checks against African-Americans and Latinos shows, employers need to fully know the U.S. Equal Employment Opportunity Commission (EEOC) policies regarding the use of background checks during the pre-employment screening process – or face the consequences in court.

Due to an increase in discrimination lawsuits such as this, the EEOC has chose to warn employers about background check practices that could get them in distress. The agency designed a program to combat discriminatory practices tied to background checks called E-RACE (Eradicating Racism And Colorism from Employment) after recently noticing a steep climb in complaints from job applicants who claimed they were unfairly excluded from employment because of in rank – such as criminal records and poor credit ratings – that appeared on background checks. African-American and Hispanic males in particular, who according to statistics usually have higher arrest tariff and lower credit scores than white males, were able to show the EEOC that the criteria used during background checks had a negative impact on their hiring opportunities.

The EEOC has defined two background check practices in particular that have caused – and will pocket up again to cause – the largest legal risk for employers:

• Blanket policies against hiring anyone with a criminal record or poor credit score.
• Failing to show the correlation linking background checks and the job itself.

According to the EEOC, even if the agency takes a discrimination charge that does not necessarily mean that the regime is accusing an employer of discrimination. It is simply the EEOC’s job to probe the matter to determine whether there is reasonable cause to believe that discrimination has occurred if applicants or staff charge that an employer has allegedly discriminated against them.

In addition, according to the “Employers” section of the EEOC website, the agency enforces Federal laws prohibiting employment discrimination that protect employees and job applicants against employment discrimination when it involves:

• Unfair treatment because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic in rank.
• Harassment by managers, co-staff, or others in the workplace, because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic in rank.
• Denial of a reasonable workplace accommodation that the employee needs because of religious beliefs or disability.
• Retaliation because the employee complained about job discrimination, or helped with a job discrimination investigation or lawsuit.

The EEOC and the courts do recognize that some in rank uncovered in background checks does grant insight on an applicant’s suitability in certain fields of employment. These instances could include jobs in which applicants would have close contact with customers, handle cash, guide vehicles, and deal with minors.  Employers need to show these correlations linking background checks and the suitability for the given job, and also ensure that their background check process does not routinely, even if unknowingly, give preference to white applicants while excluding African-Americans and Hispanics.

For extra in rank about EEOC policies regarding discrimination during background checks for employment, visit Employment Screening Resources (ESR), a national pre-employment screening firm providing background checks, at http://www.esrcheck.com.

Source:

http://eeoc.gov/employers/index.cfm

http://eeoc.gov/laws/index.cfm

http://www.eeoc.gov/eeoc/initiatives/e-race/index.cfm

A recently filed class action lawsuit – which alleges that one of the largest management consulting firms in the world conducted background checks that discriminated against African-Americans and Latinos – underscores the importance of employers understanding the U.S. Equal Employment Opportunity Commission (EEOC) policy regarding the use of criminal records during the pre-employment background check process.

According to a tale on CNNMoney.com, the lawsuit accuses the firm of violating Title VII of the Civil Civil rights Act of 1964 by rejecting or firing qualified individuals who have criminal records even when the criminal history has no bearing on the individual’s fitness or ability to perform the job in question. CNNMoney.com reports that the lawsuit alleges the plaintiff had worked as a contract employee for extra than a year when, in April 2007, the firm offered him stable employment. This job offer was then withdrawn – and the plaintiff’s employment as a contract worker terminated – after the results of a background check revealed that he had been convicted of vehicular homicide after driving while intoxicated a decade earlier.

The worker filed a Charge of Discrimination with the EEOC in November 2007 and the EEOC issued a “right to sue” letter to him on January 2010. The lawsuit, according to CNNMoney.com, seeks to force changes in the management consulting firm’s hiring and retention policies, practices, and programs, restore the worker and others like him to their positions at the company, front and/or back pay and benefits, and litigation expenditure.

Leading national online background check firm Employment Screening Resources (ESR) targeted the use of criminal reports in its recently released third annual “Top Ten Trends in the Pre-Employment Background Screening Industry for 2010” that identifies new trends making a difference – such as attorneys, including class action lawyers, focusing extra on background checks – and ancient trends evolving as the screening industry matures.

The first of the “Top 10 Trends” ESR will track closely in 2010 concerns the increased focus on whether both credit reports and criminal records promote discrimination. In October 2009, the EEOC filed a lawsuit against a national employer alleging that credit reports and criminal records were being used to discriminate against members of protected groups.

These recent actions should not come as much of a surprise to the background check industry, according to ESR, as there has been a steady drumbeat of concern about both credit reports and criminal records.  While the use of credit reports during background checks has been in the headlines recently due to the hurt the economic downturn has done to the credit rating and finances of many job applicants, the use of criminal records during background checks is also coming under closer scrutiny. In 2009, New York passed new laws to ensure that employers were not automatically rejecting applicants with criminal records without considering the individual on their qualities. 

ESR believe this lawsuit clearly shows why employers should be familiar with discrimination and the critical “No Automatic Exclusion Rule”  when it comes to the use of criminal records during background checks. This rule states that employers cannot deny employment automatically but need a business justification not to hire based upon criminal records. 

The EEOC has made it clear the automatic use of a criminal record without showing a “business necessity” can have discriminatory impact by disqualifying a disproportionate number of members of underground groups.  The EEOC’s position when it comes to the use of criminal records: “an employer’s policy or practice of excluding from employment on the basis of their conviction records has an adverse impact on Blacks and Hispanics in light of statistics showing that they are convicted at a rate disproportionately greater than their representation in the population. Therefore, the Commission has held and continues to hold that such a policy or practice is unlawful under Title VII (the Equal Employment Opportunity law) in the absence of a justifying business necessity.”

According to the EEOC, employers must show that it considered these three factors to determine whether its choice was justified by business necessity:

• The scenery and gravity of the offense or offenses;
• The time that has passed in view of the fact that the conviction and/or completion of the sentence, and;
• The scenery of the job held or sought.

In other words, employers cannot simply follow a “No one with a criminal record need apply” approach that statistically could end up having an unfair or discriminatory impact on certain groups of people. Instead, if an applicant has a criminal record, ESR suggests that the employer determine if there is a rational, job-related reason why that person is unfit for that job.  Employer must show that the consideration of the applicant’s criminal record is job-related and consistent with business necessity.

One vicinity ESR reckon employers need to review their practices is with regards to using automated “pass/fail” scoring matrixes where job candidates are given a green (pass) light or red (fail) light.  That sort of automation where individuals are judged entirety by their membership in a particular category instead of their private abilities is precisely the type of process that is likely to get some unwarranted attention in the courts as a discriminatory practice.  This practice presents dangers to employers – both large and small – and they should not be engaging in automated choice making based on background checks. The final say should be left in the hands of creature beings.

As a general rule, ESR believes it is a best practice for employers to have written policies on vital issues such as possible discrimination through the use of criminal records during background checks. Without such a policy, an employer’s actions in denying employment may become harder to defend, and having no policy also subjects an employer to claims of a discriminatory practice.

Sources:

http://www.esrcheck.com/2010-trends-backgroundscreening-industry.php                                                                        

http://www.esrcheck.com/wordpress/1057/new-eeoc-lawsuit-for-discrimination-based-on-credit-report-and-criminal-records

http://money.cnn.com/news/newsfeeds/articles/prnewswire/DA83387.htm

The author notes that in response to seeing an increase in claims of discrimination based upon criminal records and credit reports,  the EEOC started the E-RACE Initiative (Eradicating Racism And Colorism from Employment).  This brilliant article can be found at:

http://www.hrmorning.com/recruiting-eeoc-warns-about-background-checks/

As ESR has advised employer on a number of reason, the unfair use of credit reports or the automatic exclusion of individuals with criminal records without considering if there is a business justification are two huge vicinity of potential liability for employers.  The Safe Hiring Manuel, the first comprehensive book on background checks that was written by ESR goes into these issues in detail.  It can result in an action by the EEOC or a lawsuit for discrimination.  Needless to say, employers would rather not face either.  As noted in a recent ESR blog, the EEOC has brought a legal action against one national employer alleging the discriminatory use of credit reports and criminal records. http://www.esrcheck.com/wordpress/1057/new-eeoc-lawsuit-for-discrimination-based-on-credit-report-and-criminal-records 

The one thing that small and standard businesses do not want to do is to use screening software that makes automated choice.  That is a huge risk taken for no excellent reason.  

To attempt to minimize exposure, employers may want review the following articles by ESR:

1. http://www.esrcheck.com/wordpress/815/basics-of-credit-reports-and-background-checks
2. http://www.esrcheck.com/wordpress/942/the-basics-of-criminal-records-searches

According to the EEOC press release the lawsuit charged that, “This practice has an unlawful discriminatory impact because of race, national origin and sex, and is neither job-related nor justified by business necessity.”

Even though the use of criminal records and credit history does not directly target people   protected by civil civil Civil rights laws, the argument is that when those criteria were applied to Freeman applicants, the end result was that greater numbers of blacks, Hispanics and males were affected.  This is referred to as a “disparate impact.”  In other words, by using this in rank to make hiring decisions, the practical impact was that members of protected groups were unfairly treated and rejected in higher numbers.   

The EEOC has been active in identifying barriers that contribute to discrimination     In 2007, the EEOC launched the “E-RACE” (Eradicating Racism and Colorism from Employment) Initiative. The purpose was to “improve EEOC’s efforts to ensure workplaces are emancipated of race and color discrimination.” http://www.eeoc.gov/eeoc/initiatives/e-race/index.cfm

The use of credit reports and criminal records being used to deny employment has been hot-button issues for the EEOC.  The last significant case was El. v. Septa, 479 F.3D 232 (3d. Cir. 2007), where a 40 year-ancient second degree murder conviction was allowable to be used to deny employment.  But, part of the choice was based upon the fact that the applicant that was suing for discrimination did not present any statistical prove to rebut expert testimony by the employer that even a 40 year ancient crime can be relevant.  The company had a “bright-line” policy of rejecting applicants with convictions for violence. 

In view of the fact that then, a study was conducted by Professor Alfred Blumstein at Carnegie Mellon University that suggested that after a period of as modest as five years for some crimes, a person with a criminal record was no extra likely to re-offend then a person with no criminal record.   Ironically, the same professor was the expert in the El v. Septa  matter where a 40 year ancient murder was sufficient to deny employment .

ESR has written an in-depth analysis of the Blumstein study at:   http://www.esrcheck.com/Blumstein-and-Nakamura-study-on-redemption-in-Criminology.php”>http://www.esrcheck.com/Blumstein-and-Nakamura-study-on-redemption-in-Criminology.php

This case will not likely be finalized anytime soon and could well need to go to higher courts for a final pledge.  But, the case is a stark reminder that employers need to review their hiring practices, to ensure that any pre-employment assessment tool is both a valid predictor and job performance and not discriminatory. 

In the case of criminal records, Employment Screening Resources (ESR) has long advised employers that they should NOT automatically reject an applicant with a criminal record, but should instead determine if there is a business necessity that precludes hiring.  The EEOC has suggested that employers pocket into account the scenery and gravity of the crime, the scenery of the job, and the age of the offense.  Similarly, ESR has also long advised employers that credit reports should be approached with caution, and only used where relevant to the job, such as positions involving access to cash, assets or fiduciary duties.