Editor’s note: This is the second in a three-part series focusing on criminal background checks. Read part 1. The third installment will be posted Thursday.
The U.S. Equal Employment Opportunity Commission is serious about investigating and eradicating discrimination based on the use of criminal background check information. Recently, PepsiCo Americas Beverages settled a case and agreed to pay $3.13 million and provide job offers and training in a case filed by the EEOC. The EEOC’s investigation revealed that more than 300 African-American applicants were adversely affected by Pepsi’s criminal background policy. Under Pepsi’s former policy, applicants were denied employment if they had pending arrests, even if they had no convictions. Applicants with certain minor convictions also were denied employment under the policy. The EEOC found Pepsi’s policy unlawful because it denied employment based on records the agency determined were not relevant to the jobs.
Under the EEOC’s recently issued guidance on employers’ use of criminal background checks, Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, employers that screen applicants’ criminal backgrounds must prove that their use of the information is job related and does not result in discrimination against minorities. Although not binding to employers, the EEOC will be enforcing Title VII with the guidance in mind.
To check or not to check?
According to some studies, more than 90% of employers conduct criminal background checks for some job applicants and more than 70% of employers conduct background checks on all potential new hires. Most hospitality industry employers conduct some criminal background checks. They do so to avoid negligent hiring lawsuits—a lawsuit from a guest or customer, for example, based on a hotel’s failure to properly screen an employee who later does harm. In light of this risk, hospitality employers must be particularly careful in scaling back their background check policies or abandoning them altogether. Hotel employers are caught in a Catch-22—if they run background checks, they may run afoul of the EEOC’s guidance, but if they don’t run background checks, they risk a claim of negligence from a guest or member of the public who is harmed by an employee.
Federal and state law compliance
Both the EEOC and the federal Fair Credit Reporting Act set forth the legal framework for the use of criminal records. Many state laws also place limitations on the use of both arrest and conviction records for employment purposes. These laws range from restricting an employer from asking about arrest records at all to limiting the use of conviction records in making employment decisions. Under California law, employers may not ask applicants to disclose arrests that did not result in conviction and may not seek such information from other sources. New York law allows employers to consider criminal convictions only if the conviction bears a direct relationship to the job, would create an unreasonable risk to property or to the safety and welfare of the individual or the general public, or is related to the state’s regulation of child-care facilities. Massachusetts law prohibits employers from asking about any misdemeanor convictions occurring five or more years before the application for employment.
Adopting/revising a criminal background check policy
In light of the EEOC’s updated guidance on the use of criminal background check information in employment decisions, all employers, but especially those in the hospitality industry, that use criminal background checks extensively to protect their guests and property must carefully review their current policies or practices. Be certain to consider the state law limits and assure that the credit reporting agency you use is in full compliance with the FCRA and state laws. Become familiar with the EEOC’s updated guidance. Keep in mind the EEOC’s guidance is not law, but only the EEOC’s interpretation of the law. No “one-size-fits-all” or “model” criminal background policy is suitable for all employers. The following parts of your policy must be considered:
Your job application
The criminal background reports you receive from third-party vendors
The timing of your inquiry into an applicant’s criminal background
The use of arrests vs. convictions
Documenting your decision
Individualized assessments based on applicant feedback
Federal and state laws and regulations
Training for hiring managers
The final article in this series will provide specific guidance on how to prepare or revise your criminal background check policy in light of these complicated restrictions.
Disclaimer: The foregoing provides an overview of certain legal issues. It is not intended, and cannot be construed, as legal advice for any purpose.
Andria Ryan is a partner in the Atlanta office of Fisher & Philllips, LLP and serves as the chair of the firm's Hospitality Industry Practice Group. She represents employers in virtually every area of employment and labor law and can be reached at 404-240-421 or firstname.lastname@example.org.
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