On April 25, 2012, the Equal Employment Opportunity Commission (EEOC) issued its Enforcement Guidance No. 915.002, titled Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964. The Guidance was broadly understood to signal the EEOC’s intent to move aggressively to curb the ability of employers to base employment decisions on criminal history and as an invitation to the private plaintiffs’ bar to do the same. That understanding has proven to have been well-founded as the past 18 months have seen a number of high profile cases brought by the EEOC and private plaintiffs against employers such as BMW, Disney, Dollar General and others. At the same time, apparently unwilling to wait to be sued, the state of Texas sued the EEOC on Nov. 4, 2013, seeking a declaratory judgment that its policy of refusing to hire convicted felons for state positions does not violate Title VII.
This article will discuss employer use of criminal history information in the context of potential disparate impact theory discrimination claims under Title VII (and, at least in theory, state law analogs). It is important to recognize that potential discrimination claims are only one concern in this area. Two others can be equally important but are beyond the scope of this discussion. First, where the employer uses a third party to perform a criminal history, or any other sort of background, both the employer and the third party must comply with the requirements of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq., particularly the obligation to provide the applicant or employee with notice of and an opportunity to challenge a background report. Second, many states and municipalities have specific restrictions on employer access to and use of criminal history information, including the increasingly popular “Ban-the-Box” ordinances which prohibit employers from asking about criminal history on an employment application, only permitting such an inquiry further on in the application process.
The EEOC Guidance and the disparate impact theory of discrimination
In Griggs v. Duke Power Co., the Supreme Court held that an employer violates Title VII where it makes employment decisions based upon a facially-neutral criterion which is demonstrated to have an adverse, disparate impact upon a protected class unless the employer demonstrates that its use of the criterion is justified by business necessity.
In Green v. Missouri Pacific Railroad Co., the 8th Circuit found that the employer’s exclusion of applicants with any criminal conviction (in Mr. Green’s case, for refusing military induction during the Vietnam War) had a demonstrated adverse impact upon African-American applicants and, absent any consideration of the relationship between the underlying offense and the position in question, was not justified by business necessity. The Court later affirmed the district court’s conclusion on remand that an employer is not precluded by the fact of its adverse impact from considering criminal history, “so long as [it] takes into account the nature and gravity of the offense or offenses, the time that has passed since the conviction and/or completion of sentence, and the nature of the job for which the applicant has applied.” These three considerations have become known as the “Green factors” and form the basis for the business necessity analysis in the criminal history context. The Green analysis itself has not been terribly controversial. However, the same has not been true of the EEOC’s efforts to expand it.
First, the unbroken line of authority following Griggs would appear to make clear beyond any argument that to proceed with a disparate impact claim under Title VII, the plaintiff must first prove that disparate impact — that the particular employer’s use of the challenged criterion actually has an adverse impact upon the protected class of which the plaintiff is a member. In the 2012 Guidance, however, the EEOC takes the position that its national statistics demonstrate that use of criminal history to screen out applicants has an adverse impact upon African-Americans and Hispanics generally, such that it will presume adverse impact and shift the burden to the employer to demonstrate that there is no such impact within its own applicant pool. To date, the courts have been less-than-receptive to what several district judges have characterized as the agency’s efforts to reverse the burden of proof under Griggs.
Second, the courts have held consistently that the Green factors may be used to establish the business necessity of a “bright-line” policy regarding criminal history and have rejected the EEOC’s past insistence that business necessity can only be established by an “individualized assessment” of the specific applicant. For example, in El v. Southeastern Pennsylvania Transportation Authority (PDF), the 3rd Circuit upheld an employer policy of excluding from the position of paratransit driver any individual who had been convicted of a violent crime against a person. While the 2012 Guidelines recognize that Title VII does not necessarily require individualized assessment in all cases, that recognition is grudging at best and the agency’s clear priority is to apply the Green factors first to the exclusionary policy itself and then to do so again to the particular circumstances of the protected class individuals who are excluded.
While the fervor with which the EEOC is pursuing the issue may be extreme, and there can be no doubting the importance of appropriate due diligence in hiring, broadly-drawn policies which deny any consideration of individual qualifications and circumstances are not only difficult to justify as a business necessity, they may in many cases deprive the employer of the best available applicant for reasons which are at best speculative. A more carefully focused policy with “bright-line” exclusions reserved for the most sensitive positions and egregious crimes is not only more legally defensible, it may also be simply better business.