New EEOC Guidelines Address Criminal History in Employment Decisions

On April 24, 2012, the Equal Employment Opportunity Commission (“EEOC”) enacted guidelines that prohibit certain businesses from making employment decisions based solely on an employee’s or job applicant’s arrest or criminal conviction.  The EEOC imposed this policy because racial minorities are significantly more likely than Caucasians to have criminal action taken against them.  Thus, according to the EEOC, a blanket policy of treating all persons the same because of their criminal history has a “disparate impact” on minorities, discriminates, and violates Title VII of the Civil Rights Act of 1964.  The only exceptions to this rule are (1) an employer’s compliance with other federal laws or regulations that conflict with Title VII or, possibly (2) state and local laws to the extent they require or permit action that is illegal under Title VII.

Whether you agree or not with the EEOC rationale, the guidelines are very real and the EEOC is already taking action.  Even before the release of the new guidelines, Pepsi paid more than $3 million and changed its policies after the EEOC charged Pepsi with “disparate impact” discrimination.  Pepsi had a policy of considering arrests and convictions when making employment decisions.  According to the EEOC press release, “the use of arrest and conviction records to deny employment can be illegal when it is not relevant for the job, because it can limit the employment opportunities of applicants or workers based on their race or ethnicity.”

Pursuant to the new EEOC guidelines, employment decisions based on criminal conduct are allowable only if they are “job related and consistent with business necessity.”  This relatedness-necessity analysis is satisfied when an employer:

1. validates its criminal conduct exclusion per the Uniform Guidelines on Employee Selection Procedures (which are other objective guidelines to be used as a basis for making employment decisions), and, if available, takes into consideration data about criminal conduct as it relates to subsequent work performance; or

2. develops a “targeted screen” by considering at least (a) the nature and gravity of the criminal conduct; (b) the time that has passed since the criminal conduct; and (c) the nature of the job held or sought, and then conducts an individualized assessment to determine whether the criminal history policy as applied would be job related and consistent with business necessity.

Compliance with the EEOC guidelines will unquestionably be burdensome and could become expensive.  Complicating matters, there is little information available addressing the relationship between certain criminal acts and the ability to perform particular jobs.  However, failing to adhere to the guidelines could result in costly litigation and monetary penalties. We strongly encourage all employers to revisit their employment practices, policies, job applications and handbooks, and to eliminate any activity that might exclude or impact an employee based solely on a criminal record.

We would be happy to provide your company with the guidance necessary to navigate and address these new mandates.