Many employers are surprised to learn that they should not automatically exclude an applicant based on a felony criminal record. Doesn’t an employer have a duty to protect other employees and customers?

Employers do have an obligation to properly screen employees, but they should ensure that the screening does not run afoul of anti-discrimination laws. Title VII of the Civil Rights Act does not protect individuals with criminal records per se, but rather prohibits policies that discriminate against applicants or employees based on race, either intentionally or in practice.

In June of this year, the Equal Employment Opportunity Commission filed lawsuits against BMW and Dollar General Corp. over their use of criminal background checks to screen out job applicants or fire employees. In these cases, the EEOC claims that the practice of automatic disqualification discriminates against African-Americans, who have higher arrest and conviction rates than whites.

While EEOC Guidance is not the law, it provides the EEOC’s view on the law and thus informs cautious employers of EEOC’s enforcement position. According to the EEOC’s April 2012 Guidance on arrest and conviction records, Title VII race and/or national origin discrimination may occur in two situations:

* When employers treat criminal history differently for different applicants/employees, based on their race or national origin (disparate treatment).
* When an employer’s neutral background check policy or practice disproportionately impacts protected individuals (disparate impact), unless the policy is job-related and consistent with business necessity.

A targeted screening process is the most common way an employer may establish that the background check is “job related and consistent with business necessity” — i.e., satisfy the “business necessity” affirmative defense — and, therefore, defend against an EEOC finding of disparate impact. The Guidance suggests that employers should use the targeted screening process to determine whether they may rely on the criminal background check information in taking adverse employment action.

A targeted screening process should take into account the following factors:
• The nature and gravity of the offense or conduct;
•  The time that has passed since the offense, conduct, and/or completion of the sentence; and
•  The nature of the job held or sought.

In its Guidance, the Commission repeats its long-held position that an arrest, by itself, is never job-related and consistent with business necessity because an arrest does not establish that criminal conduct has occurred, individuals are presumed innocent until proven guilty, and many arrests do not result in convictions. The Guidance makes no distinction between pending/current arrests and arrests that did not result in convictions, although employers often do. The Guidance provides, however, that an employer may make an employment decision based on the conduct underlying the arrest if the conduct makes the individual unfit for the position in question.

In order to avoid EEOC charges and lawsuits related to criminal background checks, employers should follow these best practices:

• Eliminate policies or practices that automatically exclude people from employment based on any criminal record.
• Develop a narrowly tailored written policy for criminal background screening, wherein you identify essential job requirements, determine the specific offenses that may demonstrate unfitness for performing such jobs, determine the duration of exclusions for criminal conduct, record the justification for the policy, and note and keep a record of consultations and research.
• When asking questions about criminal records, limit inquiries to records for which exclusion would be job-related for the position in question and consistent with business necessity.
• Consider eliminating questions regarding criminal records from the employment application. The question can be asked later in the process when you have more information on the candidate. This also limits the number of targeted screening that must be performed.
• The background check consent form should be separate from other documents (e.g., employment application). It should describe the various types of background check information being requested and/or reviewed – e.g., criminal, credit, etc.
• Keep information about applicants’ and employees’ criminal records confidential, and only use it for the purpose for which it was intended.
• Do not use arrest information that did not result in a conviction. Pending arrests should be considered only if the employer has independent knowledge of the underlying facts.
• Comply with the Fair Credit Reporting Act when the records are obtained through a consumer reporting agency.
• Perform an individualized assessment of criminal background information before using it to exclude a candidate or an employee. Factors to consider are:

o Individual’s showing that he/she was not correctly identified in the criminal record;
o The facts or circumstances surrounding the offense or conduct;
o The number of offenses for which the individual was convicted;
o Older age at the time of conviction, or release from prison;
o Evidence that the individual performed the same type of work, post-conviction, with the same or a different employer, with no known incidents of criminal conduct;
o The length and consistency of employment history before and after the offense or conduct;
o Rehabilitation efforts, e.g., education/training;
o Employment or character references and any other information regarding fitness for the particular position; and
o Whether the individual is bonded under a federal, state, or local bonding program.

Tracy A. Miller is shareholder with Ogletree Deakins in Phoenix. She represents management in all facets of labor and employment law and civil rights.