I must have slept through my high school social studies class. I must not have paid attention when I was in law school. I apparently find myself in a curious new world.
To use an old expression, someone moved the cheese. In this case, the cheese is the guideline for what you as an employer can ask about a job applicant’s background. You might know this trend as “ban the box” laws.
In ban the box states, an employer can no longer ask a job application about his or her prior (or presumed ongoing) criminal history. Without the ability now to ask about criminal history, the applicant you hire might be a big risk, to you, your employees and your customers.
Today, the U.S. Equal Employment Opportunity Commission (EEOC), and many states, and even municipal governments view the use of background checks as an unfair hurdle to those with prior convictions trying to re-enter the work force.
Fair for whom?
This new hiring guideline is rooted in a theory of liability called disparate impact. Disparate impact does not only apply to lending. In fact, whether disparate impact claims may be brought to prove lending discrimination is a hotly contested legal issue that has yet to be determined by the United States Supreme Court.
What is clear, however, is that the disparate impact theory of discrimination in employment cases can be, and is, used as a theory of legal liability in employment cases.
Employers use background checks to ensure a safe work environment for employees and their customers. Background checks take on even more importance given federal and state regulatory demands to protect non-public customer information. According to one survey, 92 percent of employers check criminal history, at least for some positions.
As mentioned, the EEOC views the use of background checks as an unfair hurdle to those with prior convictions trying to re-enter the work force. The EEOC has as a priority on its agenda the bringing of actions against employers who routinely exclude all candidates for employment based upon any felony conviction.
The EEOC published its “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions” in 2012. The guidance discusses how use of national data supports a finding that criminal record exclusions have a disparate impact based on race and national origin. The EEOC reiterated the issue as a priority in 2013, and it continues to file disparate impact cases against employers who have a broad policy on background checks.
Many states have followed suit and passed laws that limit what and when an employer may inquire about an employee’s or prospective employee’s criminal history. These laws also limit the types of criminal information that can be obtained and used in the decision and may require that any exclusion based upon a prior criminal conviction be related to the job duties and responsibilities.
Some states and municipal governments have passed or are passing so-called “ban-the-box” laws. These laws and regulations bar employers from asking about criminal records on employment applications. Thus, the box on the application that asks about criminal history has been made illegal in many places.
Protection up to you
Having laid out this discouraging scenario, let me reinforce that despite EEOC and state action, background checks are still a sound business practice, especially for dealerships.
The information, both financial and personal, that flows through an automobile dealership on a daily basis is too valuable not to properly vet individuals who have access to such information. Background checks should be done on every potential new hire, even friends of the dealership. In the future, however, those checks should be part of a standard policy and carefully crafted.
Disparate impact in hiring occurs where an employer’s neutral policy or practice has the effect of disproportionately screening out persons protected under Title VII, and the employer fails to demonstrate that the policy or practice is job related for the position in question and consistent with business necessity.
The EEOC stated that employers will consistently meet the “job related and consistent with business necessity” defenses to disparate impact claims where the employer:
- Develops a targeted screen considering at least the nature of the crime;
- Considers the time elapsed since any felony conviction;
- The nature of the job and business necessity; and
- The employer’s policy provides an opportunity for an individualized assessment for those people identified by the screen, to determine if the policy as applied is job related and consistent with business necessity.
All this can get rather confusing for anyone who infrequently navigates these matters. For a quick view of the new necessary guidelines, click to download “Suggested Background Check Policy and Procedures.”