Use of Arrest or Conviction Records in Hiring Decisions

Last year, the Equal Employment Opportunity Commission (EEOC) issued “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.” This Guidance consolidated and superseded prior policy statements regarding this issue and provides recommendations for employers, offering data that decisions based on criminal history frequently have a disparate impact on black and Hispanic job applicants.

The EEOC’s Guidance in Action

Just over a year later, the EEOC filed lawsuits against BMW in South Carolina and against Dollar General in Illinois, accusing both companies of using criminal background screening practices that resulted in discrimination against black applicants. Even though the commission has since suffered stinging losses in court, employers everywhere would still be well advised to exercise caution in their use of criminal background checks in the hiring process.

The complaint against BMW alleged that its policy automatically excluded individuals with convictions for certain crimes, without regard to the type of conviction or how much time passed since the conviction. According to the EEOC, the “gross disparity” in the rates at which black (80 percent) and non-black (20 percent) employees lost their jobs as a result of BMW’s criminal background checks was “statistically significant.”

Similarly, the EEOC alleged that Dollar General’s hiring matrix, which disqualified job candidates with convictions for specific crimes, did not consider (among other factors) the age of the offender, whether a nexus existed between the crime and actual job duties, or the time or events that transpired since the conviction. Again, the EEOC found that the “gross disparity” in the rates at which black (10 percent) and non-black (7 percent) candidates were rejected (a mere 3 percent ) to be “statistically significant.”

These and similar lawsuits have brought an onslaught of criticism against the EEOC from attorneys general of multiple states. Courts, too, are closely examining the EEOC’s claims. For example, the EEOC alleged that staffing agency Peoplemark Inc. had a companywide policy that denied employment opportunities to applicants with felony records. But Peoplemark had no such policy, and the EEOC’s failure to promptly dismiss its case upon learning this critical fact fueled a Michigan federal court’s order (recently affirmed by the U.S. Court of Appeals for the Sixth Circuit) directing the EEOC to pay Peoplemark more than $750,000 in legal fees, experts’ fees and other costs incurred fighting the agency’s claim.

Implications for Employers