Criminal Background Policy Checkup

Recent federal guidance poses challenge for employers.

By Gary Siniscalco, Erin M. Connell and Alexandra Stathopoulos Jul 1, 2012
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July CoverFor many employers, criminal background checks are necessary. They help prevent employee theft in the workplace; avoid lawsuits from employees, customers or clients based on the conduct of a worker who was formerly incarcerated; and ensure compliance with laws that bar people with criminal records from certain occupations.

Yet this bar to employment may result in higher unemployment rates in some areas and among some minority groups. For instance, nearly half of residents with a criminal past in Washington, D.C., alone are unemployed, according to the Council for Court Excellence, and 13 percent of black Americans are unemployed, according to the U.S. Bureau of Labor Statistics.

As the unemployment rate for people with criminal records skyrockets, particularly among minorities, the U.S. Equal Employment Opportunity Commission (EEOC) has increased pressure on employers to re-examine criminal background check policies.

On April 25, the commission released new enforcement guidance for employers that emphasizes the agency's presumption that consideration of a criminal history is unlawful unless the employer can prove that its policy is narrowly tailored, job-related and consistent with business necessity. Employers now face the difficult task of ensuring that their policies satisfy business needs.


At odds with employers' need to conduct criminal background checks is the astronomical unemployment rate in the United States today for people with criminal convictions. Recent statistics from the U.S. Bureau of Justice Statistics show that more than 700,000 people are being released from prison each year. Minorities are systematically overrepresented in that group.

For example, black individuals accounted for 39.4 percent of the prison and jail populations in 2009, even though they represented only 12.6 percent of the U.S. population. Hispanics made up 20.6 percent of the total jail and prison populations in 2009, but they represented only 16.3 percent of the U.S. population.

Enforcement Framework

The new enforcement guidance outlines the framework officials will use to determine the legality of an employer's criminal background check policy. Technically, the guidelines do not establish new rules but instead aim to clarify the guidance first issued by the EEOC in 1987. The new guidance makes clear that there is a presumed disparate impact on black and Latino job applicants whenever an employer excludes applicants on the basis of conviction records, because those groups are overrepresented in the criminal justice system.

Unless an employer rebuts this presumption with contrary local demographic data or data on specific crimes, it must show valid business necessity to justify the policy.

The commission's enforcement guidance reiterates three factors an employer must consider when evaluating applicants' conviction records to demonstrate business necessity:

  • The nature and gravity of the offense or offenses.
  • The amount of time that has passed since the conviction or completion of the sentence.
  • The nature of the job held or sought.

Even when an employer has a narrowly tailored policy that takes these factors into consideration, the EEOC nevertheless advocates engaging in "individualized assessments."

In cases where an individual's criminal history does not pass scrutiny under the employer's policy, the commission still expects the employer to:

Inform the individual that he or she may be excluded because of past criminal conduct.

Provide an opportunity for the individual to demonstrate that the exclusion does not properly apply to him or her.

Consider whether the individual's additional information shows that the policy as applied is not job-related and consistent with business necessity.

Although the guidance states that individualized assessments are not required in every case, the commission nevertheless emphasizes that the assessments can "help employers avoid Title VII liability" under the Civil Rights Act of 1964.

State laws that bar employers from hiring people with criminal convictions may not shield a company from liability.

Note that many states have enacted statutes that specifically address criminal background check policies and, in some cases, that impose specific restrictions beyond those set out in the enforcement guidance. For example, New York Corrections Law Section 753 specifically lists factors employers should consider when evaluating an applicant's previous convictions, including:
  • Public policy.
  • Specific duties of the employment sought.
  • Bearing of the past criminal offense on the applicant's ability to perform his or her job duties.
  • Time elapsed since the past offense.
  • Age of the applicant at the time of the past offense.
  • Seriousness of the offense.
  • Evidence of rehabilitation.
  • Legitimate interests of the employer in protecting property and the public safety.

State Laws

Although the EEOC's enforcement guidance recognizes that compliance with federal laws or regulations that bar employers in certain industries from hiring people with particular criminal convictions constitutes a defense to a charge of discrimination, the commission takes the bold position that compliance with similar state laws will not shield an employer from liability because the state laws are pre-empted. The only legal authority the commission cites to support this position is the pre-emption clause in Title VII. Historically, this clause has been used to strike down state laws that on their face mandate discrimination that is contrary to Title VII, such as limitations on the number of hours women are permitted to work or weight-lifting restrictions that apply only to women.

The EEOC's current position that Title VII's pre-emptory reach now extends to state legislation that is not discriminatory on its face, but instead may have a discriminatory impact that agency officials believe is not justified by business necessity, is questionable at best and forces employers to make unfair choices.

For example, Nebraska has a state law covering pharmacy technicians. To be licensed, a pharmacy technician cannot have been convicted of any drug-related felony or misdemeanor. The statute does not consider the time passed since the conviction, nor does it allow for individual consideration. Nebraska pharmacies do not have the choice of ignoring this law when employing individuals to work as pharmacy technicians, and the EEOC offers no suggestions for employers faced with this type of dilemma.

The commission makes clear that "an arrest does not establish that criminal conduct has occurred," and the agency does not distinguish between arrests that did not lead to convictions and arrests pending prosecution.

Risky Hires

Recidivism data can help employers determine potential hires who may pose risks in the workplace. Employers can use this information to craft policies that are narrowly tailored to address business needs. 

For example, employers need to:

Prevent workplace theft, which currently costs U.S. businesses $200 billion annually.

Avoid negligent hiring lawsuits, where an employer may be liable for an injury caused by an employee if the employer knew or should have known the employee's propensity for the conduct that caused the injury.

Unfortunately, there is little research analyzing the likelihood of recidivism in the workplace. As a result, employers must turn to private data from the employer's own experience or general recidivism data not specific to the workplace.

General data from the Alaska Judicial Council in 2007 reflects an extremely high rate of recidivism: Two-thirds of released prisoners are back in prisons within three years of release. For many incarcerated people, particularly young men ages 20 to 40, prison is a revolving door.

Predictive value

As employers craft criminal background check policies designed to limit workplace risk, courts—and the EEOC—may require that they look beyond general recidivism statistics and consider nuances presented by an extremely diverse body of people with criminal convictions. Several recent studies show that criminal background checks are a valuable predictor of future employee behavior in certain circumstances, but the relationship between past crime and future behavior declines significantly with time and varies by age, number of crimes and types of past offenses.

The risk of re-offending varies, depending on the type of offense. For example, Alfred Blumstein of Carnegie Mellon University found in a June 2009 study published by the National Institute of Justice that it takes 3.8 years before an 18-year-old arrested for burglary resembles a same-age nonoffender in terms of risk of rearrest. For aggravated assault, it was 4.3 years; for robbery, it was 7.7 years.

Given current trends in unemployment, as well as pressure from the EEOC, state administrative agencies and private lawsuits, employers are faced with a dilemma: How can they craft criminal background check policies that satisfy business needs while acting in a manner consistent with the guidance and applicable law?

Right Balance

Finding the right balance is not easy. Employers cannot maintain blanket policies or rely on "common sense" as a justification for their use of criminal background checks in hiring. Key data on recidivism is still being developed, and the legal landscape in this area is subject to change.

Employers would be best advised to re-examine their criminal background check policies sooner rather than later. They should consult with legal counsel on ways they can narrowly tailor their background check policies to meet business needs while remaining mindful of related legal risks, state laws and positions taken by the EEOC.

Gary Siniscalco and Erin M. Connell are attorneys with Orrick in San Francisco. Alexandra Stathopoulos was a summer associate at Orrick.

Web Extras

SHRM web page: SHRM Online Legal Issues home page

Online sidebar: Recent Legal Action

Online sidebar: Considerations Supporting Business Necessity

SHRM article: EEOC Guidance Encourages Individualized Assessment (Legal Issues)

SHRM article: Criminal Background (HR Magazine)

SHRM article: Second Chances: Employing Convicted Felons (HR Magazine)

SHRM article: What HR Professionals Need to Know About the EEOC’s New Guidance on Criminal Background Checks (Government Affairs)

SHRM article: Mass. Employers Face New Obligations Regarding Criminal History Checks (Legal Issues)

SHRM article: Pepsi Settles Dispute over Criminal Background Checks for $3.13 Million (Legal Issues)

SHRM article: Report: Lawsuits Challenging Criminal Background Checks on the Rise (Legal Issues)

Article: The Predictive value of Criminal Background Checks: Do Age and Criminal History Affect Time to Redemption? (Criminology)

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