When Are Criminal Background Checks Permitted?

Criminal background checks should be conducted after a job offer and feature an individualized assessment of any criminal justice record, a U.S. Equal Employment Opportunity Commission (EEOC) lawsuit indicates. Such screening is more necessary and relevant for some positions than others.

Lawsuit’s Allegations

In EEOC v. Sheetz, the commission claims that Sheetz, a large convenience store chain, violated federal law by denying employment to job applicants because of their race. Sheetz has a long-standing practice of screening all job applicants for records of criminal conviction and then denying them employment based on those records, according to the lawsuit. The EEOC maintains that Sheetz’s hiring practices disproportionately screened out Black, Native American/Alaska Native, and multiracial applicants.

“Federal law mandates that employment practices causing a disparate impact because of race or other protected classifications must be shown by the employer to be necessary to ensure the safe and efficient performance of the particular jobs at issue,” said EEOC regional attorney Debra Lawrence in Baltimore.

Even when such necessity is proven, the practice remains unlawful if there is an alternative practice available that is comparably effective to achieve the employer’s goals but causes less discriminatory effect, she added.

“Sheetz does not tolerate discrimination of any kind. Diversity and inclusion are essential parts of who we are,” said Nick Ruffner, PR manager for Sheetz in Altoona, Pa. “We take these allegations seriously. We have attempted to work with the EEOC for nearly eight years to find common ground and resolve this dispute. We will address the claims in court when the time comes.”

Fair Chance Act Requirements

Some state and local laws prevent private sector employers from asking applicants about their criminal history until after a conditional job offer is made. Federal contractors must follow a similar path.

Companies with federal contracts must comply with the federal Fair Chance Act for positions related to the federal contract work, said Jerry Hathaway, an attorney with Fox Rothschild in Atlantic City, N.J., and New York City.

“For those applicants, there may not be a criminal background check until after a conditional offer of employment is made—though there are exceptions for law enforcement/national security, those who require access to classified information, and some very few positions required by law to reveal criminal information before a conditional offer is made,” he said.

If there is no federal contract at issue—and no applicable state or local law banning it—the employer may lawfully ask about criminal history as part of the application process, Hathaway said. “But if it does so, the employer must assess whether using criminal history creates a disparate impact among applicants,” he said. “If it does, then the employer is at risk of being sued, like the target of the EEOC lawsuit.”

Some states and localities regulate the use of criminal history for employment decisions in what has come to be known as the “ban-the-box” movement, Hathaway noted. This refers to the checkbox on employment applications asking whether the candidate has ever been convicted of a crime. Ban-the-box laws require hiring managers to put off asking about a candidate’s criminal history until after an interview has been conducted or a provisional job offer has been extended.

[SHRM members-only HR Q&A: What commonly asked questions should not be on an employment application?]

In addition, clean slate laws in 12 states offer automatic record-clearing once a person remains crime-free for a set period of time.

Title VII Considerations

To avoid violations of Title VII of the Civil Rights Act of 1964, the best practice is for employers to conduct criminal background checks post-offer, said Emily Borna, an attorney with Jackson Lewis in Atlanta.

Susan Corcoran, an attorney with Jackson Lewis in White Plains, N.Y., agreed, saying, “Based on the rubric of federal, state, and local laws and the desire to focus on a person’s qualifications for the job and not conviction status, post-offer is when the criminal history inquiry or screening should take place.”

Employers also should conduct an individualized assessment of any criminal justice history, Borna said. They should consider:

• The nature and gravity of the offense(s).
• The time that has passed since the incident(s).
• The essential functions of the position.
• Whether and how the candidate’s criminal history relates to their ability to perform those functions, if at all.

“Such information should be handled discreetly and shared only with those having a business need-to-know of it,” Borna said. It is also recommended—and in some cases obligatory—to notify an individual if their criminal history is the basis, in whole or in part, for withdrawing a job offer.

When Screening Might Be Needed

This doesn’t mean that employers can never conduct background checks. If there is a job-related reason and it is consistent with business necessity, an employer can request criminal history information at the appropriate time in a manner consistent with applicable laws, Corcoran said.

For example, organizations that deal with vulnerable populations, have employees who visit individuals’ homes, or employ individuals in safety-sensitive positions are most likely to engage in criminal history background checks, she said.

“Typically, employers should narrowly tailor any possible automatic exclusions, and most conservatively, to any legally required disqualifiers,” Corcoran said. Otherwise, before potentially denying someone employment, an individualized assessment should be conducted, she noted.

“Some positions should always require a criminal background check, such as for employees who have access to the company’s cash,” Hathaway said.

If a company offers services that involve employees going into customers’ homes, such as cable or fiber optic installers, the employer may be regarded as being negligent if it doesn’t check an applicant’s background, he said: “The problem arises when an applicant has a history of violent crime, the applicant is hired, and then the employee commits a violent crime within a customer’s home.”

Hathaway added, “If a company is hiring a chief financial officer and it chooses to disqualify applicants who have committed financial crimes, such as embezzlement, that disqualifying factor would be justified. But if the same company is hiring warehouse employees, who move product around a warehouse, and anyone with any criminal background is disqualified, say for a minor drug possession that happened 20 years prior to applying for employment, that would be problematic.”