California Ramps Up Enforcement of Fair Chance Act

Evaluating candidates with known criminal records in compliance with the California Fair Chance Act (CFCA) poses a challenge for covered employers because the CFCA limits the discretion employers have to rely on such records when making hiring decisions. To make matters worse, the state agency that oversees and enforces the CFCA, the California Civil Rights Department (CRD), has been requiring strict compliance with the CFCA’s requirements. The CRD also interprets the CFCA’s requirements liberally in favor of applicants and, arguably, beyond what the statute requires. With the increasing number of administrative charges and lawsuits alleging CFCA violations, employers can proactively fortify their CFCA compliance.

Sample Form: Criminal Record Risk Factor Assessment

The CFCA regulates both the pre- and post-offer stages of the hiring process. The CFCA makes it unlawful for covered employers to:

Include on any job application any question about an applicant’s conviction history.
Inquire into or consider conviction history before the applicant receives a conditional job offer.
Consider an arrest that did not result in a conviction (with narrow exceptions), a referral to or participation in a pretrial or posttrial diversion program, and any convictions that have been sealed, dismissed, expunged or statutorily eradicated.

Employers may consider an applicant’s conviction history after extending a conditional job offer but must follow the steps outlined by the CFCA.

First, the employer must conduct an individualized assessment of whether the applicant’s conviction history has a “direct and adverse relationship” to the duties of the job, considering:

The nature and gravity of the criminal offense or conduct.
The time that has passed since the criminal offense or conduct and completion of the sentence.
The nature of the job held or sought.

Next, if the employer makes a preliminary decision that the applicant’s conviction history is potentially disqualifying, the employer must notify the applicant of this preliminary decision in writing and allow sufficient time for a response before taking adverse action. The CFCA prescribes the text and timing of this initial notice. If the applicant timely responds to the initial notice, the employer must consider any information submitted by the applicant before making a final decision.

Sample Form: 6 Tips for Using Criminal Records in Hiring Decisions

Next, if the employer decides to rescind the job offer, the employer must notify the applicant of this final decision. The CFCA prescribes the text of this final notice, including notification of the applicant’s right to file a complaint with the CRD and any existing procedure the employer has to challenge the decision.

Notably, in administrative proceedings and negotiations, the CRD has been aggressively pressing an overly broad construction of the CFCA. For example, the CRD has been asserting that the CFCA requires more than a fair chance process for employers to follow in evaluating an applicant’s conviction history, i.e., that the CRD has the discretion to second-guess an employer’s final decision even if the employer followed each step of the process. The CRD also has filed and is vigorously litigating a lawsuit for alleged systemic violations of the CFCA.

With the spike in charges and lawsuits asserting CFCA violations, proactive efforts to fortify CFCA compliance can pay dividends for employers that hire employees in California. Employers that use criminal records to screen applicants should consider a privileged review of the various policies, procedures, and other documents related to the screening process (e.g., job applications, offer letters, guidelines for recruiters, pre-adverse action notices, criminal record screening standards, standard operating procedures). Employers also can conduct related training of all personnel involved in interviewing, screening, and selecting candidates.