Last month, the new chair of the EEOC, Charlotte A. Burrows, was the keynote speaker at a conference regarding new research on criminal recidivism.¹  The EEOC has been mostly quiet on the topic of criminal background checks and Title VII since the U.S. Court of Appeals for the Fifth Circuit upheld an order enjoining the EEOC from enforcing its Enforcement Guidance against the State of Texas.²  Chair Burrows’ comments reveal the EEOC remains keenly interested in this subject.  But this is just one of the reasons why employers, particularly those operating in multiple jurisdictions with a high concentration of entry-level jobs, must continue to be thoughtful about criminal record screening policies.  The other reasons include the risk of disparate impact class actions by the plaintiff’s bar, regulatory actions by local fair employment agencies, and increased claims activity by individual plaintiffs, particularly in California and New York. And these concerns fall against the backdrop of widespread class actions under the federal Fair Credit Reporting Act (FCRA).³

Comments by Chair Burrows

Initially, Chair Burrows framed the issue of criminal background checks by employers as one that ties to broader issues nationwide regarding racial justice and systemic discrimination.  Chair Burrows made the point that criminal background checks impact the employment opportunities of those individuals with criminal records and those in, but soon to be released from, prison (i.e., who will be seeking employment in the near term).  Chair Burrows’ tone was fairly moderate overall.  In fact, Chair Burrows said at least twice that the EEOC’s Enforcement Guidance does not outright prohibit criminal background checks, although she did not once mention the Fifth Circuit’s opinion. 

Importantly, though, Chair Burrows also repeatedly emphasized that criminal background check policies must be “evidence-based.”  She did not offer any comments about the meaning of the term “evidence-based,” but presumably was referring to the standard adopted by the Third Circuit in El v. Southeastern Pennsylvania Transportation Authority (SEPTA) in 2007.⁴  In El, the court held that for employers to prove criminal record screening policies are justified by “business necessity,” they must prove the policies “accurately” distinguish between applicants that do and do not pose an unacceptable level of risk.⁵

Chair Burrows closed by emphasizing that criminal justice reform is going on at various levels of government, is directed at “structural barriers,” and is integral to what she described as the nation’s promise of “equal justice to all,” including those who have paid their debts to society.  The chair did not mention any ongoing investigations or impending lawsuits.⁶

Heightened Claims Risk

Whereas the EEOC has not been pursuing criminal background check cases aggressively of late, the class action plaintiff’s bar has taken up the mantle.⁷ Plaintiffs’ attorneys have had some high-profile success negotiating both cash payouts and programmatic relief (i.e., mandatory structural changes to the employer’s criminal record screening policy).⁸  Additionally, activity at the local level, particularly in California and New York (especially New York City), and both by local agencies and individual plaintiffs, has increased significantly.⁹  Meanwhile, so-called “ban the box” laws continue to proliferate or reinvent themselves across the United States, for example, in Illinois,¹⁰ Pennsylvania,¹¹ Hawaii,¹² and Massachusetts.¹³   

In addition to such litigation and new background check laws, employers must contend with persistent disagreement among federal courts about the scope of the FCRA (e.g., about the “injury-in-fact” required for standing under Art. III of the U.S. Constitution).¹⁴  The U.S. Supreme Court recently passed on an opportunity to rein in such technical, “no-harm” class actions.¹⁵

Risk Mitigation

There are several practical steps employers can take to help mitigate risk. For example, employers should consider designating an in-house subject matter expert to help oversee efforts to fortify compliance with the various laws.  Because sensitive judgment calls may be needed, having someone with an understanding of the business, on the one hand, and compliance, on the other, is indispensable.

Employers should consider arranging for a privileged review of their background check policies, forms and notices. If this review has been planned but is languishing on the “to-do” list, it is a good time to give it priority.

And, employer should assess the adequacy of training, and as needed, arrange for updated training sessions.